October 27th 2008
Making the Number. How to use sales benchmarking to drive performance. Greg Alexander, Aaron Bartels & Mike Drapeau. 2008. ISBN 9781591842170. This book should take sales from Art to Science. This is a very comprehensive work which any sales manager looking to make a difference in the next 10 years, should read and start to implement. If you are also looking at top grading for sales, then this is a book you will need to learn from. The authors website has published a list of sample data to help you get started on benchmarking. Its illuminating to see where some of the “top” 100 companies actually come out.
They do a good job of isolating the various dependencies in sales.
- Industry segment
- Geographical areas
- Sales channels
- Sales force organization
- Public, private, NGO
Then they give a sample of data required in each category of sales such as:
- Account planning – churn rate, lifetime value, customer share
- Budgeting – break-even, gap to goal, net income/rep, return on sales
- Channel – Outside sales contribution, outbound lead ration
- Comp- sales quota attainment, total available income, variable comp rates
- Expense – cost of advertising, cost of marketing, cost of sales, cost per rep.
- management – Sales quota/sale, sales productivity/rep, forecast accuracy, pipeline ratio
- methods – sales activities to close sale, sales cycle length, deal size
- staff – ramp time to full productivity, sales rep/manager ratio, sales rep/ sales support ratio
- talent – turnover rate, interview pool needed, sourcing pool needed, time to backfill a rep
- infrastructure – sales growth rate, CRM/SFA utilization, lead source utilization, mobile utilization
- territory – close rate, customer acquisition cost, customers /rep, potential leads /rep
- training – budget, training hours per rep.
They break out sales types into an interesting six categories
- Order taking
- Demand creator
- Solution provider
This is a very useful book which could help save your job if you are a VP Sales and its tough going. The job is not easy , but this is a terrific way to help you manage. A bonus is the epilogue where they describe sales peering. Visualize a souped up Linkedin Questions all about best practices and benchmarking sales. Something really needed.
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