A New Breed of Number-Crunchers Changing the Game

The MoneyBall Answer to World-Class Sales Performance

Sales people are like world-class athletes; they are constantly striving to improve performance. They study the behavior of the best and work with coaches to measure up.

You may recall the 2003 book, Moneyball: The Art of Winning an Unfair Game by Michael Lewis, about the Oakland Athletics (A’s) baseball team and its General Manager Billy Beane. Its focus is the team’s analytical, evidence-based, sabermetric approach to assembling a competitive baseball team, despite Oakland’s disadvantaged revenue situation. A film based on the book starring Brad Pitt and Jonah Hill was released in 2011.

The central premise of Moneyball is that the collected wisdom of baseball insiders (including players, managers, coaches, scouts, and the front office) over the past century is subjective and often flawed. Statistics such as stolen bases, runs batted in, and batting average, typically used to gauge players, are relics of a 19th-century view of the game and the statistics available at that time. The book argues that the Oakland A’s’ front office took advantage of more analytical gauges of player performance to field a team that could better compete against richer competitors in Major League Baseball.

Offensive Success

Rigorous statistical analysis demonstrated that on-base percentage and slugging percentage are better indicators of offensive success, and the A’s became convinced that these qualities were cheaper to obtain on the open market than more historically valued qualities such as speed and contact. These observations often flew in the face of conventional baseball wisdom and the beliefs of many baseball scouts and executives.

Take a sport I love─golf. To compete on the world stage and the PGA tour, your game needs to be at its best. There’s lots of competition against great athletes who continue to perfect their game. This year Jordan Spieth topped the money list as the number one player with more than $12 million of earnings. Number 100 was Chad Campbell who earned just over $1 million. The surprising thing was the difference between these players in scoring average was less than two strokes (68.938 versus 70.604). A 1.7 stroke difference between number one and number one hundred and a difference of over $11 million in earnings.

Behind these players are coaches analyzing performance metrics─distance, putting accuracy, greens in regulation, driving distance and more. The software application Golfmetrics was created to capture and store golfer shot data and to quantify differences in shot patterns between players of different skill levels.

Across all golfers it is shown, somewhat surprisingly, that longer hitters tend to be straighter than shorter hitters. Now as a golfer, I would have thought the opposite. Individual golfers can be measured relative to a benchmark to assess accuracy and to suggest whether to focus on increasing distance or decreasing directional errors. When they focus on what matters, their games improve dramatically.  Now, let’s turn to sales.

Studying Sales Metrics

How do you measure the true efficiency of a sales process? How do you know if your sales reps are actually following correct processes to complete objectives? Are they working on the right prospects in the funnel? Do you know what matters in improving sales performance?

These are difficult questions, right? The truth is, precious few sales managers can answer any of these questions. Unfortunately, the lack of an answer may not be acceptable much longer.

Measuring sales performance is becoming a hot-button issue, even as senior executives are being given more and broader responsibilities and performance objectives themselves.

The result is a quandary for sales managers: How do we do a better job overseeing sales rep performance? How do we improve the predictability of our sales funnel? The answers are not more insight, it’s smarter oversight. Or as world-class sales organizations do – they measure what matters.

Measure What Matters

In the professional world of selling, MHI Research has been studying world-class sales performance for more than 12 years. During this period, more than 30,000 participants took part in the studies. All respondents were filtered to reflect complex sales; that is, three-plus decision makers. The study included three sections: demographics, behaviors and metrics. The analysis defines key behaviors that, when leveraged collectively, consistently and executed properly, drive sales performance.  In fact world-class sales organizations, defined as a small percentage of respondent base (8.5%) outperformed All Respondents by 22 percent in key metrics measured.

World-Class Sales Performers See Better Results

World-class sales performers represent a segment of sales professionals that consistently see better results in the key metrics traditionally measured by sales organizations. In the 2015 MHI Sales Best Practice Study, world-class sales performers outperformed all respondents by 22 percent in key metrics measured in this study, the most significant of which are listed below:

• Number of qualified opportunities

• New account acquisition

• Average account billing

• YOY existing customer growth

• Quota achievement

• Forecast accuracy

By identifying the behaviors and attributes of world-class sales performers that lead to results, the MHI Sales Best Practice Study provides an aspirational benchmark for others that are working toward achieving high-performance results.

Each year, the MHI Sales Best Practices Study examines the strategic issues in business-to-business (B2B) sales. These issues are complex questions that require research, data, perspective and knowledge for the sales leadership of an organization to be able to answer within the context of their organization.

By addressing these issues effectively, world-class sales performers are able to produce consistently superior results. The study begins with a set of questions derived from the best practices we’ve observed in the organizations we work with, as well as through our analysis of emerging trends in global B2B sales. The study is organized and analyzed by the following elements of the sales system:

Top 12 Key Initiatives

Effective performance measurement conveys relevant information primarily to the sales reps and company resources and draws corollaries between processes and key performance objectives. Measuring sales performance should be about communicating both real-time performance and showing how that performance correlates with daily, weekly, monthly and quarterly performance objectives.

How do you find important correlations between process and performance?  Improving sales performances starts with understanding the 12 core behaviors. Here is a breakdown of how certain industries measure up against World-Class Sales Behaviors.

Certain industries do a better job against world-class results than others. As an example, in creating new opportunities, 35 percent of banking and financial services companies versus 40 percent of technology companies said that “sales and marketing are aligned in what our customers want and need.” The metrics to measure were the number of qualified opportunities. However, both industries were far behind the 92 percent of world-class sales organizations. Working to improve incrementally, the two- stroke difference, can give your organization a competitive advantage.

Our Sales Performance Meter can give you an opportunity to see how your sales organization measures up. In our case example, in our recent eBook, gives a great example of how this tool helped the organization improve its sales performance.

Hitting or exceeding quota begins with understanding daily behavior. Tracking Moneyball Sales Metrics and exposing progress will incentivize sales reps and empower managers with the actionable intelligence needed to make important decisions.

Done correctly, Moneyball metrics can tell you a great deal about your overall sales process efficiency, what motivates your sales reps, and which aspects of your process are and are not working.

30+ Years and 5 Beliefs

The architecture behind the MHI Global Sales System was constructed from in-depth research and experience in working closely with clients over the last 30-plus years:

• We pin down issues and challenges salespeople face, and analyze the efficacy of solutions in use

• We then take a deep dive into the processes used to deliver world-class results

• We create and manage individual opportunities, and manage relationships to grow/ retain customers

• Organizationally, we develop workable systems for company support to those processes

From this research and our experience we have come up with five core beliefs.

1. The most important decision we make as sales people, managers and leaders is how to connect with our customers.

2. Talent is one thing, but a scalable, consistent selling methodology is everything.

3. Customers expect a perspective; not a sales pitch.

4. The best sales people are always looking for ways to improve.

5. Those that prepare win more and win more consistently.

See you on the upside,
Bill

For more information on how to simplify the complex sale, go to www.pleinairestrategies.com
Or call William L. MacDonald in San Diego at PleinAire Strategies LLC at 760.340.4277 or 213.598.4700