Let’s look at a few simple scenarios.
There is a sales force for which the win rate is 50%. How are they doing?
Of course we can’t possibly give an answer for that without more information.
There is a sales force for which the win rate is 50% this year, and was 45% last year. How are they doing?
The win rate has a positive trend, so that shows improvement, but we still have no frame of reference. What should the win rate be?
When hypothetical situations are laid out for evaluation like this it seems so simple. Yet, we are creatures of habit. Sales leaders often look at trends to evaluate what they believe needs attention. Instead of looking to a benchmark to set a target, they look to the status quo and how to incrementally build off that. Historical views certainly tell us about progress or regress, but unless we have an idea of the ideal there is a significant component missing. Benchmarking provides the frame of reference that is needed to develop an informed vision from Sales Performance Management.
The word benchmarking in fact comes from cobbling. A cobbler would mark out the outline of the foot they were fitting for on their bench. The shoe was then built to those marks. The benchmark is an external indicator of the ideal that gives you indication of what you are striving for. It would be foolish for a craftsman to attempt to size a shoe without knowing what was required of the final product. They could be of great skill and end up with a useless pair of shoes. Similarly, making decisions without knowing what the world class metrics look like leaves a sales leader risking focusing on the wrong issues.
There is a sales force for which the win rate is at 50%, in a space for which the top players have win rates of 80%. How are they doing?
Now we have context and know that this is a serious gap that represents a great opportunity for improvement.
Are you making management decisions off of information evaluated only off of your company’s history, or are you letting external examples shed light on what the future could be? Taking the latter approach will lead to effective Sales Performance Management and help your sales force step up its game.