How to measure sales performance
Now that you know how to set sales performance goals against benchmarks, you need a framework for evaluating your reps’ sales performance. To create a sales productivity formula that works for your company, you need to look at multiple success metrics.
Different sales reps will have differing strengths, so using multiple sales performance metrics will give you a more detailed view of each rep’s performance. Here are some sales performance examples that will give you a good start and enable you to complete a sales performance analysis.
Average deal size
This sales performance metric calculates the average monetary value of each sale. A sales rep with one sale worth $25,000 earned you more money than a rep with 3 sales of $8,000 each. That said, if your sellers make roughly the same number of closed sales, AOV will begin to set them apart. Monitoring the average deal cycle helps identify trends in the value of individual sales and can inform pricing strategies. For example, the way to get sales up across the board might include offering upsells and add-ons, and making sure each rep mentions these options without being pushy.
Customer acquisition costs (CAC)
CAC measures the cost incurred to acquire a new customer. Some reps might excel at bringing new customers aboard. Maybe they have the perfect mix of genuine excitement that convinces someone to try a product. It’s essential for understanding the efficiency of sales efforts, and lowering CAC while increasing sales is important given that gaining a new customer costs up to five times as much as keeping one you already have.
Customer retention costs
This is another valuable metric that you should include in your sales performance dashboard. If your company increases customer retention by a mere 5%, you can see a 25% to 95% increase in profit. There’s a 60-70% close rate when selling to an existing customer versus a 5% to 20% close rate for a new customer.
Sales revenue
This is the total revenue generated from a seller during a specific time period. It’s the most fundamental sales performance metric to track as it reflects the financial success of individual reps and of the sales team as a whole. If revenue stays flat or decreases, it’s a good indicator that sales performance isn’t as high as it should be.
Sales conversion rates
Sales conversion metrics measure the percentage of leads or prospects that reps successfully convert into buyers. It helps assess the effectiveness of your organization’s sales process and your seller’s ability to engage with buyers and move them through the sales cycle.
For most companies, a good sales productivity formula will take these sales performance metrics into account. Once you evaluate your sellers by these standards, you’ll be able to identify areas of opportunity and areas where reps stand out from the rest.
