Metrics for measuring solution-selling

As many formally product-focused companies migrate to selling solutions, most overlook one critical component: the way they measure sales performance.

Sales people, using a solution-selling approach, generally nurture larger, more complex and lucrative deals. They are engaging in business-level discussions with key executives in prospect companies. They will invest heavily in building long-term, trust-based relationships with key decision makers. But in many instances, their success is still being measured using the old transaction-based sales metrics.

Working with many sales leaders and their sales teams since 1995, we understand that while making the shift to solution selling is a challenge, identifying and isolating metrics that can track the productivity of solutions-led customer engagements is particularly difficult, if not wholly problematic.

Sales managers sit right in the thick of the challenge

Sales managers are charged with managing and improving sales performance. This is something they have always been able to do using easy-to-measure numbers. This could include the amount of revenue a salesperson brings in each quarter, the number of calls being made, the number of client presentations given or the length of the sales cycle.

But in selling solutions things get much more complicated. The same salesperson who delivered regular sales volumes may have millions of dollars worth of contracts in a pipeline, yet close only one or two deals in a quarter. Because the solution sale is much more complex and usually involves outside partners, the salesperson’s sales cycle might extend beyond a traditional six to eight weeks. It could be up to nine months or more.

Based on our years of experience in working with chief executives, sales and business leaders and sales teams, none of this is bad. It’s just inherently difficult to either monitor or measure when companies continue to define success using the more traditional measures.

So how can the challenge of measuring solutions sales performance be met?

A systematic process called proximity-metrics provides an effective measure and addresses the issue.

Proximity-metrics measures the activity that lies at the heart of the issue of solution-selling, such as customer intimacy. For example, the amount of face time with the right decision-makers in the prospect organisation is a meaningful proximity-metric. This is because it measures the interaction with key decision-makers and the progress of the sales process in terms of both frequency and duration.

By contrast, traditional sales metrics tallied the number of customer ‘touches’ a salesperson made. If the salesperson left a prospect five voice mails, they could record five customer ‘touches’ without ever having talked to that customer. Equally, if a salesperson had interacted with low level decision-makers in the prospect company, this too was measured as successful interaction. This is despite the fact many of these low-level calls did little to progress the process.

Proximity measurements, on the other hand, count only those instances when a salesperson spends quality time in front of the prospect company’s right contacts. Talking to the receptionist – whilst it may provide information of some value – doesn’t count. Neither do activities such as voice or emails. But an hour-long discussion, with a clearly defined decision maker about critical business that relate to the solutions under review, does count.

There are other examples. Sales managers have long relied on quarterly revenue numbers to gauge sales progress. But that metric is irrelevant in a solution-selling environment. Managers should instead be looking at the quality of the deals and the depth of penetration of a customer’s business. In other words, not how much business the organisation is getting, but how much of the customer’s spend, in a category, the company is getting.

What about social media and social selling?

The biggest mistake many companies make is overemphasising social selling activities at the expense of effective human-to-human interactions. Human-centred selling is at the heart of solutions-selling. Using social selling to help build currency and provide insights is part of the solution sales process, but it is not the process. Used wisely, social selling can help build credibility, add value to the prospective client and enhance the reputation of the salesperson and their company.

A complete overhaul of the metrics used in selling may sound like an overwhelming task. However, the key to successfully measuring solution selling effectiveness is to use a limited number of metrics that provide a solid picture of what’s going on. Instead of the wide range of metrics usually employed to monitor transactional selling – sometimes as many as eight or 10 criteria – solutions selling relies on fewer, more effective and focused criteria.

As organisations around the world come to grips with making the transition to solutions-selling, it is vital that they take time to ensure that the right standards (measures and metrics) are in place to effectively monitor and report on progress. Generally speaking, what gets measured gets done.

Remember everybody lives by selling something.

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