In successful companies, everyone from the executives to the sales effectiveness manager to sales team managers are (and should be) monitoring the success of current sales activities, the buying cycle, and pinpointing opportunities for improvement. In this environment, everyone knows what they should be doing for sales success. In a growing company that is scaling its sales teams, this can especially become a challenge.

That is why it is important to truly understand what sales effectiveness is to be able to continually improve it. In this article, we’ll go over just that. Plus, we’ll break down important sales effectiveness metrics to monitor, tools and software to do that, plus tools that can help improve effectiveness.


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What Exactly Is Sales Effectiveness?

Often, sales effectiveness is equated to efficiency. But, these are two distinctly separate things. Sales effectiveness speaks to whether the right sales tasks are actually being performed — ones that result in deals won and support the company strategy. The key difference between sales effectiveness and sales efficiency is exactly what tasks are being performed (effectiveness) versus how they are being performed (efficiency).

Sales effectiveness is more than if sales reps are consistently hitting their sales quotas — it’s also about the pieces of the puzzle that lead to the deal being closed. Sales effectiveness is identifying the key metrics of success for sales reps and reducing the obstacles that are in the way of reps hitting those goals. Of course, this will look different for every company. It may involve shortening the sales cycle, automating sales tasks, etc. All depending on what the company defines as sales success for them.

So one of the most important pieces of sales effectiveness is to define what sales success looks like for your company. This might be based on revenue, profit, sales of a new product, etc. Then you can sufficiently track metrics and improve the tasks leading to sales effectiveness for long term growth.

“Efficiency is doing things right; effectiveness is doing the right things.”
Peter Drucker, father of modern management theory


Sales Effectiveness Metrics You Should Be Tracking

Now that you understand what exactly sales effectiveness is, you may be wondering what the best way is to measure sales effectiveness. It is even more important to know which sales effectiveness metrics you should be paying attention to.


Source: DemandFarm

Certain key metrics and KPIs can help pinpoint, on a granular level, which pieces of the sales puzzle can be tweaked to optimize sales effectiveness. Remember, you are measuring these metrics against what you have determined success looks like for your company. These are some of the most common that you should be tracking:

Fluctuations In Sales Team Activities

Keep an eye on the time spent on calls, number of calls or emails, number of in-person meetings, etc that your reps are making. Monitoring fluctuations in daily activities like these gives you a quantitative overall view of your sales team’s efforts. Not only will this help you increase effectiveness, but you can also make improvements in efficiency.

Sales Lead Response Time

Monitoring metrics like how long it takes sales reps to respond to prospect inquiries, the last time the sales rep spoke to a prospect, or how often is crucial. If a prospect is highly engaged with the sales rep, the chances for the deal closing are much higher. A proactive sales cadence and quick response time can greatly increase sales effectiveness.

Length Of Sales Cycle

Understanding the length of your sales cycle and your overall pipeline is an effective way to identify unnecessary delays. By monitoring the time spent in each stage, you can pinpoint any bottlenecks, address them immediately, coach the sales reps through effective solutions, and improve sales effectiveness.

New Customer Acquisition Rates

One way to gauge the overall selling success of individual reps is to monitor the rate at which deals are closed and new customers are brought on. Tracking new customer acquisition rates between individual reps can help pinpoint gaps in skill sets or selling experience. When your reps are working in predetermined territories, this metric can also help determine what territories are higher demand areas and help inform decisions around how many sales reps are needed to support them.

Effectiveness Per Territory, Product, Etc.

By tracking sales effectiveness per territory, product, etc, you may determine that specific territories or products have a much longer sales cycle and/or have a lower close rate compared to your core territory/products. Then you can implement proactive solutions to improve the sales cycles or processes where possible.

Customer Turnover Rate

Just as important as metrics looking at customer acquisition are metrics that monitor customer turnover. Look at your customer turnover rate as a percentage against sales growth and new business development. This will allow you to identify dangerous trends in lost business opportunities and react quickly.

Individual Effectiveness Against The Average

You should also be tracking sales effectiveness per rep and compare that against the overall average of the team. Certain reps will naturally outperform their peers due to some innate quality or valuable lessons learned that gives them an edge. They can help develop key aspects of the sales process based on what they know works. Tracking individual effectiveness also allows you to pinpoint what reps may need further specialized training in certain areas.

Impact Of Investments On Effectiveness

It costs money to improve effectiveness. Whether it is through new software and tools, hiring a sales effectiveness manager, or the time spent by executives to strategize on improving processes. So it is important to monitor those costs against the percentage of improvement in revenue and overall sales effectiveness. This will help determine what costs are showing value and what may need to be cut.

Net Profitability

Costs to manage and maintain growth also increase as companies grow. So, another important metric for executives to measure sales effectiveness is net profitability. You have to adequately analyze operating expenses, customer acquisition costs, resource allotments, etc against revenue and customer acquisition rates to determine net profitability and if continued growth is sustainable.

The metrics above are just some examples of things that can provide insight into what is working and not working on your sales team, and where to focus efforts for improvement. Periodically, look at measurements of overall effectiveness (for example, average output per salesperson) to gauge whether the improvements you make are effective.


Best Practices In Sales Effectiveness

As you can see, maximizing sales effectiveness is critical to generating long-term growth for your company. Outside of tracking metrics like the ones above, there are some best practices and strategies that are extremely effective in ensuring sales effectiveness in 2020 and beyond.


Source: ITA Group

Let’s break down a few of them:

  • Determine The Right Sales Process For Your Company -

With what activities you have determined are effective, outline a clear and consistent sales process. Set sales objectives around those activities and specific sales goals. According to research from Salesforce, companies that follow a defined workflow are 33% more likely to be high performers.

  • Make Sure Your Sales Reps Have Proper Training -

Ensure your sales reps are clear on what needs to be done to meet sales goals and how to execute effectively. Clear and continuous training is how to make that happen. Continuous training can yield up to 50% higher net sales per sales rep. For new sales reps, a 30-60-90 day onboarding is highly effective.

  • Make Selling Simple -

Reduce the complexity of the sales agreement. Not only will this result in a smoother sales process but it will improve the customer experience and increase customer satisfaction. If there are specific sections in the agreement that are consistently getting pushback or questions from customers, revise that section or take it out if possible.

  • Align Support & Resources With Your Sales Reps -

Make sure your sales rep has easy access to the people or resources that can help guide them. If your company sells a product that is more technical in nature, ensure there is a sales engineer available to support your sales reps. Also, sales managers or executives should be available to the sales reps in case they are having a tough conversation and extra clout added to the opportunity can be useful.

  • Make Sure Your CRM Is Easy To Use -

Make sure your sales reps aren’t having to waste unnecessary time inputting irrelevant data into your CRM. The Account, Contact, and Opportunities layouts should be simple and only contain what is needed to close the deal. Trim any extraneous info or tabs to reduce confusion, clutter, and inefficiency. Sales reps that are clear on how to use a CRM that is clear-cut and straightforward will inherently be more effective.

  • Optimize Sales Activities -

After you have determined the best sales process, as we mentioned above, increase sales effectiveness by optimizing those sales activities and data tracking. By automating tasks and reducing the time needed on manually entering data or analyzing numbers, you can give your sales reps more time to actually sell and you’ll be able to pinpoint opportunities in real-time.

These are just some of the sales effectiveness best strategies that can help. The main thing to keep in mind is you want to do things that help remove any roadblocks or obstacles that can slow down or trip up your sales reps in closing deals that align with your company’s overall strategy.


Sales Effectiveness Tools & Software

After you have identified which key metrics to track and identify which sales processes are most effective, you can elevate sales effectiveness even further by utilizing some of the tools and software available. Some of these tools help you track those key metrics in real-time, while others can help optimize the actual sales processes. Many sales enablement tools are also great at improving sales effectiveness.

Either way, these types of tools are crucial to becoming a best-in-class sales leader or sales team. A 2016 study from Aberdeen Group determined that investing in sales analytics and forecasting solutions is directly correlated to better sales and business-wide performance results. This is also true for sales process optimization tools.

Here are just a few examples of some sales effectiveness tools:

Map My Customers

Map My Customer is a data analytics tool, territory mapping and routing software, and sales CRM all rolled into one. Track all of the necessary sales effectiveness metrics in real-time while optimizing your sales team’s activities and allowing them to operate at peak efficiency. Thus improving sales effectiveness. Our robust platform was built with the outside sales rep in mind so it is highly responsive on any device.

DocuSign

When it comes to making selling simple, especially in regards to your company’s sales agreements, using a tool like DocuSign can optimize and accelerate closing a deal. This e-signature and digital transaction management software helps businesses increase sales effectiveness and be more productive with faster electronic exchange of business documents.

FirstRain

FirstRain is a tool built around data science and analytics. This software offers actionable insights into the sales process using sales intelligence. Allowing you to make informed business decisions to improve sales effectiveness. Utilize data visualizations, see sales activity trends, use predictive analytics, and receive crucial industry information to identify improvements in your sales process.

People.ai

People.ai is a robust revenue intelligence tool. Measuring sales effectiveness and monitoring performance of your company’s sales activities by leveraging the power of artificial intelligence, the People.ai platform gives you the ability to derive deep insights and visibility into your team’s overall sales effectiveness.

ZoomInfo

ZoomInfo is a powerful business to business contact database that can help optimize your sales team’s lead generation. This platform provides actionable business information regarding customers and ideal prospects that empowers your sales and marketing efforts. Your reps can keep their finger on the pulse of industry opportunities, reach decision-makers quickly, and convert ideal customers faster.

Collective(i)

Similar to People.ai, Collective(i) is a business intelligence solution that combines networks of sales data with AI and predictive analytics to create valuable insights into your sales efforts. The tool helps in mapping customer buying behavior using artificial intelligence, predictive technologies through ERM, & more. Allowing you to improve sales effectiveness and grow revenue.


Why You Need Sales Effectiveness

Improving sales effectiveness is a key strategy that will help set your company apart as one that continues to grow and increase revenue versus one that fails. By pinpointing what exactly is working and what can be improved upon and making sure everyone is on the same page with that, you can help ensure long-term success for your company.

Key parts of this are knowing which metrics to track, what tools to use, and how to optimize aspects of sales effectiveness. Over time, you can better understand how your efforts are impacting your bottom line by comparing what you are measuring and optimizing against overall effectiveness (average output per salesperson).