RSS feedsHave you ever met a sales professional who can’t spot a mistake in their bonus statement, down to three decimal places?
Sales teams probably outperform accountants when it comes to calculating
commission-related figures, but do they count the numbers that really matter?
If sales professionals don’t understand how the business numbers add up, then
any forecast they provide will be meaningless. Not that they are rushing to hand
over forecasts anyway; the sales team’s priority is to be in front of the
customer, not doing what they consider to be ‘the accountant’s job’. Without a
reliable sales forecast then you know a company is only ‘travelling hopefully to
arrive’, rather than having a clear-sighted forward view.
So the task is to sell number-crunching to a sales professional and you do that just as they do by tapping into what makes people buy. However, the sales force will want to know precisely what numbers are required, which figures matter in delivering a useful sales forecast.
Left to an accountant, the answer is likely to be predicted revenue and margin, with a date attached. But that’s not the full story. A properly clued-up sales manager will focus their attention elsewhere to achieve optimum results. Training sales people to count the right numbers at the right time can quickly transform their performance profile. These are key figures:
- How many prospective deals are there in the pipeline and where are they today?
- How long has each one been in there?
- How long will it take to close the best few?
- How much time does a sales person have, and how do they plan to allocate it?
The sales team’s approach to time management has to integrate all these numbers not only to close the current deals, but also to keep the sales funnel topped up with new opportunity and open deals moving through at a measured pace.
The metrics you need each sales person to understand, focus on and track are:
- Conversion percentage: what proportion of deals in progress will they convert to sales?
- Conversion time: how long does it take to progress a deal from opening to closing?
- How much of their time is needed for each activity: lead generation, development, proposing and closing?
If a sales force can be helped to see that a forecast is a plan for action that benefits their customers as well as themselves individually, they are likely to repay the effort involved and make that bonus statement all the sweeter at the end of the budget period. That way, you are using the numbers that matter to you to drive the numbers that matter to them.
John Connors is a consultant at Thornbury Associates
