With your selling motions in full swing, and with some bookings coming through the door, how can you best assess the health of your organization as it relates to revenue growth? Through our work helping leading companies grow their revenue year after year, we’ve found that the health of a sales organization can be, to a large degree, assessed by leveraging four specific metrics. You’ll find a summary of the metrics below, along with guidance on how to leverage each of them in your business. In combination with our KPI Builder, you’ll have everything you need to fast-track a robust metrics & reporting framework for your team.
Additionally, if—like most of us—you’re looking for ways to support your customers during these difficult times, you might find some helpful thoughts in this recent article that we published.
The Following 4 Metrics Will Allow You to Assess Your Selling Motions and Maximize Revenue Growth:
1. Revenue/Cost Ratio, by Sales Head
- Having clear visibility into the bookings that each seller brings in is critical. But to really understand the value of every booking, it’s important to remember to factor in the cost of the seller as well. By looking at the revenue/cost ratio for each member of your team, you’ll be able to gain valuable insights into many aspects of team performance. Where do you have sellers over-allocating effort? Who are your highest value team members, or who needs additional coaching? These are the types of questions you can explore with this metric.
- It’s important to note: your goal should not necessarily be to maximize this ratio. Instead, look to strike the right balance between bringing in bookings and appropriately incentivizing your sellers. While too low a ratio is obviously problematic, too high of a ratio can indicate that your sellers might have an incentive to take their skills elsewhere.
2. Quota Attainment
- Territory and quota design are critical pieces to any revenue growth puzzle. Maintaining a healthy, growing business requires careful quota planning. And it’s not easy; in fact, this topic is one of the more common challenges that we find clients struggling with. By establishing proper territories and quotas, and then by measuring attainment, you’ll empower your sellers to achieve their full potential. Sales efforts will be deployed in the most efficient manner possible. And you’ll have a solid framework to use when it’s time to assess your team. Without well-designed territories and quotas, inefficiencies will grow, and important sales opportunities will be missed.
3. Selling Time vs. Non-Selling Time
- Particularly as seniority increases, it becomes essential to ensure that your best sellers have as much time available to sell. Opportunity management and key data capture points are critical to any sales organization. Without them, you’ll never be able to forecast revenue with much reliability. However, at the same time, it’s easy for these tools and mechanisms to become overly cumbersome for your team. Therefore, it’s critical to regularly assess the daily motions that your sellers run through and calculate the time spent selling vs. doing everything else. Again, the optimal ratio here is not necessarily 100%. But if this ratio dips too low, you’ll know that there’s probably an issue that needs to be addressed. The solution will vary depending on the size and complexity of your organization. Whether it be through new tools, streamlined processes, or additional support resources, your sellers will only be able to succeed if they are able to allocate the amount of time needed for their selling motions.
4. CRM Utilization Rate
- While at first, it might seem to be at odds with what’s written directly above, it’s crucial to maximize the utilization rate of your CRM platform. With low utilization, forecasting accuracy will be unattainable, and the ability to effectively manage the business using a data-driven framework will slip away. Once you begin measuring CRM utilization rate, keep a close eye on any meaningful drops in this metric. And make sure to regularly assess data quality as well. At the end of the day, your forecasting motions will depend on the accuracy of your CRM data. Ensuring that the right CRM solution and supporting processes for your business are fully adopted will pay dividends for you down the road. Once in place, you can then start diving into topics like Lead Scoring to maximize value even further.
Quick Recap: By Measuring the Right Things, You’ll Be Able to Optimize Your Team of Sellers
There is an endless array of metrics that you can measure, so it’s important that you focus on the ones that will drive the most impact for your business. Our experience has shown us that several key ratios can be leveraged to optimize your selling motions. Revenue/cost by seller, quota attainment, and selling vs. non-selling time will help you assess your team’s performance and highlight any areas that require additional attention. And CRM utilization rates, combined with a regular cadence of quality checks for accuracy, will ensure that your forecasting capabilities remain strong. As you work through this process, it’s always helpful to benchmark your team against industry peers. One of the easiest ways to do this is through our Revenue Growth Maturity Diagnostic, available on our website.
And if you’re still in the early stages of mapping out your reporting framework, don’t forget to use our KPI tool to help you along the way.