Sales productivity is about getting more out of your sales resources. If you can pull the levers that drive sales efficiency and sales effectiveness you can do more with less.
Sales leaders are nothing if not busy. So, if you want you can jump straight to our killer stats or our tips and tools for sales reps. But if you want the full story of sales productivity, keep reading.
- Sales productivity and the modern sales team
- What is sales productivity?
- How do you measure sales productivity? Some key sales metrics
- Improving sales efficiency and sales effectiveness with SMART goals
- Improving sales productivity: Top tips and tools for sales reps
- 10 killer sales productivity stats
Sales productivity and the modern sales team
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 sales organization – the structure, process and job roles you use to run your sales department.
Sometimes the challenge is knowing where to start. Thankfully, we’re here to help. This is our guide to understanding sales productivity and how it drives revenue.
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 to automate, remove or streamline each administrative task until every salesperson is maximizing their selling time.
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.
How do you measure sales productivity? Some key sales metrics
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 routes for efficiency on the road: It’s important that sales reps don’t waste time while out visiting clients and prospects. A sales productivity tool that allows them to streamline their travel with 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 also helpful to visualize your data for each sales territory. Software that allows you to build, align and balance your sales territories will help you run a more productive sales force.
- Target the highest potential leads for effectiveness: Another advantage of leveraging technology 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 rep 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 strive for continual 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.
10 killer sales productivity stats
Hopefully we’ve succeeded in illustrating the importance of data if you want to increase sales productivity in your organization. So it seems fitting to finish with some stats.
There are plenty of sales productivity stats out there but here are our favourites:
1. Most sales reps learn from their peers
According to HubSpot, 50% of men and 56% of women who work in sales rank their peers as the most important source of improvement.
Turning around an under-performing sales rep or getting even more out of your sales superstar can have a big impact on sales productivity. So understanding what drives learning and development on your sales team really matters.
2. Sales turnover is twice the national average
At 27%, sales turnover is twice the average for the wider US labor market, according to HBR.
If you are constantly hiring and training new sales reps, it will kill your productivity. As a sales manager, you’ll be in a never-ending cycle of interviewing and onboarding. And you lose the personal networks and know-how that experienced team members bring to the table.
While some turnover in sales is healthy, this stat should prompt sales leaders to focus on two things: 1) how to improve sales rep performance. Reps who make quota are happier and less likely to leave; and 2) how to reward and retain top performers as sales revenue is rarely spread evenly among team members.
3. Sales coaching really matters
Every sales manager will tell you they wish they could spend more time coaching and mentoring their team.
Their hunch that this would boost sales is supported by data. Research by Gartner revealed that when sales managers spent time working with core performers sales performance improved by on average 8%.
But training is not just about short-term revenue growth. It’s also about reducing staff churn and maximising the potential of your sales opportunities.
Sales leadership seems to get it. The same Gartner report revealed that your average sales leader wants their managers spending a third of their time on coaching. But the managers said in reality they had much less time – around one fifth – for tasks such as sales training and personal development plans.
4. Sales territories could be your secret weapon
Every sales team has hidden inefficiencies. A common area to uncover them is in how you manage your sales territories.
Finding the right sales technology to align and manage your territories can improve outcomes by up to 20%. That means less wasted effort on territories that don’t have enough good leads. And fewer missed opportunities in territories where your reps can’t keep up with demand.
If you want a quick win, new software to review and re-organize your sales territories is a good place to start.
5. More than half of reps expect to miss their sales quota
According to Salesforce, 57% of sales reps expect to miss their annual revenue target. That’s a big productivity gap right there.
The same research warned that missed targets weren’t just a case of unrealistic expectations from sales leadership. More than 80% of reps said their organizations took a proper, data-led approach to target-setting.
The problem is likely more complex, with reps failing to “differentiate on customer experience”. What this means is that the expectations of prospects are not met – or not consistently met – at various stages of the sales cycle.
6. New reps take 6 months to hit quota
We mentioned staff turnover already. This stat really highlights the productivity impact of losing team members. It’s also a reminder that bringing on an additional sales person does not mean an immediate hit of additional revenue.
According to Ambition’s State of Sales Performance Survey one third of respondents said new reps took 6 to 12 months to reach full target.
A further 8.7% said it took even longer – more than 12 months.
7. Big fish fill up the net faster
Any sales leader will tell you that deal size is one of the most impactful ways to improve sales performance. Convincing every decision maker in your sales pipeline to spend just a little more can really add up.
And in a lot of industries, the time and effort required to close deals doesn’t correlate with deal size. Sometimes the small deals are the hardest to get over the line and vice versa.
The temptation to hoover up small deals will always be there. But while SMEs outnumber large enterprises they will never outspend them.
This stat is a great reminder of that: in 2015 the companies in the Fortune 500 generated 71.9% of US gross domestic product (GDP).
8. More time selling doesn’t necessarily mean more sales
Sales reps and sales managers regularly complain about red tape. Entering data, writing notes, filing reports – it’s all time they could be spending out there selling.
A goal of many sales productivity drives is to harness the latest fancy sales tool or technological breakthrough to get more time in the field (or on the phone).
But according to Accenture, business customers are, on average, 57% through the buyer journey when they first interact with a sales person. That means your sales team is shut out for more than half the decision-making process.
So it’s not just a case of more time. It’s understanding when the opportunities to influence and advise come up. And maximizing your impact when they do.
9. More calls doesn’t necessarily mean more sales
That can’t be right. Sales is a numbers game. If you shake more trees you catch more fruit.
But not always.
Research by Gong revealed that sales reps outside the top 20% of performers made significantly more calls in the last month of each quarter. And 37% of those calls included a discount offer (more than any other month). But a lower percentage led to a positive next step.
The lesson here is that being productive requires a good sales operation. Letting reps coast for two months and then scramble to catch up is not going to help your productivity.
10. Your sales team’s productivity isn’t just a job for your sales team
Larger sales teams will often have a dedicated sales enablement or sales operations function that takes the lead on driving productivity improvements.
But even in a smaller organization sales productivity is not just about what the sales team does. It is also impacted upstream.
The Docurated State of Sales Productivity survey found that 52% of businesses made marketing responsible for boosting sales productivity.
It’s common for marketing teams to own marketing automation platforms and run extensive nurture programs before passing leads to sales.
This means that when marketing does a good job, sales gets to be more productive. They waste less time on dead leads and only speak to prospects who have been warmed up and already have a positive impression of the brand.
When marketing and sales are truly joined up, organizations experience some of the biggest sales productivity gains.