Why bother with sales reporting?

Recently, I met a very impressive young sales manager. Let’s call him Sam. Sam knew his sales stuff. He knew what to look for when it came to accurate reporting of sales data. Nothing too complicated.

He was conscious of focusing on the key measures and not overloading his sales team with too much reporting because he wanted his sales team out there selling instead of being glorified administrators.

Sam is my kind of sales manager. There for his people and his company making sure that his sales team knew exactly what was expected of them in terms of targeting the right kind of prospects and clients, knowing what to sell and how to sell based on value not price. These salespeople also knew what was relevant to their clients and markets and how often they needed to be out there to deliver the results expected of them.

Sam is a great believer in empowering his people with the right information and resources so they can make informed decisions and self-manage their sales portfolios. The sales dashboard his salespeople complete is succinct and to the point.

Sam, in turn, then sends succinct sales reports to his senior managers so they can synthesise his team’s findings and results to allow them to make informed decisions about the broader sales strategy and its effectiveness.

Sounds ideal, doesn’t it?

But sadly his reality is not so rosy.

Sam is very frustrated, as the succinct sales reports he sends to senior management are only one part of a more complex set of reports he is required to fill out and send on a weekly basis. In his opinion, these complex reports add no real value beyond his actual sales report and are a complete waste of time. Why does Sam feel this way? Firstly, no one has ever explained why the complex reporting is required and what it is used for, and secondly, he suspects that no one in senior management is reading the reports anyway.

How does he know this?

Sam conducted an experiment late last year. He submitted the same sales report narrative week after week, changing only the actual sales numbers. As yet no one has called him on it. His only conclusion – no one is reading his reports.

Is Sam embroiled in reporting for the sake of reporting? Most likely.

Many organisations are obsessed with tracking data like sales forecasting, pipeline management, CRM compliance, sales results, NPS (Net Promoter Scores), motivation, behaviours, and so on. They are fixated on the plethora of software reporting solutions in the market place often foisting them on their sales teams only to make matters worse. For instance, indecision is a big factor affecting many buying decisions and this is affecting sales forecasting and pipeline numbers. Another factor is the erosion of margin in many sales deals as businesses try to fight ‘the race to the bottom’ dramas. 

With all this disruption in the market, senior management are desperately trying to make sense of the world and predict the future and stay in control, which means they often throw linear forecasting models into a sales world of approximation and complexity. This is an attempt from senior management to allay their fears about predicting the future of their revenue, which is only serving to make everyone’s lives more stressful not less.

Reporting, especially sales reporting, is becoming a nightmare.

Reporting is only useful if it helps us make better, more informed decisions about the effectiveness of our activities and helps us sell better. Sales managers need reporting that helps them make sense of the outcomes of their salespeople’s activities. 

Salespeople and sales managers need to see that their reporting counts for something and adds value, if not don’t report on it:

• Does my sales reporting help me manage my sales activities better to make better sales, better customer retention, better ROI, etc?
• Does my sales reporting help me see who are my more profitable/loyal/repeat business accounts/etc?
• Does my sales reporting help me inform senior management about the outcomes of our sales strategy initiatives.

Here’s my reporting validity test   

I advise people like my savvy sales manager Sam that if they are asked to report on something but believe it is not being measured, to simply not report on it and see what happens. If no one follows up on it then it’s not being measured.  

This doesn’t mean you don’t report at all.

Limiting the number of measures of performance is an important design principle in any sales oriented performance measurement program. Simply put, too many measures diffuse the impact of any one of the measures and adds confusion when what we really need is clarity. Less is more in this instance.

So what should we report on?

Measure the things that matter.

Remember, up to 80% of selling is outside the salesperson’s direct control. 

So we need to measure input measures (the things salespeople can control) and then output measures (the results of our activities).

Input measures are made up of type and quantity of activity and the quality of activity.

These are the areas that can be directly managed by the salesperson, reported on, trained and coached.

Type of input measures – the following are examples of types of activities that can be measured and reported on; however, they need to be executed as part of an overall sales strategy:

• Leads and referrals developed
• Prospecting calls made
• Client meetings had
• Proposals developed that properly address the priorities of the clients
• Deals in the pipeline
• Up / cross sales discussions
• Customer inquiries acted upon
• Key account management calls / meetings
• Account reviews had
• Networking and industry events attended

The quality of activities would be observed in action looking at how well the salesperson performs these activities. Sales managers can really make a significant difference to their salespeople’s results if they invest the time in coaching, training these activities and then getting salespeople to take ownership of measuring their quantity and quality of their sales activities. Any self-respecting salesperson knows that what they control is their sales activity input.

Now that we have some traction, we can measure the effectiveness of our sales activities and how they affect a salesperson’s sales ratios i.e. ratio of contacts to viable prospects; ratio of prospecting call to client meetings; ratio of clients meetings to proposals submitted; ratio of proposals submitted to closed sales for instance. Once we understand the Input measures then we can see their effect on the Results or Output Measures.

Output measures/results can include:

• Overall sales made including sales with new clients and existing clients
• Sales revenue i.e. revenue of customers by segments
• Sales profitability i.e. profitability of customers by segments and segmentation of customers by profitability
• Sales growth i.e. in individual customers, segments, etc.
• Sales quotas
• Customer attrition
• Sales by product/solution or region
• Average deal size
• Market share & growth

As stated any measures need to be part of a clear sales strategy and purposeful approach to market.  

In summary this means:

1. First, some measure of impact – revenue or sales growth – to the company or business; specifically market segments and key accounts; etc.
2. Second, an objective-driven component that focuses on the outcome of client account management based on the strategic imperatives of the business unit, company or division and the input measures of the salespeople concerned.

These two meta factors are measurable and positively impact the business.

Remember, everybody lives by selling something.

Sue Barrett is the founder and CEO of the innovative and forward thinking sales advisory and education firm, Barrett and the online sales education & resource platform www.salesessentials.com.