Five Sales Effectiveness Metrics You Can't Ignore

Top sales organizations must be productive and efficient to operate at peak performance. These are 5 sales effectiveness metrics you should be measuring.

6 min read

There is nothing more important to your business than sales. No amount of awareness, fanfare, or marketing matters if prospects are not converted to paying customers. While there is definitely a fine art to successful selling, companies need to consider the science of sales performance to truly tap the motivational power of their incentive compensation initiatives and maximize results.

While there is a nearly endless list of metrics companies can track to monitor sales effectiveness, here are five we feel are too critical to ignore.

1. Percentage of Reps Achieving Quota

Quota attainment is a core marker of any salesperson’s success. What might be surprising however, is how often quota is missed. For example, through our big data offering, Xactly Insights, we analyzed the sales and incentive compensation patterns of SaaS companies to pinpoint the impact of compensation on sales performance.

Surprisingly, the study revealed that a large percentage of quota-carrying SaaS sales representatives are not hitting their goals: 79 percent of sales representatives miss quota and 14 percent never achieve even 10 percent of quota. That is a big miss.

To optimize effectiveness, a company must analyze WHY this is occurring. Were quotas set too high? Were elements of the plan too complex? Is the company too dependent on its top performers to meet their sales numbers? To meet long-term company objectives of growth, retention and profitability, companies need to understand where reps are getting stuck on their path to quota attainment and what can be done to help more reps reach their goals.

2. Lead Response Time

The old adage, the early bird catches the worm certainly applies to leads. An Inside Sales stat noted that “if you follow up with web leads within five minutes, you’re nine times more likely to convert them.”

A Docurated post also noted that companies who “wait a full 24 hours before contacting the lead are 60 times less likely to qualify the lead than those who responded in the first hour.” It’s critical that sales is striking while the iron is hot, or in this case, currently engaged in your website or content.

3. Sales Win Rates

For a rep, it all comes down to getting that customer signature on the dotted line. For some reps, they are putting too many eggs in one basket, i.e., they don’t have enough deals in the pipeline to ensure a healthy stream of wins. For others, they may shine in the hustle department with lots of prospects, but they just can’t seem to close the deal.

Understanding where each rep is getting caught in the sales funnel (and why) is critical to enhancing their future performance. Which brings us to our next point…

4. Time Spent on Sales Coaching and Training

Per the above, its critical to understand how coaching and training investments are helping, or hindering, a rep in moving the needle when it comes to performance. As such, companies should be constantly analyzing and rethinking how their sales enablement resources are impacting everything from the sales rep’s ramp up time to what materials are helping existing reps sell more effectively.

Are reps showing a marked improvement investing time in a certain set of materials? Are other materials or coaching efforts showing zero impact? Time is money for a salesperson, so ensuring they are not only investing the time to enhance their skills, but also investing that time in the most effective places is key.

5. Sales Rep Satisfaction

This one may not seem as intuitive – but then keep in mind the cost of replacing a rep that leaves because they are unhappy. DePaul University’s Sales Effectiveness Survey estimates this cost to be upwards of $114,957. That likely doesn’t include the lost opportunity cost in sales, disruption to customers, and what you are paying new reps in draws as they get up to speed.

Happier, engaged reps are more motivated to reach their goals and to deliver a better experience to customers. As such, keeping a pulse on the sentiment of the sales team can be an important metric of a company’s overall sales health and potential. A drop in sentiment could be signaling sales issues to come.

We all know there’s no linear approach when it comes to sales effectiveness. But tracking and analyzing these metrics can result in improvements to your sales processes and bottom line.