About 10 years ago, I was catching up with a friend – a Regional VP of a $2B software company that specialized in healthcare – and the discussion shifted to metrics. What struck me was a statistic he shared: For all opportunities that reached the proposal stage, his company had a 55-percent close ratio; however, when a prospect visited their corporate headquarters in Kansas City, their close ratio jumped to 93 percent. His comment was perfect: “I tell my team to do whatever they have to do to get their prospects to corporate – it is that simple.”
I understand that these numbers may seem skewed, but the sample size was large enough to make it a valid statistic. There is no need for a deeper analysis of “why” when 93 percent of prospects that made the visit moved forward with an order. Get those clients to Kansas City!
What is your dominant metric(s)? What Key Performance Indicators (KPIs) do you measure? KPI tracking tends to be a bit dated in the security industry. In writing this piece, I considered the scenarios of salespeople both for integrators and manufacturers, as well as sales managers, and developed a best practice for each:
Integrator sales professional: The integrator salesperson requires a balanced approach more than any profession. You must prospect for new business, develop relationships with contractors and consultants, network with the marketplace, work with manufacturers and distributors, drive demand with end-users, design and propose solutions, close sales –and the list goes on. They must do all these different activities every week – if they fall out of balance, they are in trouble.
Although that list of activities is diverse, they all lead to one KPI that really matters: quotes on the street. To ensure that their work strikes the necessary balance, measure two KPIs: Open Quotes and Quotes Delivered per Week/Month. Understanding these two KPIs will give you and the salesperson visibility into recent activity and the health of their pipeline. Balancing these two indicators will ensure success.
Sales managers: In my first sales job, one of the newer reps in my district killed it one quarter, and my boss could not stop talking about his greatness. Six months later, he was fired. He got lucky for one quarter, and the company was ready to crown him king of sales.
Later in my career, one of our regional sales reps was struggling. This guy was sharp, but he was not hitting his numbers. My boss was ready to let him go – thankfully, he didn’t and within a couple of months, his funnel popped and it never stopped flowing.
Both scenarios represent the same mistake many sales managers commit: only measuring “what you’ve done for me lately.” To get an accurate analysis of a sales team’s performance, you must measure sales results and sales activity.
How many times have you had a salesperson break every record in April, but delivers goose eggs in May and June? As the leader, you need to hold them accountable to sales and key activities that lead to sales.
Manufacturer sales professional: For a vendor, predicting sales is like predicting the weather for next month – most of the time it comes down to experience and gut-feel. The key is to make sure that your gut is consistent, because it is better to be consistent than accurate. Read the last sentence again – it is counterintuitive but true. To predict sales success, you must identify an early-stage activity metric that indicates success.
To determine which metric, measure all activity: End-user demos, lunch-and-learn meetings with consultants, sales training with integrator partners, etc. After doing some math, you will determine a few KPIs that predict success (i.e. 10 demos and three lunch-and-learns per month means the sales number is reached two months later).
Chris Peterson is the founder and president of Vector Firm (www.vectorfirm.com), a sales consulting and training company built specifically for the security industry. To request more info about the company, visit www.securityinfowatch.com/12361573.
