I remember the sales motto of one of the largest retail multinational banks: "Targets is in our 'DNA' - Do Numbers Always."
Most successful organisations are sales driven. That's because only top companies in any industry make money, and you can't rank high if your sales team isn't running in top gear.
While they are most important, sales teams are also the most difficult to manage and measure. What do you do when managers find it difficult to manage staff sitting under their noses, let alone teams that are not in office, or have nothing to show for their efforts except a call report?
The answer is simple: Track Track Track. As effort or activities are ineffective in measuring sales force performance, tracking performance on various measures from all dimensions assumes greater significance.
We have known sales managers who would call up their executives every hour and ask 'where are you' to make sure they were not home sleeping. Effective managers, however, are able to track performance without engaging in radar surveillance.
It requires you to define key performance indicators (KPIs) apart from targets. If you just measure targets, it is not effective. Because bad sales can get disguised in these measures whereas genuine sales efforts such as client calls, hot pipeline don't show up.
The customer and product related measures should be tracked monthly or quarterly and must include the number of new customers acquired, sales by product, sales by customer segment and new product sales.
New customers acquired as against cross-sales is important to track, and the productivity benchmark for executives working on the cross-sell base must be higher. Mystery shopping to gauge quality of customer experience is critical.
Process measures should be tracked quarterly. These should include productivity, channel mix and turn-around time. On sales activity, just measuring the number of customer calls made is not sufficient, but the number of prospects generated or the percentage of target customers called with desired frequency is more effective.
Monitoring source of business being generated is key to safeguarding against sales becoming overdependant on branch walk-ins, or call centre leads without making an effort to go out into the market to fetch new business. Also leads conversion ratio must be tracked as some sales guys receive more leads than others.
Financial KPIs are the most important for sales but most organisations only track these. They need to be monitored at all frequencies, but not hourly please (some managers do). They should include sales value by geography, profitability, cost of acquisition, attrition, book growth, fee income etc. Profit per sales executive becomes important in situations where sales reps can tweak the profitability of a transaction eg interest rate offered, margins etc.
All measurements are ineffective unless mapped against the right benchmarks, targets and also internal benchmarks. Internal benchmarks are better than others as they tell you what the best team can do in the same situation. What gets tracked, gets done', could not be more true than for sales.
Sanjiv Anand, managing director, and Himanshu Bansal, senior engagement manager, Cedar Management Consulting International.