What is sales productivity?

Sales Productivity: How well a sales team uses its resources, like time, people, tools, strategies, and technology, to meet its sales goals is measured by its output.

There are two goals for sales productivity:

• Look for ways to get the sales team to spend more time doing things that will help them close deals.
• Ensure that the time spent selling makes the business more efficient (not all selling time is applicable).

There’s more to sales output than how well sales reps do their jobs. It also looks at how to improve the whole selling process, from finding leads to finishing deals.

Companies need to know how much general sales they make because it directly affects their bottom line.

When there is low sales output, sales reps spend a lot of time doing things that don’t get them the desired results. Ultimately, this means less money coming in and fewer deals being closed.

In the worst situations, the company won’t make enough money from each salesperson to cover its costs.

Synonyms

• Sales efficiency: A measure of how much revenue is generated per hour of sales activity and sales dollars invested.
• Sales effectiveness: A benchmark of a company’s success in achieving its sales objectives.
• Sales performance: The success or failure of a sales team in meeting their goals, such as the number of high-quality leads generated and closed deals.
• Revenue generation: The overarching process of generating business income from sales activities.

Advantages of Getting More Done in Sales

In general, sales efficiency has gone down. According to LinkedIn’s Global State of Sales 2022 study, reps spend less than 30% of their time selling in this age of digital sales transformation, where sales teams use digital tools to connect with customers and prospects.

Companies that can increase their sales productivity can enjoy several perks, such as:

• More money from sales
• Lower costs of doing business
• More clever use of resources
• Made customers happier and kept them as customers
• It takes less time to close deals

Aside from the measurable benefits, increasing sales effectiveness also boosts employees’ morale. People who work in sales are usually happier and more motivated when they can spend more time selling and getting money.

Looking at Metrics for Sales Productivity

Companies should monitor different metrics that give them information about the sales process to track, assess, and improve sales productivity. There are some problems with this, though.

• Buyers are more innovative and need more interactions to complete a deal.
• Even though record amounts of money have been spent on sales technology, data, and analytics, uncertainty is almost impossible to escape.
• It’s harder to find and measure the real effects of sales rep actions when decisions are made online.

Figure out KPIs

The first step in evaluating sales output correctly is choosing the right KPIs to track. These are some of the most essential measures to keep an eye on:

Average Time to Answer an Email

The average time it takes for sales reps to answer emails indicates how quickly they deal with approved leads. They’ll likely attract potential buyers and close more deals if they answer quickly.

Reps should try to answer emails within an hour, which is how long 88% of buyers plan to wait for a response. It’s best to stay ahead by 15 minutes.

Rate of Conversion

Turnovers are the most essential part of any sales process. The rate of conversion shows how often salespeople turn leads into customers.

Keeping an eye on this measure shows how well a business finds qualified buyers and keeps them interested.

A low conversion rate means the sales team must change how they do things. On the other hand, a high conversion rate can mean they are doing an excellent job of finding new customers.

It’s not always true that low conversion rates mean low sales output. As an example:

• High-value deals with good profit margins
• Current users who buy more than one service or product
• Business relationships and partnerships that last a long time
• Short sales processes and a steady flow of new, qualified leads

Despite being unable to close many new customers, these all point to a healthy business.

Deal Size on Average

A business’s conversion rate and average deal size are linked because they show how valuable sales chances are.

This number, sometimes called the average order value (AOV), shows how much each customer brings in.

A bigger average deal size could cause the following:

• The company wants to do bigger deals that could bring in more money.
• Salespeople have sold customers plans and sets that cost more.
• The business has achieved higher profit margins with more prominent clients.

A smaller deal size may mean:

• A low-value sales strategy that focuses on making a lot of sales.
• Putting more effort into making connections and giving buyers more value is needed.
• There are too many small deals with low returns.

Rate of Win

How many chances did you close and win compared to the ones you lost? Their win rate shows the quality of sales reps at finishing deals.

The win rate is like the conversion rate, showing how well sales chances are doing.

However, the win rate is the number of leads that turned into customers, while the conversion rate is the share of all chances (from any source) that led to a sale or movement through the sales funnel.

The win rate is a better way to measure success. Based on conversions, companies can determine how to price, market, and sell their products and services.

Teams that monitor this measure can see where they need to make changes, like where reps might need more help or resources, like better training and support.

Size of the sales cycle

The sales cycle shows how a sales chance moves from the beginning to the end of the pipeline.

By tracking how long it usually takes for reps to turn qualified leads into customers, companies can see where they can cut back on time to make sales more productive.

The average length of the SaaS sales cycle is 84 days, but this number can change depending on the value of the annual deal.

Enterprise sales, which are more essential contracts, take much longer to close than SMB or retail sales.

Average Sales Per Customer

You can find the average revenue per customer either once a month or yearly, based on whether sales leaders want to see short-term results (like new sales productivity strategies) or long-term data for making revenue predictions.

ARPC gives businesses a better idea of how and why customers use their products and which kinds of customers bring in the most money over time. In addition, it helps them find chances to cross-sell and up-sell.

ARPC, in other words, helps sales reps figure out what else they can do to boost total sales productivity and rank those actions in order of importance.

Rate of Retention

The customer retention rate is usually found on company sales records because businesses need to know how many customers renew their contracts at the end of each term.

The retention rate is another helpful way to measure customer loyalty and happiness. Getting customers isn’t enough; you need to keep them after they make a buy.

High retention rates show that customers are likely pleased with their purchases, and this could be a chance to make the average deal size bigger.

A low recall rate doesn’t always mean customers are unhappy or sales aren’t going well, though. If a person buys something or gets a service they only need once, they might not return, even if they are happy with those things.

In business-to-business sales, low retention rates usually mean that you can’t count on making money and that the business can’t last in the long run.

Set clear goals.

Every business has its way of increasing sales, but most have the same primary goal: making more money.

Businesses should pick attainable sales productivity goals (they push the company) and attainable (they can be measured).

Some examples are

• The win rate went up by 5% over the quarter.
• Cutting the length of the sales cycle by ten days
• ARPC going up by 15%
• Getting the retention rate up from 80% to 85% in one year

These goals can then be broken down even further into smaller steps that can be taken, such as:

• Steps reps can use to get in touch with them
• Sales managers can keep an eye on things with their CRM software
• Leaders can keep an eye on how well sales goals are being met.
• Organizations can use it to change their overall plans from time to time

Track Your Performance

When tracking success in sales productivity, you need to use more than just the usual CRM metrics.

Also, it’s essential to monitor surveys, customer reviews, and other data that can show how well sales reps are doing at ending deals quickly and effectively.

As you keep track of your sales, here are some tips:

• Use tools for data visualization to get a clear, real-time picture of how well each person and the team is doing. This will make it easier to spot trends and find places to improve.
• Hold check-ins with sales reps once or twice weekly to talk about success, problems, and opportunities. This will encourage open communication and keep them motivated.
• Help sales reps set personal goals and keep track of their progress one-on-one. This will help them feel responsible and like they own their work.
• Monitor how much time each sales activity spends to find waste and help reps focus on the most critical tasks.
• Use sales automation to track and study email open rates, answer rates, and follow-up patterns. This will give you information about how engaged your buyers are.
• Compare the performance of each rep to the team averages and industry standards to find the best workers and areas that might need more training or coaching.
• Encourage people to keep learning by holding regular training classes, workshops, or seminars and monitor how these efforts affect sales.

Tips for Making Sales More Productive

Sales managers need to do more than track how their reps are doing. They need to make sure that reps meet their sales goals.

You can help your business make more sales by doing the following:

Match up your marketing and sales goals.

The sales and marketing teams often don’t talk to each other or work toward the same goals because they don’t understand each other’s jobs and responsibilities, set different priorities, and use different performance metrics.

This misalignment can cause both departments to waste money and time, miss out on chances, and work less efficiently overall.

SugarCRM study shows that 45% of sales and marketing leaders have problems because their teams don’t talk to each other enough. And 72% of those people have this problem when they try to reward teams with different goals.

To close the gap between sales and marketing goals and boost sales, businesses should think about the following steps:

• Make sure that the sales and marketing teams have the same goals.
• Track leads using the same steps to make a unified income pipeline.
• Create shared success metrics showing how well the group meets its goals.
• Hold cross-functional talks regularly to promote open communication.
• Use lead score and qualification to put high-value leads at the top of the list.
• Get people from different departments to share their ideas and comments.
• Work together to make material that will help with the sales process.

Make it easier to make sales.

There are many parts of the sales process that can be automated, such as:

• Qualifying leads and grouping them
• Setting up meetings
• Emails to follow up
• Getting new customers
• Making documents

A big part of how productive (or not productive) salespeople are is how much time they spend doing the same things repeatedly. With technology, companies can make these tasks more efficient and give their sales reps more time to work on more important tasks that bring in money.

The human side of sales is what salespeople should always do: getting to know customers, knowing their needs, and coming up with solutions that fit those needs.

Make use of technology.

The most important thing for the success of any sales team is a well-designed sales stack (more on this below).

Companies can help their sales reps handle their sales process better and be more productive if they have the right technology.

When it comes to sales productivity, some popular technologies are:

• Software for managing relationships with customers (CRM) to keep track of information about customers, sales actions, and performance.
• Tools for managing proposals that allow for individual quotes.
• Data visualization to show KPIs and data.
• Outbound email marketing efforts that are automated.
• Social media tracking tools to help you make friends online.
• Analytics screens to track how healthy sales are going.
• Algorithms for machine learning to make the sales process better (most useful for complicated sales).

Automate your sales processes.

To get the most out of automation technology, businesses need to set up the right processes.

Making sales processes is the first step in this process. As an example:

• Lead qualification workflow: Whenever a lead comes in, it should be quickly checked against a list of factors to see if it fits your product or service.
• Lead nurturing workflow: This is when you send leads automatic emails and messages over time to keep them interested in your product and build trust.
• Sales process workflow: This shows sales reps’ steps to close deals. This includes learning about customers, writing bids and contracts, and getting back in touch with leads after a sale.

Businesses should understand their sales process well and how different jobs need to be done before they automate.

Use coaching and training for salespeople.

Sales training can make or break a company’s ability to keep employees, make sales calls go smoothly, and get more sales done overall.

Reps get the skills, knowledge, and confidence they need to do well with the proper training and teaching.

To make sure the hiring process goes well, businesses should:

• Ensure that each step of the sales process has clear goals and targets.
• Give reps easy access to various sales training materials, such as books, movies, and webinars.
• Show new employees how to use CRM and other sales tools.
• Set up one-on-one coaching meetings with AEs and company reps with much experience.
• Give reps regular comments and direction on their work.

Software for Boosting Sales

As a general rule, any tool that helps with sales effectiveness also helps with automation in some way. Here are the best sales tools that will help you get more done.

CRM

Customer relationship management, or CRM, is what makes sales teams work. It’s used to keep track of success metrics, store information about customers, and more.

Even analytics engines and predictive algorithms in enterprise CRM systems can guess how many sales will be made in the future.

CPQ

The quote-to-cash process is made more accessible by CPQ software. Some of its many valuable features are:

• Making documents
• Handling of proposals
• Billing and sending out bills
• Sale prices and discounts
• Dealing with contracts
• A digital salesroom, like DealRoom

It also supports price rules and product customization so customers can quickly set up solutions that meet their needs.

CPQ makes a massive difference in how quickly and easily a company can sell its products, especially if its options are long, hard to understand, or based on quotes.

Making sales possible

Sales support is the process of giving sales teams the tools they need to do their jobs well.

Some of these are:

• Libraries with printed materials and sales materials.
• Marketing automation tools that let you make emails, messages, and campaigns more personal across all platforms.
• Dashboards for sales analytics to track KPIs and success results.
• Sales coaching platforms (e.g., Chorus) that provide real-time feedback and direction.
• Pay attention to social media.
• Sales call apps with AI.

There are many types of tools that can help with sales.

For example, artificial intelligence (AI) technology can show buyer triggers and customer insights during sales talks. It can also map conversations and determine how people feel in real time.

Information about sales

Sales intelligence tools get information about customers and leads from many different sources.

This information can be used to make targeted sales outreach plans, find buying trends among certain groups of customers, and make the entire sales pipeline clear so you can see where prospects are dropping out of the process.

The following tools can all help with sales intelligence: CRM, CPQ, and sales support. But for a more in-depth look, you need specialized sales intelligence software to gather and look at all that data.