𝗦𝗮𝗹𝗲𝘀 𝗠𝗲𝘁𝗿𝗶𝗰𝘀: 𝗕𝗲𝘆𝗼𝗻𝗱 𝗠𝘆𝘁𝗵𝘀
Updated: May 21, 2022
“Never measure just because you can.
Measure to learn.
Measure to fix.”
- Stijn Debrouwere
Ancient people used myths to teach powerful lessons. While myths are effective, they can teach the wrong lessons.
Avoid some myths which have arisen in sales in order to build a meaningful business.
Myth: You have to track the same metrics as your competition.
Better: Define metrics based on your vision (e.g. you have a clear exit plan so work your way backwards to determine what steps are needed and how to measure their progress). The best metrics are defined by company objectives, not by your competitors or industry.
However, you also want to avoid “vanity metrics” which simply make you feel good by making sure any metrics you measure connect with measurable growth. It’s tempting to report certain activities (e.g. we’ve gotten more meetings) but make sure that activity is leading towards your desired outcome.
Myth: You want favorable results.
Better: Measure your activity, results, AND outcomes. Here’s an easy example - If you close a ton of new clients but those clients churn quickly, you must reevaluate. You want positive outcomes and not just greater throughput or output.
Myth: The purpose of data is reporting.
Better: Rely on reports to drive strategic decisions. The best reports connect individual behavior to desirable outcomes. You want data to build reports which then allow you to make the best decisions to grow the business and to develop careers.
By helping people understand which activities contribute to the best outcomes, they can decide how to focus their efforts.
Myth: Compensation should be based on quotas.
Better: Recognize behaviors, outcomes, collaboration, and company goals. Use complexity to amplify performance (e.g. separately reward the person who introduces new deals and the person who closes those deals). Sometimes, a large deal is due to luck, or the CEO walks the deal to the salesperson who gets commission.
Having incentives and bonuses based on individual activities and results as well as team and company performance require more time and thinking up front, but serve as an investment in driving collaboration, productivity, and long-term growth.
Myth: Salespeople thrive in competition.
Better: Encourage people to outperform their past quarters and collaborate on team goals so everyone wins. Motivation is complex. One person may need more structure (e.g. daily reports) while another needs to know the latest product information in order to sell successfully.
Focusing on individual optimization also requires more work initially but will lead to breakthrough success.
Also, rely on metrics as a learning device, not a scoreboard, in order to optimize success.
From here, there are many resources for choosing the right metrics will align your goals, value, and growth. KPIs across the company, contributor activity and productivity, lead generation and pipeline metrics, and conversions all provide useful insights.
Positioning the data in context will have company goals driving metrics, which in turn inform your progress and opportunities to evolve company goals.
For now, realize that the right metrics should be driven by purpose, focus on outcomes to optimize performance, and may require complexity for long-term success.
I really want to thank Sanj Sanampudi for his wisdom and passion. His thoughtful rants against simple commission plans taught me to appreciate rewarding collaborative behaviors and holistic outcomes, not merely counting the final results.
Photo by Cristina Gottardi who can be found here: https://www.instagram.com/cristinagottardi/