Tracking the right sales metrics

Acumen Executive SearchBusiness UncategorizedTracking the right sales metrics

Last night I read this article from L’areal Lipkins through Vistage’s network. It made me pause and it hit home as Acumen works with our clients to help determine who is the best candidates for them. More importantly “Who” will be the best cultural fit while meeting the professional skillsets required to do the job.

As a business consultant partner, we see companies through an outsider’s lens.  Leaders, C-level executives and boards members come to Acumen to find managers, directors, and C-level professionals. Some of the questions we ask our clients reveals so much and are important questions we ask to determine the metrics they use for success:

Describe your culture in five words or less.

Who will work best in your current state (behaviors, personality traits)?

What are three top problems that this person needs to solve?

How are you measuring their success?

All hiring managers that are hiring or planning on hiring need to ask themselves these question. Then look at their answers to see if they follow L’areal Limpkins definitions.  Here is what Ms. Limpkin wrote:

Are you tracking the right sales metrics?

created by L’areal Lipkins in Manufacturing NetworkView the full blog post

There are three metrics high performing sales organizations track: behaviors, leading indicators, and lagging indicators.

Most organizations only track lagging indicators like revenue, profit, number of new customers, close ratio, etc. The problem with just tracking lagging indicators is that it’s history and there’s nothing you can do about it. This is especially problematic if you have a long sales cycle.

You should also be tracking leading indicators such as appointments, demos, proposals, or whatever makes sense for your business. Leading indicators will give you a red flag that your sales team is on or off track much sooner than waiting until the end of the month, quarter, or year. For example, if you know you close 1 out of 3 proposals and your goal is to bring on 3 new customers, theoretically you need to have 9 qualified proposals. Now obviously we can work on different techniques to improve our close ratio, but the key is you, your sales leader, and your sales people should know what the critical leading indicators are and how they impact results.

Lastly, you should track behaviors. What activities should your sales people be doing every week to get in front of prospects. Maybe it’s cold calls, referrals, prospecting emails, LinkedIn connections, or networking. Again, the goal is to improve our output by improving (or increasing) our input. If we just try to fix the results, we’re fixing the wrong end of the problem. Your sales people should know their top 3-5 prospecting activities and how much they should be doing each week to keep their funnel full and drive leading indicators.

About Ms. L’areal Lipkins:

L’areal Lipkins is Managing Partner at Acuity Systems, and she specializes in helping companies streamline, systematize, and scale their sales efforts. L’areal is a Vistage Member and Vistage Speaker.

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