As a business owner, it is most likely that your most expensive resource is your sales team. Human nature dictates that when you have an expensive resource you will want to maximise its output. We often get the greatest sense of perceived value when our sales resources are ‘busy’ and operating at full throttle.
Consequently, business owners and leaders can get drawn into managing sales staff with ‘input activity’ levels such as volumes of calls and meetings. As such, it’s all too easy to end up managing activity for activity’s sake, rather than focussing on the quality of output from that activity.
Of course, it seems to make sense that more calls and meetings will result in a higher probability of winning business.
Even if you have got somebody who is motivated to make a high volume of calls, I would question its sustainability. Experience has taught me that asking sales staff to undertake this type of activity either creates high staff attrition or significantly reduces the quality of the calls.
There is also another flaw in the concept of high volumes of calls. As a decision-maker, are you willing to receive cold calls from those selling to you? I doubt it.
Therefore, why would your sales team be able to get through to senior decision-makers in other businesses?
Activity isn’t about the number of calls. It’s about what they are achieving at each stage of the sales process. For example, the initial calls might be around research, identifying decision-makers or achieving a greater understanding of the organisation you are selling to. If you have been reading these articles, you will already realise this is a very important part of winning business – see our understanding your customers article.
It might take multiple calls just to achieve one research step. On one hand, it could be argued your sales team have achieved their quota on calls. Yet, at the same time, you as the business owner have only achieved one very small component towards achieving revenue, margin and cash.
So, what’s the answer?
In my opinion, activity should be measured by output. For example, requests for information or for a meeting or a call, willingness to receive a proposal and, of course, orders. You will naturally know what outputs you are seeking most from the sales team. Also, some members of your team may take more calls to achieve the same result. Provided the outputs are measured equally, the numbers of calls and meetings become less relevant.
Finally, building and growing a business involves the development and retention of high-quality staff. By measuring output, you can see which members of staff are truly making a positive contribution, rather than those who may be engaging in a high volume of low-quality activity for minimal gain.
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Our next article concludes this series of key management practices, focussing on how you can manage the performance of your team effectively.
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