How to Define, Measure and Improve Sales Effectiveness

Sales effectiveness is the impact an organization’s sales team, sales process and tools have on a prospect engagement. It is usually represented by the number of positive or negative sales engagement, closed deals and client acquisition and retention, to name a few.  

In fact, there is a simple equation summarizing the term as well:

SALES EFFICIENCY = COST INVOLVED TO GAIN $1 IN REVENUE

Sales efficiency is a clear metric that will help leaders and business owners understand whether their business will scale or not. Different aspects affect the sales effectiveness of an organization. Onboarding, training, service/product/solution understanding, KPIs and many more factors that drive sales effectiveness of the team. 

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How to Measure Sales Effectiveness

The question arises, what to measure and how to measure. Most sellers talk about increasing revenue, however, that, like Rome, cannot be built in one day. 

Time to take baby steps by asking these questions first:

• Are the sellers qualifying correctly?
• Are they developing good opportunity plans?
• Is there substantial coaching offered to the sellers?
• What are the training and skill programs carved out for sellers to help close deals?
• What is the ratio between client acquisition and client retention?
• What has been the sales cycle length of each sales rep?

An insight into these questions can help predict how effective the sales process and measures will be. 

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1. Training of Sales Reps

Are the sales reps receiving ample training and guidance from sales leaders and business owners? 

The rate at which reps are offered training and upskilling programs is a great way to measure whether the SDRs and BDRs are up to date with latest practices and can manage prospects’ questions and concerns. They should also be knowledgeable when it comes to product/solution updates. These new updates are intrinsically tied to customer demands, feedback and latest industry practices that makes the organization relevant.

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2. Rate of Deals Closed

This is a pretty direct parameter to measure the sales effectiveness. The rate at which the deals are closed determine how effective the existing sales strategies are. In order to improve the rates of deals closed, it is important for sales reps to set up a pipeline with the marketing team and nudge their prospects towards conversion. 

Again, training here plays a significant role as it helps determine the knowledge base that the seller deployed in order to converse with the prospect.

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3. Assessment of Number of Retained Clients

Customer churning is one of the most pressing concerns for sales leaders and business owners. While it is great to have a growing client list, it is also a sign of goodwill to have customers who have been with the organization for a long time.  Client retention shows the capability of an organization to rise along with times, cater to customer feedback and incorporate latest innovations to make their service/product better. 

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How to Improve Sales Effectiveness

Sales effectiveness is directly tied to the performance of your sellers, the sales process, and everything in between. Since your seller is the protagonist of your sales success story, a lot of improvement techniques will revolve around your BDRs and SDRs however, not limited to. 

Here are some ways you can improve sales effectiveness at your organization. 

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1. Enhancing Training and Onboarding

As per G2, 84% of sellers forget their sales training in the first three months. This is a short period of time and has a direct impact on sales performance, calls and conversions. 

Many sellers often complain that they do not have all the answers to their prospects’ questions which makes it further difficult to make a convincing case. 

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Automated training and onboarding solutions enable sales leaders as well as BDRs/SDRs to simplify their process. With the world embracing remote and hybrid work, it is essential to make training digital, accessible and easy to understand. 

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2. Guided Ramp Up Plan

Setting up the right ramp up plan helps set the right expectations. Most sellers do not come with years of experience and with a new product/solution at hand, the learning scope diminishes further. 

Having a ramp up plan will help sales leaders create a clear sales map, chart out milestones and track progress. This clear picture will help ensure that new joiners do not feel lost and have a guided pathway to get started with cadences, touch-points, etc. 

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3. Create an Onboarding User Journey for Sellers

Bearing minor semblance to a ramp up plan, an onboarding user journey is deep dive into what the seller can expect. 

These onboarding journeys are mapped out keeping in mind:

• The existing training process and content
• The flexibility for improving the said training process and content
• Learning and upskilling anytime and anywhere

An water-tight onboarding pathway helps draw a visual picture of the complete program with step-by-step instructions. 

‍Read how Wonderway helped Virtuagym reduce ramp time by 50% - Help is on the way!

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4. Enable Easy Integration with In-House Platforms or Other Solutions

Sales is not a solitary process. It requires varied tools and processes that can lead to a success summary. However, it is not easy managing multiple tools which calls for an integration.  Whether your sellers use salesforce or any other popular solution, it is ideal to streamline them on a platform that takes care of onboarding, training, content etc. 

This integration with your in house solution will help sales leaders achieve the following:

• Easy tracking
• Ease in measuring KPIs
• Reduction in feedback loop
• Tracking progress and milestones easily
• See where sellers might require help 
• Pull the sales data in real-time and implement it in training process to upskill sellers

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On the other hand, this integration will also help the sellers achieve the following:

• Data readily available for reference during prospect calls
• Self analysis by tracking their progress and work on their drawbacks
• Save time instead of toggling between different tools and software
• Get their queries rectified in real-time by the sales leaders

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5. Invest in Seller Upskilling 

As per a report by McKinsey, executives hint at the probability skill gaps emerging amongst workers on a mega scale in the coming five years. This will have a direct impact on revenue.  Skill gaps are one of the major obstacles on the path to productivity which is further amplified in a field as dynamic as the sales. Sellers are busy folks and prefer spending their time closing deals instead of going for training which, in their opinion, they have already gone through. 

In order to improve sales effectiveness, it is important for sales leaders to draw distinctions between training and upskilling.

Upskilling helps identify existing gaps among the workforce that has been a part of the organization for some time but struggles to display results. In order to identify these skill gaps, data from managers and executives in the form of feedback is essential. These feedback will help determine what top performers are doing right and analyze the revenue potential.  Once the challenges and the vision is clarified, it is time to create content modules that can help close these skill gaps. 

These upskilling sessions can comprise of:

• Identifying improvement areas: What is working for your top performers, what is not working for your low performers.
• Stage based training: All sellers are aware of pipeline stages (discovery, negotiation, etc.). However, not every seller is able to hit the sweet spot at every stage. Upskilling sessions can help sellers be confident at every pipeline stage and close deals faster and better.
• Building new sales techniques: Step away from the conventional and make bold choices to enhance the sales process. This includes new sales techniques, new cadences and varied touch points that can make prospect interested in what the sales rep has to say. 
• Company specific certifications: These certification courses help align teams, keep them updated of the latest measures at an organizational level, product/solution updates etc. This helps sales teams niche down their pitches and have greater success in closing deals. 

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The best thing about upskilling is its ability to help the low performers improve their performance and top performers to keep pushing the envelope and encouraging all to apply more intricate sales techniques. 

Babbel managed to close 40% more leads with the help of upskilling! Curious minds click here!

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6. Defining Sales Territories Strategically

Named during the time of traditional sales practice where sales territories were categorized based on geographies. However, territories now include industry, target audience, technology, etc. The length at which the seller is able to align with his/her sales territory is a great parameter that can offer insight into sales effectiveness. 

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By setting up sales territories, sellers have the following advantages:

• Clarity with respect to customers, industries in focus, and best practices to resonate with their respective prospects.
• Realistic goals based on the market instead of going for a one-size-fit-all approach.
• Razor sharp focus on that particular customer instead of spreading oneself too thin.
• Do what they do best - selling. 

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How can sales territory be categorized?

Sales territory plan rests on the following steps that should be taken by the sales rep:

• Defining the right market and customer.
• Assessing the quality of leads that come in.
• Gathering market and customer data
• Assign sales reps for that category
• Tracking progress and analyzing any data that comes in

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Final Takeaway

Sales effectiveness is an organic term that defines a company’s growth. While there are no fixed rules and one specific strategy for all companies, practices like offering sales reps the right training, making content accessible for prospect calls and basically enabling them to sell better, lie at the crux of a successful sales strategy. 

If you are a remote team or a fast growing sales team looking to achieve scalability while ensuring consistent & quality training, try Wonderway!