Applying Moneyball to Sales Leadership

Posted by Chris Mott on Tue, Oct 11, 2011 @ 10:10 AM

Dave Kurlan’s recent post on the movie Moneyball re-defined some sales Key Performance Indicators (KPI’s). 

His definitions are:

NFM - The percentage of first meetings that are new (new customers, new opportunities with existing customers, or a new group or division of an existing customer)

Traction - The percentage of first meetings that progress from Suspect to Prospect

Quality - The percentage of opportunities that progress from Prospect to Qualified

Effectiveness - The percentage of opportunities that progress from Qualified to Closable

Run Efficiency - The percentage of First Meetings (Suspects) that end up as Wins - Closed Deals from New Opportunities

DAIM - Deals Closed at Ideal Margin or Better

Since a sales leader's job is to develop his or her people, their success should be reviewed in the context of the sales core competencies measured by OMG's assessment. These competencies are:  

1. Sales Process

2. Desire

3. Commitment

4. Outlook

5. Responsibility

6. No Need for Approval

7. Controls Emotions

8. Supportive Record Collection

9. Supportive Buy Cycle 

10. Supportive Money Concepts

11. Goal Oriented 

12. Consultative Selling Skills

13. Develops Strong Relationships

14. Rejection Proof

15. Qualifier Skills

16. Hunter Skills

17. Closing Skills

18. Overcomes Resistance

19. Not Self Centered

20. Presentation Skills

21. Sales 2.0 Skills 

We are going to discuss the application of these KPI's in a series of articles starting with:

NFM - The percentage of first meetings that are new (new customers, new opportunities with existing customers, or a new group or division of an existing customer)

Looking at the core competencies involved in New First Meetings we find both intrinsic and extrinsic factors. So, what influences this metric is partially what the salesperson brings to the table and partially the influence of the environment sales leadership provides.  

A salesperson that has some Need for Approval, trouble recovering from Rejection and Incomplete Goals will likely have a lower NFM. They may lack the motivation to consistently make calls and hunt for referrals because they are not compelled by their goals. If they have goals, the Difficulty Recovering from Rejection will cause them to stop and start. To increase the NFM percentage their sales leader needs to step in, reinforce the goals and help them understand that they (the individual) are not being personally rejected. This will be an ongoing process because overcoming rejection takes time.

Skill gaps in the Consultative Selling skill set will also drive down NFM. A salesperson’s ability to find and develop problems is based on their ability to ask questions in response to what prospects say.  Here’s a sample dialogue to illustrate the point:

Prospect: Things are going pretty well.

Salesperson: When you say pretty well what does that mean?

Prospect: We are getting the job done.

Salesperson: Are you under pressure from management to improve?

Prospect: Yes

Salesperson: Is getting the job done enough or do things need to be better?

Prospect: Better is always good.

Salesperson: What would you like to improve?

All of the questions must be in response to what the prospect says. One irony is that salespeople continually say, "I didn’t know what to say or do next." When you actively listen you will never run out of questions. You simply need to hear what a prospect says and ask a question about what you heard.

Salespeople rarely close. Interview some salespeople and observe how many actually ask about next steps or more importantly, how well they did. A commitment requires clarity; specifically, what happens next, when will this happen, what will be discussed and what outcomes will occur?  A salesperson who doesn’t consistently ask questions may be capable of identifying problems but may fail to leverage them because they missed the commitment part.

Why do salespeople struggle with Getting Commitments?
  • They don’t want to be pushy
  • They are afraid if they ask the prospect will say no
  • They don’t like it when people ask them for a commitment
  • It’s not something they are disciplined to do

As a sales leader you may be thinking, "My people don’t have these challenges, this stuff is basic, I hire people who are better than this." Go ahead, leave it to chance and hope this isn’t the case. The real reason you may be thinking this is it changes the nature of your job and forces you to be much more hands on. Yes you want to hire better people but if you want to drive NFM the responsibility comes back to you.

Stay tuned!  

Topics: sales, kpis, Moneyball, Moneyball for the Salesforce

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