How Well is the Sales Team Really Doing?

How do sales executives measure performance of their salespeople?  Can you even measure their effectiveness? Is there a method to managing what each person is doing and how they can improve?  Sales people think they’re doing well if they hit their numbers and doing poorly if they don’t.  Sales Executives often feel the same way about their people.  They have a “handle” on who is doing what, but the problem with such a model is that the expectations and requirements are vague, “soft”, and subject to inconsistent evaluations.  To have a truly effective system of performance evaluation, an executive needs a consistent system of measuring how the sales team is doing.

So how does an executive create such a system?  The first step is  “Key Performance Indicators” (KPI).  KPI’s are the behaviors or activities that we have identified which will generate the desired results.  Those KPI’s need to be understood and accepted by each person.  Evaluation of performance is a comparison of the activities committed to by the salesperson against activities actually performed.  We can only hold people accountable for those activities over which they have control.

We also must compare the results of the efforts versus the expected results.  People fall into four categories. 

The first group is meeting the KPI requirements and are reaching the goals.  Our strategy with this group is to reward them and raise the bar.  Getting them to raise their expectations is helping them to grow.

The second group is doing the required KPI’s but not getting the results.  Training may be effective with this group.  They may be more effective with better skills.

The third group are those who are not doing the KPI’s but are getting the desired results.  This group has business fall in their lap through no merit of their own.  This group needs to understand that without activity it is hard to maintain results.  It is a poor long term strategy and can lead to failure if things don’t change.

The fourth group are those who are not doing the KPI’s and are not achieving the results.  Developing an exit strategy is the most likely next step with this group.  People who will not perform and do not get results are not people that we should keep on our team.

A executive should understand where every person fits in the above equation.  Each person should also know where they stand.  Each individual should have an action plan for improvement and be measured accordingly.

Don’t leave evaluations to gut feels.  It’s hard to be perfectly objective with our sales team.  Personal feelings always leak in.  An objective evaluation system allows us to analyze how the sales team is doing and what needs to change to make it better.