Back in the dark ages of the web, sales managers relied on a combination of intuition and experience to gauge their team’s performance. Often, it left behind unanswered questions like “are we losing deals because the pipeline is weak or because our reps aren’t selling?” That was until automated lead generation, and sales activity monitoring tools sprouted in the 90s and took the world by storm.
Today, sales remain notoriously tough, especially for B2B marketers. For example, over half of your customers will say no four times before they finally say yes. And that only happens if a sales rep follows up with the customer – 48% of sales reps never actually follow up with potential customers. Additionally, the number of sales reps meeting their quotas has dropped sharply in the last 6 years.
Clearly, this has an effect on the team’s performance and the business at large. If you’re struggling with one or all the issues mentioned above, buckle up! We’ve compiled a checklist of the essential sales performance metrics for sales teams struggling to hit their quota consistently.
The sales team is the engine that drives business. It’s an essential business driver for all time’s sake because, without sales, there’s no revenue. As such, the sales team’s collective performance has a clear impact on the overall performance of the business.
When we think about sales performance tracking, our focus automatically shifts to individual performance. But this is only half the story. If your collective sales team’s performance isn’t aligned with your company’s goals, you’re less likely to hit those objectives with the limited resources at hand.
There are many benefits to a collective sales team performance review. But one of the most important aspects of this review is that it helps trace any areas of weakness that could be improved. From that, you can work out something with your team to correct these weaknesses.
For instance, you can use sales performance tracking software to track each rep’s number of calls per day, the average length of calls, or the number of qualified leads generated. The total averages from these sales activities should be enough to track the entire team’s progress. Remember, the most reliable and actionable sales metrics are those that are most important to your company’s business goals.
For some, that might mean having the highest number of sales. For others, it might mean having a certain number of buying customers in every sales cycle.
Let’s break down what sales productivity metrics are and how they benefit you, the sales manager.
Sales productivity metrics measure your sales team’s overall performance. Similar to other types of metrics, they show how your team’s work contributes to the company’s overall goals. The best way to understand these metrics is to look at them as key pointers to your overall company’s goals.
If you look closely at your sales dashboard, you’ll often see dozens of numbers that represent some aspect of your sales process. These metrics may include:
As you can see, there are seemingly endless numbers to track, analyze, and optimize. And although not all will give a clear picture of performance in your sales team, it’s important to understand the value of each metric to your business.
Below, we’ve broken down some of the most important sales productivity metrics:
How many deals is your sales team able to close? The win rate shows how successful an individual or team is at converting leads into customers. A high win rate sums up your sales team’s efforts to be “great,” while a low win rate indicates some flaw in your sales operations.
What’s a good win rate, you ask? The average win rate is often estimated at 47%. As a rule of thumb, always aim higher than the average.
Sales reps spend less than 30% of their time selling, partly because they’re spending more time on manual activities, such as collecting customer info, updating customer info, setting up calls, and so on. To close more deals, your sales team should be spending most of their time selling, not data entry.
Simply put, a sales team using paper-based sales processes will take much longer to close deals than a team delegating manual activities to a CRM.
How much time does your sales representative spend with customers on average? You should aim at spending just enough time with customers to understand their needs and nudge them to take action. For instance, one meeting with an existing customer lasts about 29 minutes but can stretch to 51 minutes with prospects.
Every sales team relies on at least one sales tool for its vital activities, including lead generation, meetings and follow-up, messaging, bookings, and so on. While it’s true you can’t expect to reach your goals with just one daily sales tracker, you don’t want to overspend on an unhealthy number of tools for your sales and marketing campaigns.
Any tool that’s helping you streamline your process, generate leads, and convert prospects into sales contributes to your team’s success. So, how about one tool to rule them all? Outreachly, for instance, is a LinkedIn lead generation tool that takes full charge of your LinkedIn lead generation campaign, from prospect targeting to automated messaging.
The conversion rate is the percentage of visitors to your website who become leads. It’s also the number of prospects that turn into buying customers at different stages of your campaign. This metric is particularly important for businesses that rely heavily on digital marketing or online sales.
A high conversion rate indicates that your sales and marketing efforts are paying off. To boost the conversion rate, start by analyzing your current pipeline and identifying the customers that are most likely to convert. Next, optimize your sales processes and provide exceptional customer service because 54% of your to-be customers make buying decisions based on customer service.
The net promoter score (NPS) is one of the most important metrics to track when it comes to customer retention. This score measures customer loyalty and satisfaction and will help you understand how likely your customers are to come back to your business and refer others in the future.
NPS is based on a single question: “How likely are you to recommend this company/product/service to a friend or colleague?” Customers respond on a scale of 1 to 10, with 10 being the most likely. NPS can be tracked at different stages of the buying cycle.
The average time to close a deal covers the length of time it takes for you to make a sale from start to finish. On average, it takes an average of 40 days to close a deal with leads generated from social networks and even longer (75 days) if your sales efforts are centered around your website.
It is important to note, however, that the average time it takes to close a deal depends on the product or service you offer. For example, selling high-value products to large companies can take several months from the first meeting to closing the deal. On the other hand, if you sell quick-turnaround products to small businesses, you can close deals within a week or two. Keep in mind that the average time it takes to close a deal might be longer than you expect.
Customer churn is a bitter pill for sales experts to swallow because not all qualified leads convert into a sale. 26% of all forecasted deals result in no sales due to the sales team’s failure to align with their needs (a qualified lead is someone who has expressed interest in your product or service and is likely to buy it). The churn rate is the percentage of customers who stop using your product or service or stop being your customer within a given period of time.
This metric is especially important for SaaS (software as a service) companies but applies to other businesses as well. A high churn rate is a sign that something is wrong with your sales process. It may indicate that your product or service has failed to meet the needs of a significant number of customers. All this traces back to the sales department in one way or another since they’re responsible for qualifying leads and ensuring that they’re best suited for the offering.
Net sales is the total amount of money that your company receives after accounting for all expenses. Salespeople are responsible for generating new revenue through deals, upsells, and/or contract extensions. Their performance will be measured by the net sales they contribute to the company’s total revenue.
Tracking net sales provides a detailed view of a company’s sales pipeline and shows how much money is coming into the company compared to how much you’re spending to generate that money. High-level managers use this data to forecast future cash flows, determine budgets for new expenses, and plan for expenses that may be coming up during the next fiscal year.
We saved the most important for last. At the end of the day, it’s all about the money. And when it comes to selling products or services to customers, total revenue is the ultimate metric that sums up all your selling efforts. Total revenue drives informed business decisions by pointing out the key areas that can be improved.
When building a sales team, it is important to invest time in setting the foundation for measuring their performance, effectiveness, and growth from the get-go. An efficient sales team needs to have a structure that makes them operate at peak performance and with the highest level of collaboration.
That means every member of the team needs to be on the same page so that everyone is working towards a shared goal.
With that in mind, here’s how to measure sales performance:
First, you need to understand what is expected of your team. A good sales manager is aware of the bigger picture and understands what goals the company is pursuing and why. That way, they can make sure their team is on the same page and able to support those goals effectively.
Too often, companies fail to properly define their strategy and objectives for their sales team. As a result, the team operates in a vacuum without any sense of direction on what their priorities are. Without this direction and focus, sales teams tend to meander, make poor decisions, and misallocate their time and energy on activities that really don’t matter.
Once you’ve outlined the company’s goals, it’s time to set goals and expectations for your sales team. Revenue is not the only business goal. Some other goals may include:
Too often, sales managers go into “sales mode” and expect their team to automatically know what they need to do. That’s a recipe for confusion and miscommunication. Clearly defined goals and expectations also put everyone on the same page so that everyone is held accountable for meeting those milestones.
Short-term goals are usually between 1–12 months, while long-term goals can be between 12–36 months. Short-term goals are often easier to achieve and track, but long-term goals are just as important. Depending on the type of business you have, short-term goals can be more significant.
For example, short-term goals are more important if you have a seasonal business. You need to have enough inventory to supply your customers during peak times but not so much that you have a lot of unsellable inventory during off-peak times.
Once you’ve established the goals, expectations, and performance tracking metrics for your sales team, you can then move on to checking the progress of each member on an up-to-date visual dashboard that incorporates every stage of the pipeline.
This will help you see the big picture and understand how your team is contributing to the greater goal. A visual daily sales tracker dashboard provides a more complete view of your sales team so that you’re able to make more informed decisions. Visual dashboards are often integrated into your favourite sales tools like Salesforce and sales CRM software like Pipedrive.
Working smarter means you need to be more mindful of how you’re spending time on the sales process. Not only should you be working towards completing your to-do list every day, but you should also be working towards improving your numbers every day.
That means cutting down your losses both in time and money wasted on manual activities that can be automated or outsourced. Certain sales activities, such as data entry and report generation in your daily sales tracker should be left to your sales CRM to leave more time to close more deals.
At the end of the day, your sales team is only as strong as its weakest link. That means you must be mindful of how each team member is performing and what they need to succeed. Regularly check in with each member of your team to see how they’re doing, what they need help with, and if you can provide any assistance.
Generating leads is an essential part of any sales team’s workflow. However, there are some tasks that are better left to experts, and LinkedIn lead generation is one of them. By outsourcing lead generation to a company with proven expertise, your team members can focus on other activities that are more important for your company’s success.
Outreachly’s No Risk Sales Service enables sales-hungry B2B marketers to generate leads on LinkedIn with little effort and time. And the best part? Our No Risk Sales Service guarantees that you’ll get results in as little as 21 days!
You no longer have to waste time creating a lead generation campaign from scratch. Instead, you can order the number of leads you need, and we’ll take care of the rest. Our service is 100% risk-free and fully managed, so you can focus on what really matters – growing your business.
In summary, there’s an ocean of metrics to keep track of when managing a sales team. While there is no one-size-fits-all approach to sales performance tracking, identifying and keeping track of the most important metrics should help identify where your sales team needs help to boost its performance.