The number of dials a salesperson makes is easily measured. So is the time they spend speaking with prospects and clients. The hours they work is also easily captured. You can also count the number of emails a salesperson has sent.
The value of a potential opportunity is also easy to measure. Whether the opportunity is measured by revenue, gross profit, or margin, it’s relatively easy to determine the value of a deal.
The days an opportunity has lived in a certain stage is very simple arithmetic. You subtract the date the opportunity entered the stage from today’s date to determine the number of days (or weeks, or months, or years if you allow your pipeline to be stuffed with what are actually leads).
You can also verify that you have the necessary deals to reach your goals by ensuring that you have 300 percent of your goal in your pipeline at all times. This is easily measured and requires the smallest amount of math.
While all of these measurements provide good and useful information, sales effectiveness cannot be collapsed into objective measures alone. The difference between success and struggling to produce results is found in more subjective measures, none of which lend themselves to objective measurement.
Subjective Measurements and Context
How effective is the salesperson making the calls or sending the emails? Is there enough value being created for the client who receives the communication to agree to their request for a meeting? If the results are not forthcoming, then focusing on objective measurements is of no use to you in making an improvement.
The value of an opportunity, as easily measured as it may be, provides little to no information at all about the likelihood of your capturing it. It says nothing about how compelled the client is to change, how well the salesperson is doing helping them, or how susceptible you are to a competitive threat. You can only determine the real value of the opportunity to your organization by looking at more subjective factors.
Why has a deal been in a stage for longer than normal? Why did a deal move through a stage faster than expected? Does more time mean the deal is at greater risk of being lost? Does less time mean that the deal is progressing fast because the client is seriously motivated to change or because they are skipping the commitments they need to make to really change?
Objective measurements provide one small part of a much larger picture. Reducing everything to what can be measured is to ignore the subjective factors that give you a fuller picture of what is true. The subjective is more difficult to assess, but the conversations necessary to surface the subjective factors that can’t be easily quantified is how you improve your results.
Qualitative measurements are what allows you to determine what the objective measurements mean.
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Filed under: Sales Acumen