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Revenue Is Not A Sales Metric

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Identifying the right sales measures and metrics are key to driving sales performance. However, revenue doesn’t tell you the whole story. Sales managers can’t affect revenue, they can affect the metrics that lead to it.

Caddyshack…One of my favorite all time movies. Do you remember the locker room scene where Judge Smails asks Ty Webb about that day’s golf game?
Ty says, “Oh, I don’t keep score.”

A puzzled Judge Smails asks, “How do you measure yourself with other golfers?”
And, Ty says, “By height.”

A very funny scene, but what isn’t funny is when sales performance is gauged by the wrong measures. When I ask CEO’s about sales metrics, the first critical metric they say is revenue. And, I have to be the one to break the bad news. Revenue isn’t a metric. It’s a result of the right metrics being delivered upon by the sales people.

I’ll give you an example. Let’s say the sales cycle in your industry is six months long. When a sales person wins a piece of business, does that tell you he is doing the right things now? No, it means he did something right six months ago.

You can’t affect revenue, but you can affect the behaviors that lead to revenue.

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.