In our last two blogs, we’ve talked in depth about the ways in which our Sales Productivity Diagnostic (SPD) solution collects data, and how we can generate clear “health check” reports, complete with targeted, actionable insights to create a clear growth pathway for your sales organisation.
These reports give you a clear and concise view of the health of your sales organisation, highlighting strengths and clearly demonstrating knowledge or skills gaps that need to be addressed.
However, perhaps the most important function of the SPD reports is their ability to provide you with benchmarks for your people.
Why does benchmarking matter?
Benchmarking can be considered as the process of identifying, understanding and transferring ‘best practice’ from organisations in order to help another organisation to improve its performance.
Let’s look at the two critical steps of benchmarking; identifying and understanding.
Firstly, you have to identify the behaviours or metrics that you want to replicate within your organisation. These are the behaviours or metrics that track most consistently with elite performers.
Naturally, these will differ from industry to industry. When it comes to sales, we have leveraged our years of expertise and experience to determine what we call our Magic Seven sales performance metrics. These metrics are:
• Sales Pipeline Coverage
• Average Deal Size
• Sales Funnel Leakage
• Time to Close
• Conversion Rate
• Customer Acquisition Cost
• Customer Lifetime Value
We have seen that elite sales performers consistently perform at a high level in these seven critical metrics. When it comes increasing the revenue performance of your sales organisation, providing training and coaching that targets those metrics will typically yield the most tangible results in performance and in productivity.
The second step is understanding, and it is perhaps the most important part of the entire benchmarking process.
It is not enough to simply identify behaviours metrics; you need to understand why those things are driving high performance.
You can identify a whole range of behaviours and metrics that would seem to correlate with high performance, but if you don’t know why those behaviours are correlating, or why others are not, then you can quickly find yourself in a situation where you’re driving behaviours that are entirely coincidental with performance, rather than truly correlated.
Understanding the why necessitates a deep and intricate understanding of the nature of performance in the specific industry you’re in. Sports organisations across the globe have invested billions into their sports analysis departments to keep their athletes at the cutting edge of performance, and sales should be no different.
That, again, is where our team of industry experts come in. Their knowledge and their insights have done all the heavy lifting for you when it comes to identifying and understanding best practice behaviours.
The concept of identifying and adhering to best practice is nothing new, and so in this sense the concept of benchmarking can hardly be considered revolutionary.
However, what we’re seeing is that sales organisations simply aren’t doing this effectively or consistently enough. Business seem either reticent to change their processes to stay in line with the shifting sands of sales performance, or they are unaware of the gaps between their performance and the rest of the industry.
Other organisations identified a benchmarking standard years ago, and have simply failed to adapt it over time.
We know that benchmarking works – it has become standard practice in a whole host of industries. But the sometimes ego-driven world of sales provides unnecessary resistance to changing processes and changing times.
That in and of itself is one of the key benefits of benchmarking sales performance; by showing what consistently works outside of an organisation, data-driven benchmarking can negate the emotional resistance to change within organisations, which naturally in turn drives adoption and engagement with the process.
The benchmarking reports produced by the SPD allow you to set standards and thresholds against all kinds of data sets, whether it be industries, markets, geographies, competitors, inside sales teams, last year’s data or even aspirational data.
This benchmark report will serve as the foundation of the transformation of your sales organisation’s performance and revenue potential, operating as the gold standard for all of your salespeople whilst also remaining flexible to future changes.
Ask yourself, how could your business benefit from the power of benchmarking? What could you do with a targeted, agile threshold for sales performance?