Sales reports should reflect opportunity.
Good sales reports cover the basics:
Leading indicators on activity that drives results (effort).
Lagging indicators that reflect the results of that activity (production).
Great sales reports offer one other dimension:
Performance relative to the opportunities available.
Reporting inputs and outputs is necessary to manage a sales organization. But If you want to build a high performance sales culture, performance relative to opportunity has to be considered.
The objective of sales reporting is to publish and evaluate performance, draw conclusions, and make educated decisions on how to improve — for both managers and reps. In my ebook, Systematic Growth, I refer to sales reports as “Salesball Cards,” drawing on ball cards I traded as a kid and describe some fundamental ingredients to effective reporting.
Beyond the framework I offer in the book, one piece of information missing from many sales reports is the actual performance of a salesperson relative to the opportunities they had.
Many businesses I’ve worked with report the performance of a salesperson reselling the same person for the tenth time the same way they do a rookie salesperson selling a new customer for the first time. This skews performance reporting, encourages managers and salespeople to draw the wrong conclusions, and leads to poor decision making.
All sales are not created equally, and reporting them as if they were moves a sales team away from a true meritocracy, which is a necessary element of a high performing operation.
If you want to measure the true performance of the individuals on your sales team, or simply improve the credibility of your sales reports, look for ways to evaluate how these three variables affect your particular business:
Difficulty of sale.
Are you reporting new business the same way you are reporting renewal business? Are you reporting cross-selling the same you do acquisition? Are you reporting a first-time winback the same way you are a ten-year repeat customer?
You won’t be able to categorize sales according to difficulty at the individual sale level, but you can develop the broad categories that you and everyone on the team know differentiate sales from one another.Value of sale to business.
Sure, we’ll cash a customer’s check the same way, but that doesn’t mean every sale is of equal value to a business. As an example, a business that can’t reliably secure new business is going to fetch a much lower valuation than one that can consistently acquire new customers.
If you invest time into assigning different sales the proper valuation in reporting, it will help you assess the value each salesperson is really adding to the business.Preferential distribution.
If lead distribution is any part of your sales operation, the way those leads are distributed has a huge impact on the outcome. Even if you aren’t actually distributing leads and your salespeople have assigned territories, make peace with the fact that territories are not created equally — and pretending they are affects your credibility to the team and the team’s morale.
Assessing distribution objectively can be difficult, especially if you’ve been in the business for a long time. One way of going about this is simply asking the team for feedback. Another is enlisting the help of outside help (shameless plug).
There may be other factors to consider, to be sure. What matters more than the specific practice is the principle:
Are your reports three dimensional, meaning they are telling you who is contributing the most value to the business and who is performing the best given the hand they had? Or are they two dimensional, reporting numbers in an incomplete and limited way?
If your sales reports are going to drive good, data-driven decision making, and have any credibility within the team on performance relative to one another, they have to reflect the reality of the business — the full reality.
If you are in a sales leadership position, or aspiring to be, feel free to schedule time with me for free leadership coaching by visiting here.
