From his experience, Jordan has noticed a trend in which small and growing business companies reach a revenue plateau. To overcome this plateau, he believes companies must learn how to manage a sales force: this will allow such companies to become mature and sophisticated businesses.
Generally, when small and growing businesses realize they need to work on their sales team, the first step they take is hiring sales people, and the second is buying a CRM in an effort to organize and share data. CRM can create a variety of different reports; the assumption is that when the sales team has access to data, they will use such data to sell and manage better. The key question is, “How should management use all that data?” The data that companies have access to, whether in sales, finance, or operations, should be measured only with the intention of improving it. In other words, use the data to improve the data. Moreover, another fundamental question of CRM is whether it is fair to ask sales people to improve data. To answer this question, Jordan and his colleagues conducted research by studying sales management reports from companies such as GE and IBM. They recorded the companies’ reports by way of metrics, how they were using those metrics to manage the sales team, and the impact.
During the initial investigation, Jordan and his colleagues learned from sales management reports that these companies were using 306 different metrics. Some of these metrics included revenue, market share, quota achievement, and customer satisfaction. Their guiding question became, “Can we manage these metrics?” and they learned that some of these metrics were not controllable, such as revenue and market share. In comparison, call type and number of accounts are controllable metrics. Jordan and his colleagues eventually came up with a metrics framework that starts with business results at the top, followed by sales objectives and sales activities. Business results include, among ohers, revenue growth or hitting your revenue target for the year; they are outcomes the organization wants but cannot manage. Sales objectives are things that can be influenced such as customer acquisition and selling more products; they are things that you want that can be influenced with sales activities. Sales activities providing your team with training, or making sales calls.
From this research, Jordan and his colleagues discovered the concept of reverse engineering your team’s success, which means that the only thing you can manage is sales activities.
In conclusion, companies can only manage their sales activities to reach their sales objectives, which influence the business results.
