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How to Measure and Improve Your Sales Effectiveness

How to Measure and Improve Your Sales Effectiveness
Casey O'Connor
Casey O'Connor

Casey O'Connor

12 min read0 reads
Sales Management, Sales Tips 

Contents

  1. What Is Sales Effectiveness?
  2. How Do You Know if Your Sales Team Is Effective?
  3. Metrics to Better Understand Your Sales Effectiveness
  4. The Best Tools to Improve Your Sales Effectiveness
  5. 5 Steps to Take To Make Your Sales Team More Effective
  6. How Yesware Can Improve the Effectiveness of Your Sales Team

Sales effectiveness is a twofold measure. It takes into account:

  1. Whether your sales team is performing the right activities for an optimized and profitable sales process, and
  2. How efficiently your team performs those activities

In short, sales effectiveness is the measure of how well your sales organization turns leads into paying customers. 

In this article, we’ll go over everything you need to know about measuring and analyzing your team’s sales effectiveness (including some common misconceptions about the process).

Here’s what we’ll cover:

What Is Sales Effectiveness?

Sales effectiveness is a subjective measurement. Whether or not your team is effective will depend on what your organization’s goals and priorities are; what’s effective for one company may be entirely ineffective for the next.

Some salespeople conflate sales effectiveness with sales efficiency, but the two are not one in the same.

Sales efficiency measures how quickly an organization performs its tasks. Sales effectiveness, however, is not all about speed. It’s also about ensuring that the sales activities the team performs are the right ones — meaning, the ones in line with the company’s overall performance goals. 

sales effectiveness vs sales efficiency

In other words, it’s not about how quickly your sales professionals perform tasks; it’s about how well they perform the right tasks.

Of course, sales efficiency is important, too. But it’s not the only metric that matters. The most successful sales operations are the ones that measure their efficiency in the context of effectiveness.

sales effectiveness chart

When you measure your team’s sales performance according to effectiveness, you can focus on closing deals more quickly by optimizing the process. This approach will have a direct impact on your bottom line.

chart-bar
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How Do You Know if Your Sales Team Is Effective?

Whether or not your sales team can be deemed effective will depend on your specific company’s goals, and how the c-suite and sales leaders prioritize various key performance indicators. 

A startup or fledgling business, for example, may focus entirely on lead generation, the volume of sales opportunities, and win rates. 

An enterprise company, on the other hand, may be looking to drive sales productivity and revenue growth. 

In order to accurately measure sales effectiveness, sales managers need to understand what is most important to their company during a given time period. They need to design their sales strategy in line with the company’s goals, and carefully monitor the corresponding sales metrics. This is how you measure sales effectiveness.

Metrics to Better Understand Your Sales Effectiveness

Depending on your company’s goals and priorities, the following sales metrics may help you determine your sales team’s effectiveness.

This list is not exhaustive, nor should it be applied word-for-word to every business or organization. Remember, the key to measuring sales effectiveness is doing so in line with your specific company’s priorities.

Percent of Sales Reps Achieving Quota

One of the most straightforward ways of determining sales effectiveness is to determine how much of your sales force is achieving their quotas. 

sales effectiveness: quota attainment

Quota attainment is about much more than bottom-line results; it’s also critically important for accurate sales forecasting and motivating sales reps.

Average New Deal Size

For companies looking to increase their revenue with bigger accounts, average new deal size may be one of the best KPIs to analyze. 

As a standalone metric, average deal size can help you determine whether your sales team is effectively nurturing relationships with impactful clients. 

It can also help you determine your team’s sales velocity.

sales effectiveness: sales velocity

Sales velocity is, in simple terms, a measure of how quickly your business is making money. It can be an important predictor of sustainability and growth. 

Sales Cycle Length

We can conclude from the sales velocity formula above that a shorter sales cycle means money flows into the business more quickly. 

If your revenue or profits are falling flat, it may be time to analyze how quickly your salespeople move prospects through the sales pipeline.

sales effectiveness: pipeline stages

Of course, this is another metric that is not standard across companies or industries. Some products or markets require a longer sales cycle — especially those with higher price tags. 

The length itself is not as important as whether or not the process has been optimized against industry benchmarks. If your industry-standard sales cycle is 45 days, but yours takes 63, it’s very likely that you’re leaving money on the table.

Sales Productivity

Salespeople today are being asked to do more and more non-selling activities. In fact, only 36% of a sale’s reps time is typically devoted to revenue-generating activities.

sales effectiveness: sales productivity

This can make a huge difference to a company’s bottom line. Measuring your team’s productivity will help sales managers determine whether certain activities need to be outsourced or automated in order to free up valuable selling time for reps.

Sales Lead and Customer Response Time

Research shows that the faster a rep connects with a prospect, the more likely they are to close the deal.

sales effectiveness: speed-to-call conversion
Pay attention to this metric; it’s a quick and easy fix if you find that you’re needlessly losing otherwise seemingly qualified opportunities. 

Customer Acquisition Cost and Lifetime Value

It’s important for companies to acquire new customers in order to grow their bottom line. 

That being said, acquiring new customers can be a huge expense in time and money. In fact, acquiring a new customer can be up to five times more expensive than retaining an existing one.

With that in mind, it’s important to measure whether the average lifetime value of your customers exceeds the customer acquisition cost.

sales effectiveness: successful model vs unsuccessful model

Customer Attrition Rate/Churn Rate

Speaking of money spent on acquiring customers, attrition and churn rates are two more key indicators in how effectively your sales and marketing efforts are performing. 

sales effectiveness: churn rate

If your customers are churning out more quickly than you can make money from their accounts, your efforts are likely not very effective; it might be time to go back to the drawing board somewhere in the process.

The Best Tools to Improve Your Sales Effectiveness

It can take some time, effort, and analysis to get to the bottom of how to improve your team’s sales effectiveness. Fortunately, there are a number of tools to make the process easier for your sales team. Here are a few of our favorites. 

SalesOptimize

SalesOptimize provides complete market intelligence analysis for outbound leads. 

sales effectiveness tool

It corrects bad data being fed into sales pipelines and helps companies identify 100% of their available market. Its proprietary algorithms help pinpoint the most relevant businesses for sales organizations to target. 

Salesforce & Slack

Salesforce is one of the best known sales enablement softwares, and for good reason. It’s the world’s #1 CRM and has recently acquired Slack, a highly efficient and intuitive communication platform. 

sales effectiveness tool

With over 150,000 customers, and more being added every day, it’s safe to say that Salesforce + Slack can take your sales team to the next level of performance. 

Yesware

Yesware’s all-in-one sales toolkit for sales professionals will transform your team’s productivity and effectiveness. 

sales effectiveness tool: Yesware
With their Attachment Tracking, Meeting Scheduler, and Reporting & Analytics tools, you’ll be able to easily see which content and communication efforts make the biggest bang for your buck.

LevelEleven

LevelEleven offers performance management for customer-facing sales teams.

sales effectiveness tool
With features like personalized scorecards, data-driven coaching, and fun sales contests, you’ll maximize productivity and motivate your team to reach new heights. 

5 Steps to Take To Make Your Sales Team More Effective

It can be hard to know where to start when you decide you want to start measuring your team’s sales effectiveness.

Because this kind of analysis is so unique to each company, there isn’t one specific formula that will highlight strengths and areas of growth for everyone. 

That being said, the following steps will have you well on your way to determining your team’s effectiveness in the areas that matter most to your business. 

1. Set Goals

The very first thing your organization needs to tackle in order to determine sales effectiveness is goal-setting. If you haven’t already, spend time with your c-suite and sales team members developing goals using the SMART goal framework.

These goals will act as your team’s “North Star” in determining whether their sales activities and overall process are effective and efficient. 

2. Define KPIs

Next, use your SMART goals to determine which KPIs and sales metrics you’ll need to track. If you’re unsure where to start, try using one of the metrics we outlined earlier in this article. 

For those teams who are a bit more advanced in this kind of measurement and analysis, you might consider broadening your scope of KPIs by making sure you’re tracking both leading and lagging indicators

sales effectiveness: KPIs

3. Analyze Current Benchmarks

Once you’ve set goals and determined the corresponding KPIs, you’ll want to take stock of your current level of performance. You won’t know how far you’re going unless you know exactly where you started. 

4. Optimize the Process

This stage of the process is where you’ll start to see results. Once you’ve honed in on the exact goals you’re targeting, and the KPIs required to meet them, you can start to fine-tune the processes around them. 

This is where the bulk of the work happens. Take all the time needed to analyze and optimize your sales process — the most successful teams are the ones who have a formalized structure in place.

sales effectiveness: sales structures

5. Rinse & Repeat 

One of the best things about measuring sales effectiveness is that the process can be repeated for any aspect of your performance that you’re hoping to improve. 

As you start to see your team hitting their effectiveness goals in one arena, it’s time to start setting goals and measuring KPIs for the next area of growth. 

How Yesware Can Improve the Effectiveness of Your Sales Team

Yesware can be a powerful tool to add to your repertoire in increasing your sales effectiveness.

With automation, personalization, tracking, and integration capabilities, Yesware can quickly help your team reach new levels of performance. 

Prospecting Campaigns

Use Yesware’s Prospecting Campaigns to help your sales team tailor outreach to any prospect or audience. 

Yesware Prospecting Campaigns

This feature offers the perfect balance of personalization and automation, meaning you can reach more people, more meaningfully.

Meeting Scheduler

Use Yesware’s Meeting Scheduler to book more meetings and connect with more buyers.

Yesware Meeting Scheduler

The Meeting Scheduler integrates directly with Gmail or Outlook calendar, so you can skip the back and forth when scheduling meetings. This creates a seamless meeting scheduling process for both sales reps and prospects.

Engagement Analytics

The Attachment Tracker and Reporting & Analytics features available in Yesware will help you identify your most impactful content and outreach. 

Yesware Campaigns by Campaigns Reporting

The tool allows you to see which content is viewed and when, so you can design smarter and better-converting outreach.

Measuring sales effectiveness can take some practice, but it’s a great way to continuously push your team to new heights once you master the process.

Try targeting one of the metrics outlined above to get the process started with your sales team.

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