Why Activity Alone Does Not Create Revenue

Research & Sources / Sales & Revenue Growth

Step onto a treadmill and run as fast as you can. Your heart races, you sweat, the display shows impressive numbers. And after an hour you are exactly where you started. Many sales teams work like that. Lots of calls, lots of emails, lots of meetings, great activity numbers. Revenue stays where it was.

The comfort of counting activity

Activity is easy to count. Number of calls made, emails sent, meetings booked, posts published. It feels concrete and controllable. If revenue is low, the obvious fix seems to be: more activity.

Sometimes that is right. If nobody is calling anyone, more calls will help. But often the problem is not how much the team does. It is what they do, with whom, and how well.

When a measure becomes a target

There is a well-known idea in economics called Goodhart’s law: when a measure becomes a target, it stops being a good measure.¹ If salespeople are rewarded for the number of calls, they will make many calls, including short, pointless ones to people who will never buy. The number goes up. The thing it was supposed to show does not.

Activity is the input, not the result

Research by Jason Jordan and Robert Kelly on B2B sales found that what made a difference to revenue growth was not simply more effort, but a clearly defined sales process and regular, careful management of the pipeline.² In other words: the right activities, at the right stage, with the right buyers.

Think of fishing. Casting your line a thousand times in an empty pond is a lot of activity. Ten casts in the right spot, with the right bait, at the right time of day, catch more fish.

Three questions better than “how many?”

“With whom?” Are we talking to people who have a real need, budget and the power to decide? A conversation with the right person is worth twenty with the wrong one.

“What moved?” After a call or meeting, did something change? Did the buyer agree on a next step? A meeting with no next step is mostly activity.

“How good was it?” Did we ask good questions? Did we understand the problem? Neil Rackham’s research on thousands of sales calls showed that the quality of questions made a large difference to success in big sales.³

What to measure instead

• Qualified opportunities created, not just meetings.
• Movement between stages, for example from first meeting to proposal.
• Conversion rates at each stage.
• Average time deals spend in each stage.
• Revenue won, of course, and from which kind of client.

Activity still matters. It just belongs at the beginning of the story, not the end.

What this means for you this week

• Look at last month’s activity numbers next to last month’s won deals. What is the connection?
• Review ten meetings and check: did each one end with a concrete next step?
• Pick one stage in your sales process where deals get stuck most, and focus there.
• Replace one activity target with an outcome measure.

Running is good exercise. But if you want to get somewhere, step off the treadmill.

Sources

1. Wikipedia. Goodhart’s law. en.wikipedia.org“When a measure becomes a target, it ceases to be a good measure.”
2. Jordan, J. & Kelly, R. (2015). Companies with a Formal Sales Process Generate More Revenue. Harvard Business Review, January 2015. hbr.orgA defined sales process, regular pipeline reviews and clear stage rules go together with faster revenue growth.
3. Rackham, N. (1988). SPIN Selling. Routledge (originally Gower). routledge.comThe Situation, Problem, Implication and Need-payoff question model for large sales.