Data and analysis is critical in keeping track of business growth. As Google has pointed out, “data beats opinion”. When any large business – Home Depot, Target, you name it – measures the effectiveness of your sales teams and Salesforce usage, it’s important to keep things in perspective, particularly when it comes to making conclusion solely on revenue. While many businesses distribute and allocate bonuses, raises, and employee rewards programs based on the revenue brought into the company by each employee, revenue has weaknesses as an indicator of employee performance and should not be the only factor considered.
For one thing, there is often a period of lag time between new sales initiatives and revenue totals as sales teams learn to integrate and apply new tactics. It is better not to have wait the several months it might take for sales to trend upward in order to accurately evaluate the performance of your salesforce. Further, total revenue depends on a host of complex factors that are difficult to weigh accurately in assessing sales performance. Finally, looking only at total revenue as a Key Performance Indicator (KPI) does not allow for the possibility that different members of your sales team may have different strengths and should be utilized accordingly.
Let’s look, then, at some more nuanced KPIs that will enable to you better understand where room for improvement lies within your sales force.
1. Rate of Contact
A recent study suggests that sales reps should be achieving about 32 sales opportunities per 1,000 outbound calls. First, then, it’s important to measure the number of outbound calls made by each rep to ensure that a window for these opportunities is being created. But it’s equally necessary to measure the rate of opportunities generated. If for any given employee it doesn’t approach 32 per 1000, it may be time to take a closer look at their sales pitch.
2. Rate of opportunities to closures
The next KPI involves moving from sales opportunities to closed sales: signatures and handshakes. You will want to track this data for each member of your sales team as well. Based on these measurable metrics, you may discover that one of your employees has an excellent rate of contact, but has a hard time closing the sale, or vice versa. You can then adjust his or her role within the salesforce to suit his or her strengths.
3. Follow-Up Contact
Research has shown that almost half of sales reps don’t follow up on their leads a second time. Most sales are not made on initial contact, so follow-up contact is essential to good sales performance, and is a KPI that should be tracked internally. Emails can easily be ignored, so in-person or phone contact is preferable, but follow-up contact should also occur following a sale. This contact might be in the form of an email that encourages a customer to call if they have any questions and offers links to related products and services. The more your customers feel that you are engaged and active, the more likely they are to become repeat customers.
4. Social Media Engagement and Usage
Research firm Gartner recently said that “Social Media for CRM Will Force a Shift From Contact Centers to Customer Engagement Centers”. This ties into another valuable, if trickier to assess, KPI – social media engagement. If your company is on Twitter and Facebook (and in this day and age, it should be), do your employees make use of these platforms to reach out to potential customers? If so, how often? Develop a metric for rating employees’ online profiles, with measurable grades for such qualities as professionalism, originality, and overall activity.
5. Customer Satisfaction
Every company wants to know whether its customers are satisfied. But it’s also very valuable for you to know which member of your sales force provided them with a satisfying customer experience. In online feedback forms or in phone surveys, ask customers to provide the name of someone who helped them. In short, develop a means of assessing customer satisfaction in relation to individual employees rather than simply to the whole salesforce or company.
The above KPIs will help a company get beyond the black-and-white figures of revenue to more focused aspects of employee performance. This will allow you to more accurately assess the performance of your salesforce, and in the long run, it is likely to cause revenue to go up more than it would if you restricted your KPIs to the numbers alone.