3 approaches to assessing sales effectiveness
Posted: Sun Dec 22, 2024 9:01 am
The most important aspect in sales analysis and performance evaluation is reporting. It is the basis for collecting statistical information that is needed to calculate indicators. Sound business management decisions can only be made with reliable and up-to-date data. Therefore, before evaluating sales performance, make sure that the reporting system you use is reliable.
Efficiency is assessed in three fundamentally different ways:
By comparing actual and planned results.
By comparing the results of different reporting periods (dynamic changes).
By comparing with the best results.
The first method of assessing the effectiveness of indonesia email database enterprise sales is carried out if there are statistical data and experience that allow for the correct calculation of planned indicators or standards. These can be both internal standards of the organization and industry indicators.
The second method evaluates the dynamics of sales indicators: in which direction (positive or negative) they change and by how much.
The third method has a fundamental difference from the previous ones, since it takes into account not the average indicators for the period or for the industry, but the best ones. These results are the benchmark that the company strives to achieve.
3 approaches to assessing sales effectiveness
Source: shutterstock.com
There are many indicators of the effectiveness of product sales. To understand which of them are best to determine, you need to focus on the company's goals and what stage of development it is at.
Market entry stage and active growth
The task is to attract clients
At this stage, it is quite difficult to plan indicators, since the manager at this period does not yet have complete information about the market, which makes it difficult to make a reliable forecast of sales levels and seasonal changes.
Growth rates should be planned. When motivating employees to grow and develop, it is best for a manager to use the second path and monitor the dynamics of indicators. The main players operating in a fast-growing market are also in a similar situation: if a company grows at the same rate as the market, it maintains its share; if its growth lags behind the market, it loses its position; if it grows faster than the market, its influence expands.
During the period of active growth of the enterprise, it is necessary to pay attention to the following indicators and formulas for assessing sales efficiency:
Number of customer contacts / Number of presentations. Or Productivity = Number of customer contacts / Number of working hours.
This indicator should be set to the lowest value below which the sales manager should not fall.
In this case, working with reports is very important, and the period for submitting them should be short (once every 2-3 days or a week).
Contact efficiency = Number of deals / Number of contacts
This parameter also indicates the quality of the manager’s work.
Database growth percentage = Number of new customers/contracts / Total number of customers/contracts x 100%.
This indicator characterizes the speed of an organization’s entry into the market.
Percentage increase in sales volume = Sales volume in the second period / Sales volume in the first period x 100%.
Return on sales (efficiency) = Profit / Sales volume.
The percentage of accounts receivable that remain unpaid on time.
Increase Your Profits by 10X: 5 Key Metrics You Must Track
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
After working with over 300 online projects , I can guarantee: monitor these metrics weekly and your company will not only survive, but also increase its profits by 10 times!
In the context of sanctions and crisis, knowing the ROI of your advertising decides whether your business will be successful. Tracking these 5 critical indicators is the key to your prosperity.
What you get for free:
5 Key Metrics to Increase Profits by 220%
Advertising Channels Efficiency Calculator: Optimize Your Budget and Increase ROI by 70%
A Killer Commercial Proposal Template That Increases Conversion to Deals by 60%
We have prepared all the documents and templates with formulas for you. And yes, it is FREE:
Efficiency is assessed in three fundamentally different ways:
By comparing actual and planned results.
By comparing the results of different reporting periods (dynamic changes).
By comparing with the best results.
The first method of assessing the effectiveness of indonesia email database enterprise sales is carried out if there are statistical data and experience that allow for the correct calculation of planned indicators or standards. These can be both internal standards of the organization and industry indicators.
The second method evaluates the dynamics of sales indicators: in which direction (positive or negative) they change and by how much.
The third method has a fundamental difference from the previous ones, since it takes into account not the average indicators for the period or for the industry, but the best ones. These results are the benchmark that the company strives to achieve.
3 approaches to assessing sales effectiveness
Source: shutterstock.com
There are many indicators of the effectiveness of product sales. To understand which of them are best to determine, you need to focus on the company's goals and what stage of development it is at.
Market entry stage and active growth
The task is to attract clients
At this stage, it is quite difficult to plan indicators, since the manager at this period does not yet have complete information about the market, which makes it difficult to make a reliable forecast of sales levels and seasonal changes.
Growth rates should be planned. When motivating employees to grow and develop, it is best for a manager to use the second path and monitor the dynamics of indicators. The main players operating in a fast-growing market are also in a similar situation: if a company grows at the same rate as the market, it maintains its share; if its growth lags behind the market, it loses its position; if it grows faster than the market, its influence expands.
During the period of active growth of the enterprise, it is necessary to pay attention to the following indicators and formulas for assessing sales efficiency:
Number of customer contacts / Number of presentations. Or Productivity = Number of customer contacts / Number of working hours.
This indicator should be set to the lowest value below which the sales manager should not fall.
In this case, working with reports is very important, and the period for submitting them should be short (once every 2-3 days or a week).
Contact efficiency = Number of deals / Number of contacts
This parameter also indicates the quality of the manager’s work.
Database growth percentage = Number of new customers/contracts / Total number of customers/contracts x 100%.
This indicator characterizes the speed of an organization’s entry into the market.
Percentage increase in sales volume = Sales volume in the second period / Sales volume in the first period x 100%.
Return on sales (efficiency) = Profit / Sales volume.
The percentage of accounts receivable that remain unpaid on time.
Increase Your Profits by 10X: 5 Key Metrics You Must Track
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
After working with over 300 online projects , I can guarantee: monitor these metrics weekly and your company will not only survive, but also increase its profits by 10 times!
In the context of sanctions and crisis, knowing the ROI of your advertising decides whether your business will be successful. Tracking these 5 critical indicators is the key to your prosperity.
What you get for free:
5 Key Metrics to Increase Profits by 220%
Advertising Channels Efficiency Calculator: Optimize Your Budget and Increase ROI by 70%
A Killer Commercial Proposal Template That Increases Conversion to Deals by 60%
We have prepared all the documents and templates with formulas for you. And yes, it is FREE: