Measuring Sales Rep KPIs

Measuring Sales Rep KPIs

Key Takeaways

  • Identifying KPIs for your sales reps will help you evaluate their effectiveness.
  • Making your KPIs known to your sales reps will help them self-evaluate and improve performance. This reduces the need for intervention from you and other administrators.
  • When evaluating your sales rep’s performance, your highest priority KPIs should include:
    • Opportunity-to-Win Ratio
    • Number of Appointments Booked
    • Rate of New Contacts
    • Number of Qualified Leads
    • Average Deal Size
    • Customer Lifetime Value (CLV)
    • and Monthly Revenue

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: 

Definition: KPI

KPI (key performance indicator) is a broad term for any data point or metric that can be used to evaluate the effectiveness of a staff member, a team, or an implemented strategy. By identifying KPIs early and making those KPIs known to your team, you clarify their objectives and increase your chance of achieving your KPI goals.

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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