For revenue organizations, sales data shows your performance towards your goals, but it also can be a useful tool to guide strategic planning and business decisions. However, before you can begin putting your data to use, you need to make sure you’re looking at the right information.
What sales performance metrics should you track?
To use your sales data more effectively, you need metrics that provide valuable information, give you insight into performance, and can be used to guide decision making. As companies and their product/service offerings become more complex, the list of metrics they track may also grow, but the following provide a good place to start.
What portion of reps are meeting their revenue targets? Quota attainment gives you an indication of the health of your sales organization and is a common metric used to measure performance toward overarching goals.
According to LinkedIn, 60 percent of sales leaders feared they would miss their end-of-year quota targets in 2020. Although the past year was an outlier in terms of selling conditions due to the pandemic, frequently missing your targets can indicate a problem within your sales plans.
Using Quota Attainment More Effectively: Quota attainment can be used to identify potential problem areas, such as where rep performance levels drop off and the difference between top, middle, and low performers.
For example, if you notice that rep performance tends to drop off after they meet quota, you may need to examine if your incentives are truly motivating reps to exceed their targets.
Performance vs. Tenure
The longer a salesperson has been on the job, the better their performance should be, right? Ideally, you want new reps to ramp up quickly and hit their peak performance levels as soon as possible. Xactly Insights data shows that for the average sales rep, it takes 12 months to fully onboard, and most reach their peak quota attainment potential between 2-3 years.
Understanding Performance vs. Tenure: Examining the connection between rep tenure and performance can uncover useful trends across your sales team. For example, the amount of time it takes your reps to fully ramp is a reflection of their training. If reps consistently tend to have a slow start, you might need to consider giving your boot camp an overhaul.
Average Deal Cycle
On average, how long does it take for a lead to open up, move to the next stage, and close? Looking at the factors that impact your deal cycle can help you better understand your sales pipeline, which in turn, can improve your forecasting.
Examining Average Deal Cycle: Your pipeline and lead response times play a crucial role in identifying problem areas in your sales funnel. When you analyze this sales data further using an intelligent forecasting solution, you can discover where deals are lost most frequently, where they get stuck in the pipeline, and where you may need to provide additional training.
Compensation Payout & Percentage to Quota
How far to quota is the average rep, and how much is being paid out to reps through commissions? Is your incentive plan motivating reps to take actions that work towards company goals? These are all important questions your sales compensation data should be answering to help you plan incentives more effectively.
Gaining Insights from Compensation Data: By examining how much reps are earning compared to their quota attainment, you can understand the effectiveness of your sales incentives. For example, if sales performance drops off after a rep meets their quota, it may be an indication that your compensation plan is not incentivizing enough to motivate sellers to exceed their quota.
Take Control of Your Sales Data
When data drives strategy, the end result is a strong, integrated sales plan. It clearly defines goals, describes the necessary rep behaviors, and provides the resources each person needs to execute successfully. Tracking the right metrics is critical, but it’s difficult to do successfully without adequate technology.
Sales Performance Management (SPM) solutions enable you to analyze performance data continuously, providing real-time vital insights into your sales landscape. This helps you avoid reacting to performance issues, and rather, plan proactively to achieve revenue goals.
To learn more about Sales Performance Management and how you can get started, download our guide, “The Enterprise Leader’s Guide to Success in the New Sales Era."