It goes without saying that sales is the backbone of nearly every organization. Sales can include business-to-business interactions as well as sales to the general public. And while almost every industry has a sales aspect, the companies that succeed are those who prioritize and optimize sales performance.
A working sales performance definition is necessary before deciding what constitutes “good” sales numbers for your company. Depending on the type of sales and costs of what you’re selling, different performance rates may be considered “average.”
Across all industries, the average closing rate is 2.4%–3.2%. And while that sounds pretty dismal, remember that it’s just an overall average. The average for your particular realm can, and probably should be, much higher.
So, before conducting a sales performance review, compare your current sales rate to the industry’s average. If you’re near the norm, there’s no need to panic, but there are still ways to bring up your rates. If you’re well below the industry average, you have at least one problem that you’ll need to address. If you’re struggling to find benchmarks to compare your performance against, here are some average sales rates across various industries according to MarketingSherpa:
- E-commerce: 5% or lower
- Electronics: 22% or more
- Business services: 20%
- Art & Collectibles: 15%
Fireclick Index also reports that other industries typically convert at much lower rates. But, you can see from this data that specialty stores score higher conversion rates than generic sells-everything places. That’s because people looking for something in particular, instead of simply browsing, are more likely to go somewhere known to sell that item. The other reason is related to expertise.
Consumers like to know that whoever they contact in their buying journey is knowledgeable about what the business sells. 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.
How to evaluate sales performance
Now that you know how to set sales performance goals, 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 metrics will give you a more detailed view of their strengths and weaknesses. Here are some sales performance examples that will get you off to a good start and enable you to run a sales performance analysis.
Average order value (AOV)
A sales rep with one sale worth $5,000 earned you more money than a rep with 20 sales of $100 each. That said, if your employees make roughly the same number of closed sales, AOV will begin to set them apart. 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.
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. Whatever the formula for success, bringing new customers into the fold is a valuable skill. Given that gaining a new customer costs up to five times as much as keeping one you already have, this is a valuable skill to nurture in your sales team.
This is another valuable metric that you should include in your sales performance review template. 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.
Number of sales
If your company has more lower-value items than big-ticket products, your sales goals might revolve around total units sold. This would also stay true for products or categories that are of the same value per unit. So it might make perfect sense for a company that only manufactures one type of hardware to measure nothing but total units sold per employee.
For most companies, though, a good sales productivity formula will take all of the above metrics into account. Once you evaluate your salespeople by these standards, you’ll see your primary areas of weakness, as well as which reps stand out from the rest.
The importance of a sales performance dashboard
It’s challenging to evaluate your salespeople without a sales metrics dashboard. That’s because you need to view your sales data by salesperson, the sales data listed above, and by month. In fact, a monthly view is a perfect way to review each employee’s key performance indicators (KPI).
A good software framework allows you to view multiple sales metrics dashboards and organize each one using the data you choose. A higher-end sales KPI dashboard might let your employees track their own progress and allow them to identify their own weak points. A visual representation of their performance could be just what they need to evaluate their own efforts.
A more basic online dashboard might help you collate your data into simple charts you can send to anyone who needs it. User access for each employee might be overkill, especially if you’re a small business on a budget. You can choose to generate team reports, individual reports, or month-by-month comparisons to track seasonal sales.
The sales metrics dashboard you use depends on your company’s size and the amount of data you want to track. No matter which one you choose, it’s an important tool in measuring your team’s sales performance. By comparing your sales reps’ performance, you can figure out which employees might need extra training or more input from a manager. If your reps work together in teams, the same things apply.
Though it will vary by industry, several strategic sales goals examples bear repeating. What sales performance metrics you want to focus on will depend on the type of item you sell, how often repeat customers usually return, and the average cost of an item from your store.
Setting simple, short-term goals are a great way to motivate your sales reps. The sales goals and objectives examples below will get your brainstorming session off to a roaring start!
Monthly sales goal: Want to make $50,000 in sales this month? Go for it! Smart sales goals examples abound, but it’s hard to beat the tried-and-true.
Customer acquisition: Need a certain amount of new customers before you can expand your production facility? Set your sales reps on this goal, and be sure to offer an enticing reward or bonus at the end!
Get XX new sales: Weekly, monthly, and yearly sales goals are the lifeblood of every industry. Gaining new customers is expensive, so reward and encourage the reps who get the first-time sales rolling in.
Better than last year: Did you sell 500 widgets last March? Let’s sell 600 this March! Tangible progress from the year before reinforces company growth and makes sure you’re always going in the right direction.
New best sales month: Was your all-time best sales month January of 2018? Well, it’s time to shatter that record once and for all—no matter what month it is today.
Ideas to improve sales performance for teams
There’s more than one way to improve the sales performance of your team. As you move through your sales performance review phases, you’ll have the chance to speak with your reps, listen to their concerns, and offer ongoing education to reinforce their skills. As you identify the reps who are (and aren’t) hitting sales goals, it’s essential to ask yourself why.
Hubspot reports that 46% of salespeople didn’t intend to go into sales. This means that many of your sales reps may feel under-equipped and make their way by instinct or trial-and-error. Those who didn’t intend to make sales their career are less likely to seek outside training and are almost totally dependent on in-house options. By offering training to improve sales performance, you give your employees the tools they need to excel.
Still, you can’t implement just any ol’ sales training. You need a detailed action plan to improve sales performance, one that is tailored to your industry. Training programs will vary depending on the weak points you found in your sales performance audit. Perhaps your employees don’t feel confident enough in their product knowledge. Maybe they don’t know that 80% of leads say no four times before saying yes, — and 92% of professional salespeople give up after the fourth “no.”
The problem might be that your reps don’t remain attentive to old leads. They may not realize that 83% of sales prospects request info but don’t buy anything for 3–12 months. By finding the weak points in your sales approach, you can up-power your sales team to reach new heights!