It might seem the only necessary indicator of sales success is the bottom line. If your sales team is contributing to healthy profits, it’s all good, right? Well, not necessarily. The sales process has many stages – from building the pipeline, to nurturing prospects, to closing deals and managing customer relationships. Along the way, there are milestones and pivot points where course corrections can occur if warranted. But to know when and how to make those corrections, it’s important to measure sales team effectiveness at every stage of the process. Here’s a quick look at how to assess sales, track sales productivity, and ensure your sales team is effectively building a solid pipeline and driving results.
The Big Picture First
Obviously, the best place to start assessing the effectiveness of your sales team is by looking at overall sales. Does the bottom line look healthy? How does it compare to past results? To targeted goals and objectives? To your competitors’ results?
Understanding your company’s sales effectiveness and its opportunities for improving sales processes requires a big-picture assessment. Sales Xceleration’s free Sales Agility Assessment is a great starting point for understanding the state of your sales operation and improving your sales processes.
From there, you can take a deeper dive into sales performance at the various stages of the sales process.
Sales Forecasting Using Accurate Metrics
Before you can adjust your sales processes, however, you’ll need to understand where you are and where you are headed. Metrics (captured in a well-designed and maintained CRM system) provide that critical information. While tracking sales productivity should be fundamental in all sales organizations, our research shows that only 42% of Sales Managers provide clearly defined and understood sales metrics to their teams. But if you’ve set goals and quotas for your sales reps (not all companies do!), they will be empowered to achieve or exceed these goals if they can rely on metrics to show them where they stand at any point in time.
Sales forecasting uses Key Performance Indicator (KPI) metrics to provide actionable data. Many companies focus primarily on “lagging” indicators – that is, indicators from historical information such as deals closed, deals lost, or quarterly or annual sales data. Over time, they can help you analyze the quantity and quality of prospects in your pipeline, and indicate where prospecting and process adjustments are needed. So, this type of information can be important and useful. Nonetheless, lagging indicators ultimately show only where you’ve been rather than where you are going.
“Leading” indicators, on the other hand, are forward-looking and predictive sales performance measures. As such, they are more useful than lagging indicators for sales forecasting. Leading indicators often include such essential real-time (or near real-time) metrics as the number of prospects in the pipeline, the value of those pipeline opportunities, and time spent prospecting. They might also facilitate projections based on the number of customer visits, presentations made, or proposals submitted. Because leading indicators are forward-looking, they can empower sales teams to make timely strategic and tactical adjustments to improve sales performance.
Fixing and Fine-tuning Sales Performance
Before you can set sales goals or conduct fair performance evaluations for sales representatives, sales processes should be clear, actionable, and empowering. Fine-tuning these processes based on sales assessments, metrics, and KPIs, only enhances the sales rep’s ability to perform at a high level.
Superior sales performance also demands that reps be well-trained. A good Sales Manager will always equip their reps with effective training about the company’s products and services, as well as the best sales processes. But because only 37% of Sales Managers provide proper training for their sales reps, your team could enjoy a competitive advantage if sales training is part of your arsenal.
From the pipeline to the bottom line, top-performing sales organizations know how to boost sales team effectiveness throughout the sales process. If you want to make the right adjustments to optimize sales performance at every stage, the best place to begin is by taking our Sales Agility Assessment. This free tool can arm you with good baseline information to begin elevating your sales performance. Based on your results, your local sales leadership consultant can help you transform your sales processes to achieve next-level results. Click here to take the assessment and here to connect with a consultant. Or you can contact us at (844) 874-7253.