The Monumental Effort Required to Grow Sales in 2014

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Understanding the Sales Force by Dave Kurlan

BroncosRegular readers know I’m a baseball guy but that doesn’t mean I ignore football. Sunday, the New England Patriots needed 30 points to win their game over the New Orleans Saints 30 – 27. But that’s nothing. The previous week the Denver Broncos needed…wait for it…51 points…to win their game over the Dallas Cowboys. 51 – 48. 99 points in a single football game.

It takes 51 points to win a football game now?

When game planning for an opponent, I don’t think any coach, anywhere, could have prepared their team and said, “Look fellas, it’s gonna be a real high scorin’ game so let’s plan to score 6 touchdowns and add 3 field goals for good measure.”

But that’s what it took.

When you look ahead to 2014 sales, are you using the same assumptions as always? If you want to grow by 20%, do you use the same metrics for next year that you used for last year? Will the plan that got you there last year continue to work next year? Have you accounted for any of these changes?

  • What if customer retention worsens?
  • What if your average sale or account drops?
  • What if the closing percentage changes?
  • What if it takes 15 attempts instead of 10 attempts to reach a single prospect?
  • What if 10% fewer conversations convert to meetings?
  • What if your margin drops by 10%?
  • What if you lose 10% of your salespeople and you aren’t able to replace them for six months?
  • What if your sales cycle extends by 2 months?
  • What if it takes 25% more of everything in order to reach the promised land next year?
  • What if your competition introduces a better product for less money?
  • What if it takes the sales equivalent of 51 points to meet budget?

While a customized, structured, optimized formal sales process and targeted, effective, and integrated sales training and coaching will address and improve all of those metrics over time, you must also assume that your assumptions with regards to metrics for next year are wrong.

But how will you know which ones are most likely to be wrong? How long will it take to notice?

You can’t possibly know whether or not your metrics for sales cycle, margin, closing percentage, retention, or average sale are going to change until you have completed enough sales cycles to collect the data for an appropriate sample size. For those you’ll have to head into 2014 and leave margin for error. However, within one week you should know the top of the funnel metrics like attempts to conversations and conversations to meetings and whether those have changed since 2011. By the way, they have!

This is one of the advantages of pipeline management and CRM. If you have the applications tuned to report on the right metrics, getting this information in real time is not a problem. The real issues are:

Will sales managers pay any attention to the metrics or look only at sales?

Will they notice if the metrics change?

Will they change the metrics on the fly and provide training and coaching to help?

Will they demand more sales without providing tactical and strategic support?

Will they be lazy, ignore the changes, but later cite changing metrics as the reason they missed quota?

What will you do?

Republished with author's permission from original post.

2 COMMENTS

  1. What a great addition to my topic – thanks Andrew!

    One particular point that you made is so very important and that is your comment on the length of the sales cycle. If salespeople start the engagement earlier does that mean the sales cycle became longer? Great question!

    Membrain, The Pipeline Management Tool I love so much, has a Prospecting module. The contact remains in that module during drip marketing, contact attempts and other pre-sales cycle efforts. When the contact is ready to convert to an opportunity, it moves into the Pipeline, from which point the length of the cycle is measured.

  2. Assuming “that your assumptions with regards to metrics for next year are wrong” seems draconian, but I think you are correct to question past assumptions. Anytime new forecasts are made, assumptions must be questioned and manipulated to have a better handle on risk.

    You’ve asked some good questions, but I would go after the causal stuff – the how? or what might cause . . . as a way to manage risk. From there, you would get a question such as, “what might threaten customer retention?” The highest likelihood, highest impact events, problems, or forces will lay the groundwork for what to manage. At the same time, it’s important to provide an estimate of the revenue performance impact – which should always be a range.

    Of course, there’s great danger in over-reliance on metrics, and I see many companies fall into this trap. For example, when sales executives track sales cycle time, they often define it as ‘first contact to close.’ But what if salespeople become effective at engaging earlier in the buying cycle (or in some cases, engaging before there is a buying cycle)? The “sales cycle” will appear to lengthen. Is that good–or bad? It depends. And since nobody on the buying side formally flips a switch that indicates “buying cycle initiated,” this metric is particularly fickle to compare year-to-year.

    For managers, I often caution that comparative analytics assumes (many times, wrongly) that there is little variation in what is being compared. “Jennifer in Tulsa averaged 18% higher margins than Tom in San Diego.” – It’s just that their territories and product mixes are nothing alike. Second, because they take a retrospective view, such comparisons often provide scant insight into how a person, product-line, or segment may perform in the future.

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