What is sales performance?
Sales performance measures and evaluates an individual seller’s or sales team’s ability to reach sales targets, goals, and objectives. This refers to how effectively they accomplish their objectives during a specific period of time whether that’s monthly, quarterly, or annually.
Managing sales performance expectations
Good sales performance is crucial for organizations, but deciding what “good” looks is based on your industry, your company’s products and services, and market conditions.
Today’s average closing rate across all industries is 20%. And while that sounds low, data shows that high-performing organizations close 30% of deals. Before you set goals and complete sales performance reviews, it’s helpful to compare your current sales closing rate to historical averages. If you’re struggling to find benchmarks to track sales performance against, here are some average sales rates across different industries according to Hubspot.
- Software: 22%
- Financial services: 19%
- Biotech: 15%
Fireclick Index also reports that other industries typically convert at much lower rates. But, you can see from its data that specialty organizations score higher conversion rates than generic sells-everything places. That’s because people looking for something specific are more likely to go with an organization that specializes in that product or service.
Buyers also like to know that whoever they contact in their buying journey is knowledgeable about the organization’s products and services. So, what does this mean for your company? Sales reps who exhibit confidence about what they’re selling and how they’re selling it have a better chance of closing the deal.
Did you know?
Across all industries, the average closing rate for deals is 19%.
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.
Accelerating Seller Success
The importance of a sales performance dashboard
It’s challenging to evaluate your salespeople without a sales metrics dashboard. Tracking sales performance metrics in monthly and quarterly dashboards is a great way to review each sales rep’s performance.
A sales performance dashboard provides a centralized platform to monitor all of your sales metrics in one place. This is especially useful to measure performance for each individual seller as well as your entire sales team’s performance metrics. Let’s dive into a few reasons why a sales performance dashboard is so important.
- Make Data-Driven Decisions: A sales performance dashboard consolidates essential sales metrics to track and presents them in an easily understandable format. This empowers sales managers and executives to make data-driven decisions. They can quickly identify trends, strengths, weaknesses, and opportunities within the sales team’s performance. For instance, by examining conversion rates, they can pinpoint which stages of the sales process need improvement and allocate resources accordingly.
- Establish Goals and Accountability: Sales performance dashboards help set clear and achievable sales goals. By having real-time access to metrics such as sales revenue, lead conversion rates, and individual salesperson performance, organizations can establish realistic targets. Furthermore, the dashboard promotes accountability within the sales team. Sellers can track their progress and understand how their efforts contribute to the overall sales objectives and where they may need to improve.
- Drive Continuous Improvement and Growth: With a sales performance dashboard, organizations can track their performance over time and measure it against historical data and benchmarks. This enables them to identify areas where they can improve and optimize their sales strategies. For instance, by analyzing customer acquisition costs (CAC) in comparison to customer lifetime value (CLV), they can refine their lead generation and customer retention strategies, ensuring long-term profitability.
Remember, the sales dashboard you create and the sales performance metrics you track depends on your organization’s size, the amount of data you’re able to track, and performance goals. Regardless, it’s an important tool in measuring your team’s progress and growth over time. For example, by comparing your sales reps’ performance, you can figure out which employees might need extra training or more feedback from a manager.
How to improve sales performance
There’s more than one way to improve your team’s sales performance. As you move through your sales performance review phases, you’ll have the chance to complete sales rep evaluations, listen to their concerns, and offer ongoing training to reinforce their skills. Here are a few effective ways to drive sales performance across your team.
Deliver sales onboarding and training
Hubspot reports that 46% of sellers didn’t intend to go into sales, and it’s common for new sellers to feel under-equipped and unprepared for the role. A dedicated sales onboarding program can improve sales performance by equipping new sellers with the knowledge and skills they need in their roles. This will set them up for success and put them on the path to performance quicker. Ongoing sales training further improves skills, equips sellers with best practices, and helps them keep up with evolving market trends and buyer preferences.
Provide ongoing feedback and coaching
Continuous feedback and coaching is crucial for improving sales performance. Regularly evaluating your seller’s performance is a great way to identify areas where reps can improve and grow. Effective sales coaching sessions also highlight areas where sellers succeed. By providing constructive feedback and offering guidance for growth, reps are more likely to overcome challenges and maximize their sales performance.
Invest in enablement
Effective sales enablement provides sellers with the necessary tools, resources, and content to streamline the sales process and enhance productivity. By investing in enablement, organizations empower their sellers to focus on selling rather than wasting their time on manual tasks, searching for content, or looking for answers to common questions.
Control content chaos
Sellers spend an average of 10 hours per week tracking down and revising content. By organizing and centralizing your sales content, you ensure that sellers have easy and fast access to relevant and up-to-date information. This reduces time spent searching for content and allows sellers to focus on engaging buyers and closing deals. It also helps sellers speak to buyers from a more informed standpoint, feel more confident during conversations, and better prepare for future meetings.
Update sales strategies
As the market and your business continues to evolve, it’s crucial to adapt and refine your approach to stay competitive. Analyzing sales performance data, gathering customer feedback, and following industry trends can help you identify areas for improvement and update your sales strategies accordingly.
Drive sales performance with Seismic
Effective enablement is a key driver behind improving sales performance. That’s why the Seismic Enablement Cloud™ is purpose built to help GTM organizations equip sellers with the content, tools, and training they need to meet and exceed performance goals. Visit our Product Innovation Center to learn more about our latest features and capabilities. Or, if you’d like to learn how to drive greater sales performance and growth with Seismic, get a demo today.
