It's obvious why sales performance is a crucial part of any organization. Good sales performance leads to increased sales and greater profits. These results become a motivating factor for your sales force.
A motivated sales team will perform well. This creates a cycle of continued success. However, it's often hard to achieve.
Poor sales performance results in lost time and increased costs. Sales managers end up spending 90% of their time trying to manage poor sales performance. Your organization can avoid this by implementing an effective sales performance strategy.
This will facilitate the productive use of your sales managers' time and a motivated sales force that helps improve your company's bottom line. Read on to learn more about sales performance and how you can improve it with a comprehensive strategy.
What Is Sales Performance?
Sales performance can be simply defined as measuring the sales activity and results of your team. These measurements are a reflection of the effectiveness of individual team members as well as the entire team. It involves comparing results achieved to sales quotas and goals.
Sales performance is not:
- Solely about pitching to potential customers
- A 'one-size-fits-all'
- Guessing sales targets
If you want to achieve good sales results you have to know the factors that affect sales performance and what you can do to improve them.
Factors That Affect Sales Performance
The factors that affect sales performance can be both internal and external. Some are directly associated with your sales team's resources and ability, which you can control to some extent. You may have to develop a strategy to mitigate others as you have little or no control over them.
Some internal factors include:
- Company culture
- Sales recruitment standards
- Sales team training
- The technology and automation available to your team
- Marketing efforts
- Product quality
- Customer experience
- Availability of capital
- Your supply chain
All these can affect the ability of your sales team to be effective. It starts with recruiting team members that are the right fit for your organization. You then have to provide them with the right resources, training, and guidance to be successful.
Your company culture should also support development efforts that aim to achieve your vision and mission. It ensures that company performance is a team effort that not only involves your sales team. It should be a collaborative effort across departments because they all have a part to play in the organization's overall success.
External factors that can affect sales performance include:
- The economic or political environment
- Regulations and laws
- Changing consumer tastes or trends
- Technological advancements
Although you don't have control over these factors, your company can do an environmental analysis to identify potential threats to the business. This will allow you to put strategies in place to respond to any that may occur.
How to Improve Sales Performance
Implementing a sales performance strategy allows you to identify the factors responsible for changes in performance. You can then put measures in place to improve it. Here are few things you can do.
Recruit the Best Sales Team for Your Company
You can improve sales performance if you can work with your team. This starts with recruiting individuals that understand your company culture. Each team member should have the skills needed to be successful, but they should also be the right "fit" for your culture.
Hire team members with people skills who value the importance of being customer-focused. They should also have a level of technological know-how to use your company's customer relationship management (CRM) system. This will help them to establish, nurture, and maintain relationships with prospects and customers.
Provide Your Team With Resources
Once you have the right team, provide them with the resources to facilitate their success. This includes marketing and sales materials to support their customer interactions. A user-friendly CRM will also allow them to manage customer data and will provide them with good leads.
Part of managing your sales team should include individual development plans. Create these once you've assessed each team member's skills. Determine their strengths, weaknesses, and sales experience and work on the areas that need improvement. This will usually involve training, coaching, and mentoring.
Have a Sales Strategy
There should be a comprehensive sales strategy that each team member knows. It should not include scripted sales pitches. It should involve a customized approach for each prospect. Sales members need to have real conversations with prospects to identify their pain points.
Teams should provide customized solutions based on research and the experience of past customers. The goal of your strategy should be to improve each customer's experience when they interact with your organization. If needed, review your current sales structure to ensure it is working effectively.
Use Data to Measure Performance
Team members need to know the individual as well as team goals. Provide them with the data that lets them know if they are missing, meeting, or exceeding their targets.
Team members should know:
- The average length of the sales cycle
- Conversion rates
- Appointment acceptance rates
- Total revenue
- Percentage of revenue from new business
- Total sales for specific time periods
- Prior activity sales
- Sales by lead source
- Market penetration
- Revenue per sale
- Revenue by product
Have Individual Focus Meetings (or one-on-one meetings) to discuss performance and provide feedback. Tie goals to appropriate incentives. Have measures in place for continued performance shortfalls.
Measuring Sales Performance
There isn't any way to determine success without measurement. Having comprehensive methods to measure your sales performance not only ensures your sales team knows their targets, but you'll also know if you're meeting company goals.
There will be key performance indicators (KPIs) that you will need to measure based on the results you want to achieve. In addition to the targets your team will track, some other KPIs may include:
- The average lifetime value of a customer
- Growth over time
- Deals won against deals lost
- Cost of selling vs revenue earned
Your method of measuring these key metrics should include every phase of your sales cycle. This starts from lead generation to your sales pipeline.
Quantitative measures are extremely important, but there are also qualitative methods you can use in addition to data to track your team's success.
Determining Issues Affecting Sales
The Individual Focus Meetings you have with your team members will help to identify, based on their interaction with prospects, what parts of your strategy work and what may need modification. Sometimes issues occur even before members of your team meet prospects.
They may not have all the data they need to meet a client or might miss an opportunity to provide a customer with additional solutions. A simple reason might be that they're not using all the features of your CRM that can assist them to create a complete customer profile.
It can also be a product that isn't working the way it's intended. This feedback can be funneled to the production department where they can do a product review and make improvements. Customer feedback can also help improve marketing and communication efforts.
Finding out about issues such as these might involve asking the right questions when meeting with team members. Thoroughly investigate issues so you can find long-lasting solutions.
Feedback to Help Improve Performance
In addition to providing your team with the resources they need, you also have to find ways to motivate them. In addition to incentives, always praise results on an individual as well as team level. This can boost morale.
When providing feedback, always start with the positive. Then identify areas that require improvement. Your team might be able to provide you with ways to improve current methods that may not be working.
Individual members can also share experiences about the things that work well for them. If they have proven to be successful, you can adopt them as part of your strategy moving forward.
An Action Plan for Better Sales Performance
Let your team find methods to work on past mistakes. These methods can become a part of an action plan that you include in your training materials and sales process.
Take time to review the progress made against the plan. This will indicate if the methods you've put in place are actually working.
Getting the Best Performance from Your Team
When all factors align, the result is usually sales success. It includes your team, resources, technology, and overall strategy. Getting each element right will result in sustained achievements and positive sales performance.
It may involve tweaking each until you get it right. You can incorporate new methods of training, use additional resources, or implementing new practices. There are many tools you can use to make this process easier.