How should you measure the performance of your sales teams? Most sales leaders measure their teams by total sales in dollars . For example, the southeast region sold $27.2 million in calendar year 2021, and the west region sold $15.3 million. The southeast region performed far better.
Total sales is a good measure for determining compensation of sales managers. But if your goal is diagnosis and performance improvement, total sales does not help you. Is $15.3 million good? Is $27.2 million? What skills should the west region improve, to sell more? What should they do different? Could the southeast region improve?
Your sales team created an ROI spreadsheet, a spreadsheet that attempts to quantify the return on investment (ROI) of your business’s offerings, for your prospective customers. You share this with your customers to persuade them to purchase your offerings, but your customers are not convinced. They don’t believe the assumptions and they find your spreadsheet confusing. They take no action. Or they purchase from a competitor.
(This is a description of a particular model, a simple Excel model I use for my own business development. I explain it, mostly in words, but with a couple of graphs and a bit of math. If you want to skip the math, feel free; I think it is understandable without. If you want the model itself, let me know, and I will send it to you, as well as explain how to use it.)
Do you network enough? Does a friend have a great opportunity for you today, an opportunity you never learn about because you have not talked to that friend in six months, and your friend never thought about you? How many opportunities are you missing every week, every month, every year, because you are not talking to people you know?
Models are often built as black boxes. A user can explore the dynamics of the model, trying different actions and viewing the results. But the internals are hidden: the user cannot see how his actions produce the results.
In 2009, Michael Dougherty and I created Mass Enrollment, an interactive simulation of the process of signing up illegal immigrants for an amnesty, should Congress pass a law granting immigration benefits to illegal immigrants. Mass Enrollment had a user interface, allowing the user to explore different sign-up processes, different temporary staffing strategies for the sign-up, and different strategies for application fees. Mass Enrollment simulated the dynamics of adoption: did immigrants apply at the first opportunity or did they wait to see what happened when others applied? Mass Enrollment simulated both legitimate applications, and also fraudulent applications by people who are trying to achieve immigration benefits with fraudulent documents. And Mass Enrollment simulated the backlogs in the process, showing which tasks in the selected process built up long delays.