5 Tips for Choosing the Right Sales Performance Metrics


Measuring the performance of your sales team and generating tangible data is essential for long-term success. Understanding each employee’s strengths and weaknesses will show you which sales reps are carrying their weight and which ones need coaching. This information can also help you address any problem areas before it’s too late.

Here are five tips for choosing the ideal sales performance metrics so you and your team can thrive in your industry.

1. Compare sales goals to results.

To gain a basic understanding of each sales rep’s overall performance, compare the goals you set versus the final results. You can break this up by day, week, month, or year to get an overarching perspective of how reps stack up against each other. An example is setting a goal for five sales a day, 25 a week, or 100 a month and measuring this against the actual number of sales an employee gets.

Although this won’t necessarily give you in-depth, detailed information, you can get a broad sense of the value that each employee provides. It can also serve as motivation for employees to exert their maximum effort and be more productive. This will also give you an idea about how realistically you are setting sales expectations.

2. Look at lead response time.

After capturing a lead, it’s crucial to follow up as quickly as possible. According to Harvard Business Review, businesses that follow up on a lead within an hour are seven times more likely to qualify the lead than businesses that wait longer than an hour. The ones that follow up right away are also 60 times more likely to qualify the lead than businesses that wait longer than 24 hours. Consequently, using lead response time as one of your sales performance metrics should make sales reps more aware of how long they’re taking to respond. Once they begin to consistently respond within an hour, overall sales should increase.

3. Look at sales reps use of social media campaigns.

According to Forbes, sales reps who utilize sites like LinkedIn, Facebook, Twitter, and Google+ typically outsell sales reps who do not by 78 percent. While it’s not always easy to determine the exact social media channels and techniques that are leading to conversions, measuring the time and effort that sales reps are putting into social media can be beneficial. Be sure to set up guidelines and parameters if this is something you implement in your business.

4. Determine cost per customer acquisition.

Knowing an average of how much you’re spending to acquire a customer is a great indicator of how well or poorly your growth strategy is working. To determine this ratio, divide total sales costs by total revenue. Sales costs can include employee salaries or commissions, sales management costs, and overall marketing expenses. Although obtaining high sales revenue is great, it doesn’t mean very much if you’re spending an excessive amount of money in the process. Using cost per customer acquisition as a metric will provide you with deeper insight into the true effectiveness of your sales team.

5. Calculate each employee’s conversion rate.

Dividing a sales rep’s number of qualified leads by their number of conversions is also important. This metric makes it easy to spot patterns with each employee and determine their value. If someone has a history of perpetually converting only a small number of qualified leads, there is obviously a problem that needs to be addressed. On the other hand, an employee with a high conversion rate is doing his job well.

Not having a system for measuring each employee’s output is like blindly running a sales campaign and hoping for the best. Implementing the right sales performance metrics is essential for continual growth and improvement. As you unearth new data, you will have the knowledge to make educated decisions for the future. This should lead to a combination of higher sales figures and a lower cost per customer acquisition, which ultimately means higher profits.

Nick Mann

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