Ineffective measures killing your sales results?

Part 5 of “Knowing” how to sell is not enough

Our journey to eliminate the gap between what we know we should do and actually doing it continues.

Part 1:  Knowing how to sell is not enough

Part 2:  Talking too much.

Part 3:  Routine versus a Rut.

Part 4:  Fear & Conventional Wisdom holding you back?

Today, we dig into cause #4: Measuring

The old saying, “What gets measured, gets done,” needs an amendment to include, “So, be careful what you measure.”  For a salesperson, life is based around measurements.  It’s one of the easier parts of our business to measure.  Dollars and units of products sold are typically easy to track because accounting software is developed early in a business to bill customers.  These numbers are consolidated on a monthly basis and reviewed by management teams.  They’re the basic measure of the bottom line results of a territory and should be monitored for every salesperson.

Once you leave that chart or spreadsheet, you venture into the gray area of measuring.  The gray area includes measurements of both results and actions.  The reason they are gray is that they might not tell the whole story or vague.

Let’s examine a few times that ineffective measuring gets in our way of selling:

1. No measurement: This one is rare, but does occur.  A salesperson will have no idea of where they are on results, customer orders, etc.  They don’t have a way to track their results nor track who they are calling on each month.
   • Get your customer list, establish results for the current month and year compared to previous year’s month and year results.
   • Review these measures monthly. When reviewing, compare same month this year to the same month last year.  Most of ag is very seasonal.  So, compare this December to last December, not December versus November.
   • Bonus tip: If your gross margin doesn’t cover the cost of your compensation plus about 30% for expenses, find this out before your sales manager does.  Then go to him and figure out how to fix it.  You want to be part of that conversation.
2. Single Line Measuring: The next mistake I see in measuring is getting tunnel vision around one measure.  A sales manager once was struggling with her team’s results and determined the problem was her sales team wasn’t signing up enough new accounts.  She then developed a single line focus on measuring the number of new accounts her team signed up.  Guess what results she got.  Of course, a lot of new accounts that bought very little.  Her sales team responded to her single line focus. They went out and got the results she was measuring.  An emphasis in a critical area is great, but single measure focusing can actually hinder results.
3. Sporadic measuring: Whatever you decide to measure, it needs to be sustainable and consistent.   A measurement is a health indicator, just like your blood pressure or cholesterol level.  Sometimes the number is important, but often, it’s the trend that is more important.  Consistent measuring gives you a baseline of where your territory runs on that number.  Then you can easily detect swings.  Let’s take accounts receivables as an example.  I know that’s not everyone’s favorite thing to measure.  (However, keep in mind that if you don’t get paid for your products, it’s called charity.)  Anyway, your percent current is running 80% and your 1-30 days past due is running 12%.  May be good numbers and may be bad.  The more important signal is that right now, in a tough economy, your % current slips to 75% one month, then 72%, then 68%.  By measuring regularly, you can identify trends early and begin to take action.
4. Poor measurements and poor measuring skills:
   • Low correlation to the results –
     • # of sales calls you make
     • # of prospects on your list.
     • # of outbound phone calls.

In an attempt to monitor their salespeople, sales managers will often measure these numbers, which are activities.  While they can be indicators of effort, they don’t necessarily correlate to results.  Agribusinesses find this out every day when they launch a CRM tool.  One of the first dashboard measures they track is “# of sales calls by salesperson”.  To the leadership team, it makes sense to track this number.  They reason, “More sales calls = More results.”  What do they get?  A bunch of sales calls on the CRM dashboard.  Salespeople realize it’s more important to stay on top of that chart than it is to spend time on a call and get results.  So, the correlation between # of sales calls and results fades away.  Please note:  This does not mean CRM is a bad tool.  CRM is a tool that should be used to measure the right data.  Hating CRM is like hating your bathroom scale for measuring your weight.

• Debatable – This one needs to be fixed immediately. If there is any question on how a measurement is defined, clear it up immediately or get rid of the measurement.  I spent 4 hours of my life once debating the definition of a “new customer.”  One group argued that a new customer was “someone who never bought from us before.”  Another group thought a new customer was – “A customer that hadn’t bought the majority of their products from us.” And off to one little corner was a group caught in the middle that said, “A new customer is someone who hadn’t bought the majority of their products from us in the last 6 months.”  Stakes were high as commissions were higher for new customers versus current customers.  If you are creating a measure, make sure it is clearly defined.  If you don’t, trust me, your salespeople will be on their cell phones with each other between farm calls debating how the measure should be defined.  Save valuable time and negative energy by defining it.  If you can’t, then don’t measure it.
• Too hard to get – In today’s digital world, charts, graphs, dashboards need to be at the click of a button. If you have to go in and download Excel data and then convert it into usable data, it just doesn’t happen.  Here’s a shocker – We may have some members of our team that aren’t as techy on computers as we would like them to be.  You can certainly beat on them to get better or you can bring someone in to build the measurement tool for them so all they have to do is click on the tool or open an email.  Now if they don’t click on the tool, then you’re justified to beat on them (not actually/physically).  My reasoning is, “If you can work your TV remote, you can work most software programs.  Point and click does not require a person to be “techy”.

5. Unfair: I know, life is not fair and the winner takes all and …….  But measuring can demotivate as much as it can motivate a salesperson.  This topic will actually take us directly into reason #5 that causes the knowing-doing gap:    Fairness in measuring could actually mean that it makes sense.  I understand we love to track and compare as much as we can, but there are comparisons that are just not helpful.  For example,
   • Comparing a brand-new salesperson to an established salesperson. I’m reminded of an anonymous quote on this topic: “Don’t compare your day 1 to my year 15”. 
   • Comparing someone selling a high-volume product to a person selling a low volume product. While we always want to monitor profitability, measuring based on units sold is a poor measure, by itself.

The ramifications in sales of ineffective measuring are significant.  They can send us in the wrong direction with the wrong product at the wrong time.  They can fail to indicate profitability or fail to warn us when we are losing money.  Equally important, ineffective measuring can lead to a lack of action on our part to move and do what we know we should be doing.

Take a few minutes today and review your measures.  Have someone that is not in your department review them as well.  Get a fresh perspective.  You might even hire someone that has looked at many territory and sales team numbers to help you (Ok, sorry, that was a shameless plug.  But if interested, send me an email Greg@GregMartinelli.net )

Please join me next time as we wrap up the five causes of the Knowing-Doing Gap.  Cause #5 may surprise you as we typically think of competition as one of the most important traits for an aggressive, high performing salesperson.  Cause #5:  Misplaced competition.

If you found this to be helpful, forward on to someone you know who might also appreciate it.

For more Ag Sales Training, Ag Sales Coaching and Leading Ag Sales Teams, go to http://www.GregMartinelli.net/