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How to Measure Sales Productivity - The Sales Blog
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“When it is difficult to confirm the output of an activity, we must use a proxy measure for productivity.” Look at all the deals you won over the last quarter and divide it by the revenue generated by cold calls versus revenue from other sources. The results can be enlightening, whether you are calculating them for yourself or your team. For example, imagine that in the last quarter your team made $1.8 million in total revenue, and $1.6 million of that came from cold calls. You would calculate your cold call productivity as: $1,600,000/1,800,000 = 89%. Because this method is based on revenue rather than on the number of calls made, your data automatically eliminates unanswered calls. Productivity in the Sales Conversation Productivity in the sales conversation isn't easy to measure, but it is important to your success. What makes this so tricky is that the outcome is difficult to assess. One outcome of a sales conversation is creating value for your contacts, and different clients are likely to find value in different conversations. Because this outcome exists between the contact's ears, it is difficult to assess. Another outcome of a sales conversation is creating a preference to work with you, which could eventually lead to the contact allowing you to help them improve their results. Both of these outcomes are nebulous, so we must use a proxy outcome to determine how productive the sales conversation is. As our proxy, let's use the client’s commitment to another conversation. Imagine you have three first meetings with new contacts this week. When your meeting with Contact A ends, you ask them to meet again to share what's working and what's not, so you can help them and their team recognize why they should change. You created value in your meeting with Contact A, so they agree to schedule another conversation. Your meeting with Contact B doesn't go so well, and they ask you to call them next week, even though they have decided they will not meet with you again.
“This activity is fraught with waste, as you can make many calls but yield fewer conversations and first meetings.” Look at all the deals you won over the last quarter and divide it by the revenue generated by cold calls versus revenue from other sources. The results can be enlightening, whether you are calculating them for yourself or your team. For example, imagine that in the last quarter your team made $1.8 million in total revenue, and $1.6 million of that came from cold calls. You would calculate your cold call productivity as: $1,600,000/1,800,000 = 89%. Because this method is based on revenue rather than on the number of calls made, your data automatically eliminates unanswered calls. Productivity in the Sales Conversation Productivity in the sales conversation isn't easy to measure, but it is important to your success. What makes this so tricky is that the outcome is difficult to assess. One outcome of a sales conversation is creating value for your contacts, and different clients are likely to find value in different conversations. Because this outcome exists between the contact's ears, it is difficult to assess. Another outcome of a sales conversation is creating a preference to work with you, which could eventually lead to the contact allowing you to help them improve their results. Both of these outcomes are nebulous, so we must use a proxy outcome to determine how productive the sales conversation is. As our proxy, let's use the client’s commitment to another conversation. Imagine you have three first meetings with new contacts this week. When your meeting with Contact A ends, you ask them to meet again to share what's working and what's not, so you can help them and their team recognize why they should change. You created value in your meeting with Contact A, so they agree to schedule another conversation. Your meeting with Contact B doesn't go so well, and they ask you to call them next week, even though they have decided they will not meet with you again.