Performance indicators to drive your sales by.

One of the more useful things I learnt at Business School was the idea that running a business is like driving a car (and most of us do that on a daily basis). To successfully drive a car, the driver needs information, much of it comes from the dials on the dashboard. Information relating to speed, engine revs, fuel levels, oil pressure, engine temperature, and these days as well, a host of sat-nav indicators relating to external factors like location, traffic, hold ups.

How does this relate to your business? Well you probably have monthly management reports with a range of business critical measures: bank balance, debtors, WIH, creditors, production figures, stock levels. When you review these, the chances are you recognise which ones are critical to your business (the ones you need to be aware of to keep your business “on the road”) and because they are critical, you look at these first. Using the car dashboard metaphor, these particular measures will be on your dashboard front and centre, chances are you have half an eye on the really critical ones most of the time.

What information do you have to monitor the performance of your sales function? You may be reviewing orders received, sales processed, pipeline cases; do you have any qualitative measures to measure performance by? Sales conversion rate is an example. Remember that when businesses are suffering from poor sales, it is generally a result of actions, or inactions, to how they performed three months previous. In our experience, it is vital to pick up on changes in sales performance as soon as they happen, so that corrective action can be taken to avoid suffering the effects three months down the track.

As the economy tightens, like driving your car up an ever-steepening hill, you can rely on your intuition that your sales engine is labouring, better still, you can look at your dashboard indicators for even earlier signs that your sales performance needs attention. Then, of course, you need take some action! And it’s best to do this before your sales engine completely stalls, because push-starting a car facing uphill is a lot harder work than tuning one that’s still running.