Of every ten people with a gym membership, only five actually get fit.
Do you know why that is?
It’s not that exercise doesn’t work the same for everyone.
Nope, it's not that some gyms have terrible trainers.
No, it's not that people tend to eat more when they start exercising.
Nope, not people using equipment wrong at the gym either - but you’re close.
It's because 5 out of 10 gym membership buyers do not actually go to the gym. And even when they do, they laze around and take selfies more than they actually work out.
Just buying a gym membership isn’t going to strengthen your core and give you washboard abs. (If only!) And the same way, a team that’s sitting at their desks making calls all day is no guarantee of sales success. They need to be saying the right words to the right people. They need to actually be productive while they’re playing busy.
That’s why you need productivity metrics.
What are sales productivity metrics?
Sales leaders set benchmarks and track the growth of their sales team using quantifiable figures called sales productivity metrics. When a certain number is less than the average expected value, then there is a need for sales reps to improve. For the most part, it will be up to you, their sales manager, to figure out what’s going wrong in this particular area and how your rep can be empowered to improve.
Sales productivity metrics analysis can be done monthly, quarterly, or annually.
Sales analytics can help you
- Improve individual team members’ efficiency.
- Improve the overall sales team’s performance by showing the shortcomings in your sales processes.
- Optimize sales activities by indicating the effectiveness of your sales strategies.
- Increase accountability to your sales leaders and within the team.
- Increase employee as well as customer satisfaction.
- Optimize sales coaching strategies according to the sales performance figures
- Make realistic sales forecasts.
9 key sales productivity metrics you should track to boost efficiency
Here are some must-use metrics, the problems they can indicate, and what you, a sales manager, can do to fix some of the problems linked to these metrics.
1. Activity metrics
The total number of sales activities undertaken per team member (sales rep, BDR, and SDR) in a given amount of time is definitely something you want to look at.
These activities can be :
- Number of calls scheduled
- Total number of meetings booked
- Number of emails sent
- Number of follow-ups per day
Although this key performance indicator (KPI) indicates the amount of work your reps are putting in, it does not reflect the quality of their work. Being productive also includes producing tangible output.
That said, this is a good starting point for you to begin charting out productivity metrics. First, you need to know how many apples you have got in your basket, and then you can go on to evaluate whether the apples are good or bad.
Why look at this metric: It sometimes happens that the reps fight tooth and nail to land a client but aren’t able to close the deal in the end - due to reasons they can’t control. Activity metrics help keep track of all the efforts your reps are making, giving you complete visibility.
2. Win rate
How much did a specific engagement add to the rep’s average revenue? What number of deals did all those calls and meetings yield?
These are the questions you get the answers to when looking at the win rate. How many viable opportunities were fed to your sales reps, and how many were successful? Win rate is the ratio of closed deals to opportunities.
The industry average is set to 1:3. If your SaaS business is delivering a lower rate then you need to look into your sales strategy.
Win rate is also known as the conversion rate.
Conversion rate is calculated as (leads converted into sales / qualified leads) x 100.
Why look at this metric: You want to look at win rate against activity metrics. If your rep is making 900 sales calls a month, why are only five converting into paying customers? Does your rep need personalized coaching? Is there something that they unconsciously say or do that makes customers not want to work with you?
3. Sales cycle length
The total time taken by your sales reps to get the opportunity to seal the deal is the average sales cycle length.
This sales metric gives you an insight into how much time your sales team requires to nurture a lead into a paying customer. A smaller sales cycle is positive.
Why look at this metric: If your reps are taking longer to convert, maybe there is something that you can do to accelerate the process. For example, maybe you have a very tedious pitch deck format which means that your reps are only able to personalize the deck and send it to prospects a few days after they pitch. This is a clear red flag that your pitch deck is an obstacle to success and needs simplification.
Alternatively, maybe a sales rep has a longer sales cycle because they keep bringing negotiations back to you and need training on how to stand their ground on a specified rate.
4. Average deal size
What is the total revenue that your team members are bringing in? This sales metric is deal size. Why does a deal size matter?
Picture this: Your sales reps Jim and Gerry, each spends five days pursuing a lead. Jim’s lead signs up for a US$ 50,000 deal, while Gerry’s signs up for a US$ 500,000 deal. You’ve spent the same acquisition cost on both customers, but Gerry’s customer delivers a higher ROI.
That’s why deal size matters. You want your rep’s efforts to go further. Their time is money because their time costs the organization capital, not to mention allowances and capital spent on overheads.
Why look at this metric: When your reps display a low average deal size, it could point to several factors, most of which you can fix easily. It could be that your sales team lacks the confidence to reach out to the level of prospects that it takes to crack a high-value deal. If this is the case, you can play back recordings of others on the team who have aced this. Or coach them on what to say and how to carry themselves with confidence.
It could be that prospects themselves only want to sign smaller deals with your brand because you’re still new and they haven’t got enough reviews to go by. This might simply call for a higher volume of reviews and testimonials, maybe some advertising.
7. Customer Lifetime Value (LTV) churn rate and customer retention rate
LTV refers to the customer’s total purchase value over all the time that they remain a customer of your brand. You want salespeople to zero in on customers who will continue to purchase from you or continue to subscribe after the first subscription concludes.
This concept overlaps with the retention rate, particularly in the case of subscriptions. Retention rate is the number of customers a brand is able to retain versus those it loses in a given time period. The customers lost during a given time period is the churn rate. You want a high retention rate and a low churn rate.
Why look at these metrics: Low LTV and low retention rates can sometimes be alarming signs of bigger, deeper problems. Since these metrics point to customers being lost after the sales team managed to win them over, it could point to unrealistic promises being made by the sales team, lacking post-sales service, or a product that does not work as promised.
But sometimes, it is not that drastic. Sometimes, it's a sign that your salespeople are following up too late to resell to existing customers. Maybe they call them when the subscription period is ending - when, in fact, it might be advisable to call customers for renewal a few weeks or months in advance when they start shopping around. If you notice a high churn rate, low retention rate, or low LTV, you might want to see how follow-ups call timings and dates line up against renewal dates. Maybe your salespeople just need to start calling prospects earlier.
8. Sales quota attainment
Your team has been working hard, following strategies, and optimizing plans, but how close have they gotten to their targets? Sales quota attainment shows whether your sales team is actually close to achieving its sales targets.
This sales metric not only tells you about your sales team’s productivity, but if you mix it up with other sales metrics like lead-to-opportunity rate and the number of leads engaged, it enables further analysis of the benchmarks you’ve set.
Why look at this metric: If you’ve set unrealistic goals, this metric will tell you so. But that’s not all it can tell you. If your sales quota attainment metrics are fantastic until a particular event (like a new player joining the market or a new process is introduced by your marketing team). Then, you know exactly what the spanner in the works is. You know what to fix.
9. Total revenue
This final sales KPI on our list tells you how much capital is earned in a given period of time. You can select between monthly recurring revenue (MRR), quarterly recurring revenue, and annual recurring revenue (ARR), depending on the context of your SaaS business.
Why look at this metric: This is the very basic that any sales manager will look for one. And yes, it's essential to look at this figure to know if you’re doing better than the last quarter and to set goals for the future.
Using metrics like a pro
A suave sales manager not only looks at metrics in isolation but also uses them to compare one period of selling to the last. You want to compare month-over-month, quarter-over-quarter, and year-over-year growth rates.
You also want to do “same period last year” calculations. Just because your January 2023 metrics look far better than December numbers is not a reason to rejoice. Maybe numbers come to a bit of a standstill every December on account of people being in holiday mode and pick up again in January as people return to work.
As a sales manager, you have a lot of work to do and a ton of duties to fulfill. It wouldn’t hurt to delegate some of your metrics calculations and analysis to a sales intelligence tool.
Ask Wingman to track your sales team’s performance
Inefficient salespeople hurt your sales goals, hopes, and dreams. You need to keep your sales team on their toes. Get Wingman to help you track, monitor, and analyze your team’s performance.
Wingman delivers ready activity metrics and also provides you will call volume and call success metrics. These allow for fully informed forecasting.
But tracking is not all you get with Wingman.
Wingman also helps improve your sales team’s productivity by providing reps with real-time, contextual on-call cues. You and your team will also witness far fewer lost deals thanks to Wingman’s at-risk deal alerts that tell you when you need to rush to the rescue of a struggling rep.
Wingman also enables better productivity because it integrates seamlessly with your sales tools like Zoom, messaging apps like Slack, and CRM - automated information flow means less data entry and more selling, which typically translates to higher sales productivity.