sales forecasting

Why Activity-Based Selling Drives Account-Based Sales

It’s no secret that many B2B sales organizations are switching to account-based selling.

What you might not know is that the trick to creating a well-oiled sales machine with account-based selling is with an activity-based selling strategy. This methodology is built on the premise that sales is a cascading chain of controllable behaviors that leads to a defined outcome – closing a deal.

With account-based sales, you have a target prospect profile and account list. Activity-based selling helps guide reps through the best actions to take in pursuing those accounts. This forces the daily routines of sales reps to go from reactive to proactive, because reps know what activities they can control that will lead to winning more business.

This strategy focuses on the basics of selling like qualifying prospects, having conversations with senior buyers and demonstrating ROI, but with more process. Here’s how it works:

Using Activity-Based Selling to Proactively Manage Account-Based Sales

1. Determine sales goals.

How much revenue do you need to bring in this year? I’m guessing your leadership team is looking for year-over-year sales growth. Let’s say you generated $100 million in sales last year, and you’re supposed to increase that number by 40%. That means you need to bring in $140 million this year.

If your average deal size is $100,000, your reps would need to close 1,400 deals. And with 100 sales reps, that comes out to just 14 deals per rep.

2. Calculate conversion rates.

Use a sales scorecard to track activities on your team. When you have one month’s worth of data, you can start to evaluate conversion rates. Here’s an example of average monthly activity levels for reps:

  • 20 Prospect Conversations
  • 10 VP-Level Meetings
  • 5 Proposals Sent
  • 1 Deal

Based on this data, here’s what our conversion rates look like:

( 10 VP-Level Meetings / 20 Conversations ) x 100 = 50%
( 5 Proposals Sent / 10 VP-Level Meetings ) x 100 = 50%
( 1 Deal / 5 Proposals ) x 100 = 20%

Now we can work back from our end goal to determine how much activity it will take to get there.

3. Reverse engineer the sales process.

Start with your desired sales number. For our example, that’s $140 million. We already know that we need 1,400 deals. Based on the 20 percent conversion rate from proposal sent to deal closed, we’ll have to send out 7,000 proposals:

(1,400 deals / 0.2) = 7,000 proposals

Then we can calculate the number of VP-level conversations and meetings we need.

(7,000 proposals / 0.5) = 14,000 VP-Level Meetings
(14,000 VP-Level Meetings / 0.5) = 28,000 Conversations

These levels of activity will drive our revenue outcome.

4. Divide and conquer metrics.

Assign activities. With a 100-person sales team, here’s what each salesperson needs to do:

  • 280 Conversations
  • 140 VP-Level Meetings
  • 70 Proposals Sent
  • 14 Deals

Then break it down to a monthly level:

  • 23 Conversations / Month
  • 12 VP-Level Meetings / Month
  • 3 Proposals Sent / Month
  • 1-2 Deals / Month

Consider adding cushion to your goal. An extra 15-25 percent on activity numbers can offer an added layer of assurance that you’ll achieve quota. But the activity numbers must still be achievable.

5. Monitor and course-correct activities.

This step is critical. Use sales scorecards or a sales activity management system to track daily activities of reps in real time. This helps you ensure that all activity levels stay on (or ahead) of pace to hit quota. Talk about your metrics often – make them a part of your weekly sales team meeting and weekly one-on-one sessions.

Perhaps the biggest advantage of this strategy is the ability to course-correct performance in real time. When a metric falls behind, focus sales rep efforts on it. Host a team meeting to communicate that getting the metric back on pace is a priority. You can even run a quick contest or spiff to foster urgency and rally the team around a common goal.

Treat your metrics like the pulse of your pipeline. If the rhythm slows, so will revenue. But if you use activity-based selling to keep your metrics on track, you’ll surely experience success with account-based sales.

Check out this ROI calculator to see what activity-based selling could do for you.

Founder & CEO

Bob Marsh is Founder and CEO of LevelEleven, a sales engagement platform used by VP's of Sales to drive their transformation into a modern sales organization. High growth companies including HubSpot, Symantec, and Rocket Fuel use LevelEleven to keep salespeople focused on the behaviors that drive revenue, and help sales managers be modern, metrics driven coaches. Bob has more than 20-years of sales and sales management experience, and prior to founding LevelEleven in 2012, Bob spent more than a decade at ePrize which went from startup to more than 400 employees during his time there. Bob lives in metro-Detroit with his wife and three children.
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