Get two or more sales enablement professionals in a room, and soon the talk will turn to metrics – specifically, how to measure the success and impact of their programs. Sales organizations aren’t lacking data. In fact, the total amount can be overwhelming for sales leaders. Traditional metrics such as course completion, quota attainment and revenue earned, while all important, don’t seem to tell the whole story.
For example, course completion is a “check-the-box” measurement – as in, “We know the rep took a course.” Quota attainment can be impacted as much by quota setting as it is by rep performance. And revenue attainment, while always the ultimate measurement in sales, is a lagging indicator. None of these metrics provide the insights to enable sales leaders to make precise improvements in the sales funnel.
Case in Point: Let’s use sales onboarding as an example. The ultimate goal is to accelerate the time-to-productivity of a new hire, and the typical way many companies measure this is time-to-first deal. This is a valuable metric – but, in isolation, what does it really tell you? It doesn’t indicate whether reps are confident, competent and able to hit first-year targets, or whether they simply happened upon a willing and eager buyer in that first deal (the proverbial “bluebird”).
Rather than fixate just on symptoms of performance, look for specific metrics on how reps actually perform.
For measuring performance and diagnosing issues at every phase of the sales cycle, it’s important to develop metrics that answer the Three Big Questions of Sales Enablement:
- Are reps ready to sell?
- Are reps doing the right activities?
- Are reps producing the expected results?
Exploring each question gives greater insight into the why behind the results.
Question #1: Are Reps Ready to Sell?
The usual answer is “Yes – they’ve completed all the training program.” But while it is important to verify reps have completed the training content, consumption alone doesn’t guarantee real-world readiness.
For example, take a typical sales transformation, requiring reps to call on a new type of buyer – shifting from selling to operations, to selling to C-level executives. To make this change, reps need to show they have more than just textbook knowledge. So, before reps first try to sell to a CXO, you’ll want to see actual proof they are ready to have the type of conversations you need them to have.
With metrics based just on learning consumption, sales enablement leaders are betting their reps are actually ready. Instead, it’s important to certify rep readiness with an assessment-based approach focused on three core areas:
- Mastery of concepts: Consuming training material is the first step – but beyond learning consumption, it is important to be able to confirm reps’ mastery of concepts through online testing and other assessments.
- Mastery in simulations: Managers can ask reps, for example, “How would you respond to these objections from a C-level buyer in this target industry?” Live role play, as well as video coaching and assessment tools, can be used to check readiness.
- Mastery in the real world: Direct, in-the-field observation of a rep by a coach or manager is the last step. In the above example, coaches can give feedback on how well reps engaged this new level of buyer.
Question #2: Are Reps Doing the Right Activities?
Once reps are certified as “ready” for a given activity, such as selling to the C-suite, it’s important to make sure they’re actually doing it – not reverting back to their old habits. This is a common problem with transformation efforts, because people naturally gravitate to their comfort zones. With new hire reps early in their onboarding experience, activity is the only thing you can measure before they actually begin producing revenue.
To ensure reps are doing the right activities, establish a baseline benchmark of what their acceptable activity level should be. This will vary based on the length of the sales cycle, the complexity of the buying process and the average selling price. For example, a rep selling a $10,000 product to the midmarket requires a different set of activities and activity volume than a rep selling a $5 million product to large enterprises.
The best way to create this benchmark is to reverse-engineer the sales pipeline to define the right activities:
- Establish the pipeline-to-quota ratio: If the goal is to sell $1 million per quarter of a new product, for instance, the typical sales organization will require $3 million worth of pipeline opportunities, or a 3:1 pipeline-to-sales ratio.
- Calculate the right number of opportunities: Use projected deal size to calculate the number of opportunities each rep must manage – in this case, to achieve $3 million in pipeline revenue for the new product.
- Determine the number of sales calls required: Once the number of opportunities in the pipeline is established, target closing rates can be used to calculate how many C-level sales calls will be required to generate the desired $1 million in revenue.
Taking this approach will define rep quarterly metrics for pipeline revenue, pipeline opportunities and number of sales calls required.
Some organizations are hesitant to impose these types of metrics on their reps, though, because they do not want to come across as micromanagers. However, the alternative is to discover months after the fact that reps have not been engaged in the right activities – which will create a much larger problem. By tying metrics to activities, you can link activity-level data to results, while also giving reps clear instructions on how they should spend their time.
Question #3: Are Reps Producing the Expected Results?
Most sales enablement professionals would say, “Of course we know if our reps are producing the expected results – that’s what quotas are for.” But to truly understand rep production, it is critical to move beyond traditional quotas.
Some of the most useful metrics for understanding rep productivity include:
- Run-rate productivity: Assigning goals tied to revenue run-rate provides an “early warning system” on reps who are underproducing. For example, newly hired rep goals could be tied to the average amount of time it takes reps to get to $250,000 in deals, and then $500,000, and so on. This baseline run-rate enables sales managers to understand if there are issues in productivity much faster than typically happens when measuring reps against quarterly or annual quotas.
- Sales velocity and conversion metrics: Determining conversion rate and velocity for every stage of the sales funnel will provide vital information for understanding rep performance. For example, if you have a six-stage sales funnel and stage three typically has a 30% conversation rate in an average of 30 days, this can become the metric for all sales reps at this stage of the funnel.
- Funnel-wide metrics: The approach above can be applied to every stage of the sales funnel, providing granular information on rep performance at each stage. This enables the identification of specific performance issues (if a rep’s deals tend to stall at a specific stage, for example) and can be used to target coaching activities to deliver maximum impact on conversion rates.
There is a tremendous opportunity to adopt metrics answering the Three Big Questions of Sales Enablement. This approach enables organizations to move beyond traditional “symptoms measurement,” and into measuring the actual underlying factors behind rep readiness and performance.
Readiness Scorecards fully automate the manipulation of massive amounts of data about training courses, curriculums and coaching challenges and tie all that data to the sales rep or learner. This makes it possible for sales enablement teams and sales managers to focus their energies on what really matters, which is whether the reps are prepared for success. Scorecards can then be further enhanced with performance data from the Salesforce CRM to make this ‘coachable’ context even more powerful.
With this ‘coachable’ context you and your sales managers have everything you need to collaborate, diagnose problems, motivate reps to improve and hold reps accountable for results.
Looking to learn more about how to use data to drive strategy and improve team outcomes? Check out our brief “How to Harness Data to Improve Your Sales Enablement Strategy”