Category: Sales Performance Review

Sales

How to Measure the Effectiveness of Your Sales Process

You’ve established the various stages of your sales process. You know how the typical prospect goes from an email address in your CRM to a paying customer. You’ve trained your salespeople on the key actions required to move prospects from stage to stage.

But how do you know if it’s actually working? What factors should you be taking into account? And if it’s not functioning as well as you’d like it to, how can you improve it?

The concept that underlies all those points is known as sales effectiveness. Here, we’ll go over what that means, how to most aptly measure it, some steps you can take to improve yours, and some of the best resources available to get the most out of your sales process.

The way that sales effectiveness is measured can vary by company or sales organization depending on which sales metrics are the most important to them.

Some other ways to measure sales effectiveness include:

  • Individual quota attainment
  • Percent of the sales organization achieving quota
  • Average annual on-target earnings
  • Sale cycle length
  • Average new deal size

How to Measure Sales Effectiveness

Lifecycle Stages

Before diving into conversion rates, we need to understand the process a contact takes to convert.

Lifecycle stages help you organize your contacts based on the stage of your sales process they’re in.

The definition of a “lead” depends on how you acquire customers. If you’re connecting with prospects on LinkedIn and then following up over email, a lead might be any LinkedIn user you’ve identified as a potential good fit. If you’re meeting buyers at trade shows, a lead could be anyone who left their email address at your booth.

An “opportunity” is a contact in your CRM confirmed their interest in your product or service. That could mean they’ve confirmed their interest over email, booked a demo, requested to speak with a salesperson, etc.

Lead to Opportunity Conversion Rate

Which percentage of your leads are turning into opportunities?

This metric tells you several things.

First, are your salespeople getting enough leads to hit their goal? Maybe they’re converting a high number of leads into opportunities, but they’re still missing quota. That could suggest your marketers need to generate more leads.

Second, are your salespeople effectively following up with those leads? If your reps have the opposite problem — they’re converting a low percentage of leads into opportunities — their follow up could be the problem.

Review their approach. Are they personalizing their outreach? Using multiple channels (email, calls, voicemail, social media, etc.)? Are they reaching out enough times before giving up?

As a subset of this, you can also monitor how many leads your salespeople are trying to contact at all. Let’s say marketing usually sends sales 1,000 leads per month.

If your reps only email 200 of those on average, the leads may be extremely low-quality. Ask your sales team why they didn’t work specific leads; their answers will reveal whether it’s a matter of fit (“This company is way too small to need our product”) or inefficiency and laziness (“Carla called them in February and they weren’t interested.”)

Opportunity to Close Rate

How many of your legitimate sales opportunities become paying customers?

This percentage varies by industry. According to HubSpot’s analysis of 8,900 companies across 28 industries, the average close rate for hospitality is 11%, while the average close rate for arts and entertainment is 28%.

That’s why it’s important to compare your opportunity to close rate to other businesses in your space, if you can. However, there are a few universal takeaways you can draw.

If your opportunity to close rate is really high (think 60% or higher), your salespeople are probably being too selective with the accounts they choose to work. They’re cherry-picking the prospects who are determined to buy — or at least, require very little convincing — and the ones who are nearly perfect fits.

The problem with this? You’re leaving money on the table. It’s likely you could be selling far more if your reps were less discriminating.

You may also need to hire more reps. Demand for your product is clearly there, so expand your team to meet it.

If your opportunity to close rate is extremely low, your salespeople might require more training. Try to figure out where prospects are dropping out of your funnel.

Do most of them say they’re not interested after the connect call? Teach your reps to offer immediate value so buyers view them as a resource and see the benefits of continuing the relationship.

Do the majority of prospects go dark after the demo? Coach your team on giving tailored, benefits-driven presentations, uncovering urgency, and setting firm next steps.

Measuring your opportunity to close rate over time gives you a good sense of your salespeople’s collective performance. It should either be flat or increasing.

Finally, compare an individual rep’s opportunity to close rate to the team average. If theirs is far lower, they need training or a performance plan (and if you don’t see any improvement, you should part ways).

If theirs is right in line with the average, they’re a solid performer; make sure you’re consistently working with them to help them get better and make sure they don’t leave for greener pastures.

If theirs is far higher, leverage them as a mentor and inspiration for your other salespeople — and don’t forget to keep them happy so your competitor doesn’t poach them.

How to Improve Sales Effectiveness

Invest considerable time, energy, and resources into training.

This one is kind of a no-brainer. Your reps’ ability to make the most of their engagements with prospects can only stretch as far as their skills and preparation will take them. So, naturally, it serves you to make sure they’re skilled and well-prepared.

Training is the most fundamental, straightforward base to cover when you’re trying to get there. Make sure your reps have a thorough understanding of your sales process, preferred sales methodology, and your product or service.

If you feel your training isn’t extensive or rigorous enough, you might want to consider enrolling your team in an externally coordinated sales training program.

And while some of these programs might be pricey, they can still be extremely valuable in helping your reps refine their sales skills and improve their sales effectiveness.

Refine your opportunity management infrastructure.

In a lot of ways, opportunity management is the practice of gauging sales effectiveness. Per HubSpot’s own definition, it’s “the process of tracking and managing sales opportunities — contacts who have entered your sales cycle with a demonstrated interest and ability to do business with you — as they move through your pipeline.”

Committing energy, scrutiny, and resources towards your opportunity management efforts allows you to better understand your potential customers and prioritize your interactions with them based on their business potential.

It also helps you determine the best way to approach them based on the interest they’ve demonstrated and the stage of their relationship with your company. At the same time, it exposes flaws in your sales processes, allowing you to consistently improve how you interact with potential customers.

By taking the proper steps to improve how your company manages its opportunities — including firmly establishing a pipeline, encouraging extensive research on your opportunities, maintaining and tracking contact with your opportunities, and keeping a holistic view of your sales pipeline to identify room for improvement — you can set your reps up for success and improve sales effectiveness.

Leverage a sound sales process.

This one might be obvious in the context of this article, but it still bears reviewing.

Salespeople need a framework to operate by. They need some form of guidance and repeatable actions — specific to the product or service they’re selling —if they’re going to be effective. In short, they need a solid sales process to work with. Even your most talented reps will run into trouble if yours is unsound.

Your reps need to have a baseline understanding of how you want them to guide opportunities through your pipeline. You have to give them some concept of how they should be operating during whatever stages they’re responsible for —from prospecting to closing.

As you can assume, the effectiveness of your sales process has considerable influence over the effectiveness of your reps, so you need to make yours as strong and efficient as you can. If you’re finding your process is inadequate, thoroughly analyze where you might be going wrong.

Pin down the steps that seem to be giving your reps the most trouble. Give your reps a more thorough perspective on your target buyer personas and what their journeys should look like. Define the specific actions and exit criteria that characterize each step. And finally, measure whether the changes you’re making are effective and stay abreast of any hitches that occur moving forward.

Those are all viable avenues to look into if you’re interested in improving your sales effectiveness. That said, they’re a bit more high-level and less immediate than some other steps you can take — namely, leveraging sales effectiveness tools.

1. HubSpot CRM

  • Price: Free Plans Available

Sales effectiveness hubspot

Image Source: HubSpot

The HubSpot CRM features tools that can improve sales effectiveness at every stage of your sales pipeline. Elements like email tracking, email templates, and call recording allow your reps to more effectively convert leads into opportunities.

From there, tools like its appointment scheduler, automation capabilities, and live chat help support your reps’ efforts by keeping opportunities engaged. And pipeline management features offer your salespeople consummate visibility into how their opportunities are progressing.

The HubSpot CRM has free plans for smaller businesses with reasonably priced options that can suit your company as you grow and your operations expand. It’s an excellent option for any business interested in a multifaceted tool to reduce friction in its sales process and improve sales effectiveness.

2. Clari

  • Price: Contact for Pricing

Sales effectiveness Clari

Image Source: Clari

Clari is a revenue operations platform that leverages AI capabilities to gather data from across your organization to offer your sales team robust operational visibility via dashboards and execution insights.

As Clari puts it, “[The software] aligns your revenue team with efficient operational cadences for forecasting, 1:1’s, pipeline reviews, QBRs and renewals, and expansion.” All of which allows for predictable revenue and insight that can improve sales effectiveness.

The program is an excellent resource for sound pipeline management. It gives you thorough visibility into which transactions make up your inventory, what coverage each segment and territory has, and how much more you need to make the number in current and future quarters — all of which can help you identify risks and irregularities in your sales operations.

That perspective makes for a better-informed, more thoughtfully guided sales org and improves sales effectiveness.

3. Pipedrive

  • Price: Plans Starting from $12.50 per User per Month

Sales effectiveness pipedrive

Image Source: Pipedrive

Pipedrive offers a decidedly sales-oriented CRM platform — tailored toward enabling hard sales with data and automation. The software adds a new degree of insight and intelligence to a company’s sales efforts by gathering smart contact data and automatically pre-qualifying leads.

The platform includes tools that can retrieve web-data about your contacts from online sources like LinkedIn. Using this information, the platform can give you insight into the viability of pursuing the leads you gather.

The kind of intelligence and direction Pipedrive provides can set your reps up for success and boost your sales effectiveness. By giving them a leg up with and a predictive edge to their engagements with prospects and opportunities, Pipedrive ensures that your salespeople can consistently keep their sales efforts running smoothly and effectively.

4. Gong

  • Price: Contact for Pricing

Sales effectiveness gong

Image Source: Gong

Gong is a conversational intelligence platform that can provide sales reps and managers with real-time, actionable, AI-powered feedback on their calls. Using that data as a reference point, these kinds of platforms let you monitor and scan all the sales calls in progress across your sales org.

Those capabilities offer sales managers a bank of information to browse, benchmark, assess, and better understand their reps’ calls — allowing for meaningful insight to smooth over hitches in your sales process and offer reps more targeted, helpful feedback about their efforts.

Gong can improve your organization’s sales effectiveness by keeping your sales efforts sensible and streamlined, exposing any weak points managers need to address with both individual reps and their teams as a whole.

Keeping tabs on the effectiveness of your sales process is key to helping you gauge the health of your sales organization and ultimately learning how to sell better.

If you want to get the most out of your sales operations, it serves you to understand sales effectiveness, how to measure it, how to improve it, and the best resources for optimizing it.

Sales

Sales Excellence: How to Identify & Reward Your Exceptional…

Legendary football coach Vince Lombardi was an absolute goldmine for awesome quotes — one of the best ones being, “We didn’t lose the game; we just ran out of time.”

That one is absolutely killer. But as much as I love how gloriously petty and competitive that particular Lombardi gem is, it’s not my favorite thing he ever said.

No, that would have to be this quote:

“Perfection is not attainable, but if we chase perfection, we can catch excellence.”

It’s powerful, chilling, motivational, and applicable in every field or facet of life, and sales is no exception. As a manager, you’re bound to have reps that go above and beyond — salespeople that take the proper steps to pursue perfection and catch excellence. But what does that look like?

How can you tell if a rep is truly achieving sales excellence? What are the definitive qualities and patterns of behavior that separate excellent reps from the rest of the pack?

Here, we’ll go over the traits that define sales excellence and determine the best ways to incentivize and reward the reps who exhibit them.

1. Motivation

Achieving sales excellence is, in large part, a matter of putting in more effort than your colleagues. You want your reps to be ambitious and dedicated — willing to do that much more to book an extra meeting or keep a prospect with waning interest in your pipeline.

Truly excellent reps are willing to lock in and take initiative. They excel because they sincerely want to set themselves apart and are willing to prove it. Motivation is the underlying factor that enables every other point on this list. Without it, the other components of sales excellence don’t pan out.

2. Working Smarter

While motivation is central to sales excellence, it doesn’t mean much if it’s applied ineffectively. A rep who haphazardly gives it their all might burn out or see returns that are disproportionately low — relative to the amount of effort they bring to their work.

Excellent reps know how to manage their time and are selective in how they apply their effort. They’re sensible in how they structure their day-to-day. They’re savvy in understanding when a deal isn’t viable enough to warrant an extra push. And they can work tactfully to get the most out of the extra effort they’re willing to put in.

3. Quickly Getting Up to Speed

True sales excellence materializes at every point in a sales rep’s career — no matter how early. One of the marks of a truly excellent sales rep is the speed at which they onboard and ramp to a full workload.

How much did it take for them to learn the ropes? Did they take the initiative to learn the ins and outs of your product or service on their own? Could you be hands-off and still expect them to figure out your sales process?

Sales excellence is often a measure of what a rep can do for your sales org beyond their immediate contributions. By ramping quickly and effectively, an excellent rep spares your company time, effort, energy, and resources.

4. Adaptability

Excellent sales reps resent complacency. They understand that there’s always room for improvement. Falling into inertia is easy in sales. Reps might find a groove or daily rhythm that suits them and avoid embracing different processes, methodologies, or strategies that could improve their efforts.

An excellent rep is willing to keep an open mind. They’re always learning — looking to incorporate any tactics that could help them grow and progress as sales professionals. That could mean something like trying new messaging on sales calls or transitioning to a more customer-centric sales methodology.

Not everything they’ll try will work for them, but excellent sales reps are willing to stay abreast of new strategies that could potentially take them to the next level.

5. An “Onto the Next One” Mentality

Excellent sales reps aren’t afraid to fail. They can take rejection on the chin and keep moving forward — using every hitch and hiccup they run into as a learning experience. If an exceptional rep drops the ball on a deal or botches a call, they don’t sulk or get demoralized.

Instead, they analyze their performance, try to identify where they went wrong, and do everything in their power not to make the same mistake twice. And if they notice they’re running into the same issue consistently, they don’t keep it to themselves. Instead, they seek out some insight that can set them on the right course.

Rewarding Sales Excellence

Rewarding sales excellence can be tricky. Excellent sales reps are bound to smash any target you give them but might stall if you impose ceilings — meaning capping commission can hold your rainmakers back.

So one of the more straightforward ways to foster sales excellence is to let them earn all the commission they can. Another effective means of enabling sales excellence is allowing for overachievement commission — slightly increased commission on any sales made beyond quota.

That said, your organization might not have the financial flexibility to have a more liberal, generous compensation plan. If your business fits that bill, there are still some sensible courses of action that motivate excellent sales reps without straining your company’s budget.

Prizes can be valuable incentives to motivate your sales rainmakers. Periodically implementing programs like spiffs — short-term, competitive, incentive-based initiatives meant to motivate sales representatives — can keep your excellent reps engaged.

If you offer recognition, a financial incentive, a vacation, or any other sort of reward for achieving a certain level of performance, you can foster sales excellence by actively and demonstratively encouraging it.

Sales excellence isn’t easy to come by. The reps that truly go above and beyond — in their drive, team contribution, and hard results — need to be identified, further challenged, and rewarded for their exceptional performance.

The traits explored in this article are all marks of a truly excellent sales rep, and as a sales manager, you need to do what you can to encourage that kind of behavior.

Try different ways to keep your excellent reps at the top of their game. Sales excellence is a tremendous asset to a sales team, so you have to make a conscious effort to get as much of it out of your reps as possible.

Translate »