The Ultimate Sales Productivity Guide for 2023

The Ultimate Sales Productivity Guide for 2023

Harry McKay
4
min read

Did you know that the average company loses at least $1 trillion annually in lost productivity and poorly managed leads?

That's a lot of money down the drain! 

Companies are always looking for ways to boost their sales and productivity, but sometimes the solutions are right under their noses. The problem is the sales inefficiency problem is not solved by working harder. It’s by working smarter by boosting sales productivity. 

It works by identifying and eliminating inefficiencies in your sales process. When you do this, you will be able to create a more efficient process that allows you to work smarter instead of long hours.

In this article, we will cover everything you need to know about sales productivity, from establishing benchmarks to developing a strategy that fuels your sales growth. 

Let's tackle the problems head-on and identify which activities are contributing to sales and eliminate or modify those that are not. 

What is Sales Productivity?

Sales productivity is a measure of how well a salesperson is performing at generating revenue and increasing customer value. Sales productivity is one component of overall business productivity, which measures how efficiently your company uses its resources to generate revenue.

It's one of the most critical metrics that every sales team should track, as it can help managers identify which reps are underperforming and take steps to help them improve.

At an organizational level, sales productivity is defined as your organization's total revenue for a specific period (output) divided by the total number of sales reps on your team (input).

This connects the revenue impact of individual sales reps with their day-to-day productivity, helping you predict how much money your organization can make in a given period.

12 Crucial Metrics to Track Sales Productivity. 

Sales productivity is an important metric, but it can be challenging to stick with the perfect metrics for your organization. To get a better picture of how well your sales team is performing, here are some essential metrics you should consider tracking:

1. Sales length.

An opportunity's average time from opening to closing is that opportunity’s “sales length.” This metric gives you insight into how long it takes for your customers or leads to make a purchasing decision—and its value increases as the sales cycle becomes longer and more complex.

Understanding the time needed to close deals and manage expectations in nurturing leads can help you design campaigns that effectively engage prospective buyers and reduces the sales cycle’s length. 

2. Average deal size.

Average deal size is the average value of all deals closed within a specific timeframe.  It can be calculated by dividing the total revenue by the number of deals in that period.

Average deal size = Total value of deals won / Total number of deals won.

The average deal size should increase over time as you close more high-value sales and reduce the number of low-value ones; this will help you gauge your team’s performance and show whether they are closing deals that fit their target customer profile.

3. Average handling time.

This metric shows how long a rep takes to handle an interaction, such as the time spent sending an email plus follow-up activities. It tells your reps' efficiency—what volume of interactions they can handle.

Reducing customer handling time will increase the number of conversions throughout the entire business.

Average handling time = [Total talk time + Total follow-up time] / Total number of calls made. 

Using demo software like Storylane will free up your rep's time personalizing their demos for prospects. The software automatically pulls the prospect’s basic information from your CRM and customizes the interactive demonstration for them.

4. Booking Vs. Target per time

The booking vs. target ratio tells you how many appointments your reps are booking in a given period compared to the number of prospects they should be talking to. If your team is consistently missing their quotas, it’s time to look at business processes and see where improvements can be made.

This metric isn't just about getting more demos booked; it's also about helping salespeople improve their conversion rates by increasing the number of qualified leads they speak with.

5. Average deal size.

Average deal size is the average value of all deals closed within a specific timeframe.  It can be calculated by dividing the total revenue by the number of deals in that period.

Average deal size = Total value of deals won / Total number of deals won.

The average deal size should increase over time as you close more high-value sales and reduce the number of low-value ones; this will help you gauge your team’s performance and show whether they are closing deals that fit their target customer profile.

6. Opportunities lost.

Opportunities lost are the number of deals you missed out on because of a lack of sales skills, lead quality, or other reasons.

Opportunities lost = Number of lost opportunities / Total opportunities generated * 100

The opportunities lost metric can help you identify issues with your sales process that need to be fixed. Suppose you’re losing a lot of opportunities. In that case, it means that you have to improve your lead generation or qualification process so that you don’t waste time on low-quality leads and can focus on generating more high-quality ones.

7. Win Rate

Win rate is the number of deals closed over the total number in your pipeline, including ones where sales or other issues have caused a delay.  You can analyze different elements of your team’s performance by calculating win rates by stage and deal type; this helps identify areas for improvement.

Win rate = Number of closed deals / total opportunities.

The average win rate ratio is between 2 and 3. Analyzing the win rates of individual sales reps and comparing them to the overall average can reveal which employees are more productive than their peers.

8. Conversion rate.

It's calculated by dividing the number of qualified leads generated from your website by the total number of visitors sent to it. A good conversion rate ranges between 1% and 3%. A high conversion rate indicates that your website is doing its job of attracting qualified leads.

Using conversion rates is a good way for sales teams to understand how well their process works.

9. Pipeline Waterfall.

This is a visual representation of the sales pipeline. It shows the time it takes for leads to move through their stages and how many people are in each stage at any given time.

A waterfall chart can be helpful if you're trying to find ways to shorten your sales cycle or increase the number of prospects who make it through each stage.

In an interview Simon Gilks, Director, Global sales operations & Enablement of GoCardless, says,

"Were in the quarter, what have we expanded them by? Are we growing our opportunities from qualification as we progress them through? We then look at sort of stuff that we’ve been bought in from forward quarter, and we bought it in early into this quarter."

10. Retention rate.

A retention rate measures how many customers renew their subscriptions or buy again from you. The higher the retention rate, the better. You can use this metric to identify areas where you’re doing well and where you have room for improvement.

For example, suppose your retention rate is 80%. In that case, that means that 80% of your customers who signed up during the previous period (quarterly or annually) renewed their subscription or purchased again during that same period—a pretty good number!

11. Customer lifetime value.

Customer lifetime value (LTV) is the revenue a customer will generate throughout their relationship with you. It’s a way to measure each customer's profitability and can help you understand if your pricing model is working well.

Customer lifetime value (LTV) = Customer value * Average customer lifespan.

Measurements of customer LTV focus on the company's relationship with its clients over time by tracking metrics like customer satisfaction rate and level of loyalty.

12. Sales pipeline to quota.

The sales pipeline to quota metric measures how close a sales team is to reaching their individual quotas.

Sales pipeline quota = Total value of an individual sales rep's sales pipeline / Their quota.

It's a way of measuring how successful each salesperson is at closing deals and can help you understand if your sales strategy is working well. Remember to assess a rep's performance, including its size and the type of deals.

Importance of Measuring Sales Productivity

Sales productivity can be used as a benchmark for measuring sales performance. It's also an important metric to track if you're managing multiple sales teams and want to see how they perform relative to one another. By tracking sales productivity, you'll have a better idea of whether or not your current strategy is working and what changes need to be made.

By measuring sales productivity, you can,

  • Increase sales performance.
  • Improve sales rep effectiveness.
  • Identify areas of improvement.
  • Focus on the areas that move the needle for your business.

You can use productivity metrics to ensure each sales rep is on track for success and that your company earns as much revenue from its salespeople as possible.

How Do You Measure Sales Productivity?

There are many ways to measure sales productivity, and there are no right or wrong answers when choosing the metrics that matter most for your business. The key is finding a way to track sales performance that works best for your company.

Here are some common ways of measuring sales productivity:

1. Determine the key metrics that you want to consider.

This is the most crucial step when it comes to measuring sales productivity. You should identify what you want your sales reps to accomplish each day, week, and month. Then, you can use those metrics as benchmarks against which they can compare their performance. You can consider the sales metrics mentioned above to determine the right benchmarks that fit your product and sales strategy. 

2. Audit your current sales activity.

Once you have identified the key metrics and benchmarks, it’s time to audit your current sales activity. You can do this by looking at sales rep performance reports, including,

  • Number of calls made,
  • Meeting planning
  • Calendar management
  • Email creation
  • Content development
  • Customer relationship management (CRM)
  • Proposal preparation.

You can also look at the pipeline and revenue forecast reports to see how sales reps perform. This will help you identify any gaps in performance, which is key to identifying areas where you need to take corrective action.

3. Filter the works that create an impact on your sales performance.

The impact is related to sales effectiveness. Dedicating time toward impactful activities increases your chances for success and closes deals faster than low-impact tasks. Organize your team’s activities by impact — either high or low—to maximize the number of sales made per hour spent on each activity

  • High-impact activities help your sales team make progress. Examples include researching accounts, preparing for calls, and training new reps.
  • Low-impact activities are necessary but don't directly move a deal forward. For instance, expense reports and CRM updates fall into this category.

Once you have this list, categorize your sales activities into three groups:

  • Must-Do's for every deal;
  • Should-Do’s to increase the probability of closing a sale;
  • Nice–to–have actions that make no difference in whether the client buys.

This exercise drives home key sales measures and leads management toward measurable improvement.

4. Calculate the time spent on the sales rep's activity.

Then, measure the average time spent on each activity by surveying or interviewing your team members. This will provide valuable insights into how well you and they prioritize their work. Some of these tasks could be delegated to others or even automated to free up more time for client-facing activities!

Compare this information to your business goals, and see whether sales are meeting these goals. Most likely—depending on the mix of activities you're currently tracking — either reps are struggling to stay focused because they're underperforming or working long hours to make quota.

How can you resolve them and make your sales productive?

The following section has the answer.

5 Strategies to Improve Sales Productivity

You can use the information you’ve gathered to identify the areas in which your sales team is struggling with productivity and create a plan to improve their performance. Here are five strategies that will help you achieve this goal:

1. Fill your pipeline with quality leads.

Some salespeople tend to focus on quantity over quality, which can lead them to pursue leads that don’t really meet your requirements. That’s why creating an effective lead generation strategy is essential as sending out a consistent flow of qualified leads that meet your target criteria. This will ensure that you don't waste time chasing after bad prospects who aren't likely to become customers.

If you are generating better traffic to your website, you can embed an interactive product demo to capture all the leads. If someone is interested in learning more about your product or service, they can easily click on the demo and watch it in action. This will help you collect the leads that are actually interested in what you are offering, and they can better understand how your product works in action.

Here's an example of how Toplyne converts its traffic to leads with an interactive demo.

Source

They embedded a demo made with Storylane in their website and experienced a 25% increase in their lead conversion rate.

2. Enable your sales team.

Sales enablement is an integral part of any business, and it is what helps you to close more sales. The better your sales team is equipped with the correct information about your product or service, the better they can sell it. 

In fact, sales organizations that have implemented a sales enablement process achieve 49% win rates, compared to 42.5% for those without such processes.

Take a survey to find the common problems your sales teams are facing and how you can help them. For example, if your sales team struggles to handle product-related questions from your prospects, you can enable them with an interactive demo that helps them understand the product better.

3. Accelerate the pipeline with value.

If your salespeople are operating at peak efficiency but are still falling short of the quota, it's time to reevaluate how you communicate with customers. In many cases, explaining why you are selling a product is more important than what the product does.

When you sell value instead of features or capabilities, customers perceive that buying your product will help them reach their key initiatives.

With Storylane, you can make your prospects feel the value of your product with an interactive demo, as it helps them to see the product in action. If your product is truly transformative for your customer’s business, and if you can connect that transformation and what makes your offering unique, buyers will be hard-pressed to find another vendor who can do better.

4. Score your leads.

Lead scoring is a method that helps salespeople prioritize leads by identifying those most likely to be interested and the fastest to close. So they can spend their time on buyers more likely to engage with your brand.

The process is simple as it involves scoring your lead based on the activities they perform with your company. The more they engage with your product or service, the higher their score will be. To make this even better and understand their interest in your product, you can embed an interactive product demo.

When your prospects interact with the demo, you can check how they are interacting with your demo. If you spot them interacting, you can tailor your marketing messages based on the data collected with the interactive product demo with Storylane. This will help you get more conversions.

5. Automate repetitive tasks.

A recent study by the McKinsey Global Institute indicates that approximately 30% of sales operations tasks can be easily automated. You leave money on the table if you are not automating your repetitive tasks.

Automating repetitive tasks will give you more time to focus on the things that really matter to your business. You can use automation to reduce the time it takes to complete sales operations tasks, such as filling out forms or updating your CRM database. If your sales team spends too much time personalizing your demo and other sales materials, then you can automate the process. You may even find other repetitive tasks in your business that can be automated to free up time for other activities.

Storylane helps you automate the process of personalizing your demo by automatically pulling your prospect's basic information from your CRM. 

This way, you can always ensure that your prospects get the personalized demo and experience your product better, as 90% of consumers prefer to do business with brands that offer personalized services.

Make way for productivity. 

As you can see, there are many ways to improve your productivity. The key is determining what tasks you do most often in your business and how much time they take. Then, look for ways to automate those tasks or find someone else who can handle them so that you have more time for what matters most: personalizing your demo and other sales materials and communicating with prospects directly.

With Storylane, you can take off the burden of creating the content while still ensuring that your sales demo is highly effective at helping customers understand and visualize how they can benefit from your product. It helps you create and share interactive demos in less than an hour without losing the essence of personalization. With the built-in analytics and auto personalization features, you can ensure that your demo is always up-to-date and relevant.

Want to check how your sales team can improve their performance? Schedule a free demo with our team and get a firsthand look at how we can help your business.

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