Revenue, just about EVERY sales organization runs on it. Everyone has a revenue quota. Sales reps are measured on it. Sales leaders are hired or fired on their ability to make it. Sales teams are managed to it. Revenue is the king of sales metrics and thats why many sales organizations fail.
Pulling the revenue lever is a big lever.
It’s a big lever because revenue can come from a number of different places; increased deal sizes, more deals, conversion or win/loss ratios etc. In addition to revenue, there is also margin, which can’t be managed via revenue.
If you want a healthier business measure more than revenue. Consider an average deal size quota or bonus. Manage your team to a margin percentage. Coach the team on reducing the average days in the pipeline. Make each team member’s average sales cycle public. This way everyone can see what is possible and how quickly or slowly deals are moving through the sales cycle. Focus on more than a raw revenue number.
How are you measuring your sales team? What metrics do you manage your sales team to?
Can you answer these questions?
- Who are the top 10 sales people with the highest average deal size?
- Who has shortest sales cycle?
- What is the average sales cycle?
- Who are the top 10 reps with the highest margins %?
- What is your average close percentage?
- What reps have the highest close percentages?
When you look beyond revenue, you create more levers to pull. The more levers you can pull, the healthier your sales organization.
Expand beyond revenue, don’t be a one trick pony.