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SalesGrowth MD, Inc. | Denver/ Englewood, CO

It is not uncommon for business owners, leaders, and sales managers to manage their sales team based upon metrics such as revenue generated, profitability of the revenue, quota attainment, and other tangible results of sales which are typically measured by the firm.

What is the problem with that? They are all lagging or trailing indicators. Managing a sales organization through review and feedback tied to lagging indicators is the business equivalent of driving down the highway at 80 miles an hour while staring into the rear view mirror. You are managing history in the first example and about to become history in the latter.

Evaluating lagging indicators such as revenue and quota attainment are certainly important to the overall business and rightfully tied to sales employee compensation. That being said managers should manage their teams with data provided by leading indicators. Leading indicators are the activities and behaviors that lead to things like quota attainment and revenue generation but are completely within the control of each individual salesperson. In other words, manage behaviors not outcomes.

What are the behaviors that sales professionals should be held accountable to on a yearly, monthly, weekly, and daily basis that will result in the outcomes that the company is tracking on the lagging indicator side of the equation? In many firms that might be “dials” assuming you generate leads from cold calling. For example, if it typically takes 4 appointments to get 1 deal (revenue) and every appointment typically requires 25 unique conversations with decision makers the forward most point (leading indicator) within the control of the sales person is the number of dials required to generate the 25 conversations. If you know that for every 200 dials you will typically speak to 25 decision makers the first leading indicator of revenue in this example is clearly the 200 dials.

It all starts with the 200 dials in this example. As a manager if the employee is making the 200 dials but NOT achieving the typical result of speaking to 25 decision makers as a manage I knowwhere to focus my efforts. We would refer to this challenge as technical in nature and apply the appropriate coaching and training to improve his skills in this area.

If the employee was not completing the dials as prescribed we would consider the problem to be conceptual and apply our coaching efforts to the attitude and behavioral areas as required by the circumstance.

Managing behaviors versus outcomes not only allows problem solving in real time but it sets up dialogues between managers and subordinates that are purely focused upon behaviors within the immediate control of the seller. This shift means that there are fewer hurt feelings or feedback that is taken personally.

At our firm we help our clients to develop Cookbooks for managers and sellers that are dialed in to these leading indicators. We give them a format for Weekly Individual Meetings (WIM) that are designed to review the cookbook results and make corrections as required.

Selling is very mathematic in its results and predictability as long as you manage to the right math!

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