All of us that are responsible for growing sales whether the CEO, Director of Sales, VP of Sales etc., wrestle with the age old challenge of figuring out how to inspire greater performance by creating systems, incentive plans, accountabilities, KPIs, support, environments and ongoing training among other components to sales management success. Sounds like a lot of complexity doesn't it? Ultimately it is because there are so many different pieces that can affect sales success that it feel as complex as can possibly imagined (as we all know).
The ongoing raging debate that is endlessly posted on LinkedIn and online and the board rooms and meeting rooms round the country and world, centers around whether sales is an art or a science, whether one is born with 'it' or it is 'learned' (gotta' love the old nature versus nurture argument: my answer is it is really both, with the huge impact common denominator being desire/drive, which is inextricably intertwined in both sides of that argument in my view).
Bifurcating Sales success between 'art' and 'science' tends to does a disservice to what I feel is the central question concerning how to impact sales success: Which is ultimately how effective the individual sales effort is. Effectiveness accounts for how two sales reps can literally follow the exact same sales script, yet one is a consistent top ten percentile performer while the other one is a bottom percentile performer. The refinement and creation of KPIs as well as other activity data is to distill sales effectiveness down to its granular activity components in order to create a formula that is hopefully duplicable, repeatable, and teachable, for sales success.
While the work to get to meaningful KPIs and leading indicators makes sense on the surface, the assumptions of what the KPIs mean in relation to effectiveness is where the rub usually is.
Ultimately the KPIs and CRM measures are only components which management leaders hope will lead to the sales 'answer'. Because this approach doesn’t usually actually measure 'effectiveness', it can lead to misfires and managing to the wrong drivers.
So what is the answer you may ask? I wish I had invented it but I have to say that the book by Stephen Covey, "The speed of Trust" really hits the answer on all cylinders as it relates to what the underpinnings of what sales effectiveness means and how to get there. The book talks in no uncertain terms about the fact that sales is really the transfer of trust. I have found this to be absolutely true. When you find a vendor that is high integrity, is straight with you, delivers good news with as much vigor and speed as bad news, is consultative, listens and comprehends your challenges, then proposes customized responses based on your answers, you tend to trust them and the business relationship is born...
Sales wonks often talk about the million different ways to 'close deals'... but the reality is one must know how to Open Relationships. 'closing deals' are a byproduct of good relationships, while conversely you cannot close a deal without there being a relationship typically... a transfer of trust!
So, at the end of the conversation about what KPIs we should be measuring, I would posit that feathered into the measurement and tracking of activity KPIs like how many calls were made, how many Requests for Quote were received, etc., etc. etc., there also needs to be a strong system that measures sales effectiveness. Sales effectiveness can be inferred with ratios like book to bill, quote to book, average deal size, average profit margin etc. By measuring those areas which can be actually completely automated (IE: eliminating what all salespeople hate which is filling out reams of data and taking away from their sales time), owners and managers can start to focus in on sales effectiveness.
At least that is my take on how to grow numbers and sales and measure for those things that are important so we can help our salespeople actually spend time honing their selling skills with data that will lead them to sell more.... effectively!