SHARE:

What Can You Tell From These Sales Process Behavior Charts?

by Michael Webb | * Comments (6)
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...

Pictures are worth a thousand words, especially when it comes to measuring sales and marketing production.

Measuring Sales Production Correctly

Figure 1 below contains two process behavior charts showing production measurements from a B2B company’s sales process. The first shows the quantity of qualified opportunities generated per month. The second shows quantity of closed orders per month. Each is for the same group of salespeople over the same twelve month time period.

Most companies measure orders (output) only, so they have no way of knowing what is really going on in the business. In this case we can tell a lot more about what is going on because we have a measure of the input (qualified opportunities) as well as the output.

Sales Process Behavior Charts

Figure 1 – Sales Process Behavior Charts

Notice how the production of qualified opportunities trails off in the last quarter, while the production of closed orders increases during the same period. Of course, that’s normal behavior of salespeople at the end of a year, focusing more on closing deals in their pipeline than they do on lead generation. They made their numbers during the year in question.

A Problem Worth Avoiding

There are is something critical you can tell about this sales process from these charts.  It is definitely a problem, a challenge, something most B2B companies suffer from.

Yet it is something that is almost entirely avoidable.

Can you tell what it is?

I’ll tell you what it is in my next posting, on Monday.

Michael Webb
May 27, 2009

Michael Webb

About the Author:

Michael Webb founded Sales Performance Consultants to create a data-driven alternative to the slogans and shallow impact offered by typical sales training, sales consulting, and CRM companies. Michael helped organize and delivered the keynote speeches for the first conferences ever held on applying Six Sigma to marketing and sales. Connect with me on Google+ at+Michael Webb

Michael Webb – who has written posts on Sales Performance Consultants.


6 Responses to “What Can You Tell From These Sales Process Behavior Charts?”

  1. Looks like while they are closing, they are not also prospecting…and unfortunately I see B2B’s do this frequently. This is by far one of the single biggest headaches that drives CEO's crazy as it adds a degree of variability that hits home where it hurts...in cash flow.

    It is also, from my experience, is a symptom of a much bigger problem: the sales team lacks a definitive sales process. If they have one it no longer matches the buying process.

    Mark Allen Roberts

  2. Dave Hurlbrink says:

    Michael,

    I infer from these sales process charts that, although the team made their numbers during the year in question, they wouldn't make them the following year. Also, I suspect their process is biased towards later stage selling activities versus early stage ones.

  3. Bobatkins says:

    First note_-the charts do not measure the same time periods. The first chart starts in period 3, the lower chart starts in period 2. Visually, this means that chart 1 is lagged by a month (things done in month 2 on the lower chart are in line with things one month later in chart 1).

    I agree that it looks as though closing is depressing lead rates, which can cause a feast and famine cycle.

    It also looks as though very little work is getting done in month 2/3, both months are below the norms and close to lower limits.

    Last, the controls limits include 4-6x variation between the lower control and the upper control. This indicates a process that is not really under control at all--and will swing wildly from period to period.

  4. David Burton says:

    Michael

    Closed orders look to me as though they are driven more by client annual budget (spend it or you lose it) pressures, rather than by the sales process/proposition creating urgency.

    - This is why orders are low at the start of the year and build as the year goes on. (Then fall off a cliff again for January).

    This, with the exception of period 9 - where I would guess that a 'time limited' promotion was the cause, both of the increase in leads and in sales.
    - But at what cost to margin?

    Fun to guess, but would need more data to look at the true picture - ie sales lead conversion days would be a good start.

    I look forward to your answer next week.

  5. I see the "close under pressure" in full force. Of course these are inferences, but with sales closing at a higher rate at the end of the month they are selling with the pressure of the close and perhaps are relying on this technique. That is an issue and one we see in administration in such areas as collections and billings.

    The idea is the "push is on!" The downfall is throughput is very poor as we lack the smoothing consistanty of the close which of course smooths the backlog for ops and billing for revenue flow.

  6. [...] you for the excellent remarks about what process behavior charts can tell you from last week’s blog post. For convenience, I have reproduced the image here (with interpretation below). Figure 1 - Sales [...]

Leave a Reply