If you have been part of a new product launch or enjoyed the customer experience that is delivered when a product first hits the market, I can relate. It’s an exciting time! A few months ago, we launched our Sales Performance Optimization (SPO) application FunnelocitySM.
Shortly after launch our prospects began to inquire, “who’s using it?” It’s a logical question. Prospects want proof points to ensure the product they are considering will achieve a goal, solve a problem or satisfy a business need. And while our application may be new to market, the process we automated using SPO is based on solving a real-life sales management problem that has broad appeal to most companies with a strong desire to grow.
So, to answer the question of who uses the application, we did!
Our Funnel Metrics management team are former executives at a major travel services firm, and our Founder and CEO was the SVP of Sales. He was frustrated because he wanted to understand why the sales team was performing in a certain way so he could guarantee the team would attain its revenue goal. Every Sales Manager has the same challenge: to figure out what to do to in order to “move the needle” to make “The Number.” And that’s the beginning of the SPO story.
It was clear that Year-to-Date Quota performance and opportunity pipeline reports didn’t explain why team members performed like they did. For example, why did a few top performers always crush their number, while half the team failed to meet their quota? Why did some managers get their team members to perform while others didn’t? Most frustrating was the issue of new hire productivity: how do you hire someone expecting they are going to do well, and then they don’t perform?
It’s something that happens with most sales teams. Sales teams make their number for any number of reasons, but generally, one thing is certain. Not all salespeople will make their quota. Sales teams typically rely on a few top performers (or the sales manager themselves, since they once were a top salesperson before they became a manager). One way or another, the team attains its goal while 50% of the reps don’t make quota. That is why Sales Managers start to search for answers.
SPO is about how a sales team is managed to maximize its true potential. What criteria would be used to judge if that was the case? Most likely, the ideal scenario would be one where 100% of the team members make or exceed their revenue number. Yet, it’s nearly impossible for 100% of reps on a team to make or exceed their number, right?
Or is it?
In our opinion, the ultimate business objective should be to optimize the revenue potential of EVERY seller. After all, if a person is willing to invest in the significant effort, rejection and abuse that is required of all salespeople, and companies go to the trouble and expense of hiring them, isn’t it management’s obligation to do everything possible to figure out why reps perform in a certain manner and provide the tools to become more successful?
Understanding why sales reps are performing or not and how to optimize sales team member performance is the reason why Funnel Metrics exists.
We were frustrated by the inconsistencies we saw in sales rep performance. We wondered:
- Why do some of our salespeople always exceed quota while others continually sit in the middle of the pack?
- How do some of our Managers always succeed with their teams while others don’t?
- Why do 50% of the new hires we on-boarded succeed while others fail, even though the same managers both evaluated and hired them, expecting them to succeed?
- Why do some of our salespeople follow the sales process to the tee, faithfully inputting all their CRM data and updating their opportunities, while others refuse?
If one considers that the goal was to ensure all reps make or exceed quota, answering these questions is absolutely critical! And the majority of sales managers can’t, even when they aren’t spending most or all their time closing business. The real question is,
Why can’t we figure out what our team is doing and change it?
As we further assessed the situation, it was clear the information we used to manage our team (such as YTD Quota Performance) wasn’t telling us why this was the case. We decided we needed to look at performance from every possible perspective and determine what was happening.
So, we went into the CRM system and built reports for every sales activity and measurement we could think of that contributed to a salesperson’s performance. That included metrics like average length of a sales cycle, deal size, monthly number of opportunities added, lead conversion rates, close rates and many others. From these metrics (downloaded into spreadsheets), we built a scoring system that rated each rep on their metric performance. We looked at the metrics of the top performers versus the average and poor performers. We took the metrics identified from the top performers and developed improvement plans focused on these metrics for the average and poor performers.
This took a lot of time and effort to produce and even more effort to maintain. Also, the reporting and the linkages needed to determine who was doing what were very complex. Lastly, scoring reps was a manual process that required manager input and feedback. It wasn’t sustainable, but it set a solid foundation moving forward. Nearly all the reps improved their performance, and once the metrics were identified, the scoring system was updated annually. Nevertheless, it still was a tremendous amount of work to maintain and update. Later, the same process was implemented and improved at other companies where the Funnel Metrics partners worked.
Today Sales Performance Optimization is automated in the FunnelocitySM application by using Artificial Intelligence modeling, which eliminates the heavy lifting to analyze and determine what metrics should assessed and managed. What took our team weeks to manually produce is now available to managers in FunnelocitySM in a matter of minutes.
What we learned from creating SPO is that understanding what metrics most impact performance explains why salespeople consistently perform well or poorly. Metrics can demonstrate who is not complying with the sales process and can identify performance trends that exist within a specific manager’s sales team. Metrics also reveal why some new hires “get it” while others don’t. Just as important, SPO uses sophisticated automated methods so that the analysis doesn’t consume extensive time and resources. While 100% of your team make not make quota, as a Sales Manager, you will be empowered to explain the “why” with minimal effort. Once you have traction and a clear vision for the goal, you can give all team members the opportunity to dramatically improve performance to reach it.
To learn more about Sales Performance Optimization, take a look at our demo video on the FunnelocitySM application.