How do you know when your salesperson is underperforming? The easiest indicator is by looking at their results. Above plan? Kudos, leave them be. Below plan? We swoop down to intervene about improving performance. But there are many factors that contribute to underperformance, which we will address in detail over several blog posts.
Let’s start with the first known fact: the number one reason why employees don’t do what they’re supposed to do is: They don’t know what they’re supposed to do! We tell people what the end goal is (the revenue ask) but don’t clearly give direction on where to go, what to do, and/or how to do it. Start by setting clear expectations that illustrate “what good looks like.”
Next, you need clear metrics to diagnose sales effectiveness. No doubt, we are clearly concerned about Results – at the end of the day, it is about generating results, both for your customers and for you. However, these are lagging indicators – they’ve already occurred. When you focus on past performance instead of future improvement, it’s like trying to drive from your rear-view mirror – you won’t be very successful. You end up being very reactive and tend to evaluate only daily or monthly performance instead of performance trends over time. To help your team achieve success, you have to understand the leading indicators which, when done well, lead to results. These are dashboard metrics that give you immediate data to understand why performance is occurring.
The following Sales Effectiveness Equation is a simple and effective way to diagnose how well your team is performing: Activity x Customer x Execution = Results ensures you are managing the leading indicators around the right activity and coaching to effective execution of those activities, leading to results.
Activity is about choosing the right sales activities to maximize proactive selling time and focusing it on Customers who are the best prospects for mutually beneficial and profitable relationships. Once we’ve created the right proactive sales opportunities, Execution is about ensuring your team has the knowledge and skills to make the most of each opportunity.
When your leading indicators are done well, you’ll be doing the right activities with the right customers to move business through the pipeline, executing them well so opportunities move more quickly to close – leading to a win! You’ll see better results and will have better control over how and whether results are achieved. Because the process tightly links activity and effectiveness to targeted business goals, the likelihood of getting results accelerates rapidly.
You’ll find that the time you spend managing your people will be more efficient, more focused, and more enjoyable as you help them make the direct link between action and results.
How can you use the Sales Effectiveness Equation to diagnose performance? Look for these activity and execution gaps.
Help the rep reshape their activity when you observe:
- Reacting to customer “fires” determines rep’s schedule
- Customer contacts not in sync with quarterly or weekly targets or plan
- Pipeline imbalance (early, late stage, stuck opportunities, low volume)
- Poor or lack of account planning (seeing same people, expecting different result)
Coach the rep on how to execute the activity when you observe:
- No clear objective or desired activity outcome: How it will advance the business?
- No planning of the next step after customer engagements
- Skill issue: unable to or unsure of how to execute activity
- Did not get the outcome they were looking for (e.g., stuck in continuance vs. advancing the sale to the next step)
9 questions to ask yourself when reviewing sales and activity data and your observations:
- What results have they achieved to date?
- Were the stated performance expectations met?
- What are the trend lines for positive and negative gaps to plan?
- How significant are any performance gaps?
- What are the current activity volumes and trend lines?
- How are the activities balanced between growing, defending, and maintaining business?
- Activity volume and focus: continue? Do less/more? Refocus elsewhere?
- How effective are the rep’s activities and selling practices?
- What do my observations tell me about this person’s execution effectiveness?