3 Steps to Measuring your Sales Team Performance
Performance of your sales team is more than just quarterly dollar amounts. Business has evolved immensely in the past few decades and measuring the intricacies of sales team’s performance is a constant battle – so how do we measure it?
Effective research is no different in sales than it is in a lab – it typically requires meticulous planning and design. As a Scientist chooses variables to measure the outcome of a chemical reaction, a Sales Manager must also choose specific variables in order to extract appropriate and adequate information from sales figures. There is a list included at the end of this blog for your reference.
2) COLLECT DATA
Any statistician will tell you, “The more, the better”, when it comes to data. Quarterly and annual data have proven to be the most effective benchmarks in business. Tracking over this amount of time will allow you to gain perspective on a representative’s performance over the course of a few months rather than a few days or weeks, which could have been particularly tough.
Many of the variables used to measure your sales force performance will be numerical, in the form of dollar amounts ($). It should be noted that the below examples are just a select few variables that can help you in tracking your team’s performance. With that being said, there are specific aspects in sales that cannot be collected quantitatively – as a Manager, you will know what your representatives excel at and should always take this into account when analyzing the numbers.
The data you collect will speak volumes about your sales force performance – if done correctly. A crucial component to reliable sales force performance analysis includes ranking the variables that most directly impact your business in order of priority. For example, if your market is consumables and you were tasked with ranking variables – “number of calls to existing accounts” may be of higher priority than “number of new accounts opened”.
Below is the list of variables and the associated factors that should be taken into account during performance analysis:
These variables and their associated measurements may be useful in determining how your sales force measures up.
- Volume of Sales ($)
- [VoS = Total Sales – (Refunds + Returns + Expenses)]
- Total Profit Generated ($)
- [TPG = Sales – (Product Cost + Overhead + Expenses)]
These simple equations will allow you to tabulate an individual representative’s volume of sales and total profit generated. Expenses are factored into both of these equations to give a true sense of the total dollars attributed to each representative. Additional complex equations could be added to reflect variations related to industry groups, seasonality, and transactional sales vs. ongoing contracts, etc.
Number of New Accounts Opened
- This number should be taken lightly in a stand-alone setting.
- Maintaining relations with current clients is equally as important as engaging new clients.
- Number of “Calls” to Existing Accounts
- It is crucial to take the time to get to know an account and build lasting relationships with key contacts. “Calls” is nonspecific – taking the time to learn the customer’s preferred method of communication should be a top priority.
- Proper time management shows that a person truly cares about the company they represent. See how quickly representatives submit reports within a set timeframe.
If a representative goes the extra mile to help operations run smoothly, that is a quality that will foster success and camaraderie in the workplace.
It may not be a quantitative measure, but it is an indicator of someone who sees the bigger picture.
Having a general conversation about the company can go a long way.
Hearing a representative who can speak about a product or service effortlessly shows they are knowledgeable and will most likely be that way in a sales meeting. Alternatively, you could create a quantitative measure by assigning a score from 1-10 in specific areas.
It can be tough to determine how a representative sells your business. Observing demeanor, attitude, talk around the office, and listening to feedback from clients can all serve as sources of insight into a representative’s company views.