The effectiveness of a sales organization can be summarized in one word: Performance.
Sales analysis and related data accumulation, software platforms, dashboards and other management tools are just trying to understand the performance of the sales efforts and relating that performance to the cost of those efforts.
The sales process can be thought of as prospecting, approaching, assessing needs, presenting, closing and following up. A best practice is to think of the relationship with the customer not only in terms of sales activities, but as a life cycle that needs cultivation. So additional customer retention and customer advocacy processes should also be added to the traditional sales funnel.
Analytics should be developed to help managers measure and analyze sales performance at every stage of not only the sales process but the customer life cycle. From lead generation to the final closing of the deal to the retention and advocacy processes, the sales stewardship is sliced and diced to attempt to understand relationships, causal activities, patterns and trends. That type of analysis attempts to determine the effectiveness of individual processes and opportunities for improvement.
Analytics should be designed to answer some fundamental questions.
What marketing processes are performing well and what processes are not?
What individuals are performing well and who is struggling?
What resources can be redeployed to enhance overall marketing performance?
In designing analytics, managers often fail to understand that performance has at least 2 facets: effectiveness and efficiency. Therefore each process, resource and individual should be reviewed in light of effective and efficient performance.
If the truth were told, measuring is really easy. The hard part is taking the analytics and making changes. These changes can come in the form of holding people responsible for their performance, changing how ineffective processes operate, enhancing processes that bring value and shutting down processes that do not.
The ultimate question is not how to know if the sales efforts are effective and efficient. That is only the first step. Next is determining where ineffectiveness and inefficiencies are – people and processes alike. The real work is in the ultimate question – how to maximize the performance of the sales efforts.