In the simplest and convenient terms, organizations measure their sales performance in terms of the numeric volume of products sold and by the amount of revenue generated within the period under review. At the strategic levels of management, the ultimate focus is on how to achieve the financial projections which then highlights the revenue as the most important indicator on the performance dashboard.
However, at the operational or tactical level of sales management, it is quite common to see the field soldiers focus their attention on achieving one dimension of these metrics. The service industries are naturally willing to talk about just how much money has been made with the period and not necessarily how many clients they have serviced. The lack of focus or setting of an objective on the other (and many others) that is(are) not functional in the organization, usually creates a level of ignorance that can jeopardize efforts at achieving the corporate sales objectives.
As important as these two parameters are, sales performance measurement in every organization is key. The Balanced Score presents a very useful template for other critical components of the sales environment that needs to be given the necessary attention. Some of these include;
Customer satisfaction – An organization may have achieved good sales volume and value in a particular period at the expense of the customers. This ensures customer retention. Customer retention drives customer profitability for the organization.
Financial performance – More sales do not always mean more money for the company. Salespeople must understand and track the difference between just selling and selling profitably. A sales team is more productive and profitable when it can sell more at a lower cost to the company.
Business Process Improvement – Sales teams/personnel should be measured on how well they are able to simplify their sales circle in a manner that is both satisfactory to customers and also profitable to the organization. It could also be a measure of adoption or compliance with laid down best practices that are supposed to position the organization as a customer-centric and business-focused organization.
Salespeople are to actively and consciously pursue learning in their day to day activities and thereafter proffer solutions to the executives on how to improve the overall business process space. If they provide such periodic feedback as part of their performance measurement, the firm would find itself breeding talents that are capable of providing home-grown and organic solutions to their problems.
For the sales environment, I will recommend a bespoke Sales Force Automation tool that would be developed with some of the metrics already put into place.
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