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Measuring Outcomes Instead of Activity (A Note to the Sales Manager)

I had an interesting conversation with Michael Leeds, the CEO and Founder of IntroRocket. We were both bemoaning the strong desire of some sales managers to manage their salespeople’s activity. The visibility the new tools provide only seems to encourage this behavior. Activity isn’t the cure-all that some managers believe it is, but it is an absolutely a remedy for low activity (we all know someone who would do much better if only they improved their activity).

Sales managers should focus on measuring outcomes, not activity. To prove this point, all you need to do is ask this simple question: “If you could have what you really wanted without the activity, would that be acceptable?” It always is. But even when you measure outcomes, you sometimes still have to manage activity.

Measuring Outcomes

Here is a simple example inspired by a post from my friend, Jim Keenan.

Sales managers should have no interest in requiring or measuring the number of cold calls a salesperson makes. It’s irrelevant. The measurement of calls is only useful in determining whether a new salesperson has an efficiency problem (like too little activity) or an effectiveness problem (like the need for more training). But beyond that, the raw number of calls tells you nothing about how the salesperson is doing. The calls are activity, not outcomes. A salesperson can succeed at making the number of required calls and still not succeed in their job.

You measure the outcomes that you really want. If calls are being made to schedule appointments, then scheduled appointments is the real outcome that should be measured. Back to our test: If a salesperson could schedule their face-to-face sales calls without making all those calls, would that be acceptable? And, of course is would be.

But we aren’t done just yet.

Managing Activity

It’s unfair to suggest that sales managers are always wrong to manage activity.

Salespeople with call reluctance (I know, I know) argue that they shouldn’t have to make cold calls. They maintain that they should be able to use email instead of making phone calls. But then they fail to produce the results that they need, and by doing so, they force the sales manager to look back to activity. And activity is the problem.

This is where measuring outcomes is useful. If the outcome is face-to-face visits, then it doesn’t matter whether the salesperson obtains the appointments by making cold calls, by emailing their dream clients, by asking for referrals, or by using some other method of prospecting.

You don’t have to count phone calls or emails. But when the salesperson fails using the method that they prefer, like email, they must still be held accountable for the agreed upon outcome. If what the salesperson prefers to use as their primary prospecting method isn’t working to produce the necessary outcomes, you can help them understand the need to make changes (or you can help them find some other way to be successful).

You measure outcomes, not activities. You give your people the maximum flexibility in achieving those outcomes. But when the activities they take fail, you coach them on taking a different set of activities.

Questions

Do you measure activity or outcomes?

When is it important to measure activity?

How do you define the outcomes that you really need to measure and that indicate future success?

How do you measure outcomes and still help ensure that the activities the salesperson takes produces those outcomes?


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