What determines the success of a business? There are many ways to measure success: customer loyalty, retention, growth and so on. But the most basic goal of a business is to make a profit, and you can't make money if you are not selling. The more you sell, the better it is for your business. And the less you spend on customer acquisition, the greater the profit for each sale. Ideally, sales organizations want to sell more with less effort and resources. Here is a breakdown of how to figure out your sales force productivity formula and what you need to do to increase productivity and revenues.
Consider the CostsOne of the most important costs a sales team incurs is the cost of customer acquisition. Consider all the expenses relevant to your sales team and divide the revenue by the costs directly related to acquiring those customers. You need to include both hard and soft expenses — everything related to closing the deal. If you have a sales rep who brings in several deals but spends a lot while doing so, he or she may not be the most productive person on the team. If, for example, she spends $5000 in meetings, demos, free samples and presentations to bring in an order worth $10,000, that could be an unreasonable ROI for your organization.
Scrutinize ActivitiesSo, how can you tell whether your selling efforts spend too much time chasing a low-volume target? The best is to review daily activities. Here are some of the questions you need to be asking:
- How long does it take to connect with a prospect?
- How much time is spent talking to prospects each day?
- How many calls move forward with a promising next step?
- Do follow-ups happen when they need to?
- Are you talking to cold leads?
Measure Against GoalsAnother key to understanding productivity levels is to set goals and see if you've achieved them. Look at past sales numbers and current opportunities, then create a forecast. If your team is able to deliver, then you've had a productive selling quarter. If sales fall far below estimates, then something needs to be rectified. When you set specific, measureable goals, you can evaluate where your team is performing well and where it falls short. When you identify the weak points, you can overcome the hurdles to achieving your targets. Salesvue is a sales software that helps you measure and improve your sales force productivity, and it even helps you create your own productivity formula. With the Salesforce integration, you get the best sales CRM coupled with Salesvue’s detailed reports and analysis that helps you make better selling decisions. Salesvue tells you how many calls, on average, it takes for you to connect with a prospect based on your data, and it also sheds light on what each sales rep is doing, how they are performing, how many leads they have and how many deals they have closed. Salesvue identifies what’s working and creates a prospecting cadence, so you can repeat the steps that brought you success. For more information on Salesvue, download our new "Math of Sales Whitepaper: Your Formula for Sales Success" now:
Subscribe to Funnel Vision
Get the latest and greatest right in your inbox