I’ve heard this question from countless numbers of sales professionals including those who are top performers and those who are not, those who work in companies where metrics are a part of everyday life and those who work in companies that are just beginning to consider performance metrics, and those who are in inside sales, outside sales and sales management.
It’s a fair question for sales professionals to ask. Sales is unique in this one way: there is always a built-in measure. It’s a numbers-driven profession, one that looks backwards and forwards to measure what’s been done and what will likely be done in terms of sales volume. In sales, you know how much each account spent in the prior year. You know what is projected for each large account to spend in the coming year.
With this information, sales goals are set and reps are paid by how well they do in reaching or exceeding those goals.
So why the need for additional standards? To many, they seem like a waste of time. Sellers (who often chose this profession because they like to operate independently) sometimes see performance standards as micromanaging. Many managers grouse about the amount of time the extra tracking takes them to complete. Worst of all, most people aren’t really sure exactly what to do with the information gathered once performance standards are put in place.
As we look at the purposes for performance standards and the ways they are misused, too, let’s start by defining the term. I’m using it here in a broad sense to include any measure of a professional seller’s performance. That would include goal attainment as well as any activity-based standards like these:
And so on. Many believe none of it matters so long as a seller is reaching goal. That’s why some companies put performance standards in place only for sellers who are missing their targets.
But there’s another school of thought to consider. Shouldn’t every sales organization know and communicate what it takes to be effective as a seller there? With performance standards that are based on the best practices of sellers who are effective, the company lays out a road map. It provides clarity about how each seller can be successful. Without a road map, each individual seller is left to his or her own devices to figure it out. Many don’t.
If performance standards are truly based on what the top performers routinely do, then the top performers shouldn’t mind the standards. Having them requires nothing more than continuing to do what they already do.
Also, if performance standards are truly based on what the top performers routinely do, then those who aspire to improve their performance shouldn’t mind these standards either. Chances are that these are tweaks rather than wholesale changes to the way they allocate their time. Additionally, knowing that what they are being asked to do actually works for others is a pretty compelling case to refute.
Here’s the problem though. Oftentimes, performance standards feel arbitrary. Companies may reach too far and set very high expectations that no one is currently attaining. Without an example, people will doubt it can be done and will be unable to see the point in doing it. Because an arbitrary standard isn’t backed by a sound business case, it causes feelings that range from skepticism to resentment. Too many of these, especially if they are linked to a seller’s variable pay, will weigh a seller down like the Sword of Damocles.
As a seller, you have the right to know the purpose of each performance standard that you are being held accountable for. As a sales manager, you should know exactly why and how each standard was devised and what it will do to make a seller more effective. For any standard that doesn’t have a clear cause-and-effect benefit to the seller and to the organization, it’s time to reconsider whether that standard is worth the time and effort it requires to measure.
Strong sales organizations do have performance standards. They also have transparency regarding the origin of the standard and clarity about what, exactly, the standard does to improve the seller’s effectiveness.
Standards that are created and implemented just for the sake of having them are weak and unenforceable. Copycat standards seldom work because different organizations have different needs. What’s more, with “cut and paste” solutions, even senior management may not know what the purpose of a given standard is.
It takes time and effort to create solid standards. The payoff is significant for organizations that do this well and for the sellers who use standards as guideposts to improve their own performance.