3 Factors to Consider When Measuring Sales Productivity
[vc_row][vc_column][vc_column_text]Measuring sales productivity is a topic of considerable debate. There is no single formula you can use to determine it, and there may be a lot of factors at play when it comes to conversions and how they happen. At the same time, however, there needs to be some kind of measurement in place to help determine who your most efficient sales reps are. To determine the productivity of your sales team, you need to look at a combination of factors.
One factor to keep in mind while assessing productivity is the conversion rate. The more prospects you convert and the quicker you do it, the better. Have a look at how many leads each sales representative brings in and how many of those leads convert to loyal customers. However, this is only one aspect in the productivity scale; several other factors can affect the conversion rate, which is why looking at the conversion rate alone will not help.
One of the most significant costs you will have to incur is the cost of your sales team and the cost of customer acquisition. If you have a sales representative who is closing but costing the company too much while doing so, he or she may not be very productive. If he or she is spending $5,000 to acquire sales worth $10,000, then the ROI isn’t where it should be, depending on your revenue models.
You may also need to take into account existing market conditions and margins. If you are in a highly competitive and fast-growing market, then you need your team to bring in more profit with relatively low customer acquisition costs. You will also need your team to spend more time on the field, in meetings, negotiating and re-negotiating terms and agreements with existing and potential customers. Adjust your business model for changing market conditions accordingly.
On the other side of the coin, what if you knew how many times you had to dial, on average, to connect with a prospect? How much revenue would that mean for your business? And what if you could provide that information to your sales reps so they could be more efficient and effective?
Selling is an art, but connecting is math, and we have the formula for sales success. Download our “Math of Sales: Your Formula for Sales Success” white paper to learn that formula and start selling more: