The Remodelers Guide to Business

What Sales Managers Measure

At a recent meeting of one of our Roundtables™ peer groups — this one with owners of companies producing over $5,000,000 annually — I participated in a rousing discussion of the techniques and procedures used in managing sales successfully. As you can imagine, once a company reaches a high volume, using a proven, effective sales process is even more important than it is for smaller companies.

For one thing, rarely can the owner continue to be the only sales person. Typically, there are 1 to 4 additional salespeople on the team. To maintain the company’s reputation and to make measurement more effective, all salespeople should follow the same solid process. Secondly, the company must maintain this volume to cover expenses and profits, therefore, they need measurements that a process provides to see when and how to turn up the volume on marketing and sales efforts.

Two parts of the discussion were particularly interesting to me. One focused on the metrics for measuring success, and the other focused on the steps in the process — or the Sales Pipeline.

All of these savvy owners agreed that results–projects and dollars sold– is the ultimate measure. But what else is measured regularly? Close ratios are also no-brainers: the ratio between qualified prospects and design contracts signed (if applicable), the ratio between design contracts and construction contracts, the ratio between leads and appointments. Comparing these among salespeople can quickly uncover weak areas — and then you can train for improvement.

Plus, many agreed that the best managers also measure the activities that create sales. If a salesperson is participating in sales generating activities, it is reasonable to expect that they will have better results, right?

During the Roundtables™ meeting, owners worked together to develop a list of activities to measure weekly or monthly. Here are just a few.

  1. # Leads self generated — Prospecting and yes, I believe all salespeople should self-generate some portion of their leads.
  2. # of Referrals self generated–Ask for the referral!
  3. # of networking activities attended.
  4. # of calls to previous clients.
  5. # of visits to architects and/or interior designers (if applicable)

I’ve seen this process in action. Several years ago, we took three of our top Roundtables™ Groups to visit a highly successful remodeling firm in the Northwest. During the process of learning about the operation, the owner of this high-volume company showed us a chart. On one axis were the names of the sales representatives. On the other axis was a long list of activities that were available to the reps. This list included working the showroom on Saturdays, presenting educational seminars in the showroom, attending networking events, sending out a personalized newsletter to their contacts and clients, and more.  The results of the chart clearly showed that the sales reps who participated regularly in more activities had greater results — a higher sales volume. If you’re not measuring activities that drive sales, you should be.

What sales metrics do you measure?

Next PowerTips, we’ll discuss the Sales Pipeline.


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