Evaluating the performance of sales professionals is critical to achieving business goals and driving revenue growth. However, measuring sales performance isn’t always straightforward:
- Results are not immediately visible due to lengthy sales cycle.
- Judging from past performance alone will lead to bias towards experienced professionals. Just because an individual performed well in his/her last job, doesn’t necessarily mean they will perform in your team as well.
To accurately evaluate a sales professional’s performance, it’s essential to measure metrics across three main categories: effort, conversion rate, and result.
Effort Metrics
Effort is basic hygiene, without effort there wouldn’t be opportunity. Skills can be train, experience can accumulated but I never tolerate a lazy sales professional. Effort metrics are indicators of how much heart and hard work a sales professional is putting into achieving their goals. These metrics may not directly translate to sales results, but they’re necessary for sales professionals to achieve their targets. Here are some examples of effort metrics:
Calls Made: This metric measures the number of outbound calls a sales professional makes each day or week. It’s an essential metric for measuring how much effort a sales professional is putting into reaching out to potential clients.
Messages sent: Similar to call made. These days, clients are a lot more receptive towards messaging, compared to phone calls. Therefore, it’s just as crucial to include messaging metric into your calculation.
First response time. How soon does the sales professional reply to a client’s email or messages. Ideally, a sales professional should keep the response time fast to preserve the deal’s momentum.
Follow-up Actions Taken: This metric measures the number of follow-up actions taken by a sales professional after a call or meeting. It’s an essential metric for measuring how much effort a sales professional is putting into nurturing potential clients.
Conversion Rates
Conversion rate metrics are indicators of a sales professional’s learnability. I can accept low conversion rates during the early stages, what I like to see in a sales professional is consistent progression – that prove that the individual’s improvement did not happen by chance. Here are some examples of conversion rate metrics:
Lead-to-Opportunity Conversion Rate: This metric measures the percentage of leads that a sales professional converts into opportunities. It’s an essential metric for measuring a sales professional’s ability to identify potential clients and turn them into prospects.
Opportunity-to-Deal Conversion Rate: This metric measures the percentage of opportunities that a sales professional converts into deals. It’s an essential metric for measuring a sales professional’s ability to close deals and generate revenue.
Average Deal Size: This metric measures the average size of the deals closed by a sales professional. It’s an essential metric for measuring a sales professional’s ability to upsell and cross-sell to clients.
Peasy’s contact graph captures the conversion rate of your daily sales funnel, so you can easily track your sales team’s progress.
Results
Result metrics are indicators of how much actual sales a sales professional is delivering. Although these metrics are the most important for the business, but result metric does not help you nor the salesperson improves – it merely validate the direction which you’re taking. Here are some examples of result metrics:
Sales Volume: This metric measures the total sales generated by a sales professional over a specific period. It’s an essential metric for measuring the overall performance of a sales professional.
Gross Margin: This metric measures the percentage of revenue that remains after accounting for the cost of goods sold. It’s an essential metric for measuring a sales professional’s ability to generate profitable sales.
Conclusion
Evaluating the performance of sales professionals requires measuring metrics across three main categories: effort, conversion rate, and result. Effort metrics are necessary to ensure that sales professionals are putting in the necessary work to achieve their goals. Conversion rate metrics are indicators of a sales professional’s ability to turn prospects into clients. Result metrics are the most important for the business, as they directly contribute to revenue growth. By measuring metrics across all three categories, businesses can effectively evaluate the performance of sales professionals and identify areas for improvement.
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