Sales Enablement, Part 1: Margins, Metrics and Management
If you have spent much time on this blog, you know that we talk about all types of technology and strategies aimed at helping by providing information on the sales enablement process. CPQ, CRM, sales portals, content marketing and guided selling are just a few of the topics we kick around on this forum.
If you are reading this, you are likely implementing or have implemented some of these solutions within your own operation.
At some point, someone is going to look at the programs you’ve embarked upon, the programs you have invested in, the tactics and the strategies you have implemented and ask, “Do any of these sales enablement tactics really make a difference?”
The question might be asked in the context of a budget conversation with finance, or it might come from your immediate boss or perhaps from the “C” suite or a vice president. Regardless of origin, you are going to need to have an answer ready to go.
Two ways to NOT respond are:
- I don’t know; that’s above my pay grade.
- Well the sales rep told us it would work.
People who ask these types of questions typically want a more substantial, thought-out and most importantly, confirmable response. In other words, if you make a claim, be prepared to present some evidence to back up your statements.
I’m sure I’m not sharing a huge secret by saying that management is more and more a matter of metrics and KPIs driving and informing decision-making. In other words, when they have questions, you better have numbers.
More than satisfying your management and their rapacious appetite for numbers, you need data to inform your own decisions regarding sales enablement. You need to know that the part of the sales process you might be fixing really needs to be fixed, and what you are not fixing doesn’t require the slightest tweak.
The Sales Enablement KPI that Matters Most
Ultimately, margin is what it’s all about. If you can show that you are moving the needle in a positive way regarding margin, you are going to have a lot of friends in the executive suite.
You might have 100% market share, but if you are bleeding to death addressing that market, what’s the point? The same is true with customer satisfaction. They may think your company is the most responsive, customer-centered and committed company around, but if you are out of business next month, it’s all for naught.
Market share and customer satisfaction are important, but only margin equals money in the bank.
This fact should be kept in mind when you select metrics for your evaluation and everyday management of your sales operation. Margin is the goal. Actions should be designed to positively impact the effectiveness of the sales funnel and tactics.
Sales Enablement Metrics and Their Potential Impact on Margin
Product color popularity—seems silly right? It’s not.
Painting products typically require running through a paint shop that has to be set up to paint a given color on a given day. If you have three customers per year buying your Mark 1 Widget liveried in the special magenta color, it’s likely costing you more to set up the paint shop than you are making on the three sales. It’s also delaying fulfillment of orders for non-magenta widgets, which is not winning you loyalty from your other customers.
This is the kind of data that drives decisions that ultimately affect your profitability. You have access to more data than you likely realize.
The assorted ubiquitous sales enablement software deployed across your organization is a rich source of minable raw data.
- CPQ – Product configuration popularity, option frequency, pricing resistance, discount by rep
- CRM – Activity by geography, sales performance comparison and normalization, vertical activity data
- Customer Portals – Interest data, event triggers, buying behavior
There are lots. Over the next few weeks, we will look at this in detail and see how you can drive higher margins, higher sales and happier customers.
Next week, in part 2, of our “Sales Enablement” series, our topic will be “Everything That’s Wrong with Your Sales Process.”
In part 3, we’ll explore some specific metrics and how they might be useful in your quest for increased margin and better management of your sales operation.