Sales Metrics (Measures)
Metrics Used by Salespeople
Salespeople are evaluated upon several key metrics: Most important is the actual revenue generated. Sometimes the average revenue generated per customer and the average revenue generated per sales call are measured to determine if a salesperson is pursuing customers that are the most lucrative.How many prospects and suspects a salesperson has in the pipeline are two other measures. Conversion ratios measure how good a salesperson is at moving customers from one stage in the selling cycle to the next. For example, how many leads did a salesperson convert to suspects? A 10:1 ratio means it too 10 leads for the salesperson to get 1 suspect who agreed to move to the next step. Conversion ratios are used to measure success at all stages of the sales process and help the salesperson recognize which stages need improvement. They also help the salesperson estimate how many sales calls are needed in order to meet certain sales goals. Activity goals are how many sales calls of each type a salesperson has to make in a certain period. Win-loss analysis is an "after the battle" review of how well a salesperson performed given the opportunities faced. An analysis of what worked and what didn't is done. Another measure is the money a salesperson makes, either in the form of a bonus or commission. A bonus is usually paid at the end of a period of time based on total amount sold, whereas a commission is usually a per sale payment. Commissions are popular with short sales cycles and transactional selling strategies. Salaries with commissions or bonuses are more typical of sales that take longer and require more relationship-building.
Metrics Used by Sales Managers
Sales managers use previously mentioned metrics to evaluate salespeople but they also use sale cycle metrics to make broader decisions. Sales cycle metrics at the aggregate level can be very useful for making effective managerial decisions. Managers evaluate: performance of salespeople, effectiveness of sales message, market share the product captures,accuracy of forecasts for materials requirement planning purposes,costs related to sales, and customer satisfaction surveys.
This clip was used to replace a very humorous clip off twin babies by a refrigerator speaking – the translation was about sales management. If you can find the clip send me the URL. Until then this one will have to do.