Sales Performance Metrics

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    I am a new black belt, and I have been asked to look into the performance of our sales group.  What is a good metric for evaluating the performance of a sales force?  $/salesman? 



    Sales revenue/salesman, customers/salesman, new customers/salesman, product penetration/salesman – in short, what metric does the business want to drive, and how does that metric flow down to the salesman level. You get what you measure.  Figure out what you want to get, and then measure it.



    I’ve learned that sales dollars are one thing, but there are a number of metrics associated with the sales force like the following:
    – margin (gross and net) $, margin %, claims associated with sales person, sales $ (gross and net)
    Plus, how does your sales force differ by region and customer type/size.



    Both Jim and John have given some examples of Outputs in measuring sales performance which probably hold true regardless of the type of product ( consummables, raw materilas, capital equipment or services). However, the Sales process to obtain new customers, repeat orders or one off orders are very different. Flowchart the Proces and asses what the Inputs are to create each step along the process. You may well come up with such items as Sales force competencies, opportunity levels per territory, relevance of promotional campaign,   lead creation, lead conversion, number of sales pitches, trial orders.
    In selling industrial goods ( as opposed to retail) truly understanding the real customer needs and matching the product/service selection to those needs will have the biggest influence on results.



    I have implemented a system into my company answering exactly the same thing.  Although sales is an output measure you need to understand the cause and effect relationaships firstly.
    What you will find is that soft skills makes up a huge percentage of a sale.  To measure soft skills you have to nreak down the role into single attributes.  Measure these and you will see a direct relationship on sales output



    my two cents on that
    lets take a broader view. the same was implemented for my organisation and has shown result
    three perspectives of sales happening (we are working through channel and not directly where things as suggested by bharat holds true as inputs
    – channel loyalty index (how many of retailers when visited by mystery consumer) told your product as TOM (top of mind). to a shock this was the biggest Gap between high TOM and ITP scores(of product) and sales not happening
    – channel visibility : for various kinds of retailers visibility was defined and simple audit done on presence absent of mandatory requirements as (glow sign board, atleast one product poster etc). this was good control as marketing department ensured they service all touch points
    – channel awareness : again survey with basic questions on product got the score
    this gives an overall idea who is at fault (sales people) or marketing
    all inputs in terms of sales people soft skills, their relationship builiding, their regular visits etc improved automatically
    these output parameters became KRA of individuals
    sales pre and post clearly showed increase converted into $.
    for further clarifications contact [email protected]



    I supported an organization with 300 sales people mostly in NA, CA and Europe. Product was primarily surface pre-treatment.  We made the measurement simple: number of written proposals (1-2 page, but not just a price quote) that adherred to the proposal standard guidelines.  Proposals could be mailed or emailed.



    We use the individual performance measurements mentioned in earlier posts, and we also track the long-term effectiveness of the sales department using customer behavior as defined by: “Increasing”, “Decreasing”, “Lost, and “New”. We measure long-term buying behavior by rolling comparrison of current trailing twelve months (C-ttm) versus previous trailing twelve months (P-ttm). Customer behavior is measured by number of customers, transaction volume ($ per sale), and sales volume. Interviews with a sample of each group aids in the development of causes and countermeasures for behavior. Short-term measurements involve month over month changes in the above. The key result of these metrics is a window on the overall effectiveness of sales efforts and identification of opportunities for improvement. Paretos of causes for behavior in each group prioritize countermeasures. The behavioral metrics also serve as secondary “guard” metrics for operational projects.



    I see everyone is anxious to give you answers.  To even begin to answer your question there needs to be more questions asked.  What type of sales people make up your organization?  B2B inside sales?  B2B outside sales?  In home sales?  Retail sales?
    Are sales leads given to your sales people?  How does the selling opportunity present itself?
    I work for a sales/marketing organization and may have some solid ideas for you if you can answer the above questions.



    Our salesmen do B2B sales (I am asumming it means business-to-business).  Basically, we are a chemical manufacturer, and our products are sold as a raw material to industrial coatings manufacturers. 
    I am not sure exactly how leads are obtained.

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