Measure Performance with Sales Team Performance Metrics
In today's sales landscape, there is a ton of data available to sales teams. The problem is that oftentimes there can be too much data being consumed by sales leaders. What data actually matters to the sales interaction? Which data can you use to increase your sales productivity and more effectively measure your sales team’s performance?
At SalesTalk in particular, we know the importance of having the right data and using it in the right way. That’s why we give you access to our What2Know™ module in order to help you save time in sifting through all of this data. It will give your team the useful information that they need to be successful and the data you need to measure the performance of your sales team, making informed decisions along the way.
Why should you measure sales team performance?
Measuring your sales team’s performance is vital to your decision making and your efforts to optimize your sales machine. It helps you to make decisions that will result in effective performance for both individual sales reps and your team as a whole.
If your team is competent in their sales efforts, your business is going to succeed. So you need to have a method of measuring how their efforts are stacking up to your expectations. If they aren’t accomplishing the goals you’ve set, you can then reference performance data to make the necessary changes, whether that’s through changing personnel, strategies, or sales coaching.
What are Sales Metrics?
In a nutshell, sales metrics refers to the data that an organization uses to determine the overall sales performance of a team or an individual sales rep. They allow you to monitor goals of the team and gauge the progress towards these objectives. Without the use of sales metrics, you won’t have access to the relevant data you need to make the right decisions for your team, to coach your team, and to provide useful feedback.
KPI’s, short for Key Performance Indicators, represent a value that a company can use to demonstrate how effective their sales team has been in achieving objectives. It’s a great way to measure the success of your team and each individual rep. By having access to this data, you are able to make the right decision in terms of personnel and sales coaching. Here are a few examples of some sales KPI’s that may be useful to your team.
- Monthly Sales Growth: Measuring the increase or decrease of your monthly sales revenue. Allow yourself to react to the monthly trends of your sales efforts as they’re happening.
- Average Profit Margins: This allows you to take note of and assess the profit margins of your entire package of products or services. For companies with a lot of variety, this is especially important.
- Sales Per Rep: Measure each individual member of your sales team and allow yourself to set a baseline for your reps’ performances. Also helps you to determine any strengths or weaknesses of your team.
- Monthly Calls/Emails per Rep: Snapshot covering how many calls or emails each individual rep has made or sent out. This KPI can be more detailed, showing if a call or email was answered, time spent on each interaction, and how many prospects developed through these interactions.
Sales Ramp Rate
Sales ramp rate is a performance metric that allows you to better determine if a sales rep’s lackluster performance reflects the fact he or she is new to the team and still getting their feet wet, or if they just don’t have the skills necessary to be effective. It gives you a way to fairly measure up the skills of your new hires to those of your more veteran reps.
It’s probably not reasonable for you to have the expectation that your brand new sales rep hits the quarterly quota you have in place for your seasoned reps. But what percentage of that quarterly quota is enough, and what is the timeframe you should reasonably expect a new hire to develop enough to reach that quota consistently?
Sales ramp rate is essentially broken down into two aspects: time and expected quota attainment. Time is used as the benchmark for how long it takes a new hire to develop into a fully productive employee. The quota attainment refers to the performance the new hire should achieve each month of the development process. This will allow you as the sales manager to effectively evaluate each new hire’s performance and make decisions based on relevant information.
Pipeline Sales Metrics
The sales pipeline refers to the data snapshot of where each prospect falls within the sales funnel. This information can give you an accurate reading of how well the sales team is performing, allowing you to set expectations, reward accomplishments, and identify attainable goals for your team.
Within the sales pipeline, you are going to have access to data such as new opportunities gained, leads qualified, lead conversions, revenue, etc. Having all of this data removes the guesswork from managing a sales team. Allow the numbers speak for themselves.
Outreach Sales Metrics
This metric shows you the significance of your outreach efforts (emails, phone calls, social media) to your sales performances. With this data, you have access to things like open and response rate within emails, call backs for phone calls, and social media connection requests.
Make it easy on yourself when coming up with sales decisions and changes in methodology. Having access to as much relevant data as possible regarding all of your sales efforts is going to allow you to make better, more informed decisions.
Analyzing sales team performance metrics
Imagine going into a doctor’s office and before any tests were run or symptoms were checked, you were told that it was time to go into surgery. It’s safe to say you would probably start backing out of the office at this point. Before jumping to this decision, you expect your doctor to conduct some tests, ask about and check certain symptoms associated with the ailment before jumping to such a drastic solution. It doesn’t matter to you that the doctor has seen hundreds of patients with similar conditions and performed the surgery hundreds of times. You want to see why he’s coming to this conclusion and how it will make sense for the diagnosis.
The same goes for sales and sales decisions. It’s not enough for a sales rep to simply hear that they need to change their techniques. They want to see that their performance is not up to par with the rest of the team or doesn’t align with the expectations you’ve set before making a change. They want data that shows the patterns of the successful sales tendencies that you’re recommending they adopt. Being able to show exactly why they’re being outperformed by their peers and what those peers are doing differently will speak louder than simply telling them that they need to change the way they sell.
Sales team coaching using performance metrics
Every sales rep has their own strong points and certain customer types that they excel at selling to and they obviously have their weaknesses as well. For example, one rep may excel at talking and selling to engineers within a business, but they fall short when trying to sell to accountants. On the other hand, another rep on the team may excel at selling to accountants but falls short with engineers. You can use this to your advantage by taking performance metrics for each rep’s strong points and use it to coach up the weaknesses in the other reps.
Again, data and information bring context to the coaching. A sales rep will be able to accept the fact that they may need to work on certain areas of their skill set if they can see the raw data pointing to this fact.
Sales performances are measured by results, not activity. A rep can be on the phone all day, talking to prospects but not producing results. This does you and the rest of the team no good. Coaching up your reps using performance metrics gets them closer to the accomplishments you’re looking for from your team.
Measure the sales activities that matter
SalesTalk offers you the perfect tool to put all of this to use for your sales machine. You want the information that matters so your team can have the tools they need to succeed. What2Know™ does exactly this, giving your team relevant information to sell and giving you relevant data to measure your team’s performance.
Give yourself an opportunity to make the right decisions for your team based off of the data that shows you exactly what’s working and what isn’t. Empower your team by giving them the keys to success. Request a demo from SalesTalk today!