How To Make Your Sales Team More Efficient
While I’ve never been a sales manager per say, I’ve been a customer support/engagement manager as well as a salesperson myself, and I happen to have strong opinions on the right, and wrong, ways to motivate and incentivize salespeople.
I currently have about 4 years of startup experience, most of which have been in sales. I’ve also been extremely fortunate to have had some very intelligent sales mentors who have given me incredible advice. And since I know what motivated (and what didn’t motivate) me and my peers in our sales roles, I feel somewhat qualified to offer advice on this topic.
Specifically, I’m going to touch on this question:
What metrics should we track in order to incentivize the desired outcomes of our team?
What are the desired outcomes for any sales team? Sales. Revenue. Deals moving successfully through the pipeline to “closed won.” Obviously, this is the top priority for all sales managers, the VP of sales, and the salespeople themselves – it’s why the entire department exists, and they keep the whole company alive. Sales teams are the lifeblood of any organization.
What then, is the issue? The main issue I’ve seen, from talking to several salespeople, sales managers I’ve gotten to know, and from my own experience, is this:
Sales teams often focus on the wrong numbers. They fixate on the wrong metrics, and therefore, unintentionally incentivize behaviors that are less than ideal.
For instance, call numbers are often used as a metric to hold salespeople accountable. And at first glance, it makes total sense! The funnel would go as follows:
CALLS MADE > DEMO SCHEDULED > DEMO COMPLETE > CONTRACT SENT > CONTRACT SIGNED > CLOSED WON
You can’t schedule demos until you hit the phones, right?
Correct.
Does that mean that call numbers should be something you force your salespeople to live or die by?
Absolutely not.
What happens if I can schedule 5 demos with only 20 phone calls? Should I then be scolded by my sales manager for missing the 60 calls per day goal? Why would we measure someone’s effort by the number of calls they make, instead of how effective they are? Arguably, if I, as a salesperson, wish to be efficient and targeted, I am naturally going to do more research and conduct less (but more fruitful), calls. Additionally, scheduling demos naturally takes more time than calling and getting no answer, so if your salespeople are being successful and scheduling quality demos, they’re not going to have as much time for the extra calls to hit the call numbers expected of them.
In fact, in a study I conducted with real sales data, I found that on average, conversion rates were dropping by 3% when call numbers were being met, contrasted with salespeople who were hitting 66% of the call number goal. Basically, making 33% LESS calls resulted in a conversion rate increase of 3%. And although both strategies resulted in the same number of demos scheduled on average, the typical deal size was typically 70% higher in terms of revenue when making less, but more targeted, calls.
In summary, being more targeted with calls meant 70% more revenue, an increased conversion rate of 3% more, and the same number of demos scheduled (but of higher quality than before).
Quality over quantity.
Now here’s the problem with that… If we don’t track phone calls, we have no way of knowing if our salespeople are actually TRYING at the end of the day. Although no human being can be understood fully through numbers and metrics alone, they do indeed help with the process of filtering out the people who work hard vs the ones who don’t.
So now we come to the dilemma. Sales managers need the phone call metrics to measure effort, and salespeople loath being “punished” for being targeted and efficient.
Here’s where I propose a new strategy. If less, more targeted calls, seems to be the goal, why not set up a system that incentivizes salespeople to make quality calls that lead to higher-revenue-yielding deals?
How?
First, I need to let sales managers in on a secret… I promise you – if you are counting call numbers, but commission is being paid out on something else (aka – not phone call numbers but actual revenue), your salespeople WILL find a way to hit that number. Even if it means making “junk calls.” Junk calls are phone calls made by salespeople when they need to hit a call number, and it consists of calling numbers that we KNOW will go to voicemail, a busy signal, or no answer. Just five minutes of junk calling will easily get me 10-15 calls to pad that call number metric.
Sound like a waste of company time? Indeed it is.
Instead, I propose rewarding salespeople for making high quality calls by weighting their call numbers with a point system. The point system would operate as follows:
- 10 points for every qualified demo scheduled
- 5 points for every qualified connection (1 step closer to a demo)
- 1 point for every voicemail left
- 1 point for every “no answer” or “wrong number”
- GOAL: 45 points per day
- (adjust according to your sales structure)
With this point system in place, salespeople are incentivized to make calls that are going to result in demos scheduled, and not “junk calls.” I could schedule 2 demos, connect with 2 solid candidates, and then make 15 more calls with no luck, and get my 45 points for the day. All in all, I’d say that’s a great day’s work, and I only made 19 calls. I spent my time on things that mattered – like qualifying the demos I scheduled, sending out the confirmation emails, and creating deals in our CRM. With my extra time in the day, I can set up some promising prospects to call the next day!
Essentially, this method of tracking effort rewards salespeople for being targeted and efficient, and disincentivizes junk calls – resulting in a more productive, rewarding, and happy sales team.
Now the problem is automated tracking. In a sales team, being able to track your sales team metrics via a CRM is crucial to measuring the health of the business. Most CRMs have no trouble tracking phone call numbers, but how are they going to track these point systems?
I’m not entirely sure how to implement this in all CRM scenarios, but I do know that most CRMS allow you the option to edit a property labeled “Call Outcome.” And once that’s done, you should be able to create a dashboard in your CRM to track the various call outcomes by each salesperson. After that, it’s basic math. I’m sure there are even ways you could export the data to Excel automatically (there are so many integrations available nowadays) and use formulas to multiply the call number data and highlight the point totals for each sales rep.
I’m not saying it would be easier than tracking call numbers… but I am saying it would result in the desired outcome: more “Closed Won” deals in your pipeline.
Coming from someone who fought the battle of having a call number to hit on a daily basis, I can tell you that being motivated to make actual sales rather than chase a call number makes all the difference in the world when it comes to incentivizing the right behaviors and achieving the best results.
Will it require a bit more work on the part of your SalesOps team? Probably… but just ask yourself: Are higher quality deals and bringing in more revenue worth it to you and your team?
If the answer is “yes,” then maybe it’s time to make a change 🙂
Until next time,
Hope Anderson
Photo by Alex Kotliarskyi on Unsplash
