One of the ways an organization can increase sales effectiveness and therefore generate more revenue is by understanding how successful salespeople operate.
Yet this is easier said than done. Successful salespeople are often too busy to want to sit down and explain exactly what they do. They may also not be inclined to share their methods because it represents unique value to the organization. In many cases, good sales reps prefer to keep their cards close to their chest.
With this in mind, we have to start looking at alternative approaches to capture this learned behavior. One approach is to collect data about the sales process and look for patterns in this data that can help us determine what works and what doesn't.
We certainly know the most successful salespeople simply by looking at their contribution to revenue generation. That data is clear. But what about the effort it took to create this revenue? Can we look for patterns in this activity? Fortunately, Stephen Covey's book "The 7-Habits of Highly Effective People" provides us with a guide.
The idea is to attempt to quantify what good reps tend to do (the 7-habits) and then compare these metrics to the rest of the sales organization in order to understand how large a gap exists.
You can learn more about Covey's seven habits here. Below is a breakdown of each habit, focusing on the specific metrics and key performance indicators you can collect that can help us understand how the sales team stacks up.
Habit One: Be Proactive
Focus and act on what can be controlled and influenced instead of what you can't
In sales, being proactive is a requirement. You cannot expect a sales opportunity to fall into your lap. So how do we measure proactivity? One way is to analyze the amount of time a sales opportunity sits in a specific stage. In addition, we can look at the number of calls, emails, and meetings between stages. Can we learn something if we compare the level of activity of high-performing sales reps to the rest of the sales team? Can we find outliers?
Stage history data extracted from the organization's CRM system can provide interesting analysis. In this example, a line chart compares a specific sales rep, "Willy Lowman," to an average of his peers. Willy averages a higher stage duration across several stages (bad) but does above average at the Negotiation stage:
Compared to the worst-performing sales reps, Willy is at the bottom of the rank when it comes to the Value Prop stage:
From an activity perspective, Willy Loman performs below average on the initial sales stages but meets and exceeds activity levels in later stages:
Finally, comparing Willy to the best performers, we can begin to see the chasm widen:
Armed with this information, we can deduce that Willy needs to step up his outreach campaigns in the early stages of a sales engagement. The best performers work proactively, and this shows in their activity levels.
Habit Two: Begin with the End in Mind
Define clear measures of success and a plan to achieve them.
Every organization strives to shorten the duration of the sales cycle. However, the number of variables involved is limitless. What if we look at it from the "End in Mind" perspective? How creative is the sales rep in positioning the right product mix and the right price to the right buyer? To achieve this perspective, we need to analyze the relationship between buyer and product. A good sales rep will have a solid understanding of the buyer's purchasing habits and needs. This knowledge can influence the duration of a sales cycle.
The challenge becomes, how do we arm the newer sales reps with this level of knowledge and intuition? The answer lies in a recommendation capability in which a platform can make a contextual recommendation to the salesperson as they interact with it.
An example of this type of recommendation is Amazon, where the site makes recommendations to the user based on past purchases or the previously viewed products. The Process Tempo Recommendation Engine can bring this capability to a sales organization with minimal effort.
Examples of recommendations:
What products cross-sell best with this one?
What products has this customer not purchased yet but may be interested in?
What products is this customer likely to purchase?
The most basic approach to a recommendation system is rooted in a concept called "collaborative filtering," which is a method that evaluates macro-level patterns across customers and products. Armed with a recommendation capability, newer sales reps can potentially piece together offers that their customers may find appealing.
Habit Three: Put First Things First
Prioritize and achieve their most important goals, instead of constantly reacting to urgencies.
In this case, we can judge the sales rep's efforts by looking into their historical sales pipeline, specifically the top of the funnel activity. What tends to happen over time is that this funnel becomes smaller and smaller as urgent matters consume more of the sales rep's time. Note: this is not necessarily the sales rep's fault. For example, management may be implementing process changes that negatively impact salespeople's working hours to dedicate to this effort. An activity trend chart will indicate if putting first things first, i.e., sales funnel development, is still a priority or not.
This example shows that the average top-of-funnel counts are relatively flat over the last six months, with only a slight dip in May. We can see that Willy Lowman is consistently below average (at least until May). This may indicate that Willy needs to "Put first things first."
Habit Four: Think Win-Win
Collaborate more effectively by building high-trust relationships.
Habit four is about building a solution that appeals to both parties. Covey stresses that a win-lose or a lose-win solution will only end up leaving one side of the equation feeling sour and, therefore, stress the relationship. A successful sales rep will carefully capture the buyer's needs and craft the best proposal that suits both parties. The question becomes: what metrics can we analyze to deduce if our reps are collaborating at the level they need to?
Using the previous concept, we can analyze the activity trends of the best sales reps across the entire sales lifecycle. We recall that Willy Lowman consistently shows less engagement across the sales lifecycle than the higher-performing reps. He is nearly on par with some of the worst-performing reps:
Good collaboration should happen in real-time with your sales prospects. By analyzing the number of meetings or calls held at each stage, we can see patterns. This analysis shows that the best reps are very efficient, requiring fewer calls or meetings to advance a sales engagement to the next stage. Does this mean less is more? Mr. Lowman is keeping himself busy but is he working hard or smart?
Habit Five: Seek First to Understand, Then to be Understood
Influence others by developing a deep understanding of their needs and perspectives.
Habit five is a critical element in sales and will be a challenge to quantify for analysis purposes. Still, there could be patterns worth looking into. For example, if a sales quote goes through an odd number of revisions, could this indicate a disconnect between buyer and seller? What if the buyer has a large number of returned goods? Has the buyer changed their frequency of purchases?
A number of simple queries can help us determine which reps stand out in these categories. In this image, we can see that Willy Lowman ranks near the bottom in the number of order revisions but ranks average when it comes to returned orders:
Habit Six: Synergize
Develop innovative solutions that leverage diversity and satisfy all key stakeholders.
Successful sales reps tend to be very selective with their time, but they also know they need to engage with as many client personas as possible. Balance is key. How do they attack a deal to minimize risk to the deal itself and increase stakeholder engagement? In complex sales engagements, there are often multiple personas involved, each with their own needs and egos.
Using CRM data, we can evaluate the time high performers engage with each client persona throughout the sales lifecycle. In the below chart, we see that the most successful sales reps engage with the Budget Owner much more than other reps. They also spend much less time with the SME persona and engage with the C-Suite at higher levels.
Habit Seven: Sharpen the Saw
Increase motivation, energy, and work/life balance by making time for renewing activities.
The last of Covey's Habits could be considered the most important. After all, how can one expect to be effective at any effort if their mental, physical and emotional state is not 100%? This habit dovetails closely with putting first things first (Habit #3). Sadly sales leadership often doesn't attempt to track this metric. Perhaps it is time it should?
Ideas:
Schedule into the monthly work schedule for self-improvement and work/life balance. Ask team members to track this activity in the CRM system
Schedule quarterly training sessions
Encourage employees to block times on their calendar for development time and reduce the number of unnecessary meetings
Summary
It is important to remember that a large amount of empirical evidence is required before correctly judging a sales rep's performance. A handful of deals won or lost is usually not enough. However, it is essential to remember that humans are creatures of habit. Early signs can indicate a particular behavior that either needs to be celebrated or corrected.
When using data to analyze performance, it is vital to start with a baseline. In this blog, we use Stephen Covey's 7-habits as a guide. Perhaps with this focus, your sales organization can think of how data can be collected and used in a way that encourages improved outcomes and increased revenue.