Quality PREsults Lead to Desired REsults

In sales (and sales management) we tend to fall into the habit of measuring our successes based on what has already happened – closed sales. After all, that is what generates the commissions (or keeps management off our backs!). It’s not that we don’t understand what it took to get those deals closed, we just find ourselves getting to a point where we feel confident that all of the early work is going to get done, so we concentrate on our booked business in order to track the money we can expect to collect in the coming weeks or months – it’s human nature.

When we focus on reports or spreadsheets that tell us what has already happened we are only seeing what is referred to as “lag” measures. A lag measure is defined as a measurement of a result you are trying to achieve – something that has already happened. It certainly is important data to have and review since it is the final indicator of whether our efforts have been successful – or not. But using lag measures as the primary method for managing your sales activities – or monitoring the activities of your sales staff – falls under the category of managing your business by looking in the rearview mirror. While it is important to see what’s behind you and where you’ve been, it’s critical to have a wide, clear view of where you are going. That’s why your windshield is so much bigger than your rearview mirror.

Focusing on what’s in front of you enables you determine where you are – like seeing mile markers, landmarks or signs – which then allows you to determine if you’re making progress and judge how quickly you might reach your destination. These are called “lead” measures. Lead measures are defined as activities that foretell a result. They are predictive and influenceable.

I prefer to use the terms presults – which I coined to indicate a lead measure – and results for any lag measure. In selling we all know that seeing enough of the right prospects and customers and having impactful conversations with them is key to sales success. We also know that those contacts need to result in opportunities (proposals), which then need to be converted to closed deals – Sales 101.

Early in our careers we may do a reasonable job of setting contact goals and monitoring weekly customer contact activity. We may even compute the level of opportunity funnel we need in order to have the best chance at hitting our sales goal. But all too often, as we gain experience and success, we tend to abandon many of the presult habits we had when we were newer in our selling role, focusing more on the results – closed sales.

As sales managers we often make the same mistake. Once a new sales hire is trained and begins seeing success, managers may assume that they are on their way and that they know what activity level is required to maintain their success. We monitor sales reports (lag measures) to make sure the business is coming in, then when the result is not there we have to try and diagnose what happened.

Focusing on Quality Presults

I’ve never been an advocate of the philosophy that sales is a numbers game. To me that implies that anyone can succeed in sales if they call on enough prospects, which diminishes the role of skill in the profession. However, I do agree that successful sales professionals must have enough of the right activity to ensure that they are in front of plenty of legitimate prospects each week. That would be the first quality presult any sales person or manager should measure. Let’s look at the full presult list:

• Once activity targets are established, measure the number and mix (existing, new prospect,       competitive) of customer calls made each week.
• Compute close ratios, then determine the required opportunity backlog needed in the funnel to   provide the best chance of goal achievement.
• Track weekly opportunity (proposal) generation to ensure adequate funnel levels.
• Monitor “funnel movement” to allow for accurate forecasting and troubleshoot sales performance   deficiencies.

The beauty of this type of measurement strategy is that it allows you to predict the future. When sales call activity drops and funnel levels dip, you can predict a sales slump. When activity levels are high, and the funnel is overflowing with opportunity there is a good chance goals will be achieved.
I mentioned earlier that activity alone does not guarantee success. Selling requires skill and sometimes it is a lack of skill, not a lack of activity, that requires attention. But if you are monitoring the presults, you can more easily diagnose where a skill may be lacking and apply the needed training or coaching intervention.

I’m constantly amazed by the number of our clients who measure their sales operations purely by reviewing results or lag measures. By the time they recognize a deficiency or problem it is too late to act to fix the issue in the short term. Any strategy they employ will most likely take months to generate improved performance. By making a simple adjustment and focusing more attention on presults, or lead measures, they could begin to act more quickly and head off problems with sales results.