A comprehensive guide on how to discern, measure, and improve the effectiveness of your sales team from views around the industry.
What is sales effectiveness?
Trying to define sales effectiveness is like peeling back an onion. There’s a surface-level definition that feels very abstract and academic. But the deeper you go, the more practical the definition becomes.
The surface-level definition of sales effectiveness is a measurement of how productive or profitable your sales team is. But that’s not very helpful. Of course, every sales team wants to be effective. So let’s break down this molecule into its individual atoms, so to speak.
Going a level deeper, sales effectiveness is how productive or profitable each member of your sales team is. After all, the team’s success is the result of individual actions by your reps.
But by what criteria do we judge if a sales rep is succeeding? Is it enough to go by revenue generation? How do we measure and improve the small, daily actions that culminate in sales effectiveness? How do we choose what to measure?
We’ll answer these questions and more as we explore the topic in this post. Let’s dive in.
Crucial KPIs for sales effectiveness
There are a select few attributes of effective sales reps that have proven themselves to be universal. What does this mean? They cross the boundaries of all sales teams and find relevance regardless of organization size, revenue, or target market.
These, as well as any others that are unique to your organization, are crucial KPIs for sales effectiveness. They are the following:
- Sales activity
- Response time
- Sales cycle length
- Content effectiveness
- Lead generation
- Churn rate
Now we’re getting somewhere. Rather than an abstract, difficult to pinpoint definition, we’re getting down to brass tacks. Meaning actionable ways to improve sales effectiveness.
As we’ve said above, the effectiveness of a sales team is contingent upon the effectiveness of each of its parts. In other words, your reps.
This means that the effectiveness of your reps is contingent on how successful they are. Especially in measuring and improving the above criteria.
The first step to sales effectiveness is measurement. After all, you can’t improve what you can’t measure.
Strategies for measuring and improving sales effectiveness
If you’re a sales leader, you already know how much work goes into each of the above KPIs. Don’t get overwhelmed. We’re going to take each category one at a time and break them down into simple, actionable steps.
Let’s start with the first KPI, sales activity.
Sales activity is often defined as the various touchpoints sales reps make with prospects either by phone, text, or email.
In other words, it’s a measurement of the day-to-day activities your sales reps do once they sit down to work.
Unless you have a completely automated sales process, every deal requires at least a few sales activities to drive it down the funnel to close.
The reason it’s important to measure is that once you’ve got this number, you can reverse-engineer it to set benchmarks for your team.
For example, let’s say using historical CRM data you’ve figured out that the average sale closes after twenty emails and ten phone calls. You can use that as a baseline for your reps on a per-account basis.
That way, when you see that certain reps aren’t hitting those activity numbers, you can address the roadblocks before it affects revenue. This adds both visibility from a leader standpoint and accountability on the rep level.
Accent’s Sales Management AI offers a comprehensive manager’s dashboard. It allows you to set, measure, and monitor benchmarks like sales activity. The platform uses AI technology to intelligently score seller performance based on dozens of factors. This saves managers the time and headache of navigating through each sales activity.
Additionally, the platform automatically captures phone calls, emails, and meetings. Which provides complete visibility into the messaging used by sellers and its impact on the energy and length of the sales cycle.
Whatever tool you use to measure and improve sales activity, the most important things to understand are:
- What daily, weekly, and monthly sales activities drive deals down the funnel
- How those numbers extrapolate to daily responsibilities for sales reps
- How well your reps are hitting those numbers
There are a lot of factors in B2B sales that are either completely out of your control or invisible market forces. While we’ve come a long way in business intelligence, there are still many unknowns.
But if there’s one shining example of something you can control, it’s your lead response time.
And response time isn’t limited to how quickly a sales rep calls a hot lead when they submit a contact or demo request. Response time also has a broader definition of how you respond to any action made by a prospect or lead.
Effective sellers and sales leaders think through every single touchpoint throughout the funnel. And through how to best respond to prospects when they reach those milestones.
For example, when a prospect opts into your email list to download a resource, how fast do you respond? How immediate are their specific needs assessed? And are they served up another piece of content that drives them down the funnel?
Or, let’s say a middle-of-funnel prospect shows interest in a specific feature of your product. They download a case study or other indicative piece of sales collateral. How fast are your reps following up with an email with more information on that feature?
It goes without saying that hot leads at the bottom of the funnel should be responded to within 20 minutes. Or some would argue within five minutes, in a perfect world.
That may seem extreme, but according to several studies, the likelihood of making contact with a lead after 30 minutes of their inquiry dramatically suffers.
As a sales or marketing leader, it’s your job to be brainstorming how you can offer a solution to the prospect’s inquiry faster and before the competition. And to always be looking for ways to improve the process.
Consider what you’ll do if prospects make contact outside of business hours. A practical way online businesses navigate this is through an automated live chat service. They can answer questions, provide pricing, or move prospects down the funnel in some way.
You may use a pre-recorded product demo? Or an automated email that’s personalized according to each sales rep? Or some sort of free trial.
The bottom line is that if customer is engaging with your brand, you’re top-of-mind. Everything we know about inbound marketing points to this narrow window as the best and most likely time to make contact.
It’s important to measure these cycles, establish benchmarks, and hold your reps accountable. Our Sales Management AI platform offers you unparalleled insight into the activities of your sales reps. Learn more about our manager’s dashboard here.
Sales cycle length
Sales automation and business intelligence experts are always mulling over one crucial question:
“How can we shorten the timeframe from when a lead enters our database to when they become a paying customer?”
Effective sellers aren’t only concerned with the immediacy of the deal in front of them. They’re concerned with how to sell faster, be more efficient, and return more profit.
The first step is to get a thorough understanding of how long the buyer journey takes, on average.
Here’s the basic equation for calculating your average sales cycle length:
- Add the number of days from first contact to customer conversion for all available deals (the more data you can get from your CRM, the better). This number is your total number of days for all sales combined (we’ll call this variable t).
- Divide t by the total number of deals available in your dataset. The resulting number will be your average sales cycle in days.
For example …
If your total number of days from first contact to close t = 1,500,
And you have 100 deals in your dataset,
Your average sales cycle in days would be (1,500/100 =) 15 days.
I’m using nice round numbers in this example, but truthfully, your sales cycle will likely be much longer. This is especially true if you’ve never measured it or if you’re selling big-ticket items in a B2B space.
So how do you shorten your sales cycle? That is the million-dollar question.
The first step is to identify common bottlenecks. Generally speaking, at what point in the funnel do deals grow stale? Is it a lack of education on the prospect’s part, sluggish response time from your sellers, or something else that’s causing deals to languish?
Accent’s CRM Supercharger uses AI-driven visualizations to help you discern deal health at-a-glance. This way, you can identify bottlenecks within seconds. This is something most CRMs don’t offer out-of-the-box.
Another approach is to visualize your buying journey on a timeline. Then, go line-by-line through each activity, funnel stage, and milestone while asking the question: “How can we make this faster?”
Make your reps part of this conversation. More often than not, some of the best ideas for content and funnel optimizations come from the sellers. Why? Because they’re on the frontlines every day talking to prospects.
I remember hearing a story of a marketing department at a successful SaaS company creating a detailed infographic. It was for sales to use as sales enablement content.
The graphics were sleek, the formatting was professional and the copy was informative.
While aesthetically-pleasing and polished, the infographic didn’t speak to prospect pain points at all. The result was a sales team who eschewed the infographic in favor of more effective content.
That poor asset that cost tens of thousands in payroll and software to create languished and never saw the light of day.
The worst thing was that the sales team didn’t communicate back to the marketing department that the content wasn’t effective. So the marketing team assumed it was a success and began work on the next piece of similar content.
I imagine this sort of scenario isn’t uncommon in online business. Creating effective content is one of the many disciplines that demands airtight alignment between sales and marketing.
It requires a critical mindset shift away from “what content would be cool to create?” to “what content will effectively drive prospects to the next stage of the buying journey?”
For a more detailed look into funnel optimization and the sales cycle, check out our post on the topic here.
In your analysis of your sales cycle, you may notice that leads that see a demo of your product are more likely to close. Yet, you’re finding it hard to drive them into the demo stage.
So what sales enablement content or resources can you supply your reps so that more leads are eager to see a demo? Or perhaps you’re capturing lots of top-of-funnel leads into your database. But they stay stagnant due to no relevant content coming their way for months.
In that case, you’d want to introduce a nurture funnel or a series of emails to each lead that offers persona-specific content.
This content would not only need to add value to them but also position your product as a solution to their pain points.
Once you begin playing the role of detective and putting your content under scrutiny, the roadmap to more efficient content management and creation will become clear.
You’ll soon find where you once had no clue how to fix a problem, you’ll have a long checklist of things to do to optimize your content strategy.
We’ve written on the topic of sales content. Including how to do a content audit and a walkthrough of the entire content creation process.
SEE ALSO: Sales Content Effectiveness
If you’re looking for a way to judge the efficacy of content without sorting through mounds of data, our Accent Connect platform helps you do that.
It’s content management taken to the next level. It provides leaders and sellers with at-a-glance insights into how effective a given piece of collateral is. And how well it’s driving leads down the funnel.
It can be tempting to hurry up and create sales enablement content because “that’s what you’re supposed to do in online business.” That will only result in wasted money and time.
Take your time, talk to your prospects and sellers, and analyze your content efficacy. This will help you create sales enablement content to solve a specific need that you’ve identified. And it will drive more revenue to your organization.
I’ve known a lot of CFOs throughout my career. They’re not scared of snakes or spiders. And not many are easily rattled or shaken.
But if there’s one word that keeps them up at night and haunts their dreams, it’s “churn.”
Churn rate in business is also sometimes referred to as “attrition rate.” Churn rate is a measurement of how many customers cancel or do not renew their commitment to your product or service.
In other words, it’s a quantifiable representation of how your product is not meeting their pain points such to warrant their business.
This is problematic for most SaaS companies and online businesses who rely on ARR (annual recurring revenue) to grow and even keep the lights on.
Unfortunately, it seems that churn is most often laid at the feet of the customer service or customer success team. While dozens of factors could lead a customer to churn, each department should take ownership of their own part in a churned customer.
The customer service team should ask how they could’ve helped the customer adopt and use the product. The development team should ask what feature/benefit sets are missing that could’ve caused this customer to leave.
And your sales team should ask how they could’ve positioned the benefit of the product or service better.
This is such a golden opportunity for growth and improvement that many sales and marketing teams miss out on. Understanding why customers churn is directly tied to sales effectiveness.
Why? Because you’re seeing first hand that there’s a perceived problem that is not solved by your solution.
Most churned customers take part in some sort of exit survey with customer success or customer service team. This feedback is so valuable, organizations pay big money for marketing research firms to gather intel of this caliber.
There have been many times in my career where I’ve shaken my head in disappointment at customers who’ve churned. They weren’t educated on how a product solves their problem.
Perhaps it was the messaging, the sales pitch, or something in between. But there was significant (and expensive) confusion.
Or, even worse are prospects who purchased a product thinking it was one thing when it turned out to be something else entirely.
Besides offering ideas on how to improve the product, churning customers are an excellent place to look for holes in how your solution is presented.
It’d be irresponsible to hold sales completely accountable for churn. But it’s a fatal mistake for sellers to ignore it completely.
Churn affects everyone: customer service, development, finance, sales, and marketing.
I know this doesn’t exactly align with the common personality of a seller. Sales reps are always on a mission for the next deal, and rarely in the mood to do a post-mortem on a sale they closed months or years ago.
But smart sellers know that those who ignore history are doomed to repeat it. And understanding churn rate ties into how reps can position and sell your solution.
The obvious king of KPIs is revenue. Most sales leaders don’t need a reminder to track revenue. But it’d be a mistake to overlook it in a post about sales effectiveness.
The tricky thing about revenue is that it’s really the sum of all the elements mentioned above.
If you were to tell your sellers to “increase revenue,” it’d be unhelpful. If only it were that easy!
That’s like telling someone to just “be successful.”
Revenue is best measured when you break it down into tiny, actionable processes and steps. As we’ve done in this post.
Once you fully understand the aforementioned factors (and any other KPIs relevant to your business), you’ll be set up for success to increase revenue.
To illustrate the point, consider this example:
Bill Walsh was a legend in the history of the NFL. His leadership philosophy transformed the San Francisco 49ers from the worst franchise in sports to an epic dynasty.
He offered an interview to a biographer before his death, which the author published as the powerful book The Score Takes Care of Itself. It’s a must-read for anyone in leadership.
Walsh’s leadership philosophy could be summarized in the following way: when you focus on the score, you’ll lose. But when you focus on the tiny, repeatable actions that predict success, the score will “take care of itself.”
In the same way, focusing on the abstract concept of “increasing revenue” is overwhelming and unhelpful. But focusing on the individual KPIs we’ve outlined in this post — the small, but significant actions that culminate in success — is a surefire way to increase revenue, morale, and sales effectiveness across the board.