Be Smart…Set Sales Benchmarks!

Setting sales benchmarks may be the smartest thing your company isn’t doing right now. Benchmarking means analyzing the most successful companies in your sector in order to determine what these standouts are doing well and how you can do it, too. Companies often set benchmarks to cut costs, but smart sales executives have increasingly come to realize that sales benchmarks can raise revenues, too.

B2B software and technology companies are particularly well-positioned to benefit from setting rigorous sales benchmarks. A recent study by the Aberdeen Group found that the most profitable B2B companies were 19% more likely than less successful ones to employ methodical benchmarks.

But while it isn’t hard to see why your company should be benchmarking, figuring out how to do it can be confusing. How, after all, can you be sure your benchmarks are pushing you to succeed, and not just justifying your current performance? And how can you implement benchmarks effectively among your sales staff? To help your company benchmark intelligently, here are a few tips from the best researchers and consultants in the field:

• Set both performance and best-practices benchmarks. These two sorts of formal benchmarks are closely related. Both require access to data from competing firms; this is typically available for a fee from market research groups.

• Performance benchmarking involves directly comparing different organizations’ performance levels with regard to specific processes, like lead-tracking and social-media advertising.

• Best-practices benchmarking uses available data to identify the companies that lead your sector in sales. Once these leaders have been identified, comprehensive qualitative and quantitative analysis can determine the exceptional practices that set these companies apart.

• Look to sales leaders within your own organization. While it’s essential to consider data from market leaders, B2B companies shouldn’t neglect a key source of internal data: their own star performers. Identify the standout members of your sales team and carefully analyze their performance. Both in-depth interviews and data analysis can help to paint a detailed picture.

• Analyze a variety of metrics. Sure, sales volume is important, but setting intelligent sales benchmarks will require you to break down data in innovate ways. For example, how much time and money are your sales representatives spending per new client? Per new client dollar? Per dollar in new sales to existing clients? How do these figures compare to the companies that lead your sector?

• Devote time and energy to best-practices training. Identifying what others are doing well isn’t enough to improve your sales; you’ll also need to train managers and staff members to emulate these practices. View industry-leading standards as elements of a detailed, exercise-based training curriculum, and use coaching and mentorship networks to put these elements into practice.

• Set ambitious but attainable multi-year goals. Don’t expect your sales team to reach industry-leading benchmarks instantaneously, but do demand strong improvement. When a British subsidiary of Xerox began sales benchmarking, they knew that they couldn’t completely transform their sales division overnight. But their sales managers still set bold objectives, training their sales staff in industry best practices and then challenging them to achieve 70% of the benchmark standard that first year. The result was more than $65 million in additional sales the first year alone.

• Create a culture of accountability and reward for your sales team. By using tools such as lead-tracking and time-tracking systems, you can reward the most efficient sellers and ensure that the least effective ones don’t fly under the radar.

• Consider working with a benchmarking specialist. Many firms specialize in B2B software and technology benchmarking. Depending on the size and complexity of your sales operation, you may find it helpful—and profitable—to consult with an experienced professional.