Sales-measurement techniques can help your company make more sales more efficiently. In this article, you'll learn what information to track and how to use it to your advantage.
 | We find that many companies still don't have an organized and reliable customer database. |  | | Angelo Dalle Molle
general manager
Columbus IT Brazil | |
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In Summary:| • | Break down your sales process into a sequence of steps to determine what to measure. | | • | Use technology to track each step of the sales process. | | • | Analyze the data to see where the sales process stalls and to target the most profitable market segments and customers. |
In every company, you hear the same argument when sales are stagnant or down. The marketing department tells management it's giving the sales team tons of leads and can't understand why those leads are not turning into sales. The sales department counters that the leads from marketing may be plentiful but they are of such poor quality that they lead nowhere. The problem is not just poor results, but that there's not enough information about what is causing those poor results. You can easily see whether a salesperson is meeting his or her quota. What's not obvious is why some salespeople routinely meet and exceed their quotas while others struggle. With a little effort, you can discover what's behind your most successful salespeople, what's keeping everyone else back, and how to use that information to improve your business. Want to get a better handle on your sales productivity? Follow these four steps. 1. Evaluate your customer database"We find that many companies still don't have an organized and reliable customer database," says Angelo Dalle Molle, general manager of Columbus IT Brazil, a Microsoft Certified Gold Partner specializing in the development of CRM systems. Salespeople often complain that their company's databases don't have the information they need, such as thorough customer profiles that include personal information and data on any customer complaints — for example, whether they have been resolved or are still open. 2. Study your sales processBreak down your selling process into milestone events: For example, identify an opportunity, qualify the customer, write a proposal, and close the sale. For each major step, list the subcomponents — every task a salesperson completes in order to qualify a prospect, for example. Once you have defined the steps, make sure your sales force knows them and understands their objectives. 3. Track each stepThis is where technology comes in. "You can't do any of this with just anecdotal evidence," says Long Duong, EMC Corp.'s global practice manager for customer relationship management. Metrics can include the length of time it takes from identifying a prospect to qualifying the customer, the length of time it takes to write and present a proposal, and the percentage of proposals that result in a sale. Salespeople may already track that kind of information in spreadsheets, but most of the time the information is not current or reliable, Dalle Molle says. Companies with complex products and long sales cycles will likely benefit from technology that both tracks activities and allows sophisticated analysis, such as CRM software. Microsoft Dynamics CRM, for example, enables you to track interaction with prospects, create quotes, and monitor whether and when they turn into sales. You can also manage and track orders, payment history, and customer service requests. However, keep in mind that salespeople often resist CRM tools because the software creates more administrative work for them. Educate your people on the benefits, including automated reminders for sales-related tasks and a comprehensive customer history and profile. As well, look for systems that can easily integrate with e-mail and other familiar desktop applications. That kind of integration will reduce the work needed to populate the CRM system. For instance, salespeople can access and update Microsoft Dynamics CRM from within Microsoft Office Outlook (for more information, see this article). 4. Analyze the data to help boost sales and fine-tune sales strategiesYou can use the analytical tools built into your CRM software to generate reports, or you can transfer data into Microsoft Office Excel or Microsoft SQL Server for analysis, or into a portal solution such as Microsoft Office SharePoint Server for updating executive dashboards. Here are a few ways to put the tools to work: | • | Measure productivity by salesperson. Once you've measured the average length of your sales cycle (and have established a goal for sales cycle length), identify salespeople who move through that process more quickly or more slowly. Next, focus on each individual step and see where a particular person might be stumbling. | | • | Fine-tune your sales process for the best results. "I may find, for example, that once I get a customer to stage three of the sales cycle, our chances of closing that deal skyrocket," Duong says. If that's the case, you might focus on disqualifying certain leads so that salespeople can target the most promising customers, or introduce tactics that will move all customers to the next step faster. | | • | Use metrics to target the right customer segment and the right customers within each segment. By tracking selected key performance indicators, such as the time it takes for a lead to result in a sale, you might realize that selling your product into the aerospace industry requires a long certification cycle that stretches out the sales cycle and lessens profitability, Duong says. But your data might reveal that selling that same product into the trucking industry requires a shorter sales cycle and produces more revenue faster. "This relates to overall sales productivity," he says. "It helps you see whether you're deploying your sales resources in the most productive way." |
There are other important considerations, of course, when it comes to improving sales productivity. Before you spend the time and effort to monitor and improve certain steps in your sales process, make sure to analyze those processes for efficiency or necessity (this is where a sales productivity consultant might come into play). Education is also a key ingredient: Once you have identified common areas for improvement, invest in training programs to correct problems. With a focus on metrics and analysis, you can stop the finger-pointing between sales and marketing because you'll have data on what happened to each lead at each stage of the process. This should help you identify whether the lead was of poor quality in the first place or whether it simply was not handled correctly by sales. In either case, feeding that data back to the appropriate department will help refine strategies and increase your productivity, efficiency, and effectiveness. Tam Harbert is a Washington, D.C.-based journalist specializing in technology, business and public policy. Her work has appeared in CIO Decisions, Network World, and Electronic Business.
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