3 Metrics to Increase Sales Force Performance

| min read
Sales Force Performance

Regardless of industry or size, sales force performance is integral to a company’s profits. But setting the right targets and measuring performance to effectively guide a sales team’s activities not only has bearing on revenues. Part 4 of the Sales Excellence kit looks at 3 sales force performance metrics.

Target and performance measurement ensures the optimal allocation of resources, identifies missed opportunities and improvement areas, and improves staff retention and satisfaction. Setting the right targets and adequately measuring them is a complex process. Maximizing sales performance requires a structured and systematic approach. 

Choosing the right sales success factors to measure sales performance forms part of the foundations of an effective sales organization, and it’s where so many companies go wrong. Rather than sifting through dozens of sales metrics to understand and steer sales output, we’ve found performance centers on just three metrics:

“Don’t sift through dozens of sales metrics.
You just need 3.”

  1. Activity metric – What are you doing?
    Start by disassembling your sales funnel and think about the different actions undertaken by your sales team members. E.g. the number of cold calls, discussions, and meetings. What are the potential outcomes of these sales activities? These are key indicators for your sales pipeline. If a key metric drops, the resulting opportunities are also likely to drop. So, when a sales rep sends an email, the important outcomes could be “unopened”, “interested”, “future lead”, etc. And with the visits tracked by door-to-door sales, the outcome that impacts your win rate is whether or not anybody answers the door. By identifying these different possible outcomes, you can generate insights on how to boost performance. For example, a large percentage of phone calls marked as “uninterested” indicates you need to work on your sales script.
  2. Revenue metric – How are you growing?
    Most businesses track and measure revenue. Not only does it provide data on performance, it enables you to make informed commercial decisions, such as where to invest and what activities to stop. By measuring revenue growth, you can identify lost sales, predict future trends, and plan staffing levels. A steady revenue increase each year gives you confidence in your strategy, while a decreasing trend signals major changes are urgently needed. The revenue metric also reveals key information about your products. If a product with certain features generated high revenues, you know to promote those features more heavily with other products, and reduce emphasis on less popular features. Revenue measurement is also valuable for identifying cross-selling opportunities. For example, a company selling coffee machines has high revenues for the machine, but not for the accompanying pods. So customers must be buying their pods elsewhere. Why? Are their pods too highly priced? Are customers unaware that they sell the product? Or do customers buy some pods initially, but then switch to a different supplier later on? Revenue measurement is a given. But even more important is interpreting what this means for your commercial strategy and how to adapt your sales process to achieve success.
  3. Profit margin metric – What is your optimal pricing and how do you maintain it?
    Revenue is a key variable for measuring commercial performance, but you also need to be generating profits. Optimal pricing is an essential component to your product’s success. And profit margin measurement often reveals that this is where many companies fall short. They invest in winning products and a superstar sales team, but make the mistake of leaving price as an afterthought. Even with strong customer relationships, optimal lead generation, high quota attainment, and top employee performance, you won’t be able to achieve your true profit potential unless your price is right. Are you performing well with your activity and revenue metrics, but profits are lagging behind? Then suboptimal prices are likely your main culprit and it’s time to review your pricing strategy.

By determining these metrics, you understand how you are performing now, as well as where you want to be in the future. This enables you to select the right tools that assist in steering your sales force toward profit goals, while adequately tracking and measuring performance along the way.

Sales teams now have unprecedented access to data and tools to assist them in their day-to-day activities and help them be more effective than ever in their outreach. Importantly, these tools not only give sellers powerful insights about their customers. They help them automate their workflow and can track sales performance in real-time. With the right tools on hand, sales teams can better focus on what they do best: selling.

Read more from our sales excellence toolkit:

Part 1: Cutting-edge Tools Take the Guesswork Out of Sales

Part 2: Incentivize Your Sales Team With a Smart Sales Compensation Structure

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