Managing Sales to Leading Indicators

Becoming a Sales Manager?  First task-remove your rear view mirror.  One can spend lots of time managing historic reports and numbers-they are helpful, however, they are all measures of the past.  Why are results the end all?   These figures are easy to obtain and the perfect scorecard that ties to the financial statement.  That does not mean they’re fully relevant to improve sales performance.  What activities caused those results?  These are the leading indicators of the results.  Lead indicators will provide clues to success before it’s too late to make adjustments to influence the score or lagging indicator. 

Lead indicators are harder to come by, but that’s not an excuse to not define and measure them.  A Sales Manager measures to lagging indicators but coaches their teams’ activities to leading indicators.

One of my favorite recent reads was recommended by a good friend-4 Disciplines of Execution: Getting Strategy Done.   One of the 4 Disciplines is Acting on Lead Measures.  First, define your goal-usually -THE RESULT.  Then, it is important to define the most important actions that will drive your lead measures.  

1. Activity.  What are the activities that turn prospects into customers?  Some examples may be:
   1. visits/meetings
   2. demos
   3. quotes
   4. sample requests
   5. miscellaneous others e.g. qualified leads, customer seminars and trainings, new product requests, special pricing requests, custom product applications .

Then, review your activities together with:

1. Close rates. Are we converting these activities into business?  This is typically a percentage of quotes that result in new business or projects.Track close rates every which way you can.
   
2. Deal size. Are we chasing business that matter to help us achieve our plan?
   

If you manage your sales team around leading indicators, and the right opportunities that can be won, the target revenue will be achieved.  I have helped manufacturers work with their distributors to define these measures http://www.jimthomasintl.com/service-offerings.html.   One must have the discipline to gather the data to measure these leading indicators over time. 

It is not easy, but neither is success.

Good Selling!