Sales and Sales Management Blog

January 15, 2009

Track the Wrong Numbers–Get the Wrong Actions

Filed under: crm,management,sales,Sales Management,selling — Paul McCord @ 2:23 pm
Tags: , , ,

Do you track your prospecting and sales numbers?  Whether your company has an automated tracking program or you do it by hand, you must have a tracking system that will help guide you in how you spend your time, energy, and marketing/prospecting investment.

However, knowing you should be tracking numbers doesn’t answer the question of what numbers you should be tracking.  The numbers you decide to track will have a direct influence on the activities you engage in.  Track the wrong numbers and you’ll very likely concentrate on the wrong activities.

For example, one company has set up their tracking system to track the number of contacts with prospects each of their salespeople have.  Every day, each salesperson must complete a form that indicates how many contacts they had that day, where the contact came from, and how many sales they made.  Although the form lists a number of ways the salesperson may have contacted prospects-phone, internet, in person, etc., it makes no distinction between a new prospect and an existing prospect.  Rather than identifying new prospect contacts and follow-up with existing prospects, the company’s system only identifies the number of contacts.  Each salesperson has a daily contact quota.  At the end of the month each salesperson’s sales to contact ratio is calculated and rewards-or corrective action-are based on that ratio.

The problems associated with this system should be obvious:

  • The system treats each contact as a separate and unique sales opportunity, so the system doesn’t give the salesperson or management an accurate picture of the number of true potential sales the salesperson had during the month
  • The system encourages contacts, but not a particular type of contact, so neither the salesperson nor management have an idea of whether prospects are being followed-up or new prospects being contacted
  • The system lends itself to easy manipulation by salespeople
  • Management has no idea where their sales force is spending its time and energy or what the real sales cycle for their products and services are
  • It creates resentment on the part of salespeople who believe their ratios are being kept artificially low since if they had 15 sales opportunities during the month and closed 10–a 66% closing ratio, but it required 60 contacts to make the 10 sales, the system calculates a 17% percent closing ratio (10 sales divided by 60 contacts).

This company has the right concept-track numbers; they just have the wrong format.  In actuality, they haven’t thought through the why and what of tracking numbers.  Their object was to keep their tracking simple, which they did; but even simple tracking must be well thought-out since what is tracked determines which activities are engaged in.  This company tracks contacts, which encourages their salespeople to make contacts.  But since the system doesn’t care what type contact is made, the salespeople don’t care either, and consequently they go after the easiest contacts to make-follow-up contacts whenever possible.  In addition, since their ratios are based on sales vs. contacts, not sales vs. unique sales opportunities, the system encourages salespeople to make the minimum number of acceptable contacts.

Whether you are looking to track your personal numbers or those of your sales team members, before settling on what numbers to track, think through what activities those numbers will encourage.  If the numbers you are thinking of tracking don’t encourage the right activities, they’re not the right numbers to be tracking.

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1 Comment »

  1. You are so right. So many people just track the “big numbers” i.e calls made, presentations made, closes etc

    But the “real numbers” lie in the small stuff like:

    – How many of the meetings set are actually consumated? i.e how many people cancel

    – How many of your voicemails are returned?

    – Quality of contacts

    You can go on and on with this.

    Bottom line is that you must map out your entire sales process not just the big activities, but ALL of them no matter how small and then you’ve got to have mechanisms in place to track each one.

    Then, and ONLY then do you know the real numbers of your selling.

    Sean

    Comment by Sean "Your Selling Sucks" McPheat — January 19, 2009 @ 3:07 pm | Reply


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