It can highly improve management of a sales team by knowing how to measure sales effectiveness. You won’t have the information needed to make the minor adjustments which will help you to increase your sales if you don’t know what the individuals are doing well and where the areas for improvement are needed. The following are six areas to focus on when measuring sales effectiveness.
1. Sales Revenue
First, we’ll get the obvious point out of the way, which is to use sales revenue to measure results. Every sales manager is currently utilizing this metric to measure performance so this one really doesn’t need to be mentioned. What is important to mention is that many sales leaders just look only at this metric when managing a sales team which is where the problem lies.
Many other variables are at play and when a manager just rewards and reprimands based on sales revenue results, negative impacts on turnover and employee development are likely to occur. With that said, long-term sales revenue won’t be maximized when turnover is high and employees aren’t growing.
2. Activity Levels
After we get beyond revenue, we can focus on activity levels when determining how to measure sales effectiveness. Now, there certainly is a sales funnel at play where the number of cold calls leads to a number of appointments and then leads to the level of lead generation.
Appointments set and completed as well as leads produced will provide valuable data which should be factored in when measuring sales performance by using a system to monitor and track activity levels in terms of calls made.
3. Hours Worked
How much is the sales resource working is a key thing to look at. Due to a lack of fixed hours and schedule, many sales positions have a certain amount of freedom. Now, is the sales resource taking advantage of the freedom and/or putting in the correct amount of hours per week?
We all know that if the sales resource is performing well, a manager may not care how much time they’re putting in. Now, if performance could stand to be better, this area could explain what is going on as well as it is an area that is pretty easy to adjust.
You get a metric of productivity when you divide activity by the hours worked. This is an important how to measure sales effectiveness metric to focus on because it shows you if the resource is efficient and working hard.
There might be something to look at in terms of what the employee is doing when there are high activity levels, but it takes a large amount of hours to get there.
5. Sales Messaging
But, simply looking at how hard and how much the sales resource is working isn’t enough. Also, we need to measure and monitor what they’re doing while they’re working in the area of sales messaging.
Are they asking the correct questions as well as saying the correct points when they’re speaking to prospects? It will not yield the best results when working extremely hard with the wrong messaging.
6. Tactics and Techniques
Identifying if the sales resource is using the correct tactics and techniques is the last thing to look at with how to measure sales effectiveness. If you’ve given sales training, is the resource using the tactics and techniques they’ve been trained on?