Introducing a sales effectiveness solution to your organization is an important initiative. You’ve the opportunity to increase revenue, gain additional insight into sales performance, and improve sales forecast accuracy and pipeline visibility.
However, not all sales effectiveness solutions are implemented well. Goals are sometimes unclear or poorly defined. There can be a misalignment between the different internal stakeholders – and indeed between companies and their sales effectiveness solution providers – around the definition of success, and the expected return from the investment.
In most examples of successful implementations of sales effectiveness initiatives, goals and success criteria are clearly described at the outset. Measurement, Success Metrics, and Communication guidelines are well defined before the project starts, and a Review & Refine process is established to insure the initiative stays on track. All Stakeholders are involved in setting this framework for success, and everyone has a clear vision of the desired end state, and the journey to get there.
The number one goal of a sales effectiveness initiative is usually to increase revenue. There may be different versions of this: Maintain revenue with reduced headcount; Increase profit margins while maintaining revenue; Grow revenue from new market segments. In any of these cases, the achievement of the goal can usually be measured by reviewing just four variables: Number of Opportunities, Average Deal Value, Percentage Close Rate, and Length of Sales Cycle. For simplicity, we can group these as Revenue (or revenue related) Objectives.
However, the measurement of Revenue Objectives is just a lagging indicator of performance. It’s a perspective through the rear-view mirror. If the objectives are not achieved, then it’s too late to fix the problem. Furthermore, looking just at Revenue Objectives does not illuminate the behavior change needed to improve. There is dramatic benefit to be gained by coupling Revenue Objectives with Non-Revenue Objectives. These could include:- better qualification, common sales language across the organization, accurate sales forecasting, increased account penetration etc.
Maintaining a focus on these Non-Revenue Objectives helps to delineate the optimal practices needed to achieve the Revenue Objectives, and their measurement provides indicators of success (or failure) much earlier in the process. This is particularly important if your organization is prey to long buying cycles and you need one, maybe two quarters of lagging indicators to judge actual results against target results for your initiative. They can guide organizational velocity and sales business management – and it’s the latter we believe is at the core of successful sales effectiveness initiatives.
As you embark on your sales effectiveness initiative, I’d suggest that the question to ask is …
“What are the Revenue and Non-Revenue Objectives for the project, and how can I measure success?”
At The TAS Group, we’ve put together a guide – a Customer Success Charter – to help our customers answer that question, to refine the clarity of objectives, to fully understand what success means, and get everyone on the same page from the outset. It’s proven to be very valuable. If you’re embarking on a sales effectiveness initiative, and you’d like a copy of the Customer Success Charter to help guide your project, respond to me in the comments area below – or just send me an email at ddaly@thetasgroup.com.