Measuring Sales Rep KPIs
In the world of sales, there are many important objectives – primarily of course – to make as many sales as possible. But the journey towards the closed deal comes with numerous metrics to measure. KPIs (key performance indicators) will help you figure out how your salespeople are doing (individually and in relation to each other) and will help you figure out what you need to do to reach your business goals. Here are some suggestions of KPIs you can start measuring:
1. Opportunity-to-win Ratio
The opportunity-to-win ratio is one of the most indicative KPIs you can use. Taking a look at how many deals you have closed, compared to how many prospects you have, is a good way to measure how well your salespeople are doing at what they do best – selling. According to Repsly, “If this number looks a little sad, you might have some reps that are great at getting a foot in the door but could need a hand with closing deals.” It could be that they have the wrong prospects in their pipeline. Or maybe their follow-up needs sharpening.
2. Number of Appointments Booked
To close deals, you need to make appointments. Measuring the number of net new appointments booked is another good metric to use when looking at how well your salespeople are performing because, ultimately, more (qualified) appointments should lead to more sales. In fact, measuring the number of appointments booked is indicative of other metrics, as well. In an article from Databox, Lance Tyson of Tyson Group, a sales training company, says that “the appointment in and of itself measures several other things like the number of touches the rep has made such as phone calls, emails, LinkedIn connections, etc.” If your salespeople need some help getting their foot in the door, consider MarketReach’s expert appointment setting program!
3. Rate of New Contacts
As a sales manager, do you hear too much about the same prospects month after month? If your sales reps also have the responsibility of managing current accounts, does it take up too much of their week? Creating new contacts is all about building new sales pipelines weekly, rather than spending so much time on the old ones. According to Repsly, “If the contact rate for most of your reps is low, there might be a problem with your goals or some reps may be spending more time than necessary chatting with existing customers.” Hold sales reps accountable for reporting on their new prospect contact at least once a month, along with their pipeline depicting future callbacks.
4. Number of Qualified Leads
While there is something to be said for the “law of large numbers” in lead quantity, you want to make sure that these new business opportunities represent good business and that there is a chance of promising closable prospects in the sweet spot revenue-wise. In your CRM, consider implementing a rating system for each lead: A, B, C. A are your best opportunities and represent the ideal client to work with, B is good business but spend less time on that follow-up, and C – spend little time on follow-up, and instead let your email marketing automation do the work once you’ve had the initial sales conversation.
5. Average Deal Size
When comparing the performances of your salespeople, it is important to consider the sizes of the deals they are closing. One salesperson may be closing a lot of smaller deals, while another may be focused on securing fewer larger ones – that’s why considering the average size of the deal is a better indicator of performance. According to Repsly, another benefit of using this KPI is that “you want to make sure your people are skilled at managing their time efficiently, and this could highlight reps that are closing deals that aren’t really worth pursuing.”
6. Customer Lifetime Value (CLV)
Sure, it is important to know how much each individual deal will bring to your company at the time the deal is closed, but it is equally important to know how much each deal will bring your company over time. Calculating Customer Lifetime Value (CLV) will help you see the long-term value in each sale. It will also allow you to understand how your marketing investment can be justified. Often, marketing investment is not realized as ROI until Year 2. But then Year 2 – 5 is where the profit is.
7. Monthly Revenue
The last KPI you should consider using to measure the performance of your salespeople is monthly revenue. In a quote from Databox, Shane Younan, of CommuteStream, said, “This KPI can be broken down further by having the sales rep track weekly growth to be sure they are on track to reach their monthly goals.” Reviewing their own data weekly can help them stay on track.
When it comes to sales, measuring the performance of your salespeople is so important. KPIs will help you see how performance changes over time and will let you know what you are doing right and what needs improvement. KPIs are essential for determining the best practices and will, ultimately, help your company make more sales. While there are so many KPIs you could use to measure the performance of your salespeople, you should experiment with different ones and choose which ones work best for you based on your business goals – the seven listed above are a good start, but some KPIs may not be relevant to your company. If you find that your salespeople are struggling to meet your business goals, MarketReach can help you set more quality appointments that will lead to more closed deals.
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