What do you consider first when you think of speed and agility? What is the first thing that comes to mind? Did you say speedometer? Whether it is the humble analogue speedometer or the more contemporary digital one, everybody connects speed with a speedometer. But why? Why do we need to know the speed at which we are moving? It all boils down to how we want to measure and what we want to measure while we are on our path.
World-renowned management guru, Peter Drucker had once quoted so right when he said “If you cannot measure it, it cannot be managed”. To be able to improve something you need to know the present state, and for that, you need an ecosystem that enables you to measure every critical aspect. The scenario for sales leaders isn’t any different, they need to measure what efforts are being put in, how the business is responding, what is the ecosystem that the business is operating in and how efficient is the system. A sales leader should know what efforts are being put in, the costs involved, the time involved, the output of all those efforts, how quickly those outcomes are achieved and how quick the business is to respond to the various stimuli.
Doesn't all of that remind you of a car's dashboard? The dashboard essentially tells you how your car is performing overall. The dashboard lets you make quick decisions in real-time. There are several gauges, three of which are the most important and relevant. Speedometer, Tachometer, and Odometer. It is no wonder they say sales leaders drive the business. In the sections that follow, let's take a look at how this real-life analogy applies to the world of sales from a sales leader's perspective.
The speedometer on a car's dashboard is used to measure the speed at which you are travelling. It is a measure of how well your business is responding to the input. In other words, in pure sales terms, this translates to how quickly a prospect moves through the sales cycle. Can we say this also measures the effectiveness of your sales processes? Sure you can. A sales leader will also try to infer from a sales speedometer, how much faster can the sales engine be driven. What follows from the readings of a sales speedometer includes sales predictions, calculating the cost of resources required for any ramp up and measures to avoid any burnout. Another takeaway for sales leaders from this sales speedometer is whether they need to compensate for a lack of sales efficiency, determined by the sales efficiency formula,by shoring up headcount or even optimizing product pricing.
The tachometer on the dashboard gives an idea about how hard the engine is working. The effort that is being put in or the energy being utilized to achieve sales is one parameter that this tachometer can measure. In sales lingo, this translates to measuring coverage ratio, sales capacity and cost of sales metrics. Basically how much are you burning to achieve your sales targets? This directly translates to measuring the efficiency of your sales processes. The better the efficiency of your sales processes the higher the speed you stand to gain on the speedometer.
The odometer in automobiles shows the driver or the rider the distance travelled. In other words, it measures what has been produced, the end result, and the bottom line. Can we equate this to sales productivity? Yes for sure. So parameters like revenue, contract value, and margins will be the sales parameters that would drive this gauge. Sales leaders get to see the result of all the efforts put in through the quarters.
A good sales leader will read all these gauges to infer and arrive at their decisions. As an example. Sales leaders will have to find out if the increase in productivity was the result of better efficiency or was it a result of factors like headcount ramp up.
A good performance management system will not only assist the seller in day to day sales activities but also present intuitive dashboards and reports that answer executive-level questions. Sales leaders can use these dashboards to quickly arrive at their decisions, in real-time.
They say a picture speaks a thousand worlds. A graphical representation of the various sales floor statistics will help the sales leadership to be agile in today's volatile business environs. If you have not already invested in sales performance management tools already, there is no better time to invest in one. Take the plunge. In fact, we at Kennect have a dual-pronged solution for all of your sales worries, well almost. Kennect offers an AI-based intelligent tool for real-time incentive or commission management. Incentive Compensation Management by Kennect deals with all of the seller's incentive related troubles. It works seamlessly with Sales Performance Management by Kennect, a performance management solution for your sales folks.
Ask for a demo today, we’ll be glad to oblige.