I am having a disconnect with the bad economic news being reported.  Perhaps these conditions aren't like this where you live and work, but here's what I see all the time:

• Can't find a place to park at shopping malls because they are jammed;
• Every flight I take is full;
• There are lines of cars waiting to purchase fuel at gas stations;
• The restaurants are packed;
• Sporting events are sold out;
• Concerts are sold out;

Perhaps the disconnect between what I see and what is being reported is simply this.  While there are some isolated geographies and industries that are doing poorly, others are doing quite well.  But when we look at the overall numbers, they just don't provide an accurate reflection of what is actually taking place.

We heard that only 54,000 new jobs were created in May.  Shouldn't news of 54,000 new jobs, most created by small and mid-market businesses, be a good thing?  The reality is that there hasn't been much new job creation from blue-chip and other large companies.  The slow job growth is an isolated problem, not a widespread one.

Even the slumping stock market is only a reflection of one segment - investors - and only one kind of investor.  Obviously, the other kind is continuing to infuse huge amounts of cash into growing companies.

And I know the housing market is still slumping. But like I said before, it is a single industry and not representative of the whole.  But the three isolated numbers the government likes to provide us with, stocks, home sales and gas prices drive the overall numbers way down.

As a result, the overall numbers simply don't reflect what is really taking place.  And that brings me to sales numbers.  Do your overall sales numbers reflect what is really going on?

Take a look at your sales revenue by salesperson for the year to date.

Look at the numbers for some of your top salespeople and review the data to answer these questions:

• What percent of the total represents sales to existing customers?
• What percent of the total is low-margin business?
• What percent of the total might include an unusually large, one-time sale which, if taken away, would actually make the numbers unimpressive?
• Which of these opportunities were in the pipeline for one or two quarters too long, meaning that the revenue was not the result of a recent selling effort?
• How many new customer opportunities are in their pipeline going forward?

Now look at the numbers for some of your mid-tier salespeople and dig through the data to find these answers:

• What percent of the total represents brand new customers/accounts?
• What percent of the total is higher-margin business?
• Are there any unusually large sales that might skew the results?
• Is their pipeline going forward looking nice and solid?

If you come up with the answers I am expecting, then you'll see that you must approach the sales revenue numbers with the same degree of skepticism and isolation as you should when listening to economic reports.  The total is not representative of what is really taking place.

This is the 8th in the series of articles based on the 10 Kurlan Sales Competencies that are Key to Building a Sales Culture.

#8 - It's Only a Numbers Game if You Use the Right Numbers

We received a bank reconciliation statement yesterday - not the checking account statement, but the statement that justifies their monthly fees.  Take a look- they charge us:

• $1.00 each time we make a deposit
• $50.00 for having a digital deposit device attached to my PC
• $ 0.05 for each check we deposit digitally
• $ 0.15 for each check we deposit
• $ 0.14 for each credit card deposit to the account

I expect to be charged for checks and debits for money taken from the account but our bank has found 5 ways to charge us when we put money into the bank!  Believe me, it's not about how much this account is charged each month, it's about their stupidity in two areas:

1. They are paying attention to the wrong numbers.  We expect banks to charge us for using their money.  We don't expect banks to charge us when they get to use our money!
2. They are successfully unselling the commercial customers who choose to do business with them. Airlines have figured this out too. Not only are most of them (not Southwest) charging to check bags (creating a chronic scenario where there is never enough overhead space anymore and it takes longer to board and deboard planes), but this week I was charged $50 just to get on an earlier shuttle.  Instead of "happy we could accommodate you - thanks for your loyalty" I heard, "that will be an additional $50".  If it was a bargain economy fare to begin with, I could understand it.  But this was a $738 one-hour round-trip between Boston and Washington DC!  More unselling at its ugliest.

Is selling a numbers game?  Not the numbers your grandfather used to pay attention to!

Key Performance Indicators or KPI's abound for sales.  However, most companies choose to pay attention to the wrong ones.  They look at lagging indicators like:

• revenue
• margin
• number of accounts
• average sale
• revenue by salesperson

Instead, they should be looking at leading indicators that can be used for coaching, accountability, motivation, recruiting and development, like conversion ratios:

• attempts to contacts
• contacts to conversations
• conversations to appointments
• 1st meetings (suspects) to prospects
• prospects to qualified
• qualified to closable
• closable to closed
• length of sales cycle
• new opportunities in existing accounts
• new opportunities in new accounts
• new opportunities in new markets
• opportunities from inbound marketing
• opportunities from advertising
• opportunities from referrals
• opportunities from trade shows
• opportunities from cold calling

Those KPI's will tell you more about what will happen than numbers that tell you what already happened.  Additionally, these statistics will tell you who is selling versus who is taking orders, managing accounts and living off their past efforts or worse, somebody else's efforts.

Where do you begin?  You must start with the pipeline.  Using a monthly goal, average sale, and closing percentage, you must determine, for each salesperson, the quantity - how many opportunities and how much in dollar value - must be in each of the four stages of the pipeline at any given time, in order for the goals to be achieved or surpassed  Then, staging the actual opportunities using the criteria established for each stage, compare what is necessary for each stage to what is actually in each stage.  You'll be shocked - frightened and angry - when you do this comparison.  Then, you must determine what each salesperson must do - each day - to fill the first stage of the pipeline with the number and value of opportunities required each month.

If you pay attention to the right numbers, the game is on and you guarantee your sales force repeated wins each month.  Look at the wrong numbers and it's game over.  You lose again.

(c) Copyright 2009 Dave Kurlan

As we encourage our clients to do each day, both of my companies have daily huddles for their salespeople.  The purpose of the daily huddle is to keep everyone focused on the measurable activities that drive results.

During the last couple of weeks, I've had our six-year old son in the car for about 6 of these conference calls and it only took one huddle to get him hooked.  He wants to report his numbers - and he has them ready - each time he's with me.  It makes him proud to participate and he wants to report numbers that are better than theirs.

I get a lot of push back from clients when it's time to implement the daily huddles.  They don't think it's necessary.  It will take too much time.  It's too much of a burden. It's redundant.  Yeah, right.

It only takes about two weeks until even the most resistant clients figure out that they not only have more control over their future revenue than ever before, but their salespeople are more productive than ever before too.

The thing about our son?  If you're a regular reader of this blog then you know I've written nearly twenty articles that have a Salespeople are Like Children Theme and this one is no different.  Your new salespeople will be just as excited about being part of that huddle as our son.  Your veteran people will like the boundaries, expectations, attention, peer pressure and relentless focus on doing what's important to drive sales - every single day.  Why? It's good for them and when it's good for them they'll make more money.

(c) Copyright 2008 Dave Kurlan