Knowing how to measure sales effectiveness can greatly improve management of a sales team. If you don’t know what the individuals are doing well and where the areas for improvement are needed, you will not have the information you need to make the minor adjustments that will help you to increase your sales. Here are six areas to look at when measuring sales effectiveness.
1. Sales Revenue
Let’s get the obvious point out of the way and that is to use sales revenue to measure results. This one really does not need to be mentioned as every sales manager is currently using this metric to measure performance. But what is important to mention with this is that many sales leaders only look at this metric when managing a sales team and that is where the problem lies.
There are many other variables at play and when a manager only rewards and reprimands based on the sales revenue results, there could be negative impacts in the areas of turnover and employee development. And when turnover is high and employees are not growing, long-term sales revenue will not be maximized.
2. Activity Levels
Once we get beyond revenue, we can look at activity levels when figuring out how to measure sales effectiveness. There is definitely a sales funnel at play where the number of cold calls leads to a number of appointments which leads to the level of lead generation.
By using some sort of system to monitor and track activity levels in terms of calls made, appointments set and completed, and leads produced will provide very valuable data that should be factored in when measuring sales performance.
3. Hours Worked
A key thing to look at is how much is the sales resource working. Many sales positions have certain amount of freedom from a lack of fixed hours and schedule. Is the sales resource taking advantage of the freedom or putting in the right amount of hours per week.
Of course if sales resource is performing well, a manager might not care how much time is being put in. But if performance could be better, this is an area that could explain what is going and also an area that is fairly easy to adjust.
If you divide the activity by the hours worked, you get a metric of productivity. This is a very important how to measure sales effectiveness metric to look at as it can tell you if the resource is efficient and working hard.
If the activity levels are high, but it takes a ton of hours to get there, there may be something to look in terms of what the employee is doing.
5. Sales Messaging
Looking at how hard and how much the sales resource is working is not enough. We also need to measure and monitor what they are doing while they are working in terms of sales messaging.
Are they saying the right points and asking the right questions when they are talking with prospects? Working extremely hard with the wrong messaging will not yield the best results.
6. Tactics and Techniques
The last thing to look at with how to measure sales effectiveness is to identify if the sales resource is using the right tactics and techniques. If you have provided sales training, is the resource utilizing the tactics and techniques they have been trained on?