Are you making sales or measuring sales activity?

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measuring sales activityThe amount of time management spends measuring sales activity and salespeople (or dumber, the ROI of some investment they made in CRM), is generally wasted effort.

The same amount of time could be invested in making millions of dollars worth of sales if the salesperson was just pointed in the right direction, and trained what “to produce” rather than what “to do.”

How do you measure sales success?
What’s on your sales dashboard?
What’s on your manager’s sales dashboard?

Most dashboards (big picture numbers) are full of useless information that only lead to depression and posting your resume online under an assumed name. RESULT: You can get another sales job using some other useless dashboard. It’s not only frustrating; it’s also career stifling.

Maybe I’m old-fashioned, but I measure sales in 3.5 ways:
1. How many sales did you make?
2. What was the dollar amount?
3. What was the profit?
3.5 What was the source of the sale?
All other measurements pale by comparison.

There are many sales managers who measure “activity.” Complete waste of time. If you’re comparing a salesperson who makes 100 cold calls a day but zero sales to a salesperson who makes one appointed sales call from a referral and makes one sale, what’s the measurement?

Will the manager yell at the guy who made the sale? Will the manager congratulate the salesperson that made 100 cold calls but no sale? The 100 cold calls completed the activity requirement, but had a zero return, yet his dashboard will show he made 100 cold calls.

The manager will say, “Great job Bob! Keep up the good work. It’s all in the numbers, and eventually your numbers will catch up to your activity.” This is not just absurd, it’s also pathetic.

And worse, the sales manager will criticize the guy who made the sale because he wasn’t “active enough.” YIKES!

I may be old fashioned, but I’m pragmatic, especially about the sales process. Measure sales, not activity. Measure dollars, not activity. Measure profit, not activity. Document sources, not activity.

I don’t care about activity, even though activity may eventually lead to results. The real question is: what kind of results? If you have to measure a salesperson’s daily activity, you have hired the wrong salesperson or (worse) the wrong manager.

I don’t want activity. I want proactivity.
I don’t want activity. I want productivity.
I don’t want activity. I want profit.

When you understand the difference between activity, proactivity, productivity, and profit, then and only then will you understand the difference between a useless cold call and the power of an unsolicited referral. The cold call is an activity. An unsolicited referral is productivity and profit.

A salesperson or a sales manager looking at activity without understanding what the activity actually is, or produces, is basically staring at a black hole – and worse, blaming some one or some thing, rather than taking responsibility to study “What am I doing with my time?” or better “How am I investing my time?”

Here are some measurements to uncover REALITY:
• Is this the highest, best use of my time?
• Will this produce the best results for my invested time?
• Is there a better way for me to achieve a higher result?
• Am I frustrated with this activity?
• Is this activity producing sales?
• Is this activity producing profit?
• Is this activity getting to my attitude?
• Am I being rejected so often that I’m becoming reluctant to pick up the phone?
• When I go home at night, what’s my feeling about my job?
• When I go home at night, what’s my feeling about my boss?
• When I go home at night, what’s my feeling about my future?

The combination of these questions could be the best use-of-time tool ever created. If you know me, you know that other than cold calling, I consider an all-day course on time management to be the biggest waste of time on the planet.

“Highest and best use of time,” ties together perfectly, with “productivity,” and has nothing to do with “activity.”

Now that I’ve buried activity, time management, and cold calls, it’s time to move on to pipeline.

When The Tubes recorded The Completion Backward Principle in the early ’80s, their hit song, “Talk to You Later,” was a satirical comment on how backwards politics was. So, they started at the core and worked forward to society.

I created a similar backward principle on accident in the early ’60s. I was running my dad’s kitchen cabinet factory, and the output production goal was 200 cabinet doors per day. Somehow I knew if we didn’t cut and prepare 200 doors a day we could never produce them. So I started with “cutting” rather than measuring activity.

Surprise, surprise, once I “measured” 200 doors cut, I ended the day with 200 doors produced. No rocket science there.

It’s the same in sales. If your goal is two sales a week, and it takes four appointments to get one sale, then you need eight appointments. If it takes four calls to make one appointment, then the goal is NOT two sales, the mission is thirty two calls. Duh.

Got activity? Or got sales?
Get real.
Jeffrey-Corporate-Seminars-15

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Comments

  1. I’m being forced to fill out a pipeline as we speak, mostly for account management totals, not my own benefit.

  2. Debra Qalo says:

    Thank you Jeffrey for putting into words what I have been saying to Sales Managers for many years. It’s not about the numbers and it is not a numbers game. This morning I opened my Quarterly KPI Report and felt disheartened as I have never been a numbers person. My results have always been up there though not reflected b activity. Thank you again for vindicating me.

  3. Arjun Mohan says:

    It’s a real valuable read Jeffrey!

    Being in corporate life, we tend to see activities in different perspectives. Just only if managers can understand the real goal behind any activity, then each one of the team members will become more focused and show great results.

    Best regards,
    Arjun

  4. This is so true. 100 calls a month is the quota. However all of the sales made so far this year have been from referrals.
    Thanks for speaking so rationally.

  5. its really great to know
    How do you measure sales success?
    What’s on your sales dashboard?
    What’s on your manager’s sales dashboard?
    thank you for sharing the things.

  6. Hey Jeffery,

    It appears to me that you’re saying that activity not linked to a specific and targetted result is not meaningful, and also addressing that results that haven’t been reverse engineered into the RIGHT activities aren’t purposeful.

    I believe it’s wise to focus on both. Any one-sided perspective is destined to fail.

    Alexander

  7. I love you. There I said it. Just genius. Thank you for pushing truth into the world.

  8. I agree with the production part but disagree with the activity part of lack thereof. How can you produce without activity? In order to get unsolicited referrals, you need to take action in terms of activities in order to produce the referrals. You have to make sales in order for that to happen which means you need to take massive action, and produce massive activities to get to that point.

  9. bhagwant says:

    Thank you for sharing this article and it is very much true. Difference is between shorterm and long term approach towards business. The whole performance management system is activity based because activities are easy to measure and are externally focused. However to make a sales person effective is a challenge for the organization. To train him like an entrepreneur. Not order taker but value creater. Not activity oriented but outcome oriented. Not only persuasive talker but relationship builder and consultant. Taking responsibility for creating aha experiences for customers and making him preferred choice for business. This requires change in approcah from organization. Sales leaders and managers have to take responsibility for coaching people on job. Also organizational culture has a big impact on the way business is done.

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