You’ve surely heard the axiom (in sales and life in general), “Lead, follow, or get out of the way.” While this might sound, today, like an ad slogan for an athletic apparel company, it is actually attributed first to Thomas Paine. Paine is the American patriot and author whose pamphlets, Common Sense and The American Crisis incited a revolution and inspired our first American heroes. His words have been invoked in business, in battle, and in the minds and hearts of entrepreneurs and sales professionals for generations. Here’s why they ring truer today than ever, with the right mix of leading and lagging indicators being a guidepost for sales success:
When it comes to sales metrics, two essential types of Key Performance Indicators (KPIs) are leading indicators and lagging indicators. Both types are essential to effective “activity management” as you develop, implement and manage a successful sales program for the small to medium-size business. Let’s take a closer look at the differences, why both types of indicators are important, and why implementing a proper mix might just be a revolutionary game-changer for business owners who need their sales teams to step up their performance.
Leading indicators are forward-looking and predictive measures of sales performance. As Mark Thacker says in his book, Beyond the Mountaintop: Observations on Selling, Living and Achieving, they “are the ‘warning lights’ that…allow you the opportunity to intervene before it is too late.” (Think “one if by land and two if by sea,” the warning lights that spurred Paul Revere into action.)
Leading indicators are those KPIs that are most useful for sales forecasting. They might include such essential metrics as the number of prospects in the pipeline, number of customer visits, number of presentations made or proposals submitted, or even the amount of time spent in the prospecting phase. If these numbers are too low, future sales could be in trouble.
Leading indicators also make sales coaching more meaningful in real-time. It’s easier and more relevant for the Sales Manager to say to the salesperson that they need to bolster the number of prospects in their current pipeline than to say “You should have had more prospects in your pipeline 6 months ago.” Hindsight is 20/20, but it can only be reflective, not proactive (or revolutionary).
Most sales metrics used today are lagging indicators, and – used in a vacuum without the additional insights from leading indicators – they are little more than sales performance autopsies. Lagging indicators only empower you to react, to reverse your course. Because they only tell you where you’ve been, they might show you where you took the wrong path, but cannot help you avoid that path in the first place.
Lagging indicators’ rear-view outlook can be valuable, however, if you take corrective actions based on what you learn. Lagging indicators can include any quantifiable historical information such as quarterly or annual sales data, deals closed, and deals lost. This is good information to track, certainly, and this data can give you essential insights that can be analyzed through the lens of hindsight and the perspective of knowing how things unfolded. But lagging indicators, used to the exclusion of leading indicators, are the domain of followers and underperforming sales organizations. If you use only lagging indicators to guide your sales program, you are doomed to fail.
Getting Out of the Way
Even the most entrenched industries must change their sales management ways if they are to survive. Adapt or die. Sadly, by the time many business owners recognize the need to change – philosophically, methodologically, technologically (or all three) – it is too late; their competitors have kicked up their heels and left them in the dust. For those business owners who insist on doing things the way they’ve always done them, simply because that’s how things have always been done, the end is nigh. Because they choose not to use and heed the findings from leading and lagging indicators, they will need to get out of the way or be trampled in the process. It’s a Paine-ful lesson that can be avoided if they heed the advice and professional sales leadership of an expert sales manager.
Lead, follow, or get out of the way. Timeless advice, to be sure, but for the small to medium-sized business, it can be difficult to stay out front without a dedicated and proactive sales manager leading the charge. That’s where the licensed Sales Advisors of Sales Xceleration come in. While outsourcing sales management might seem revolutionary to the owners of small to medium-sized businesses, it is a proven path to success that will help them compete and succeed in an increasingly competitive marketplace.
Want to learn more about how the proven sales systems from Sales Xceleration, using a strategic mix of leading and lagging indicators, can mean the difference between success and failure? Reach out to an Advisor today!