Every sales organization has growth aspirations and aims to improve the process to close more deals and drive more revenue. They use a technique called sales tracking to collect data about their current sales processes and performance to help inform what's working and what’s not when it comes to selling their products.
Sales tracking allows organizations to measure and monitor every aspect of its performance, from the activities that salespeople engage in each day to the resulting sales, contracts, and deals that are produced at the end of the pipeline. Almost everything that a sales rep does can be tracked, quantified, and measured—and leadership can use that data to create data-driven plans, determine what works and what doesn't, and make changes to boost revenue for the business.
While sales tracking is a holistic view of your sales organizations, there are two specific ways of measuring your sales performance. You have sales tracking as in your sales force and their day-to-day selling activities, and sales tracking as in the data, metrics, and KPIs your organization should be monitoring and optimizing on a consistent basis.
Let’s look at the difference between the two and what important metrics and areas you should be looking at to improve performance.
Sales Activity Tracking
Sales activity tracking is measuring how each component of your sales process is doing individually in order to see how they impact the big picture. Sales tracking captures data from your reps so you can see who is conducting the most activity during their workday and which activities best correlate with success—the human aspect of sales.
This includes responsibilities such as digital client communication, in-person client communication, internal meetings, admin tasks, travel, training, sales prep, etc.
An effective sales tracking program enables the organization to record every detail of its sales activities and results, allowing it to accurately track employee progress and inform its strategy in order to meet crucial KPI requirements.
How Can Detailed Sales Activity Tracking Data Be Used?
When the data is collected, you can start to see the positives and negatives of your current selling strategy. By monitoring your data, you’ll be able to track the days, weeks, and months leading up to a sale so you can use that visibility into metrics in order to fine-tune your selling process.
For example, did you know that sales reps only spend 39 percent of their time selling? That means that the average salesperson spends more than half of their day preoccupied with menial administrative tasks which are taking your seller’s time away from strategic activities—ultimately keeping them off the phones.
By tracking your sales activities and using the data to inform your selling strategy, you can identify activities that take up time that but do not lead to sales, and swap them for activities that will make the biggest impact on your bottom line.
Which Sales Performance Metrics Should Be Tracked?
Metrics are important because they help businesses evaluate performance and inform their decision making. This analysis of organizational KPIs is what we would refer to as the cold-hard-facts side of sales.
One critical thing to remember here is that when you utilize data-forward solutions to help track and analyze data, it can seem easy to get lost in the amount of information you have access to. Rather than tracking everything, track the most important things. Not only will it be easier to understand the trends and their significance, but you can also begin to execute at a faster pace than before when you prioritize your efforts.
The “right” metrics depend on your sales organization, industry, and company. For industries who focus on sales performance, Hubspot recommends tracking the following metrics:
- Percentage of sales team hitting quota—the percentage of salespeople meeting or exceeding quota tells you whether your quotas are too high or low.
- Average deal size—looking at this metric on a monthly or quarterly basis tells you whether your contracts are getting larger, smaller, or staying the same.
- Conversion/win rate—this metric can help you calculate how many leads you need to make your revenue targets.
- Revenue—this not only gives you an idea of how much money your company is bringing in, but it can also shape your company's goals and help you take the next steps needed for growth.
- Sales funnel leakage—measuring sales funnel leakage tells you where prospects drop out of your funnel at the greatest rates.
How Can Detailed Sales Performance Metrics Be Used?
To improve your sales effectiveness and make informed, data-backed decisions, you need to conduct sales analyses regularly. Sales performance metrics can help you identify and correct potential issues as they arise so you can become more proactive than reactive with your sales strategy.
For example, this type of analysis can help you uncover the following issues:
- Expose pipeline bottlenecks
- Identify drop-offs from MQL to SQL
- Uncover opportunities for territory rebalancing
How to Set up a Sales Tracking Process
Define your organizational goals. If you’re not sure what those are, ask yourself these questions:
- What are you trying to accomplish?
- What do you want to be able to do with the data?
Once you have a clear answer to both of those questions, you can then list out the sales metrics you want to track that relate to the goals you identified. You can then even take things one step further by finding a tool/software to assist you in tracking and understanding those metrics.
Sales Tracking Software and Tools
If anything is certain over these past months, it is that change is inevitable and that in order to adapt to change, organizations must place an emphasis on investing in tools and solutions that allow them to be agile and proactive to changing market conditions.
Sales tracking software introduces automation to the process of recording sales activity, making it easier than ever for sales leadership to understand what the sales organization is doing and make data-driven decisions that help drive more revenue.
According to Forrester, 79 percent of enterprise leaders are facing more pressure than ever to deliver on high growth targets. As such, it’s crucial that they are able to pivot quickly and plan decisively, using objective data rather than gut-level instinct. SPM technology makes enterprise agility possible in a rapidly-changing landscape.
Xactly's Sales Performance Management (SPM) software is the first-ever platform that uses AI to provide incentive compensation insights based on 15+ years of data to give customers the real-world insights they need to improve sales performance across the board by growing revenue, reducing risk, and containing costs.
To learn more about adopting and implementing new technology, accelerating growth through change, and staying adaptable through digital transformation, watch our recent webinar, “Panel: Lead From the Front in Time of Uncertainty”.