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Sales is the lifeblood of any business.
You may have the best product, the best service offering, or even the most unique expertise in the world. If your prospects aren’t qualified, if your salespeople perform poorly -in short, if you don’t sell enough – your entire business development will stall.
It’s obvious.
That’s why the notion of sales performance is essential.
Especially nowadays, when companies are facing more and more fierce competition in almost every industry.
In the following post, you will understand what sales performance is, why it is important to monitor it, how you can improve it and how to measure it.
What is sales performance?
Sales performance -simply put- is nothing more than a company’s ability to sell better and sell more in a given period of time.
The notion of sales performance is closely linked to that of sales effectiveness, i.e. the results observed by sales teams.
Sales performance is highly related to your sales recruitment. If you get the best salespeople, you’ll necessarily get the best results.
It goes without saying that good sales performance is a reassuring indicator for any manager concerned with this company’s financial health.
That said, the stakes of a company’s sales performance go far beyond its impact on revenues.
What are the stakes of sales performance?
More often than not, results in terms of sales reveal more than just the quality of a company’s salespeople.
Indeed, the stakes of sales performance go far beyond those related to the competence of sales teams. Sales performance usually speaks volumes about the overall performance of the company.
Thus, we use the observation of a lack of sales efficiency to reflect on other essential aspects of a company such as:
- Coordination between sales and marketing teams
- Sales strategy and management
- The global business policy of the company
In this sense, the use of a tool like LaGrowthMachine allows you to solve a lot of problems.
Thanks to sales automation software, you’ll be able to automate most of the prospecting tasks, from the act of prospecting to uploading information into a CRM system.
With our tool, you can program multichannel sequences to generate leads via emails and other sources and lead qualification models in advance, which will go directly into your CRM interface
Coordination between sales and marketing teams
Poor sales performance can also be linked to a lack of qualified leads or prospects.
And often, this links to another gap: the lack of fluid communication between the sales and marketing teams, respectively.
Competition for budgets within departments, misunderstood roles, rivalries between departments, or simply a lack of adequate management information tools… Several factors can contribute to a drop in sales. Even if the product is excellent.
Sales strategy and management
When salespeople have low conversion rates, we can maybe start to point a finger at their individual competence. But often, a good part of the problem lies within their management.
Because having the best salespeople in the world is not the same as having the best sales.
If they work with a cumbersome CRM tool, are forced to follow a vague sales action plan, or are subjected to outdated and authoritarian sales management methods for a long time, they can quickly become mediocre salespeople.
The company’s global strategy
Finally, when all the sales performance indicators of a company are in the red, it is often appropriate to reflect on its overall strategy.
- Where do you want to go as a company?
- Has your target changed their preferences?
- Is your target still the right one?
- Should you think about changing your service offering radically?
- Does your company align its activity well with your brand values?
These are some of the questions a leader can and should ask themself before drawing definitive conclusions about the value of their sales or marketing teams.
What are the levers of sales performance?
Once you understand how much sales performance can tell us, the question is how can we improve it?
As you may have guessed, the levers of sales performance are legion.
Among these, two essential levers deserve mentioning:
- the attractiveness of the product or service offer
- the quality of leads generated by marketing
The attractiveness of the product or service
When your product doesn’t sell, it may sometimes be that it is not as “good” as you might think at first.
Quick Tip💡
Most of the time, the issue to be addressed is not necessarily the intrinsic or “technical” quality of your product. It is rather related to its attractiveness in the eyes of your target customer. In other words, how the value of your product or service is perceived by your customers.
One of the most common mistakes when designing an offer is to do so without having properly defined, studied, and understood the preferences and the deep psychology of the target customer.
Typically, a company’s product teams spend months and months designing a new offering without really listening to customer feedback. This customer feedback is, in turn, typically provided by the marketing and sales teams.
So when you are no longer satisfied with your company’s sales performance indicators, ask yourself these questions:
- To what extent can you better adapt your service or product offering to your prospects’ deepest expectations?
- How can you ensure better communication between your product teams and your marketing and sales teams, respectively?
The quality of leads generated by marketing
When your sales efficiency is falling, the quality of the leads you generate deserves your attention as well.
Indeed, if your sales teams spend too much time working on poorly qualified leads at the marketing level, their efficiency will suffer the consequences.
So think about how your company’s marketing team can improve its lead generation processes.
Any ideas? Think about the benefits of implementing a good marketing automation system.
Also, in B2B, one of the best workflows you can implement is the LaGrowthMachine + LinkedIn Sales Navigator combo:
1. You create ultra-targeted lead audiences via Sales Nav
2. You import them into LaGrowthMachine, which will scrape the email addresses of your leads
3. You create your automated multi-channel sequence in LaGrowthMachine
4. Thanks to the synchronization with your CRM software, each lead that responds to your messages will be qualified in the CRM.
For your information, here are the results of a LinkedIn + Email campaign for cold prospecting:
The gains in terms of time and process reliability may surprise you. The same is true for the impact on your sales performance.
How to measure sales performance?
When we talk about “performance” -sales or otherwise- we necessarily mention results. And when we talk about results, we naturally think of monitoring them. In this context, it is essential to choose a certain number of Key Performance Indicators (KPIs).
These indicators are the basis of your sales dashboard. You will have understood: they will allow you to follow your sales performance and to do what is necessary to maintain or improve it.
The number of indicators to be monitored should not be too large, otherwise, you will get lost. Their choice depends, among other things, on the nature of your company’s activity and must be well thought out.
That said, there are a number of essential KPIs, which deserve to be integrated into any business dashboard, as defined in your sales policy.
Here are a few of them:
Revenue
This is perhaps the most obvious of all sales performance indicators. It is simply the total number of sales made by your company in a given period of time.
This indicator is the first KPI to be taken into account and the basis for all the other indicators in your sales dashboard.
Number of opportunities
This indicator is the product of lead qualification work, both by marketing and by your sales teams. It is the result of filtering and organizing leads by the amount of money involved in the deal and also by the probability of closing (= sale). Knowing your turnover rate and the number of opportunities over a given period, you can start to talk about “conversion”.
The conversion rate
Also called “conversion rate”, the conversion rate is, in a way, the most important indicator of sales efficiency. It corresponds to the ratio between the number of identified opportunities and the number of closed sales. This indicator allows, among other things, to evaluate the relevance of the sales actions and the discourse of your sales representatives.
Turnover per salesperson
Another primary indicator, which can provide you with a lot of information. Not only on the individual performance of each salesperson but also on the general needs or difficulties of your sales team.
This is a KPI that should be cross-referenced with others, like the one below.
Average number of calls per opportunity (and per salesperson)
As you can see, these are two indicators, not just one.) In fact, it is important to always cross-reference them when analyzing them, as this will allow you to understand both the attractiveness of the offer and the ability of your salespeople to convey its added value to already qualified prospects. It can also give you clues about the existence of a certain number of objections that you need to deal with.
The average basket per customer
This indicator corresponds to the average amount spent by each customer on products or services provided by your company. Furthermore, by analyzing the average basket you can estimate how many customers – and what type of customers – you need to have to reach your revenue goals.
Customer acquisition cost (CAC)
The CAC is the ratio between, on the one hand, the total costs with the Marketing and Sales teams, and on the other hand, the number of new customers acquired (or “closed”) during a given period of time.
In principle, the lower your CAC, the more efficient your sales strategy is, in terms of allocated resources.
This is a very important KPI, which nevertheless deserves to be crossed with other indicators, such as the average basket per customer.
This will allow you to understand if this or that type of customer deserves more acquisition efforts than the others.
In the end, you will also be able to understand if, in order to improve your sales performance, you need to focus on the skills of your teams or rather on your sales strategy in a broader sense.
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