The 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?
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.
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.
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.
Here are some measurements to uncover REALITY:
• Is this the highest, best use of my 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?
• 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?
“Highest and best use of time,” ties together perfectly, with “productivity,” and has nothing to do with “activity.”
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 32 calls. Duh.
Got activity? Or got sales? Get real. •
Jeffrey Gitomer is president of Charlotte-based Buy Gitomer. He can be reached at (704) 333-1112 or email to salesman@gitomer.com
