Because each level has advantages of its own, sales productivity should be evaluated at both the organizational and individual levels.
While assessing sales productivity at the organizational level provides you an indication of how well your sales department is doing overall, analyzing individual performance gives you the whole picture.
- Individual accomplishment
- Per hour of labor Earnings per employee Redundancy
- Exceeded/missed quotas
- Strengths and weaknesses of each person
- Areas that need improvement, etc.
You may modify your sales procedure and provide training that is specific to the needs of each salesperson using this breakdown of your sales performance. But you’ll need our CRM reports for that.
So, the output (income) divided by the entire number of sales representatives on your team is what is known as organizational sales productivity (input).
This equation may be used to determine your organization’s sales productivity:
Number of Reps on Your Team x Total Team Revenue ($) for a Period
For instance, if you had three sales representatives on your team during the previous quarter and your sales team brought in $100,000 in revenue, the sales productivity calculation for your team would result in a rep productivity rate of $33,333.33.
Sales productivity is the amount of income a salesperson produces (output) for each hour of labor, at the individual level (input).
This statistic is intended to dig down to the precise amount of money each rep earns per hour of labor, which is incredibly important. Our prior calculation produced an average sales productivity number spread over your whole staff.
This equation may be used to determine the sales productivity of a certain rep:
Number of hours worked in a period divided by the individual rep’s revenue ($) during that period
Let’s imagine that during Q2, sales representative Alison earned $50,000. She is a paid worker who puts in an average of 40 hours per week. In Q2 of this year, there were 13 weeks, for a total of 520 hours worked. Her revenue is equal to $96.15/hr when you divide it by the entire number of hours worked. (Although you will need to include in sales incentives if you provide them)
Your individual rep sales productivity statistics will fluctuate on a daily, weekly, and monthly basis as is normal, but over longer periods of time, you’ll be able to trust these calculations and, more significantly, start acting.
In addition to revenue, there are a number of sales KPIs and performance measures you should monitor to aid in continuous improvement.
Tracking is necessary at the organizational level to:
- Time devoted to selling
- Time devoted to business operations
- The volume of sales
- Level of acceptance and utilization of technology
- The quantity of marketing materials
- The quantity of contacts made from top-quality leads
The following metrics are significant at the individual level:
- Total number of calls
- How many emails were sent
- Number of meetings that are scheduled
- Request for referrals
- A proposal was created
- Conversion of leads
- Demonstrations
- Marketing claims
