This article was originally published on Sales & Marketing Management.
Sales leaders are responsible for more than closing deals. Teams depend on them to see the big picture, measure current strategies, and evaluate new opportunities. Sales diagnostics help leaders see their operations from all sides so they can identify bottlenecks and keep revenue climbing.
These diagnostics — or audits, as some call them — go beyond the sales department to look at the whole company. Sales-driven organizations need every department working in the same direction, and when issues arise outside the sales team, diagnostics can identify hard-to-find issues and correct them.
Diagnostics require more than just a casual review, however. To execute effective diagnostics, teams must understand what they want to accomplish and the established best practices to do so.
When reviewing the health of an organization’s sales arm, leaders must focus on six key areas:
- Revenue metrics: Everything from revenue to order sizes to product popularity matters.
- Competitive position: What does the company do well, and where do competitors typically win? How does the elevator pitch resonate with the target persona?
- Internal structure: Salespeople crave reward structures. How are they compensated for great performances? From a higher level, how do prospect profiles and sales collateral make their way to the sales team, and do those tools help drive sales?
- Pricing: How much the product costs is just the tip of the iceberg. Knowing which parts are negotiable and which are not helps leaders recognize opportunities to offer discounts.
- Performance metrics: What are the leading indicators? How does the company measure performance? Do salespeople feel motivated or limited by this structure?
- Customer service: If the sales process goes smoothly, but the postsale process and onboarding are disastrous, the number of deals closed might not tell the whole story.
To analyze these areas, sales leaders must follow a three-step process to discover roadblocks, detail their observations, and develop recommendations for improvement.
In the beginning, diagnostics depend on accurate and thorough data collection. Everything from revenue numbers to prospect profiles to individual job descriptions and performances matters in the diagnostic. Once leaders collect the data, diagnostic teams move on to factors nearer the sales process, such as discounts, performance metrics, and leading indicators. By collecting this information, sales leaders can ensure their diagnostics will account for all contributing factors.
Next comes the analysis. Leaders survey staff members and compare their notes to staff impressions, separating reality from perception and identifying the issues holding back sales.
We once worked with a company that wanted to increase the number of appointments salespeople attended, but when we reviewed the numbers, we realized the sales team was only generating 20 proposals per 100 appointments. The organization thought the team needed one thing, but in truth, salespeople needed to make more of their existing opportunities — not boost appointment volume.
With analysis completed, leaders can develop actionable recommendations to correct the issues they discovered. No one can fix everything at once, however, so leaders must focus on the two or three issues that could most affect sales.
By following this outline, sales teams can identify their most pressing issues, eliminate bottlenecks, and increase revenue.
Keeping Sales Diagnostics Actionable
Every part of the diagnostic process is important, but it’s easy to get lost in the weeds and fail to make actionable recommendations. When sales leaders get too close to the process, they often overlook the data in favor of instinct, which can lead to wasted opportunities.
Avoid wasting a successful diagnostic by following these five strategies to make the most of the analysis:
1. Keep recommendations realistic.
After identifying the issue, address it directly — not with flowery language like “improve communication” or “close more deals.”
We once worked with a chief revenue officer who felt pleased about his pending business, until a diagnostic revealed that 75 percent of his pending deals had been in limbo longer than 30 days. To shorten that timeline, we helped the company institute a system to track deals in the first month, adding customer relationship management alerts to move on older deals and keep sales moving through the pipeline.
2. Move quickly.
Industries can change at a moment’s notice. Don’t perform a diagnostic and leave the information sitting on a shelf until the next annual review. Act on good analysis quickly to make the most of the information.
3. Set measurable goals.
Identify which key performance indicators are most relevant and implement a system to measure them. In the case of the company with too many deals older than 30 days, we helped leaders track the percentage of old deals by salesperson, adding timely triggers to the CRM to ensure everyone had an opportunity to keep deals moving before they turned sour.
4. Establish clear expectations.
Rely on the data to set reasonable goals for individual salespeople and the department. Figure out what “pending” should mean, set goals for how much each team member should have pending, and communicate what percentage of that number salespeople should close each month.
5. Review the process every 90 days.
Three months after implementing a new system, perform a second analysis to ensure everything works as it should. Most plans require adjustments after the outset to keep the team on course. It’s like driving a boat — drivers who set course and walk away end up adrift, while drivers who follow the compass and make corrections as needed get to their destinations faster.
Efficiency separates good sales teams from great ones. By following these tips, leaders can perform precise sales diagnostics to identify issues and make corrections, ensuring the sales department makes the most of its opportunities and keeps driving revenue.
Editor's Note: This blog was originally published in 2018 and has since been updated.