A good manager knows that the sales team can make or break their company. All other departments can be in sync, but without a strong sales staff and sales process, the revenue that pays employee wages can vanish. When it comes to the sales team, special attention must be given to ensure that the company paydays keep coming.
According to Suzanne Paling, sales management consultant and author of "The Accidental Sales Manager: A Survival Guide for CEOs (or owners or presidents) Who Find Themselves Managing Salespeople," sales reports can be key in keeping the sales process and the cash flow moving.
“Sales reports enable a manager to track how much time salespeople are spending on different sales activities, if they are meeting their productivity goals, and whether their efforts are translating into real sales,” explains Paling. “In other words, the sales reports paint a picture of the sales representatives’ day even when the manager can’t be there to observe them. The information in these reports plays a critical part in helping a manager oversee the success of the sales team and essentially the whole company.”
For the sake of sales success, Paling encourages sales managers to incorporate these basic reports into their sales process:
The Daily Call Report
Knowing how many calls your sales representatives make during a given day, as well as whom they are calling, is essential for those managing salespeople. Accounts are not all created equal. Some need to be called on more frequently than others. After establishing the call frequency for all of the salespeople’s accounts, the data from this report confirms whether they are adhering to the schedule.
Paling suggests looking for the following when reviewing this report:
• Number of calls made in a row
• Specific types of calls
• Absence of certain types of calls
• Excessive numbers of certain types of calls
• Average length of call time
The Productivity Report
Those managing salespeople need a reasonably accurate summary of how many and which type of calls they make. The data often includes the number of outbound calls, conversations, voice mails, e-mails, customer meetings, product demonstrations, and proposals generated in a given day, week, or month. The purpose of this report is to compare actual results against the benchmarks established for each activity.
Paling notes, “Whether a sales staff exceeds or fails to meet the established productivity standards, the productivity report keeps the manager informed. When a salesperson or sales staff does struggle, looking at the raw numbers can offer insight into the problem.”
When reviewing this report, Paling advises managers to ask:
• At which point in the sales cycle is the rep below/above productivity quota?
• In which areas is the rep consistently behind/ahead?
• Where the rep is below/above the productivity quota, how does it affect the next phase of the sales cycle?
The pipeline report consists of all those prospects being actively pursued by a sales representative and separates them by their appropriate phase in the sales cycle. This information allows managers to keep track of the total number of prospects the salesperson is working with at any given point. Managers can tell how quickly a prospect progresses from one stage to the next or be aware when a prospect drops out altogether.
Paling offers these as examples of typical pipeline phases:
• Phase I—Decision-maker expresses interest in product or service
• Phase II—Salesperson meets with decision maker
• Phase III—Decision-maker participates in product demonstration
• Phase IV—Proposal submitted
• Phase V—Sale closed/sale lost
“It helps if the sales manager and the sales reps agree on the pipeline phases,” says Paling. “Naming the phases adds consistency and contributes to the development of a sales culture.”
The Sales Forecast
The single most important document generated in most sales organizations, a sales forecast has multiple purposes including:
• Holding salespeople accountable for the deals they intend to close at the end of each month
• Determining which opportunities need executive attention
• Helping to estimate revenue
• Paving the way for post-sale product or service delivery
The accuracy of this report strongly affects the entire organization. Unfortunately, many people confuse the pipeline report with the sales forecast.
The pipeline report and the sales forecast both show prospects at different phases of the sales process. The difference lies in the fact that the sales forecast shows only those prospects in the final stages of purchasing the product or service.
“The potential sales shown on the sales forecast might be a cause for celebration or function as a shrill alarm,” explains Paling. “The accuracy of the information provided determines sales revenue for the month or quarter. Failure to bring in enough sales revenue over a period of time leads to staff reductions, cash flow issues, and—most drastically—companies going out of business.”
When looking at the sales forecast, ask:
• In which months (1, 2, or 3) is the rep typically above or below quota?
• Does revenue usually drop in any one month in particular?
• How many accounts drop out/get added from one month to the next?
• Does the rep have an easier/more difficult time achieving quota in one product line vs. another?
The Long-Range Sales Forecast
Often overlooked, long-range forecasts have a place in the portfolio of reports for those managing salespeople. Prospects in this report have told the sales representative that they are budgeted for and are committed to purchasing a product or service at some point in the future. The reason for the delayed purchase usually involves an expiring contract or a large capital expenditure that needs to go through a formal budgeting or bid process.
Typically, the long-range forecast keeps track of prospects planning to buy anywhere from four months to two years from the time of the initial contact with the sales representative.
Many of these long-range sales involve RFPs, intense competition, or the possible replacement of the prospect’s current provider. Sales like these usually require executive involvement at some point. This report helps management prepare accordingly.
Suzanne Paling, author of "The Accidental Sales Manager" (Entrepreneur Press), is the principal consultant of Sales Management Services, founded in 1998. She has more than 20 years of experience in sales, sales management, and sales consulting. Working with both field and inside sales organizations, she has helped clients in a number of industries including software, construction, medical, telecommunications, manufacturing, delivery, and recruiting.