Tag Archive for: ROI

Not Reaching Your Sales Goals?

Wondering why your business isn’t reaching its Rev Gen goals? Here’s the things you should be looking at to diagnose what’s at the heart of the problem…

 In the realm of sales KPIs there are leading and lagging indicators. Lagging sales indicators such as revenue sold versus sales plan are the ones most all business owners keep their eye on.  However, leading indicators are where the real money is. Measuring the incidence of those things that cause a sale to happen will provide rapid and accurate insight into where your revenue will be in 30-60-90 days.  Further, it will give you time to course correct to hit your goals.

The leading indicators you should track for each of your sellers are sales velocity, opportunity size, sales leads researched, sales leads reached out to, planned buyer facing sales meetings and proposals issued.

Sales velocity is a measure of how quickly an opportunity converts from when it is identified as viable to when it is closed won.  This number varies significantly depending on your average deal size, the product you’re selling and the market you’re selling it into. Smaller dollar value and less complex sales should close faster. Higher dollar value and more complex sales with multiple decision-makers will close slower. Do a backward analysis on how many days your opportunities remained in the sales funnel to establish your benchmark, and then strategize as to how you can make that number smaller.

Opportunity size refers to the dollar value of your average sale.  When calculating your average, take out deals that are unusually small or large as they will skew the numbers. The higher your average deal size [relative to the price point of your products and services] the better. The Land and Expand sales approach is a good one but if your initial Landing sale is very small it means you are having to sell to the same account multiple times in order to Expand and generate the revenue you could have secured in the 1st sale.

Sales leads researched and sales leads reached out to track your sales team’s top of funnel sales activities. This work is the heavy lifting of selling and most sellers don’t enjoy doing it. Once they get viable opportunities they will neglect filling the top of the funnel. This of course is a major strategic and tactical error. Having a lead funnel that is robust greatly increases your Sleep at Night Factor because if an opportunity doesn’t close then no worries, there are other viable ones right behind it.

Planned buyer facing sales meetings is of course a big indicator of sales success. A quick look into the calendars of your sellers will give you instant insight into the potential for their sales productivity. The best sellers will have ample meetings scheduled in their calendar. Poor performing salespeople will often have empty calendars for the upcoming week.

Proposals issued represent the number of sales opportunities your team is bringing to the point of closure. Be aware that a higher number is not always better. A seller who is providing quotes too early is likely skipping several important steps within the sales process and in doing so will decrease their close ratio.  This is where knowing your close ratio [number of proposals issued to closed won deals] comes in handy.

CRM of course allows for simple tracking of all these leading indicators. It’s been my experience that within the first 1 or 2 weeks of tracking your leading indicators you will get big insights into the sales effectiveness and efficiency of your team. There’s lots of nuance to setting up these measurement structures and rolling out. If you need any help around how to do that I would be happy to chat with you.

Hiring Sales Overachievers

Hiring Sales Overachievers

Q:  What is the [not so] secret to your company over achieving its sales goals?  

A:  Hire amazing salespeople [of course].  Here’s how…

Ever thought you’ve hired a great sales person only to see them underperform and exit the organization in 9 months? Aside from being frustrating, this is an expensive experience. Paying 9 months of salary [plus any commission guarantees, benefits etc.] for no net new revenue is painful.

At its best, hiring has its inherent risk that the party you’ve hired is not “the right person being put in the right seat on the bus”. To make a hiring decision even harder, any salesperson worth their salt will sell you on them, and next thing you know they are on the payroll. There are some specific things you can do to increase the likelihood you can hire a sales winner.

This might sound weird, but hiring based solely on sales track record is a mistake. What was sufficient to make a salesperson successful at another company, even if it’s in the same industry, may in fact be different than what’s required to be successful at your company [I’ve seen this numerous times]. Sales track record is of course important but by no means is the only criteria on which you should base your hiring decision.

Hiring for a salesperson’s Rolodex [contact list] is also something I’ve rarely seen work. I’ve watched companies overpay for seemingly well-connected salespeople only to find that after they come on board the new customers from old contacts don’t materialize.

Great salespeople, regardless of industry, typically share the personality traits of resilience, initiative, competition, achievement orientation, courage and high accountability.

A resilient salesperson will be able to handle rejection inherent in the job. One who has great initiative will make things happen when others cannot. One who is competitive and achievement oriented will be internally dialled up to beat sales goals. Those who possess courage will be willing to try new things and adapt towards being successful. Those with high accountability will not blame market conditions and the like for lack of sales success. My guess is you can easily see that the salesperson who does not possess these traits and characteristics has a lower probability of success.

How to determine if your candidate has sufficient levels of the traits and characteristics required for sales success? Google “behavioural interviewing” and you will find all you need to know. Asking questions that begin with “tell me about a time when…” is magic. Proceed to ask about when your candidate had to draw upon the success traits and characteristics.  If they in fact possess them, they will readily come up with examples of when they’ve leveraged them. If they don’t possess them, their examples and stories will be weak.

Behavioural interviewing is just one part of the hiring equation. I generally recommend a 4 step hiring process comprised of an initial interview to screen for overall fit, a 2nd interview to assess personality traits and characteristics, a 3rd interview for some type of “sell back” interaction so you can experience what your buyers will experience and finally an interview in which the candidate presents their 30-60-90 day plan to tackle their territory.

The 1st interview is pretty standard and the 2nd is described above. The 3rd interview involves asking the candidate to sell you something. The purpose of this interaction is to determine if they understand how to conduct a sales call, ask great questions focused on uncovering buyer needs and close the interaction. The 4th and final interview allows you to understand your candidate’s business literacy and their ability to make a presentation with something at stake.

Of course this hiring process is modified and adjusted based upon the sales role being hired for. The approach would be different if hiring for an entry-level position versus hiring for a Senior Accounts role.

There is a meaningful amount of nuance to conducting this hiring process. If you would like further detail, please let me know. I’m always happy to help.

Getting to Reliable and Predictable Revenue Growth

Here’s a silly question… Would you like your company to hit its sales and revenue generation targets reliably and predictably? I’m going to go out on a limb and say the answer is yes ????.  There is a very simple recipe to make this happen.  Implement it and you will be golden. It’s called The 4 R’s. Here it is…

If your sales team does The Right Things, The Right Way, To the Right Degree, at the Right Time your company will hit its revenue generation goals reliably and predictably.

Here’s how it works…

The Right Things: Having a detailed process flow that inventories all of the “right things” your sellers should be doing over the course of every sale will ensure that each sales opportunity is given its’ chance to convert into a happy paying customer. Sales process steps being skipped is the death-knell for a deal.  If you’ve ever done a post-mortem on a lost opportunity and said “if we’d only done this one extra thing we would’ve closed it” you’ll know what I mean.

The Right Way: If your sales team is doing all the Right Things but in the wrong way then of course results will be variable. For each of your “Right Things” have a corresponding “Right Way to Do It”.  The right way usually comes from a] studying the sales that you have won and distilling out best practices for each of the sales process steps and b] studying the ones you lost, finding the tripping points and taking them off your Right Way list.

The Right Degree: Once your team is clear on what to do and how to do it this 3rd factor relates to how much of each thing they are doing. If your team applies all their energy to closing deals and none to filling the top of the funnel you know what happens. Sales is very much a balancing act of doing the right amount of each thing so that you achieve optimal sales velocity and deal size.

The Right Time: Prime Selling Time refers to sellers reaching out to buyers and conducting meetings when those buyers are available. If you are doing the right thing [for instance sales lead research] at the wrong time [in the middle of the business day when you should be having buyer facing meetings] sales results will suffer. Honouring Prime Selling Time helps to focus your team on executing sales activities at the time of the day, week or month that will give them the highest likelihood of revenue generation productivity and success.

The 4 R’s recipe is by no means complicated. The thing about it is that you need to build out the recipe based upon your sales situation. If your company sells airplanes your 4 R recipe will look much different than a company who sells office supplies. If your company sells to senior decision makers at Fortune 500s your 4 R recipe will likely look much different than someone who sells to local SMEs.

As I know you have already guessed, the secret to making the 4 R’s work for you and your company lies in clearly defining what the Right Things, Right Way, Right Degree and Right Time are [to the granular level] for your company in your industry and geography.  Accomplishing this requires a focused and purposeful effort. It doesn’t happen in a one hour meeting. It might take several meetings over the course of a month to capture all of the elements and refine them into your 4 R’s recipe.  Distill the map down to its elements, embed it into your CRM, let your sales team bring it to life and watch meeting your sales goals become a thing of reliable and predictable beauty. 

If you have any questions about this process and how to undertake it please let me know. I’m always happy to help.


3x-5x Your ROI

The Bottom Line: A business owner should have their sales team generating at least 3x-5x their total compensation annually.

The Pain: When some business owners invest in hiring salespeople their primary measure of ROI is simply relief. “Thank goodness I finally have someone to take care of sales in my business!”.
A common trap/pitfall at this point is to bask in this relief and simply expect the sales team to go out there, drum up business and bring it home.

Nine to 12 months down the road is a frustrated business owner who’s invested significant money in a sales person[s] who did not perform. Not only is the compensation money down the drain, the expected revenue lift did not occur, which of course negatively impacts pretty much every area of the business.

The Fix: Before hiring salespeople set out their revenue goals. If your candidate was a solid fit they should produce the amount that you paid them all in + their benefit costs etc. at minimum in their first year. Good would be 2x that number. After 24 months that person should be producing at least 3x that number. Good would be 5x that number. Considering this will inform the compensation level at which you can afford to hire. It becomes quickly apparent that the best way to compensate a salesperson is to have a medium level base salary with an uncapped commission program. This will keep your fixed costs low and when your seller performs, you can then afford to pay them handsomely.

Next, document your sales process as it exists today. Teach it to your new sales hire[s]. Work with them weekly [yes, weekly!] to optimize it using Deal Opportunity reviews to understand its strengths and weaknesses and course correct as you go. Make CRM your one source of truth around sales. The mantra is “if it’s not in CRM, it didn’t happen”.

“But what if I have a sales team already and they are not producing 3x-5x total compensation?” This of course is a bigger nut to crack. At this point you may need to reengineer a] your sales compensation plan, b] your sales team composition, c] your sales process, or d] all of these.

A business owner is after a sales compensation plan with a lower fixed cost [modest-based salaries] and a higher variable cost [a commission program that incentivizes appropriate selling behaviors]. This is a shared risk & reward model. When sales go up, the sales person is rewarded, as is the company. Note that not every sales person likes this model. If they are a true Hunter they’ll love it. Hire Hunters.

An Otherwise Good Walk Ruined

There is an old saying that goes, “golf is an otherwise good walk ruined”, referring to the frustrations inherent in trying to get that darned little white ball into the hole. Achieving revenue growth may not always happen as quickly as we’d like, but it should not feel as frustrating as golf often feels.

Are you frustrated with your rate of revenue growth? If yes, below are some common causes of Revenue Generation Frustration and how to mitigate them.

You: Business Owner & Sales Manager

Do you have a solid sales pedigree? If not, running even a small department can be challenging. Time ticks by and sales results don’t come.

If you are not a sales management expert, find a resource and get this task off your plate and onto theirs. Doing so is all upside – you lighten your load and have more time to do the stuff you love, such as leading the company into the future rather than being stuck in the sales weeds.

You: Abdicator

More dangerous than managing a function you aren’t an expert in, is not manage it at all. You just let your sales folks loose with a cell phone, laptop and gas card and wait for the sales revenue to come rolling in. This generally always fails. Invariably results are tepid and when you finally dig in you find you are down 6 months sales salary and your revenue future looks pretty grim.

The sales function requires daily monitoring to assess what course corrections are required for success in the ever-changing business landscape. See the advice in the paragraph above for how to fix this.


Your sales department should be self-funding. Salespeople should be generating between 3x to 5x their salary [depending on your margins] to be paying for themselves.

Take a good hard look and determine if your sales team is covering their costs. Factor in all costs related acquiring deals. There can be many reasons why they may be falling short [the comp plan is wrong, quotas aren’t right, headcount is too high, Lead Generation is too light]. Once you learn the underlying causes the fixes will be readily apparent.

No Leading Indicators

If your main sales success measures are primarily lagging ones [revenue generated, new implementations] you’ll continually be running behind. Switch to frequent measurement – think daily, weekly, monthly – of those things that cause sales to happen.

A few to look at are:

a) Pipeline Creation Rate: How many viable sales leads have been generated
b) Number of Sales Calls conducted
c) Number of Demos conducted
Identify your leading indicators and be rigorous in tracking them.

Flying Blind – No Dashboards

The value in measuring lies in using the data toward continuous improvement. Share the dashboards at minimum with the salespeople individually and review them together for coaching purposes.

Work together to determine what the numbers are indicating and what activity adjustments could/should be made to improve results. Depending on your appetite for a competitive sales environment you may share all results with the entire team.

No Recipe for Success

The number one cause of feelings of Rev Gen Frustration is a lack of a defined sales process. If no sales roadmap exists, the team may find their way more often than not, but it will be a continual struggle. This leads to lots of bad stuff [sales goals aren’t hit; commission payouts are low, and staff quit].

Hunker down with your sales team in a boardroom and capture a) your customer’s buying process and then b) your process to help them buy from you. This is the ultimate Rev Gen Frustration reducer.