Metrics? We no need no stinking metrics, do we?

As a salesperson, I hated metrics; unless they were in my favor.  As a manager, I can't live without them; well, the important ones anyway.  And therein lies the rub.

To me, there are really only 5 metrics you need to track to effectively manage a sales team without micromanaging:

1. Number of 1st meetings - tells how many new opportunities should be entering the prospect funnel (based on your typical conversion rate of 1st meetings to qualified prospects)
2. Six month rolling pipeline - tells me how many of the first meetings are converting to valid sales opportunities
3. Average Selling Price (ASP) - tells how well the salesperson is optimizing their sales opportunities
4. Closing Ratio - tells quite a lot about the salespersons closing and forecasting skills
5. Total Sales - at the end of the day, this is the number ALL salespeople are ultimately measured against.

Certainly, there are other metrics that come into play during the sales process, especially if you truly practice value selling.  Additionally, you can also use the Sales Handicapper (soon to be on this site) from yours truly to gain a more realistic view of the match between your products/services and your prospect's needs and culture.

In today's highly virtual world, however, when "management by walking around" is not as practical as in olden days, you have to come to grips with one very real truism; you can't manage work ethic!   That is why none of the metrics above measures "activity" other than the first meeting.   If first meetings are being reported and the results don't show up in the pipeline report then you have a salesperson who is either not reporting, lying about the numbers or can't sell.  In either case, you can gain a strong indication of their progress within the first 90 days!

Non reporting is easy to fix. Usually a simple reminder that the individual can either report accurately or have daily meetings with you is sufficient to encourage the proper behavior. Lying about their activity or lack of sales ability is a different matter.  Each situation needs to be handled differently and won't be addressed in this column.  Suffice it to say, if your time is tight and your task is large, then limiting your metrics to the ones above should give you all the information you need to tip the odds in your favor of hitting your quota .