How Effective Is Your Sales Team?

This is a question that has plagued sales managers and company executives since the first salesperson was hired.  Given the cost of fielding a sales force today, finding an answer is more important than ever.

To find an answer, we must first understand what is meant by “Sales Effectiveness”.  Wikipedia does a very good job of looking at this issue.

Sales Effectiveness
(Taken from Wikipedia, the free encyclopedia)

“Sales effectiveness refers to the ability of a company’s sales professionals to “win” at each stage of the customer’s buying process, and ultimately earn the business on the right terms and in the right timeframe.”

“Improving sales effectiveness is not just a sales function issue; it’s a company issue, as it requires deep collaboration between sales and marketing to understand what’s working and not working, and continuous improvement of the knowledge, messages, skills, and strategies that sales people apply as they work sales opportunities.”

“The purpose of sales force effectiveness metrics is “to measure the performance of a sales force and of individual salespeople.When analyzing the performance of a salesperson, a number of metrics can be compared. These can reveal more about the salesperson than can be gauged by his or her total sales.”

…. the following ratios can be useful in assessing the relative effectiveness of sales personnel:
Sales ($) / Contacts with Clients (Calls) (#)
Sales ($) / Potential Accounts (#)
Sales ($) / Active Accounts (#)
Sales ($) / Buying Power ($)

“These formulas can be useful for comparing salespeople from different territories and for examining trends over time. They can reveal distinctions that can be obscured by total sales results, particularly in districts where territories vary in size, in number of potential accounts, or in buying power. These ratios provide insight into the factors behind sales performance.”

So, if you are concerned about the effectiveness of your sales team, consider implementing these suggested formulas to track performance.  Then, use the information gained to highlight training that may be needed.


By: BizBlog Advisor, Chuck Thompson