How to Measure Salesforce Effectiveness
The way we sell is changing.
Sales organizations operate in a progressively changing environment. From the sudden shift to remote and virtual selling during COVID to the economic downturn, sales leaders continue to evolve what they have to do to perform.
And with so many negative factors outside the company’s control, the attention naturally shifts to improving internal processes to gain a competitive advantage and achieve sales excellence on multiple levels.
Achieving excellence in sales, in particular, remains to be one of the most critical areas of focus for any organization looking to thrive in this new environment.
And to achieve excellence in anything, the best place to start is an agreed-upon definition.
What is sales effectiveness?
If you ask a room of 100 sales professionals, you’ll likely get 100 different answers. Some will talk about performance against goals, while others may refer to revenue or profit. Many say effectiveness has to do with making better use of one’s time (which is really just efficiency, not effectiveness).
The problem of defining sales effectiveness is an important one. Without a clear definition, it’s impossible to measure, and without measurement, it’s impossible to reliably improve. We can measure win rates or quota attainment, but these are not necessarily the same as effectiveness.
So let’s start with a simple definition:
Sales team effectiveness = average output per salesperson, where output is aligned with company strategy.
Thus, “output” might be “profit,” “revenue,” or “sales of new product line,” based on company strategy.
Of course, knowing your average output per salesperson won’t give you a complete picture of your sales team’s performance.
The reason is that average output is a lag indicator – it provides a backward or rear-view mirror into the performance of your sales team.
Best-in-class sales teams strive to also find leading indicators – metrics that ensure your salespeople are on track to hit their revenue goals.
The Traditional Sales Effectiveness Measures
CRMs have given us the ability to track leading indicators about activity and process:
- Number of accounts mapped
- Number of dials.
- Number of meaningful conversations completed.
- Number of newly created opportunities.
- Number of new quotes.
- Average opportunity size.
- Stage duration.
- Stage yield.
And sales enablement platforms have given us the ability to track leading indicators about knowledge:
- Training Completion
- Onboarding Tests
- Certifications
What’s missing is behavior.
Due to the subjective nature of behavior assessments, determining how your salesforce behaves in customer interactions is a bit more difficult, but certainly not impossible.
Conversation Intelligence Platforms often record these behaviors by recording sales calls and video interactions, but simply recording interactions is not enough. And some regulated industries won’t allow you to record customer conversations.
Another approach is to ask managers to do role plays and evaluate the reps on a scorecard. Unfortunately, most sales managers admit they don’t do this as much as they wish they could, and there’s often bias in a manager grading one of his favorite or highest-performing reps.
The dream state is we get to measure quality that’s as good as quantity.
But let’s start with the basics of measuring quality.
- Do your customers perceive your reps positively?
- Can they build rapport?
- Are they likable?
- Do they actively listen?
- Do your reps demonstrate expertise in your solution?
- And is that expressed in terms of your clients needs?
- Are your reps able to advance the sale?
- Can they perform discovery, demos, overcome objections, and negotiate?
Sound difficult to measure, especially at scale? The good news is the next generation of sales technology solutions, like AI Sales Coaching and Simulation software, can help give you the tools to measure some of these metrics easily and efficiently so that you can focus your efforts on building a first-class salesforce and driving revenue performance.