Sales benchmarking for all seasonsBy: Alexander Group Sales Analytics, Sales Benchmarking, Sales Transformation
You know you should benchmark your sales organization against best practices. But you’re too busy. After all, things are going just fine. Benchmarking is for manufacturing companies, right? When it comes to sales, benchmarking is really only necessary for big companies that have six-sigma black belts running around examining every nook and cranny of the business because they can afford the time and resources to do it.
So is benchmarking sales worth the effort? Absolutely. Benchmarking is a critical tool for assessing your current state, defining your strategy for future growth, and guiding your efforts for continuous improvement. Failure to benchmark your sales performance on a regular basis eventually leads to poor results and a more urgent need for assessing your “current state.” Why wait until there is a problem?
Best practice companies benchmark the sales force on a regular basis. This involves measuring sales time, costs, productivity and processes on a regular, on-going basis. The goal of benchmarking will differ depending on the current situation. Consider the following three scenarios:
Poor Performance: If you have experienced two or more quarters of poor performance and you’re not exactly sure why, benchmarking helps identify issues and root causes and direct efforts to course correct. The goal in this case is to directly address areas that are below benchmark. Examining your sales organization against external benchmarks and practices provides clarity and confidence in your efforts to improve.
Sales Transformation: Things may be fine, but the winds of change are blowing. Market shifts and competitor moves are rendering your current sales model out of date and obsolete. Your current sales results might be good but the future is at stake. Or, to take a more positive spin, your aggressive growth goals call for rapid expansion. You are pioneering new products, new markets and new channels. In either case, chances are very good that bigger companies in your space or companies from other industries have undergone the same or similar change. At this point you’re less interested in benchmarking to your peers. The goal now is to benchmark to your destination – compare your sales organization to companies that resemble the future of your business.
Market Leader: Being the market leader is great. It’s also scary. You should be constantly paranoid of losing your position. You care far less about how other companies stack up against you, but you can’t rest on your laurels. Innovation and continuous improvement is the name of the game. The goal of benchmarking is to stay ahead. Your focus will be primarily on internal best practices – which business unit, region, or geography is leading the pack and why? Internal benchmarking combined with periodic external benchmarking ensures that you are constantly searching for new ideas to improve performance.
Whatever the season your business is in, benchmarking provides tremendous value. Benchmarking sales time, costs and performance should be a high priority for your sales planning and enablement function. External benchmarking should be done once a year as part of your annual sales planning process so it can help inform decisions regarding go-to-market strategy, sales channels, sales roles, talent management, territories, quotas and compensation. Gathering and carefully interpreting benchmark data will lead to better decision making in these and other areas.
Don’t have time to benchmark? Get help! Learn how the Alexander Group assists companies to benchmark their sales organizations.
Original author: Paul Vinogradov