Sales Effectiveness: What is your Sales Effectiveness?

Businesses are under constant pressure for productivity improvements. Sales organizations are not excluded from this demand. Yet for most salespeople and sales organizations, working harder than they already are is probably no longer an option to increase productivity. The way out of this dilemma is thus to try to work smarter. Working smarter means doing the right things, and that’s the meaning of effectiveness.

A commonly used metric for sales effectiveness is the individual quota attainment. All available research on this metric indicates that there is much room for improvement as less than 60% of sales people achieve their quota. Even as a rough indicator quota attainment has though problematic. It starts already with the definition. Just recently I learned from a large client of mine that the quota is a stretch target. So no one would expect a 100% attainment rate of a stretch goal. In a Hard Talk Interview with Johnathan Farrington over at Top Sales World, I voiced my opinion that it is also not a good metric because managers do not care enough about it. A manager is held accountable that his/her organization delivers the budgeted number. Now the same research that indicates the low individual quota attainment rate also indicates that the budget attainment rate of sales organizations is around 20 percentage points higher. From this, we must conclude that managers can make their budgets even if a some of their people do not make quota. Why is this? Well ask yourself whom sales managers ask to help them cover a shortfall. They go to their overachievers and ask them for a little more. Usually there is not enough time for coaching those below quota to help to cover for the shortfall.

Donal Daily over at Dealmaker 365 came to a similar conclusion, that “quota achievement… does not cut it as a yardstick”. I also concur with him, that there are little benchmark data available that provides actionable insight to improve individual and organizational sales effectiveness. Donal has given himself the mission to change this. The TAS Group, who’s CEO he is, has, therefore, launched the Dealmaker Index. This is what the Dealmaker Index does according to the companies press release: “Based on an analysis of 92 sales performance factors, mapped against proven successful approaches, the Dealmaker Index measures the effectiveness of sales organizations and sales individuals across areas such as deal close rates, sales cycle management, value creation and sales opportunity development. It analyzes their activities, behaviors and attitudes and their strategic alignment with their companies and the resulting velocity they can achieve.”

It took me about 15 minutes to answer the questionnaire which is the base to determine the Dealmaker Index of the organization and the individual. As a result, I did not get just a number, but very actionable output in the form of an Executive Summary, a Company Detailed Analysis and Recommendations and a Personal Dealmaker Index Report.