Follow these steps to create metrics to improve your team's business performance! Keep reading to find out more.
RELATED: Measures of Sales Effectiveness to Evaluate Your Team
In this article:
- Sales Performance Management for Effective Teams
- Definition of sales statistics and objectives
- Rewarding the right behaviors
- Establish regular performance evaluations
- Sales and Metrics Ratings
- Sales are not "just" a numbers game
- Sales performance indicators that matter
- Measure statistics of the sales activity
- Measure sales results
- Why do you need to measure the statistics of the sales activity?
- List of metrics for evaluating sales performance
- Looking at the biggest picture
- The two vital sales skills
How to improve your assessment of sales performance
Sales Performance Management for Effective Teams
Sales are a numbers game, and the numbers never lie. However, the numbers are rarely sufficient to judge the performance of a representative.
A sales representative's performance report may not give you a clear idea of how effective it is on the team. Different organizations also use different methods and measures to achieve their sales objectives.
We asked sales executives and managers what methods and processes they used to evaluate business performance, and we provided them with helpful tips.
Performance evaluations must be just, they need to be results-oriented and employees have to look forward to them, to make sure they are engaged and inspired after this process.
The data shows that, when they are accurate, performance evaluations help employees to accept negative results more easily.
So, before you do your annual performance assessment (or look to improve for the coming year), here are some steps to take:
1. Definition of sales statistics and objectives
No performance evaluation should begin without defining the parameters – the most important is: returned.
How much do you sell will always make the difference between success and failure. Of course, this number will depend on your industry, the type of product or service you are selling and even the time of year.
However, it will always count towards the bottom line.
Once you have defined the income you want to achieve, you can define your sales quota, your specific objectives, as well as the management of incentives and remunerations. These aspects will be the sales parameters you need to measure the productivity of your team.
"Your sales figure will always be the figure of business done," says Matt Leuschner, of Gopher Leads.
2. Rewarding the right behaviors
After defining the metrics, it is essential to communicate them to the representatives. By linking the compensation of sales representatives to goals and objectives, you make sure things are going well.
Your entire team, made up of sales managers and sales representatives, may be familiar with the statistics, but there are still some who can not or do not want to follow them.
Giving an attractive incentive will make sales professionals more enthusiastic about concluding more contracts with prospects.
Before, make sure everyone is on board with everything you need to do to generate income. Sales statistics will eventually help to establish the sales culture of your business.
"In many cases, what you measure will be achieved – so measure what is most important to you and what you want your representatives to achieve," said Steven Benson, BadgerMaps.
3. Establish regular performance evaluations
Regular performance reviews with sales representatives will encourage a culture of accountability. Many sales managers perform monthly, quarterly or annual reviews. However, weekly reviews are not uncommon.
Whether you choose to conduct informal or formal weekly reviews is up to you, tracking the performance of your sales reps over shorter periods can help you quickly identify problems.
You'll find solutions faster if you're having problems with your team's sales strategy.
"I think it's a mistake to only look at things on a quarterly basis. The week on week is also a good indicator, even if there will be a lot of variability, "said Steven Benson, CEO of Badger Maps.
He added, "This is especially true in environments where sales speed is high."
4. Sales and Metrics Ratings
Most sales managers will use both sales assessments (sales reviews) and sales metrics when working with their teams. Using only one type of evaluation is not enough to judge sales performance.
"We rely on metrics to drive our discussions, but we also see the success of our sales team as being" soft, "said Deborah Sweeney, CEO of MyCorporation.com.
She added, "It is important not only that they achieve their revenue goals, but also that they have a good attitude, that they be motivated and empowered, and that they show leadership. Work ethic and dynamism are essential factors of success. "
A representative with excellent quota management may have attitude and value issues. These qualities should also be included in the management of the sales performance of the representative.
By including values in the evaluation of sales parameters, potential problems related to attitude problems can be avoided.
5. Sales are not "just" a numbers game
For some executives, it is more important to conduct regular sales assessments than indicators because they provide a more comprehensive view of the team's skills.
They are looking for a combination of quality and quantity when it comes to sales activities.
Monthly and even weekly assessments will help management determine the causes of the drop in numbers. Regular sales assessments can then make decisions to improve the sales process.
"Selling is more than a job; it's a career. The industry benefits from the quality of human interactions between individuals and their customers to win contracts, "said Jonathan Morgan. Director of Business Development at Solodev.
He added, "Some people think that sales are a clear and simple number game. Although the number of calls counts, knowing the difference between quality and quantity is also important. "
He further stated, "Quality involves doing a little bit of research."
RELATED: 4 fascinating sales research studies you should know by heart
6. The sales performance indicators that matter
Standards for measuring sales performance must be specific, measurable, achievable, realistic and specific at the time. This is the only way for them to accurately reflect the seller's dynamism and achievements.
Your statistics should also reflect the needs of your business to increase revenue. Specific performance criteria also help you in sales management.
"It is important to measure the activities of the sales team that you really want them to do. In many cases, what you measure will be achieved, so measure what is most important to you and what you want your representatives to achieve, "said Seven Benson, CEO of BadgerMaps.
7. Measurement of sales activity statistics
Activity indicators are much more difficult to select than sales results indicators. Of course, the measures will be different for each company and each sales strategy.
Include activities related to the sales goals of your business. Do not just copy the activity measures of other companies, your team may have a different process than theirs.
"To choose the best fit for your business, identify the activities most closely related to the success of the sales teams," added Benson.
8. Measurement of sales results metrics
You may think that sales depend only on turnover, but this is not always the case.
The sales organization structure now contains roles that are not always involved in the conclusion of a contract. Thus, they will have a limited influence on this goal.
The roles of field sales and sales development are part of these roles.
"For an internal sales team, the number of calls or the time spent on calls are good indicators. For a sales team in the field, this may be the number of in-person meetings she organizes, "added Benson.
Measure changes in sales performance based on the specific function and role of sales people.
9. Why do you need to measure the statistics of the sales activity?
Measuring the measures of business activity is important for the accuracy of performance evaluations. When someone has a lot of activity without much success, managers can detect a problem.
Either there is a lack of skills or the territories are not well balanced.
"Measuring business indicators also motivates salespeople to optimize their schedules and increase productivity so they can do more, ultimately leading to increased sales," said Steven.
10. List of metrics for evaluating sales performance
Although revenue figures indicate the overall performance of the team, other key performance indicators (KPIs) give the value of each representative. These key performance indicators determine whether your sales people are doing a good job or not.
What are the key performance indicators or key performance indicators? It is a series of quantifiable measures to determine whether an individual or a team can achieve the objectives of the company or organization.
Leaders observe key sales performance indicators as meaningful conversations, persistence, speed of response, and percentage of leads that get a response.
Ken Krogue, president and co-founder of InsideSales.com, lists 12 key metrics for evaluating sales reps in high-speed sales.
The top three priorities concern the immediacy of the response, which is an important success factor:
- Immediacy – How fast does your team respond to the slopes?
- Persistence – How does your team react to the slopes?
- How long does your team make an appointment?
11. Look at the bigger picture
Measuring both the results and the activity will allow you to have a panoramic view of a representative's performance.
"Everyone likes an agreement, but when evaluating business performance, we look at the big picture. We look at the number of activities, the duration of the calls, the type of sales activity, and ultimately the number of transactions they enter, "said Matt Gardiner, sales director of Frank Recruitment Group.
"It's important that each aspect is as strong as the next. A missing link is breaking the process, "he added.
12. The two vital sales skills
Sales Managers – Revenue Managers or Vice Presidents – are constantly looking for ways to meet their quota, which translates into two simple concepts, said Ron Hollis, Business Manager at InsideSales.com.
These are pipeline generation and closure skills.
"Sales representatives need to create more and better pipelines and make deals. These are the two parameters that really matter, "said Ron Hollis, on the Playmakers podcast.
An assessment of sales effectiveness will work on these two skills and create a sales quadrant consisting of:
- Great performances – Sales professionals with lead generation and closing skills.
- Deal Makers – Sales professionals who excel in closing deals but lack lead generation capabilities.
- Pipeline Builders – Salespeople specialized in pipeline generation, however, do not have closure capacity.
- Underperforming – Sales people who lack skills in terms of pipeline generation and conclusion of sales contracts.
Displaying the right indicators can help sales managers determine who is doing the best and motivate the bottom performers. By determining who your top performers are and transferring the methods and processes they use to earn, you can move all sales reps to rank to improve performance.
Which KPIs do you use to evaluate your representatives? Share your ideas in the comments section below!
Editor's Note: This position was published on December 27, 2017 and has been updated to improve its quality and relevance.