When you ask sales managers what they are responsible for, they say revenue growth. When you ask them how they grow revenue, they say by managing the sales team right. Nevertheless, we mostly only hold sales managers accountable for financial results not input related metrics. That’s flawed!
Sales managers should focus on manageable KPIs
The most important book on sales management I read was ‘Cracking the sales management code’ by Jason Jordan and Michelle Vazzana. The book is focussed on becoming a better sales manager, not necessarily how to evaluate the performance of a sales manager.
The premise is easily summarised, but incredibly strong, 83% of KPIs that managers are tracking are unmanageable, as they are neither in the realms of control of the manager nor the sales rep.
What can a sales manager do to improve business results like revenue or profit? They cannot simply say to a rep: “I need you to double the revenue next quarter, get on it!”, as it is simply not helping nor proper management. A manager must focus on what he/she can manage in their team and align that with objectives that will eventually lead to desired business results.
Winners and losers have the same objectives, what seperates them are habits [input]. James Clear
OCKI Performance framework
My personal framework to work with this methodology is abbreviated as OCKI, Objective, Conversion, Knowledge & Input.
i.e. If I want a rep to achieve 25% more in MRR growth [O], I check which conversion rates [C] in her funnel need to improve and make sure that her knowledge [K] of how to move a deal faster through the funnel is trained and that she has sufficient activity in her CRM proving her input [I]. If the knowledge and input part is fulfilled and the rep still doesn’t make her numbers, then the blame is on me. If she does not fulfill the agreed targets/knowledge points then she is to blame.
All of my clients know that I preach a thorough KPI management and always suggest a structure in Results, Conversions, and Activities/Input.
So long-story-short, when managing anything in life - focus on what you can control.
Sales management performance KPIs
Nevertheless, this doesn’t answer the question of how to measure sales management performance then. Moreover, revenue as a KPI doesn’t allow the sales manager to self-reflect, whether or not she is doing a good job. Let’s break down Sales Manager KPIs according to the ‘Cracking the Sales Management Code’ model:
What we can influence.
Number of coaching activities
Sales Managers should track how much facetime coaching was spent with individual sales reps. In this context, coaching is defined as enablement sessions with reps to give confidence, provide context & reason, dismantled doubts, and empower the individual.
Number of training activities
Coaching and training are not the same, just as psychologists don’t also instruct you how to do push-ups. Training can be done in groups, as 1on1 training is often not efficient. Moreover, training sessions should be frequent and specific, which can also be described in a sports analogy. A football manager doesn’t split his/her team into two parts and asks them to just play according to instructions, no, a football manager rehearses individual aspects of a game i.e. corner kicks or defensive moments.
The real-life implementation of training & coaching activities.
Quality of coaching score
Ask your sales reps to rate coaching sessions at the end of the month to get a picture of the quality that is provided in those sessions. Another potent way to evaluate if your sessions are actually helping is by making them voluntary and then measure if sales reps make use of them.
Aggregate pipeline conversion improvements
Changes in sales conversion rates due to specific training should be visible rather soon in specific conversion rates between stages. Whereas, revenue is likely to be impacted at a much later stage. Hence, one must keep track of the aggregate levels of improvements to see if the intended improvements are realized. General tendencies are probably best tracked by looking at a time series visualization of the conversion rate improvements.
Aggregate activity level achieved
I realized quickly that the activity levels of my team determine the results in the months to come as a sales manager. Sales is incredibly easy as it is simply the quantity of outreaches x quality of outreaches = success. Thus, it is vital to enable, coach, incentivize, and motivate your team to achieve a certain level of activities per month (i.e. # of calls).
What we cannot influence:
How many sales reps have achieved their quota and how is the quota attainment distributed? As a manager, we want to pay special attention to the average reps that could be made very successful with targeted training.
Sales team happiness
The reason behind this KPI is simple: When people feel good, they perform better. I would suggest an anonymous NPS measurement in the team. Plus, remember that sustainable employee happiness is not achieved by beer and pizza; but autonomy, mastery & purpose + a decent salary.
And now the traditional ones that you are already tracking:
- total quota fulfillment
- total new revenue
- total new cash
- revenue per sales rep
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