You hit on two key points:

1) Sales metrics alone won’t do anyone any good. As I make clear in the article, the benefit of metrics is being able to analyze an individual’s strengths and weaknesses and then to address the specific issues that individual salesperson has. Metrics for metric’s sake is a waste of time and effort.

On the other hand, a well designed and instituted metrics system won’t decrease a salesperson’s motivation because they will understand the goal isn’t to use it as a club but to increase their value and their income.

Which leads to the second key point:

2) Most sales managers are not prepared to be an effective coach. Yes, there are managers who can recognize a salesperson’s strengths and weaknesses. And there are even fewer who know what to do with that information once they understand it.

This isn’t to beat on sales managers. The issue isn’t the manager, it’s that they have never been taught how to analyze a salesperson’s sales business and then how to coach them to correct and overcome the issues they have. The problem lies primarily with the company not giving the sales manager the training they need.

Many sales managers have been put in their positions not because of their management and coaching ability but because they were big hitters. Then once put in a management position they’ve been left on their own to sink or swim and to either figure it our or not.

Furthermore, the basic concept of sales management as practiced today is a primary part of the problem. For hundreds of years sales has been managed through the herd mentality—the only metric obtained was the end result. The sales training and direction given, if any, was for the herd—everyone will take this seminar, everyone read this book, everyone uses this sales process, everyone prospects this way, etc. Managing for the most part isn’t managing, it’s herding. And the typical “coaching” an under performer receives is to do more of what’s not working. Cold calls not producing? Make more calls. Closing ratio low? Close harder.

With a properly instituted metrics system, along with a well trained sales management staff, sales management can move from moving the herd along to an end goal to actually managing the performance and productivity of individuals.

The technology is being developed, though few companies actually use it at this point. Most are still using CRM and SPM programs that are designed for herd management, not for coaching management.

Proper use of technology does not have to be a threat to salespeople. However, the resistance I hear most often to a movement to such systems isn’t from salespeople but from managers because they see that their performance will be just as transparent as that of their sales team. No longer will they simply be responsible for the final number. In addition they’ll be responsible for how resources are used, the value those resources bring to the company—, and it will all be measurable. To many, that’s a real threat.

Now that’s a real way to decrease a sales persons motivation if you do not know what you are measuring, the reasons why and what you are going to do with the data.

It is generally recognised that sales people hate administration. Therefore gathering data that does not afford any benefit to the sales team can easily fall into disrepute. The key to an effective sales metric system is ensuring that the data collection is simply and easily administered and the subsequent output provides the sales team with a clear indication of where and how they can improve their sales performance. But is data enough to improve sales performance?

I read some much about closing ratios and number of cold calls made as being the Holy Grail for top sales performers. I have witnessed that in some industries it is about closing ratios and other industries it is about activity and how many points of contact you have with the client. I have worked with sales diaries in the past in the motor industries where data has been collected. The data collected suggests that sales people with high closing ratios are amongst some of the poorest performers. Yet so many sales programs are about improving closing ratios! The data I was exposed to in the motor industry suggests that sales persistence and activity leads to the top performers. There is no doubt in my mind that sales metrics if used appropriately will help boost sales. However for me sales metrics need to be well designed-such that the data output provides valuable information so that the sales team can develop effective sales and personal development plans leading to an improvement in sales performance.

Having said that, I feel that a well designed sales metrics system is no replacement for a good sales manager. A good sales manager should not need sales metrics to be able to spot strengths and weaknesses of their staff. I was recently called into a client whose marketing team had managed to increase warm leads by 50% - just imagine clients calling you removing the need for any cold calling. Now that’s what I call effective marketing!

However, one department’s sales increased 20% while another department’s sales were flat. The client measured and recorded no end of sales metric data in a sophisticated SQL database including calls, number of proposals completed, follow up calls, reasons for not winning the business, closing rates, etc. The proposal to close ratio had dropped from 70% to 45%. Even with all this data they could not figure out what was needed to put things right. They literally spent days on more and more analysis to try to get to the bottom of it. Was the marketing bringing in unqualified leads, was geography an issue, had our recent increase in price made us uncompetitive etc?

After all this analysis and debate I was asked to spend some time with the head of the department and though a process of dialogue and observation see if we could improve sales performance. Following two half days of discussion and one-on-one practical help in a number of sales techniques we saw instantaneous results. What the department head needed was some simple help in sales techniques that would fit her personality on handling telephone calls and some sound advice on writing winning proposals. The last thing she wanted was analytical data comparing her to the other department. The crazy thing is she was capable of making the changes but it needed a human being to help see what was needed and not numbers.

For me this highlights that you can have as many sales metrics as you want. You still need good sales management who can recognise that each sales person is different and you cannot live by numbers alone. Also coaching of staff in simple sales techniques cannot but underestimated

Don’t get me wrong. I would accept that a well designed sales metric system can improve sales but this needs to work in combination with a good sales manager/coach.

He came from the era when you met your boss on a corner at 7AM every morning. You would be given a dollar to cover expenses for the day. At the end of the day you would meet at a coffee shop .. hand in your orders and receive your commissions. Take away computers, cell phones, blackberries … total integrated communication …. and not much has changed. It still boils down to getting in front of people who have a need for what you are selling … make the perfect pitch and get an order. New technology hasn’t changed the goal … just the opportunities.