According to Jason Jordan and Michelle Vazzana in Cracking The Sales Management Code, 83% of what is measured (typically in CRM systems) cannot be managed. Jason makes the valid point that you can’t manage results, only activities, and that we should focus on coaching and managing the right activities that feed into objectives (KPIs) that in turn create revenue and margin results. Most of the published research nominates the CRM failure rate at more than 30%... but it has nothing to do the CRM technology. Every organization needs a CRM; you have no chance of being truly customer-centric without one and it should be the platform on which process automation, research, planning and deal coaching occurs.
I’ve worked in large corporations where the almost insane focus of the senior executive team is on the forecast call… endlessly asking the same questions of the sales person, baiting them to go and blow the deal with inappropriate pressure or to train the customer about end-of-quarter discounts that will always be available (despite hollow threats to put the price back up). No wonder so many CRM implementations become manage-up tools with poor data and no real transparency.
Want accurate forecasting? Understand the customer’s process and timing for the necessary approvals and administrative tasks. Want more revenue? Coach and manage the smartest activities that create and progress opportunities. Here are the 8 things I recommend you manage in a CRM for complex B2B solution selling because there is an ‘activity lever’ you can pull.
1. Qualified pipeline as a percentage of target / quota. I recommend 3-5 times coverage and if it’s low, the sales person can execute activities to build the pipeline
2. Opportunity qualification score. A qualification snapshot should be done progressively as deal moves through stages. Poor scores should create actions to gather intelligence or execute tasks that improve the situation
3. Number of meetings that progress the sale (with call plans completed). Call plans should be forms within your CRM, not Word documents, and the meeting notes and actions from the call should also be logged in CRM.
4. Discovery completed. This is different to the qualification process. It’s all the information you need to be able to properly propose a solution. Again, this should reside within your CRM so that when you move from selling to implementing, and then to supporting; you have a single view of the client for all aspects of customer lifecycle.
5. Number of opportunities reviewed by sales manager. Again within the CRM with your sales methodology integrated (TAS Dealmaker and Pipeline Manager are excellent plugins for Salesforce CRM). This will be evidenced by a new qualification snapshot score and actions created.
6. Proposals submitted (accepted and validated by the customer) following documented discovery process.
7. Deal time in each stage (excessive time in a stage reduces likelihood of winning). This is the most difficult in the list to ‘pull an activity lever’, but we should nevertheless understand the customer’s process and timing.
8. Close plans validated by customer. Close plans are the secret to accurate forecasting. Best practice is to rename the document to ‘Project Alignment Plan’ and then sit with the customer to validate that we are all on the same page and can meet their expectations with resources and timing. (eg; have our legal people available for contract negotiations at the right time, have our project manager available for kick-off planning when needed, etc.)
Although you cannot manage what is not measured, Jason taught me that you can't manage everything you do measure. If you can't manage the metric, then is it just clutter? Decide what’s important and create focus and task clarity for your team. Measure and drive the activities that achieve sales objectives that then convert to revenue and margin.
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Main Image Photo by Flickr: Ken Teegardin