How To Measure Sales Productivity?

HowTo Measure Sales Productivity?

What is Sales Productivity?

Sales productivity is a measure of your sales team’s ability to efficiently generate sales revenue There is a direct relationship between a company’s revenue growth and sales productivity It is well known that an increase in sales productivity also significantly improves your company’s profitability

Measuring Sales Productivity

There are many different ways of measuring sales productivity. It depends on the nature of your business, the markets you operate in, and the goals you set for your company. Here are some examples of how sales productivity is measured –sales revenue achieved by your sales reps

how effectively your team is able to convert prospects or leads into paying customers, also referred to as deal win-rate or conversion-rate time difference between the time of lead generation and winning the deal, also called the sales cycle compare the sales revenue against the total investment made to generate that revenue, sometimes referred to as the return on investment sales revenue generated per unit of time or effort comparison between total deals won and deals lost

Sales Velocity

Sales velocity is possibly the most powerful way to measure and improve sales productivity This single metric considers the most important factors required to run an efficient sales motion These factors are the following –

Total number of opportunities

Average deal value

Deal conversion rate or win rate

Sales cycle length

You could go through this detailed article on sales velocity to know more about this metric

Sales Productivity vs Sales Efficiency

These two terms are many a time used interchangeably But they are different in a way

Sales productivity is generally focused on the quantum of sales revenue generated. However, sales efficiency measures how effectively your sales reps leverage all the resources available to them to generate revenue

Comparing the two metrics can provide interesting insights into your team’s strengths as well as the weaknesses that require improvement It will help you identify all the critical aspects required to consistently drive sales performance and growth

Arazor-sharp focus on these metrics will help you grow revenue while optimizing your cost of sales As a result, you can expect a positive impact on your bottom line too

Most Common Reasons for Poor Sales Productivity

In any organization, there are many factors that hinder sales productivity These factors could be attributed to either the sales team’s performance or organizational reasons or a combination of both

Some of the most common factors that come in the way of improving sales productivity include –

Poor market coverage

Inadequate sales training

Lack of sales tools like Sales CRM app

Inconsistent sales strategies

Inefficient sales reviews

Poor quality and quantity of leads

Lack of communication and collaboration between sales leaders and reps

Negative sales culture leading to low morale among the teams

Lack of coaching and mentoring by best sales crm software and experience sales mangers

Leakage of sales leads

Unrealistic sales targets

Complex organization structure that does not support agility and decision making

Poor empowerment among sales teams

Inadequate presales support

Sales incentive structure is not compelling enough or it is difficult to understand by the reps

High pricing of products and services making it difficult to win deals

Poor product or solution fitment

You can easily add more to this partial list.There are innumerable such challenges that make sales productivity not reach its potential.

The key is to recognize these and put in a plan to rectify them at the earliest before it is too late.

Original Source: How To Measure Sales Productivity?