Effective sales performance tracking begins with clear, defined goals that are aligned with your company’s core objectives for the year. But general goals only allow for a general performance gauge. To create a detailed and deliberate focus for development, you must identify specific, measurable goals within the product lines and departments that set your company apart from others. Good performance evaluations go beyond bottom-line sales and margin results and into the details of how a salesperson achieved these results and what triggers can be pulled to improve performance. Reports should be streamlined so you can view a snapshot of sales history but also formatted so the numbers can be evaluated from many angles to confirm progress or highlight areas of focus.
Begin evaluating a salesperson’s book of business by identifying customer types (remodeler, deck builder, home builder, commercial, tract builder, etc.), the percentages of revenues and margins by these customer types, and the number of assigned accounts that engage in high-and low-activity buying.
Examine the results of each customer and segment, developing a strategy to adjust where needed, such as the amount of development time required per account. Having a diversified book of business is good, but having the right mix is crucial when maximizing return on time invested. In some cases, simply shifting customer mixes can boost sales and margins.
Next, evaluate the core of a salesperson’s performance by tracking not only the overall sales and margin objectives against budget, but the specific measurable goals identified earlier. How does each account perform in overall sales and gross margins? What products are being sold? What product lines should be sold next? And how is the customer performing compared with similar ones?
Check also the product mix performance by category. What margins are these being sold at? Compared with like customers? Pursue “open opportunities” that the salesperson may have not yet captured within each customer and product line.
After that, compare these results to similar sales teams, both in terms of size and customer mix. How do they rate? Compare against the company’s proven benchmark. Where do they rank? This gives the salesperson a snapshot of his or her individual business performance while also providing a ranking of sorts as compared to the company benchmark.
Both sales people and managers need to take time throughout the year to utilize the tools and reports periodically. While this may be done informally each month, I recommend a more structured performance meeting at least quarterly with each salesperson or team. Write a summary of the results and actions implemented so you can track progress. Use the quarterly meeting as a coaching session for some and encouraging solid results for others.
Throughout this process you will begin to see actionable results come from implementing the strategies recommended above while learning new “levers” to pull for increased results in the future. Always remember to identify the accomplishments during these quarterly reviews, including contributing activities such as product knowledge trainings and personal development activities.
Remember: Results tend to improve when specific areas are continuously measured.