If you run a sales team you will be constantly looking for ways to drive more sales and boost revenue. That is, after all, your core function in the business.
But you’ll know that when it comes to achieving these objectives you have to tackle a wide range of different variables. You have the individual personalities and motivations of each salesperson on your team. There is the choice of tools from your CRM to your sales enablement software. And then there’s the structure, process and job roles you use to organize your sales department.
Sometimes the challenge is knowing where to start. Thankfully, we’re here to help. This is our simple guide to understanding sales productivity and how it drives revenue. We’ll take a look at:
- What sales productivity is
- Where sales efficiency and sales effectiveness fit in
- And how you can boost your sales revenue with the right KPIs, sales metrics and SMART goals
First things first: What is sales productivity?
Sales productivity is about maximizing the results you achieve from your available resources. It’s not the same as sales efficiency or sales effectiveness. But both play a part in improving productivity and, as a result, boosting sales revenue.
Measuring sales productivity
Salesforce, the world’s most popular CRM platform, uses a handy formula for defining sales productivity:
Sales productivity = sales efficiency x sales effectiveness
The idea is that you improve sales efficiency and / or sales effectiveness in order to make your sales team more productive. A more productive sales team means more revenue.
What is sales efficiency?
In the simplest terms, sales efficiency is about streamlining your processes so you can make more sales calls. You might use tools, such as marketing automation, sales enablement software, a new CRM system or even market-leading mapping software. Or you could restructure your sales team and introduce new job roles. The goal is for each salesperson spending more of their time selling.
What is sales effectiveness?
Sales effectiveness is different. It’s about targeting the right people and improving results, such as deal size or close rates. You might use some of the same tools, but this is not about more sales calls. It’s about what a salesperson does when they get in front of a prospect. And it’s about improving the quality and relevance of those prospects through better targeting and nurturing strategies. Training and sales coaching or providing better, updated case studies, presentation decks and other collateral are often good ways to boost sales effectiveness.
What sales metrics should we measure?
Next let’s consider the key performance indicators (KPIs) and other sales metrics you can use to measure sales efficiency, sales effectiveness, and, as a result, sales productivity.
Although each sales team, sales cycle and competitive environment is unique, here are some popular KPIs to track:
- Meetings / calls per salesperson: If you’ve successfully reduced the administrative burden and your lead nurture campaigns are firing, your sales reps should be meeting more prospects. If you have a sales support team, you should also be tracking their email and call volumes, as these are leading indicators for how full your sales reps’ diaries are likely to be in future weeks and months.
- Average deal size: Seeing more prospects is important, but are your salespeople seeing the right prospects? And are they maximizing every opportunity? Often the work involved in making a big sale is very similar to the work involved in making a small sale. This makes boosting deal size one of the best ways to improve sales effectiveness.
- Conversion rates: At every stage of your sales funnel you should be watching your conversion rate very closely. Conversion rates are usually the hardest things to move, but modest improvements can make a big difference to revenue, especially for high volume businesses.
- Sales territories and customer / prospect locations: This is especially important for field sales reps or outside sales teams. Being able to view, in detail, not only the sales territories that reps cover, but the number of current clients and potential leads in each area is really powerful. What’s more, the ability to visualize this data through mapping software can help sales managers improve their workload balancing and sales territory management. Better sales territory management can improve sales revenue by up to 7%.
Check out this article for more information on key sales metrics you can track.
Improving sales efficiency and sales effectiveness with SMART goals
By tracking the right KPIs and sales metrics, you and your sales team stakeholders can establish goals that will improve both your sales efficiency and sales effectiveness.
We recommend that sales managers use the SMART goals model:
- Specific (clearly defined, not abstract management speak)
- Measurable (here’s where your KPIs and sales metrics come into play)
- Achievable (unrealistic targets are highly demotivating)
- Relevant (sales reps need goals they can directly influence)
- Time-based (not open-ended, but with a date at least to review progress)
For example, a SMART goal targeting sales efficiency might look like this:
By the end of the month, each sales rep will reach 20 sales calls per day.
A SMART goal for sales effectiveness, on the other hand, might read like this:
By the close of the quarter, our sales reps will increase their closing rates by 10%.
Using this approach, your sales goals will be data-backed with your own sales metrics, and you’ll be able to see measurable improvements in your sales effectiveness and efficiency.
Improving sales productivity: Top tips and tools for sales reps
In addition to creating specific and measurable goals to guide and motivate your sales team, there are a few other tips, solutions and best practices you might like to consider:
- Optimize sales route for efficiency: It’s important that sales reps can be efficient on the road, and a tool that allows them to streamline their travel through detailed route planning and optimization is an ideal way to improve efficiency.
- Define and improve sales territories and management: In addition to optimizing routes for each sales rep, it’s especially advantageous to visualize your data through territory mapping. Mapping software like eSpatial enables you to import your own CRM and other data to clearly build, align and balance your sales territories among your traveling sales reps.
- Target the highest potential leads for effectiveness: Another advantage of leveraging a mapping software solution is the ability to use in-depth data visualizations and filtering capabilities to drill down into the areas of highest potential for lead generation. Sales team leaders can easily see any gaps that might exist in their sales territory coverage, or use heat maps to identify sales trends and help improve sales reps’ effectiveness.
- Review sales metrics on a regular basis: We recommend doing this weekly, and we’ve created this Sales Review Worksheet to help. There’s even a spot to record your sales metrics, to help you keep track of your progress with SMART goals. And, for forward-looking activity, use our Sales Activity Planner, and ensure your sales reps stay on track.
- Document your sales process and continually support improvement: Data visualization and tracking of sales metrics is key, as is documentation of your overarching sales strategy. Check out our Guide to Fixing a Broken Sales Process to learn more.
Every business wants to boost revenue. Sales productivity, sales efficiency and sales effectiveness hold the key to achieving that goal.