Imagine sales are your ship, you are the captain, and your destination is your sales goal. In this scenario, without a compass, you would be lost with perhaps irrelevant ideas, no clear direction, and not knowing if you are really making progress.
So, according to the above, sales productivity indicators are the compass you need to achieve success, showing you how effective your team is and where improvement is needed.
But first, what are sales productivity indicators?
These are measures that allow you to evaluate the performance of your sales team. And understand if it is attracting potential customers, closing deals, and generating revenue.
Here are the basic indicators that every sales leader or manager should know:
- Conversion Rate: The fundamental compass. It measures the percentage of prospects that convert into customers. A high rate indicates that your team is effectively attracting potential customers.
How to measure it? Basically, divide the number of customers won by the number of prospects and multiply by 100. For example: If your team wins 10 customers out of 100 prospects, your conversion rate is 10%.
- Revenue per Salesperson: This is like the treasure map. It shows you how much money each team member generates, indicating who is delivering results and from there you can identify best practices for the rest of your team to apply.
How to measure it? First, make a general identification to detect «star» sellers. Then divide the total sales revenue by the number of sellers. If your team generates USD $100,000 in revenue and you have 5 sellers, the revenue per seller is USD $20,000.
- Number of Scheduled Appointments: Measures the number of appointments your team manages to schedule. A high number of appointments indicates that your team is generating sales opportunities.
How to measure it? Record the number of appointments scheduled by each seller at the end of each week.
- Average Sales Cycle Time: This refers to the time it takes to convert a prospect into a customer. A short sales time indicates that your team is closing deals more efficiently. If it takes time, perhaps there are opportunities for improvement.
How to measure it? You must average how long your team takes to convert a prospect into a customer to have a starting point, from there, the mission will be to decrease it more and more.
- Customer Lifetime Value: This is the treasure you are interested in in the long term. It measures the amount of revenue a customer generates throughout their relationship with the company. A high customer lifetime value indicates that your team is retaining customers and generating long-term revenue.
How to measure it? Calculate the average value of purchases made by a customer during their lifetime. This helps your after-sales team, remember that sometimes a person who is already a customer is more profitable than a new customer (but we will always need new ones to keep growing).
- Customer Retention: The crown jewel. Measures the percentage of customers who continue to buy from the company after the first purchase. High retention means that lasting and satisfying relationships are being built for the company.
- Customer Satisfaction: The wind in your sails. Measures the level of customer satisfaction with the purchasing experience. High customer satisfaction indicates that your team is providing quality service.
To measure it, you must conduct satisfaction surveys with your customers and thus be able to obtain the percentage to continue reinforcing your current strategies, or decide to change direction if it is not working.
- ROI of Sales Activities: A positive return on investment indicates that your sales strategies are effective and generating profits.
These are the basics that any sales representative, sales leader, manager, or company owner should consider when assessing the performance of the sales team, but do not stick with them alone, we invite you to explore others that are relevant to your business, your product/service, and your team.
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