How to Measure the Impact of Your Sales Coaching Efforts
Apr 19 2018
Sales coaching is the enablement service that matters most in terms of business impact. This is a fact that CSO Insights has observed year over year. Improvement of win rates for forecast deals by 27.6% is absolutely achievable, if you follow a dynamic sales coaching approach. Do you already follow this kind of coaching approach? You can check by assessing your sales coaching maturity.
Now, how do you measure the impact of your sales coaching efforts? This is a question we asked our study participants for our 2017 Sales Enablement Optimization Study.
Most organizations measure the impact of sales coaching with lagging indicators such as quota attainment, win rates and revenue attainment.
Let’s look at these metrics in a bit more detail:
- Quota attainment, which is the percentage of salespeople who achieve or exceed their annual quota, is the classic metric to measure sales force productivity (efficiency). Therefore, it makes sense to see how this metric can be improved depending on different approaches to sales coaching. Based on our data, the impact is remarkable to say the least.
- Win rates measure the percentage of forecasted deals that were won, often measured by value (actual win rates) or by the number of deals (this is sometimes called hit rate). The win rate is another key metric to measure a sales force’s productivity. Assuming the right deals are in the forecast, the win rate is a good indicator of the sales force’s effectiveness (performance).
- Revenue attainment came in third on the list. However, revenue is a different animal altogether. Revenue is not only generated by the sales force. Think about the renewal revenues that are often generated by service associates, as well as the contract enhancements that are also often created by service personnel. Then, think about a more transactional selling scenario where the revenue is mainly generated by the quality of your online shop. And don’t forget the deals your CEO brings in just before the end of your fiscal year. We need all these revenues, for sure, but this is why revenue attainment is not an ideal indicator if you want to measure the impact of your sales coaching efforts.
- Conversion rates, the first leading indicator on the list, were fourth on the list. They can be measured by value, volume or velocity, showing how much (currency value), how many (#) or how fast (speed) leads convert into opportunities, or leads into another lead stage, or opportunities into another opportunity stage.
Conversion rates are sales enablement leaders’ early warning system, because they show you early on if your enablement initiatives, such as sales coaching, are successful or not, so that you can adjust quickly and effectively.
That includes, of course, all the enablement services you had to provide beforehand, such as developing coaching skills in your sales managers and providing relevant supporting coaching tools and guidelines. Assuming all of this has happened, you can easily leverage conversion rates in all three ways to measure the impact sales coaching has in terms of value, volume and velocity. Ideally, you move more and better deals through the process in a shorter amount of time. The beauty of leading indicators like conversion rates is that you get results as things are happening. You know if you are on the right track, instead of waiting until a deal is lost or won, which may be several months later.
Interestingly, customer retention is only listed in the fifth position. It’s another sign that for many people sales coaching just means coaching opportunities and not to leveraging the bigger picture of sales coaching that actually consists of various coaching areas, including account coaching.
Two other metrics, listed as sixth and seventh, are average deal size and average sale cycle length. These are lagging indicators related to the value- and velocity-focused conversion rates. If your value oriented conversion rate increases, chances are that your average deal size will increase accordingly. And the same is true for the velocity oriented conversion rate and the average sales cycle length.
To effectively measure the impact of sales coaching, world-class enablement leaders leverage a well-thought-through dashboard of a variety of metrics. They use leading indicators to ensure that they can adjust things as needed to improve the related lagging indicators as much as possible.
Questions for you:
- Do you have a predefined set of metrics you use to measure sales coaching impact?
- How did you involve your senior executive sponsors in the process?
- How do you think about leading and lagging indicators?
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