Sales performance: definition
What is sales performance?
Commercial performance is the ability of a company to generate revenue through the sale of its products or services. Business performance is directly linked to business results and its ability to grow. It is therefore essential to work on it constantly.
It would be simplistic AND destructive to believe that only the sales team is involved: recruitment, management, product, marketing, communication. It should also be emphasized that commercial performance is not just a matter of the rate of transformation of opportunities into customers and even less of turnover.
Why and how to measure sales performance?
There are many factors that can explain insufficient sales performance and that is why you need to set up precise performance indicators in order to quickly target the problem.
On the other hand, too many indicators would be counterproductive, there is no need to create a dashboard close to making a NASA engineer green! We have identified 9 performance measurement KPIs that provide a clear view of the performance of your business activity:
- The number of leads
- Distribution of leads by channel
- The quality of leads generated
- The conversion rate
- Turnover
- The duration of the sales cycle
- Customer retention rate
- Customer satisfaction or customer recommendation rate
- The rate of additional sales
Understand the complexity of sales performance management
The indicators that I have just presented to you are very effective in measuring the good operational health of your commercial approach, but in reality they give the illusion that only the operational elements have an impact on it.
You need to understand that in reality a good commercial performance is based on 3 main pillars:
- The right sales strategy: How many sales teams fail because of a risky and poorly thought out strategy?
- The right sales process: the sale has become more complex, without a well-structured sales process you leave your performance in the hands of chance (yes yes, chance).
- An effective commercial animation: the management of a commercial team is a very sensitive subject, the motivation of the team is a precious resource and it is absolutely not enough to set “ambitious” objectives accompanied by a variable salary.
3 keys to improving your sales performance?
Sales performance management: the key to sales efficiency.
The commercial development strategy is obviously essential to performance, since the latter is judged in relation to the initial strategy. But beware “having a strategy” and “having a good strategy” are two very different things.
The implementation of your strategy will have a major impact on your commercial performance, whether through the choice of objectives, the action plan and the resources allocated. How many times have we seen strategies that put all the means on a target that has never proven a real sensitivity to your offers (if I swear to you).
How many strategies set objectives without allocating any means or specific action plan? How many strategies do not have signed revenue as their sole tracking metric?
Do not neglect this work, a strategy is not just a turnover target, nor a simple powerpoint to be released once a year to show numbers that look good.
Structuring the sales process
This is probably the most important point in your long-term trading performance. First, what exactly are we talking about?
Selling is a complex process that aims to identify a prospect, understand his problem, prove to him that we are best placed to solve it and agree on the value of this resolution. There are therefore three main phases: Qualification, value proposition and closing.
I voluntarily dismiss the upstream with lead generation (prospecting, inbound marketing or via social networks) and swallow it with loyalty and expansion to save you a headache.
Despite this complexity, when we ask a sales team “what is your sales process?”, we have 90% of “it depends”, and if we ask “on what?”, we are witnessing a shipwreck.
A sales process should not be left to chance, well designed it is the element that will have the most impact on the achievement of your commercial objectives and it is also thanks to its good structuring that you will be able to quickly identify your weak points and therefore progress.
Sales team management and training
Your most valuable resource for achieving goals is your sales team! You are not unaware that salespeople do not run the streets, that they need time to become more efficient and that they often have to absorb a lot of pressure.
The role of sales animation is not to add pressure, nor to humiliate the sales people who underperform. I don't say that lightly and I don't force the line, that's exactly how it happens most of the time.
It is counter-productive and Darwinism aiming to recruit with a vengeance and eliminate the most “weak” gives the illusion of efficiency.
Your salespeople must be trained, talent has nothing to do with sales performance. Invest in them and they will return it to you. Beyond training, commercial animation must aim to preserve the motivation of salespeople and their morale because these two elements are extremely important for your performance.
Factors influencing sales performance
As we indicated at the beginning of the article, it would be inaccurate to believe that only the sales team and its sales process management have an impact on the performance of your sales actions. Let's take a look at three key elements that will influence this performance.
Marketing and communication strategy
Marketing and communication is important. It does not replace a good sales team, but it is essential to its effectiveness.
What you have to understand is that today two-thirds of the decision-making process is done online, outside of contacts with salespeople. During the sales process, your prospect will continually inquire in parallel with your exchanges via search engines and social networks.
Which simply means that, if you are not visible as a company during these searches, you are leaving a boulevard for your competitors.
But that's not all, a good inbound marketing strategy, for example, will bring a lot of value to your prospects. This will allow your salespeople to be much more convincing and it will considerably increase the perceived value of your offers, which ultimately will allow you to increase your margins.
Yes, sales reps are right to complain about non-existent marketing when it does, it significantly harms their work. On the other hand, it is necessary to ensure, when this strategy exists, that it is well understood and used by your sales teams.
The famous Sales & Marketing alignment is absolutely essential. This is achieved by ensuring that these two teams share a common set of skills and have common objectives.
Lead generation effectiveness
Lead generation is a very broad subject that again does not only concern salespeople.
There are many lead acquisition levers that are either more marketing-related or more sales-related. But one source is not necessarily equal to another in both its effectiveness and its cost.
Example: Digital Advertizing
Generating leads through outbound marketing type marketing actions, such as online advertising for example, is interesting because:
- It is a channel that allows an almost immediate acquisition of leads.
- It can be controlled according to your ability to process leads and orders. It is enough to increase the budgets or to reduce them.
However, it poses several problems:
- You are not building a long-term acquisition, the day you stop budgets there is nothing left.
- Acquisition costs are by nature increasing. It's an auction system, the more players the more it costs for the same number of leads.
- The leads are of mediocre quality in the vast majority of cases. They know little or nothing about you, and often look for prizes. Worst lead on earth for a salesperson.
Example: Outbounding
Lead generation lever par excellence for salespeople, mastering it will make you a “hunter”. Prospecting works, and will always work to develop an activity, it is based on identifying people who are highly likely to be interested in what you are offering and triggering a meeting.
We often talk about cold prospecting, this technique has many advantages:
- It does not assume any prerequisites or major investment other than having a salesperson capable of doing it.
- It is controllable, we decide if we need it or not.
- The leads are of relatively good quality since in principle they have been carefully selected.
On the other hand, prospecting has a number of weaknesses:
- It generally results in fairly long sales processes since the processes are initiated by the salesperson and not by the customer who is therefore potentially less in a hurry in this process (otherwise he would have initiated it himself earlier).
- The acquisition costs are high, the time spent by the salesperson can be very long to generate a few leads. Beyond time, the exercise is not simple and at a potentially significant moral cost.
- Prospecting automation tools, which have made the exercise seemingly simpler, have in fact greatly altered the ROI of prospecting. Prospects are saturated with low quality messages and end up not responding to anyone.
Example: Referrals
Surely the most effective lever but the most difficult to drive. It is a lever that can significantly increase your business performance. If each client recommends you to another, growth is guaranteed.:
- Leads of extremely good quality in general, they look like your customer and therefore are likely to become one.
- Leads who know you and have a positive view of you.
- Leads that convert quickly.
On the other hand, there is a prerequisite: to have very satisfied customers. It is a potentially slow growth it is rare that a customer immediately recommends you to very many people.
Following these few examples you understand that a lead is not always equal to another lead and that the choice of your acquisition levers will have an impact on the performance of your commercial approach.
To discover other acquisition levers, we recommend our web story on the subject: Acquisition levers to use.
Structuring your offering
Yes, basically we are selling an offer, if this offer has no value or is poorly designed, do not be surprised that your commercial performance is poor.
Sometimes it has nothing to do with the product or service as such but with the way in which this product or service is “packaged”.
Your product or service must therefore respond to the problems of your prospects, do so within a time frame and with delivery methods compatible with these needs and constraints and that you are able to demonstrate its effectiveness.
Without it, it is much more complex and it will not be a question of commercial competence.
