What’s Improving – Your Sales OR Orders?2

By Tibor Shantotibor.shanto@sellbetter.ca

Bubbling up

As the economy continues to show hints of progress, and business picks up, it is important to understand the nature of the improvements in sales you and your company experience. Taking into account the old adage “all boats rise with the tide”, you need to be able to discern where your growth is coming from.  Is it from increased sales, or just an increase in orders due to an improving economic environment; and yes Sunshine, there is a difference, much like the difference between sales professionals and order takers.

More than ever, having a defined sales process, with supporting metrics is a must. Without that, you may easily mistake increased revenues with improved sales or selling, when in reality the improvement may be organic.  Increased demand, leading to an uptick in orders or improved selling, the two are very different, but often mistaken.

In fact, this is one of the risks of relying strictly on a single lagging indicator – Revenues, rather than a mix of leading and lagging indicators.  In many ways you can look at it the way investors look at interest rates paid on fixed income instruments, where they back out the rate of inflation from the total rate they receive from an instrument to arrive at the real rate.  Think of the organic increase in orders as inflation, and the real rate as YOUR ability to sell more or better in a given market.  All sellers benefit from a rise in demand, only those who focus on selling will grow sales beyond the herd, and get more than their share of growth.  Increased market share is always a good thing.

To avoid being caught, you need understand your intra-sale conversion rates, understanding if in fact you are doing a better job of converting leads to prospects, prospects to proposals and proposals to wins.  By measuring these and other critical points you will know if you are just benefiting from an increase in demand – more leads, or ability to convert those leads.  If you have a 4:1 lead to prospect rate, then it goes without saying that you’ll have more sales from six leads than 4, 1.5 sales vs. 1.  But if your sales and selling skills improve, and you can move to a 3:1 ratio, you’ll sell proportionally more.  This is important in down markets too, but people get fooled in up markets when the wind is in their sails.

Once you understand these measures, you can set goals for theses (or other) conversions from stage to stage, and benefit from the compounding effect, and increase both real and organic sales.  With goals and metrics in place, it is much easier to develop and Execute a tactical plan, you will be in a position to adjust or change your model to ensure continuous growth and skills improvements.

Not knowing can create more than false comfort, it could lead you to make wrong decisions, and by the time you realize, you may be left too far behind the competition.

What’s In Your Pipeline?
Tibor Shanto

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Forget The Revenue115

By the time you know if you had made your quarter or year, it is too late. If you made it great, if you didn’t, too bad, it’s too late to do anything about it. So to succeed in sales, forget the revenue, it is a lagging indicator, focus on what really matters, the activities and elements that lead to a sale, the leading indicators.

What’s in Your Pipeline?
Tibor Shanto

At The End Of The Day – Sales eXchange – 8619

A few years back, a recruitment firm published the results of a survey identifying the ten most over used buzzwords or expressions.  These included things like “synergy”, and “at the end of the day”; this last one is particular favourite among sales leaders, we’ve all used it, it sounds good, and seems to capture an attitude, but is it the right attitude, outlook and posture for sales leaders, or sales people to adopt?

From what I understand it is supposed to convey that when the deadline comes, the results will speak for themselves. The assumption I guess is that if everything is done as it is supposed to, then the outcome will be what we expect at the end of the process, or the “end of the day”.  Well you know what they say about the risks you take on when you assume.

The reality is that all too many sales leaders are already fixated on the results, at times at the exclusion of focusing on anything else.  There is no denying that results are what count in sales, revenue is the lifeblood of any for-profit organization; having said that, there is also no denying that when it comes to changing results and attaining consistent results, “results”, are a “lagging indicator”, they represent things as they have turned out.  These can be great lessons for the future, but there is little that can be done to alter the “results” once they are in.  The country’s jobless rate is also a lagging indicator, know that almost 10% of Americans are unemployed, does little to change the reality of George down the street who has been out of work for three months, and is about to lose his house.  What would have helped George is to have had something happen to change the result, either with his job or house or both.  “The end of the day”, it is too late to impact the outcome. 

To do that, leaders need to focus on “leading indicators”, to be able to impact and alter results, rather than just review and analyze them.   These indicators will vary from company to company, and based on the process in place and the individual rep’s ability to execute it, may even vary between sellers on the same team, there are some core ones to choose from.  These could be number of prospects engaged in a month; account coverage and penetration for those tasked with growing existing accounts; proposals submitted or conversion of the same proposals.  You can get more specific looking at specific tasks to be taken by the seller or actions required by a prospect.

The key is to identify key indicators, not every action through the cycle, and establish a game plan with the rep to help them understand why certain actions/steps are being designated as “leading indicators”, and how these “indicators” will be used to help achieve collective success.  While it is true that many reps do not like to be measured, in some ways you can’t blame them because often these “measurements” or “stats” are used in a non=productive way.  There is more to coaching and changing results than just pointing out that the “number” or “activities” are not up to snuff. 

As a leading indicator, they should point to where you are versus where you want to be, and what specific corrective actions you can execute to move towards the desired outcome in a consistently successful way, for a consistent set of results.  A focus on leading indicators will not only deliver consistent, predictable, and desired results, but will establish a process and culture of continuous improvement through a focus on inputs rather than outcomes.  At the end of the day, the best way to ensure the outcome, is to alter things at the “start of the day”.

What’s in Your Pipeline?
Tibor Shanto

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