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Revenue Is NOT A Sales Metric!

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Ask most business executives what metric they use to gauge their sales team and they will tell you it’s revenue. In this episode of the Sales Management Minute, you will learn why revenue is not a sales metric and the 4 keys to developing your sales metric management system.

Albert Einstein once said, “Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.” As a sales leader, you are inundated with sales data, but what sales metrics truly tell you how your sales team is performing. And, of course, you’re thinking REVENUE! After all, that’s what your sales people are paid to deliver.

I agree that your sales people should bring in the dollars, but revenue is not a sales metric. It is a result of the right metrics being delivered upon by your sales team at the desired frequency. You can’t affect revenue, but you can affect the sales metrics that lead to it.

To identify the metrics for your sales metric management system, each one must meet four criteria.

The first is measurable. By measurable, I mean that this data point can be tracked statistically. Gut instinct does not qualify as measurable.

The second is meaningful. There’s a sea of sales data, but which ones truly tell you something about sales performance relative to company objectives.

The third is goal-oriented. If we can track it and it is meaningful, let’s place a goal on it and measure performance against it.

The fourth is trainable. As this metric is a key driver of sales performance, what can you do to improve your sales team’s skills at delivering upon it.

A final point…Your sales metric management system isn’t just a performance driver. It’s also your key to designing an effective sales compensation plan.

See you next time on the Sales Management Minute.

Lee B. Salz is a leading sales management strategist specializing in helping companies build scalable, high-performance sales organizations through hiring the right salespeople, effectively onboarding them, and aligning their sales activities with business objectives through process, metrics and compensation. He is the Founder and CEO of Sales Architects, Business Expert Webinars and The Revenue Accelerator. Lee has authored several books including award-winning,  best-seller “Hire Right, Higher Profits.” He is a results-driven sales management consultant and a passionate, dynamic speaker . Lee can be reached at lsalz@SalesArchitects.net or 763.416.4321.