Assessing productivity and profitability

Assessing Productivity and Profitability
Assessing Productivity and Profitability

Assessing productivity and profitability of each sales team member.

The purpose of measuring performance is to have clarity on the profitability of the sales volume brought in by each sales team member. With that seemingly attainable outcome in mind, why do companies struggle with assessing sales force productivity? They sometimes find measuring sales performance challenging because they have failed to incorporate quantitative and qualitative criteria. Quantitative criteria includes: sales volume in dollars or units, growth over previous years, new accounts, and profitability. Qualitative criteria includes: attitude, product knowledge, communication skills, personal appearance, customer feedback, selling skills, and personal initiative. Ultimately, your sales team must be assessed according to clearly defined (and clearly understood) objectives. As a great sales leader, it is your responsibility to communicate your objectives as far as sales volume, sales revenue, profitability, return-on-investment, market penetration, and market share. Be specific. Set deadlines.

One simple way of measuring lead generation and conversion activities is to use a spreadsheet. In the first column, titled “Activities”, list each of the following on subsequent rows: prospecting calls (#)/hours spent (#); prospecting calls (#)/appointments made (#); appointments made (#)/sales (#); hours worked (#)/money earned ($); and prospecting calls last month (#)/income this month ($). Each of the adjacent columns should be titled, “Week 1”, “Week 2”, “Week 3”, and “Week 4” respectively. Encourage your sales team to use this tool on a weekly basis to measure their activities. Coach your sales team by rewarding them for achieving the objectives and helping them come up with solutions to improve the results from their activities.

Qualitative criteria can be measured by listening to your customers. Who knows more about your sales team’s attitude, product knowledge, communication skills, and personal appearance, than your customers? Asking your customers specific questions and encouraging general comments can be useful. There are several ways of getting customer feedback including: comment cards, focus groups, surveys by mail, telephone and email. You could also engage your customers through social media networking to help you better reach the unreachable customer. When assessing the productivity and profitability of your sales team, be sure to differentiate between aptitude and attitude. When in doubt, train a poor aptitude and fire a bad attitude.

Remember that incorporating quantitative and qualitative criteria could help you better assess productivity and profitability.

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