For most of my sales life, I’ve been judged almost exclusively by the revenue I have generated for the company where I was working. However, my own philosophy was always somewhat different. I have always believed that if you did the right things for a customer, then business would come your way. However, you had to be out meeting with customers on a regular basis in order for this to be effective and I was forever urging my teams to “get out and meet people”! It is only in the last few months that I have seen this defined as sales activity management.
There are lots of things that a sales person can control such as how many times they call a customer, who they go to meet with and how fast they respond to requests. There are things that they cannot control so easily, such as how many orders a client will make or how big those orders will be. The client decides on these things. If you only ever measure the output of the sales process, you cannot have much impact on it. It is the input to the sales process that should be managed.
What is certain is that if the sales person never goes to visit a customer, the chances of getting an order are very low. The more visits that they make, the more the chances of an order will increase. It is not necessarily a linear increase. nor a never-ending increase, but more meetings generally equals more business.
So, what should a sales manager care about?
1. Which customers are my sales team going to visit? Are these the ones most likely to generate orders?
2. How often are they going to visit? Is this the optimum number of times?
3. Who are they going to visit? Are they meeting decision makers all the time?
If you track the number of meetings that each sales rep is having each day, then it is very simple to see which ones are likely to hit their target and which are likely not to. While they have to meet with the right people and apply the right skills when they are in the meeting, getting the meeting number high enough to be successful is the first stage of the process.
Consider the following calculation
1. An average order is £10,000.
2. Only one in three opportunities close.
3. Every good opportunity requires three separate leads.
4. It takes three meetings to find every good lead.
5. This means that it takes 27 meetings to close one average order.
So, if a sales person’s target is £100,000 in revenue, they need to close 10 average orders to hit their target. This means that they need to have 270 meetings, which is 6 meetings every week, to hit their target.
While this is a very simplistic calculation, it does demonstrate the need to monitor meeting numbers, not the number of opportunities or the revenue. If you only measure these, then you are only starting to manage sales activity half way through the sales process which is too late. Identifying the right clients and the right people within those clients are the first steps in the sales process followed by a meeting or phone call. If you measure meeting numbers against a target, then you can immediately start to see if activity is not sufficient to meet revenue targets.
Sales managers should care about how many meetings their team are having, who are they meeting with and what skills are they applying during those meetings. The first two are easy to measure and influence, the latter less so. However, if the meeting numbers are high enough but the revenue isn’t following, then its likely that the skills are lacking and training is required.
So, if you want high performing sales teams, you should be caring more about their activity levels than their revenue numbers.
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