Sales Performance Management – Is Yours Lagging or Leading?
Are You Giving Them the Guidance They Need to Meet Expectations?
By Tony Cole, President, Anthony Cole Training Group
Performance management is generally considered to be an important step in building successful sales practices and sales teams. Wikipedia, which references Aubrey Daniels, perfectly states the purpose of performance management – to close/eliminate performance gaps.
But for performance management to be successful, it must be preceded with another important step. An organization must set metrics and standards of performance before performance management can take place. And they must be the right ones to help a sales leader effectively monitor, coach, mentor, and motivate a sales person to success. The typical metrics for success used are: retained revenue, retained accounts, customer service scores, new business sales, book of business growth. These are appropriate, but limited as that they give a manager only information about the past. They are what Verne Harnish would describe as “lagging” indicators rather than “leading” indicators.
Any measure you use, and the subsequent inspection of the measure, is going to be lagging. The sales activity that you track, however, can and should be a leading indicator to future results/success. Activities like calls, contacts, appointments, opportunities, presentations, introductions asked for, networking events attended, and advocacy meetings. These are all activities that sales people perform or should be performing. These are all activities that should be used as metrics for success because they can give you, the sales manager, a leading indicator as to what will show up in the pipeline and what will potentially be sold.
Looking at present sales activities allows you to see if your sales people are headed toward successful completion of KPIs (key performance indicators) or if they are off-track. Depending on the velocity of the sales cycle you work in, real-time information is critical because missing the standards of performance for a leading indicator even for a short period may be cause an irrecoverable setback.
The other “miss” that occurs in performance management happens when setting appropriate standards for success. Just yesterday, I was with a group that described their goal setting process. They set goals for meeting the company objective, but they included the “double secret probation” goal or standard for keeping their jobs. In other words, the goal might be $300,000 in revenue, but if they do at least $200,000, they can keep their jobs – they just won’t make the additional incentive compensation or make the rewards trip. This is a “miss” or failure when setting appropriate standards because at least 75% of the population will opt for a goal that just keeps them from getting fired.
Wrapping this up, it comes down to this. You’ve hired someone, they’ve been through your on-boarding process and training program, and now it’s time for them to get out there and do what you hired them to do – succeed in selling. You didn’t hire them to be part of the group that is at 85% or below of goal. No, you hired them with the expectation that they were going to succeed. So, give them the guidance they need to meet that expectation.
Clearly identify what you expect of them in their day to day sales activity. Identify the standards by which they are to perform. Inform them that you are not just “suggesting” they make a certain number of dials, schedule so many appointments – it is an expectation they are required to meet daily. Inform them that the standards for performance are not negotiable, not variable, not something to do “if they get around to it”. Inform them that you will continuously inspect what you expect. And THIS is where performance management begins to take place.