Are you managing a team of sales reps? Are they failing to jump on the phone and make calls? If yes, what does the phone mean to them?
It’s no secret that a debate exists among many sales managers on how to track the performance of a sales team. What’s more important, the number of calls a sales rep makes, or the quality of the calls? Let’s face it, if you’re not making calls, you can’t measure the quality of them!
Maybe a more important question is: does your team have enough opportunity to hit their targets? Do they have enough data to make the calls?
What's your revenue opportunity?
In order for a sales team to succeed, they need to measure their revenue opportunity with 3 key factors:
If any of these factors are out of sync, the revenue opportunity will gradually become smaller and smaller. Ask yourself these questions:
- Are you behind on hiring your sales team?
- Do you have a high turnover rate?
- Is the sales team lacking enough opportunities in their pipeline?
- Are the pipelines full of low value leads?
If you find yourself nodding in response to any of these questions, then Houston, we have a problem! In most companies, these factors are brought back in line by the management team.
How effective is your sales team?
Assuming that your revenue opportunity is in place, to increase productivity of your sales team, you need to drill down and understand the performance levels of each salesperson. Here are 6 suggested KPIs:
1. Number of Calls Per Day vs Talk Time
- The number of outbound sales calls will differ from one industry to another. In the payment industry for example, sales reps have a lot of pre and post work to do.
- The range of outbound calls will typically vary from around 40 calls to over 80 a day. It is safe to say that every sales rep should aim for at least 50 calls a day.
- If you have an outbound dialer, sales reps can potentially generate in excess of 100 calls a day
- Sales reps should have a talk time target to track the amount of time they spend talking to decision makers, as opposed to gatekeepers. Consider a talk time target of 2-3 hours
2. Percentage of Calls at Each Sales Cycle
It’s important to know how each sales rep is progressing along their sales cycle. If a sales rep is not experiencing much success on their first call attempt, chances are they'll probably have a low conversion rate by the time they close a sale.
Here’s an example of good sales pipeline progression:
And an example of poor progression:
The second example highlights that the sales rep is failing to get past the gate keeper, and is struggling to schedule time with the decision maker. Monitoring the sales cycle progression will help identify coaching and training opportunities for sales management to help improve efficiency of their team's outbound calls.
3. Conversion Rate
People often say that a 10% conversion rate for an inside sales team is quite good, but it will vary from company to company. If your brand is well known and has a strong market position, sales reps could generate in excess of a 30% conversion rate, vs a startup which could be generating only a 5-10% conversion rate.
4. Close Lost Rate
Although a sales rep may have a high conversion rate, make sure to monitor their close lost rate too, as that could also be very high. If it is, it could be that they are burning leads, in which case you need to put out the fire!
5. Average Value of Merchant Won
When setting a sales target, you must consider the average value of a merchant that’s won. Some sales teams are winning 1000s of merchants (which is great), but the average win was so low, that they were missing their sales targets by miles. Not so great!
6. Performance Against Target
Sales targets are normally set against factors such as: country, team, and sales rep level. It is also important to include targets for:
- Average merchant size
- Close won rate
- Close lost rate
- Number of calls to be made each day, week, month
- Commission Target
These 6 KPIs offer a helping hand to sales managers, helping them understand the performance levels of each of their reps. Naturally, this is a long term effort, but it paves the way for implementing the metrics necessary to measure sales performance, and keep track of how well a sales team is doing.