Jul 10, 2012

Sales Metrics and Sales Coaching - Can You Have Both?

I recently participated in a Discussion on “Sales Metrics vs. Sales Coaching”.  The author of the article (http://ow.ly/bNcH3) makes a good point – keep sales people focused on a few things that they can perform at really well.  Don’t confuse them with too many variables.  Use their good behavior to coach others.  The following is my contribution to this Discussion, with later enhancements.

The topic is really “Sales Metrics and Sales Coaching”, not “vs.”!  Metrics and Coaching go together.  To paraphrase my great Italian friend Mike “one without the other is like a day without wine!”  Yes, most sales people when overwhelmed with too many measures simply self-select the ones they like and ignore the rest.  It is the responsibility of sales management to minimize this ambiguity.  Sales management must set the context within which their sales people can focus on a few key things and be wildly successful.  Ongoing, sales management would monitor what is going on both overall and with specific agreed upon measures.  Using insights from these metrics they would coach their sales people to greater success.

To keep this post a quick read it is focused on metrics.  Coaching, based on metrics, is another significant topic and deserves its own focused discussion.  For this post the scope of coaching includes results, behavioral topics, and out-of-the-box thinking on deal strategy.

In examining which metrics to use to track and to understand performance, it helps to examine the following general sales business process areas:
  • Opportunity Management
  • Lead Generation
  • Territory Management/Account Management
In addition to these process areas, sales management should include certain Expected Behaviors.  All of these are elaborated upon below.

Opportunity Management:

To simplify this discussion think of the Opportunity Management process as the flow through a pipeline – leads go into the pipeline (AKA Sales Funnel) and the outputs are hopefully wins, but also includes losses, cancelled deals, or opportunities that are not yet ready and should be turned back into leads. 

Life is better when the ratio of Leads to Wins is closer to 1-to-1!  

The company’s Opportunity Management process determines what happens inside the pipeline in taking the input (lead) and producing the desired output (win).  In general, sales management could examine several performance metrics throughout this process.  Having done so, they are positioned with the insights to coach their sales people to take actions that will correct or enhance desired pipeline performance.  Hence, “Sales Metrics and Sales Coaching “!

The pipeline is rich with opportunities for metrics and measures, and reflects the business context.  As noted above, a common mistake is to get carried away with too many formal sales person tracking metrics.  Following is an overview of good candidate metrics:
  • The output end – examples include:
    • Are win results meeting expectations, consistently over time? 
    • What is the yield from the pipeline (i.e., that ratio of Leads to Wins)? 

  • The actions within the pipeline are an important leading indicator to successful output, and provide great insights for sales manager coaching.  Two good examples include:
    • Velocity of opportunities through the company’s identified Stages of sales person’s pipeline.  Having lots of deals in various Stages is good unless they have been sitting for much longer than sales management’s expectations for a healthy deal velocity.  This results in a bloated pipeline!  Giving a false sense of well-being, but very misleading to all!
    • Appropriate balance of opportunities at each Stage within the pipeline that will produce a consistent stream of wins over time.  Does the sales person have enough healthy deals in his/her pipeline to produce results needed to consistently meet targets?  For example, if the sales person is only focused on a few deals at the closing Stages of pipeline then they are likely to face a “dry spell” in the near future (i.e., the pig-in-python effect).

Lead Generation:

Nothing happens unless an adequate number of leads enter the pipeline. Understanding the number of leads entering the pipeline is a key metric.  BTW: marketing people will likely want Sales to track the source of such leads.   Lead generation is a big effort, and some think one that requires a different skill set than most average high performing sales persons.  Many organizations utilize an inside sales center (or outsourced) to generate leads that are qualified and then turned over to the field sales person to confirm and work as a qualified opportunity.  If so, sales management may want to measure the number of leads generated by same and passed to field sales, the number rejected by field sales, and the number that result in a win.  (BTW – do you know how many Leads you need entering your Pipeline/Funnel in order to have the expected number of Wins?  Many underestimate this multiple!  See my earlier Blog entry on this topic http://salesopseffectiveness.blogspot.com/2011/05/great-debate-how-big-should-your-funnel.html).

Territory Management / Account Management:

This is where sales management has the opportunity to set the context for the sales person’s focus.  Just tossing a sales person into a general geography may be too ambiguous.   If sales management wants to penetrate several new industries, why not dedicate each sales person to one or two industries?  If sales management wants to sell a broad range of products/services, don’t burden each sales person with everything, particularly if the buyer level or sales approach is significantly different for each product/service.  If sales management wants to incent performance for a specific product/service, why not place a bonus on sale of same?  The outcome of this thinking is sales people are generally assigned one or more solutions (products/services) to sell into a focused territory.  Over time sales management would then inspect whether the sales person has assessed their territory and set a priority for accounts where they expect to find and close opportunities.  In other words, does the sales person have a plan for where their business will be generated?  In many cases sales people are assigned one or a few large accounts as their territory.  For these people having an agreed upon account plan for each is key to success.  These two points are key areas for coaching.  Getting the sales person focused within their territory/account(s) can reduce flail and keep their pipelines charged with good viable opportunities.

Expected Behaviors:

The above metrics reflect actions as consequence of following the company’s prescribed sales business processes.  In addition to these metrics, sales management should also inspect whether the sale person is behaving the way they expect.  Non-compliant behavior can seriously erode the effectiveness of business processes and sales success.  These are “softer” metrics, but can lead to effective “coaching moments”.   The following are typical questions that sales management should ask:  Is the sales person following the sales process that the company has prescribed?  Is the sales person interacting with client/prospect in way that the sale manager expects (i.e., make some joint calls)?  Is the sale person focused or does she/he “chase every rabbit that crosses the road”?  Hopefully coaching aligns expected sales person behavior.  In persistent non-compliance situations, sale management should identify appropriate formal measurements for improvement.  

In summary, all of the above metric areas can break down to many specific measures.  Too many with which to burden an individual sales person!  Sales management should analyze the universe of these to understand what is happening within their business.  Dashboards with drill downs are great vehicles to enable such analysis!  Having gained insights from this analysis the sales manager would select specific key agreed upon metrics and measures for focused coaching with their sales people.  These areas may change over time as various parts of the business process performance improves or weakens.  So – the entire metrics performance dashboard is for “Captain Kirk”, each sales person gets a dashboard with a few specific dials, and both are in sync with the readings, with Captain Kirk coaching as required!  …and all will live long and prosper!!


  1. Sales coaching is used to identify an employee’s strengths and weaknesses. Once those strengths and weaknesses are identified, the employee can then be trained to change the areas that need some work. Thanks.

    Sales Training Melbourne

    1. Ashlynn, thank you for your Comment. I take a slightly different view of Coaching. To me Coaching is all about the Sales Manager assisting the Sales Person to achieve a higher level of sales performance. This is done on a deal by deal basis and within the context of the sales process that the organization has implemented. It is based on a real opportunity; the Sales Manager Coaches the Sales Person on best actions to achieve the next outcome.

      I do agree with you that a by-product of this process will be the surfacing of each Sales Person's strengths and weaknesses. From these the Sales Manager will likely ask Sales Person to take some follow up or remedial training. BTW: in a perfect Implementation of CRM this initial assessment may be done as part of roll-out planning, giving the individal Sales Person a road-map of training to prepare them to be more effective. On-going it is the Sales Manager's role to Coach the Sales People and recommend further training based on observations during Coaching (or perhaps do some career counseling!).