Sales Performance Metrics That Matter Most
by Tausif Haque, on Jul 10, 2017 6:08 AM
When it comes to assessing sales performance, the revenue generated by sales reps is what most sales managers tend to focus on. Achieving sales targets may be important, but it would be myopic to completely ignore other vital sales performance metrics. For example, what if a sales rep is building a healthy sales pipeline that would deliver million dollar deals in 6 to 12 months. Would it be right to discourage or disincentive such sales reps; probably not! Sales managers need to look at the big picture and include other important sales performance and activity metrics in their assessment of sales reps. Apart from revenue generation, here are some other sales performance metrics that can be equally important.
Time spent on core selling activities: A sales rep may be logging in 60 to 80 hours per week, but the important thing to know would be the actual time spent on core selling activities. Sales managers can use this metrics to understand the problems of sales reps and identify unproductive tasks that may be eating into their work schedule. For example, research has shown that sales reps often spend a significant percentage of their productive time searching for relevant content or updating CRM. Such problems can be resolved easily by using mobile sales productivity apps.
Lead response time: How quickly sales reps respond to incoming leads can be crucial in closing the deal. Usually, the standard response time is 24-48 hours, but this can be too late in today’s fast paced world. If sales reps can respond within an hour, it would dramatically increase the chances of qualifying the lead. Sales managers should be aware of the lead response time of various sales reps and help them if they are not up to it.
Win rate: Just like not everyone is successful at scoring goals in a soccer game, the same applies to sales reps when it comes to closing a deal. Some sales reps may be masters in networking and maintaining a healthy sales pipeline, but may not do that well at the time of closing a deal. Sales managers can use this metrics to identify weak spots and introduce coaching and training to help sales reps who may be constantly facing issues with closing deals.
Deal size: A sales rep may have closed 20 deals worth $10,000 each, but would it compare to a single multi-million dollar deal? It’s a general tendency to run after smaller deals, as they are easier to close. However, it may not help the organization to achieve its sales targets. Sales managers can use this metrics to understand why sales reps are focusing on smaller deals and how the situation can be improved.
Sales cycle: Sales managers can use this metrics to know how long sales reps are taking to close specific deals. If sales reps are taking too much time, it could indicate a problem with the individual or it can also be due to sales bottlenecks. The exact reason for the long sales cycle needs to be identified and dealt with on priority.
RoI: Every sales team and its supporting infrastructure require a certain amount of investment. By comparing investment with revenue generated by the sales team, sales managers can get a fair idea about the team’s productivity. Overtime, this data can also be used to calculate the approximate investment required in case the organization is planning to scale up its revenue targets.
Sales leakage: The sales pipeline looks healthy, but targets are still not being achieved. So what’s causing the leakage? Are the sales reps responsible for the leakage, or is it some other issue? Sales managers can use this metrics to understand if there is a leakage in the sales pipeline, who or what is responsible, and how it can be fixed.
Grumpy or happy: At the end of the day, how do sales reps feel about their job, their bosses, the team and the organization itself? Are they grumpy or happy? Research has shown that happy sales reps are far more productive, as compared to unhappy or overworked sales personnel. Sales managers can use this metrics to identify problems that may be affecting employee morale and satisfaction. Remedial measures need to be taken as soon as possible before the sales growth chart starts pointing southwards.