4 Ways to Analyze Sales Performance

There is only one known objective of a sales profession - to drive sales revenue for the company. All other reasons are only a subset of this. And there happen to be 3 crystal clear KPIs that are vastly common in most companies that measure sales performance - Quotas, Appointments and Pipelines. Generally, these are also the same 3 KPIs that helped show the exit to non-complying sales individuals.

While these 3 KPIs are important, we do not think it should be the only indications to imply if a sales person is doing a good or bad job. There are a few other measurements, or rather, analytic indicators before you determine a problematic individual or situation within the company.

#1 INDIVIDUAL SALES TREND

It is often easy to put a formula in Microsoft Excel and determine the percentage performance versus a given quota. This is a very straightforward way of seeing the sales gap, but it has a very big flaw - it only indicates performance of current year's quota. It does not reflect if a sales rep has been growing year-on-year despite not meeting the quota.

And why is this a flaw?

I have personally seen how some brand principals slapped seemingly unreachable quotas downstream without a valid explanation on how it is calculated.

While achieving a sales quota is priority for a sales person, it is unfair to ask the person to leave the organization for not meeting "an unreasonable" quota, even though he or she has been performing steadily upstream.

#2 ATTACH RATE

The attach rate mentioned here is not representing subscription attach rate for every new product sold (even though it is important too). It actually means attaching complimentary products together with core solution.

If a sales individual has high attach rates compared to the rest of the teammates but still performs less than par, it could mean one or a combination of few things below :

a) needs help in building pipeline

b) discounting too much

c) in a wrong role. He or she is perhaps great at nurturing or social savvy instead of a hardcore sales role.

On the other hand, if the rep has weak attach rate, he or she is probably weak is soft selling skills.

#3 FORECAST ACCURACY

Being accurate in sales forecast is not a matter of luck or the vision to see things in the future. It is the clarity and ability to qualify the opportunity.

If your rep has weak sales performance but is very accurate in his or her forecast, this could mean :

a) weakness in prospecting which means weak pipeline

b) weakness in sales closure (especially so if rep has strong pipeline and great accuracy but still not performing to expectations)

#4 A GOOD BALANCE

In sales, many a times is about the Yin and Yang of things, or a juggler - Sales against Reports & Meetings, Prospecting against Closing. Here, we refer the balance to driving sales between existing and acquiring new customers.

How often did you hear a sales person closing an account, move on to the next, and come back to the same account the next year asking for a renewal for the now commonly known Subscription.

At times, the management, or even brand principals could be at fault as a KPI was derived to "measure" the number of new logos being acquired.

Take a look at the below simple chart to see the various possible permutations :

Orange quadrant indicates a weak sales performer who has majority of revenue and pipe coming from existing customers. This could mean the individual is possibly in a inappropriate role and lacks the selling skills.

Blue quadrant represents something similar to the person in the orange quadrant, but the exact opposite. He or she could possibly be a farmer trying very hard to hunt new customers.

It is pretty obvious for both the Green and Brown, so we will not discuss them.

"There are a few other measurements, or rather, analytic indicators before you determine a problematic individual or situation within the company.

- Cherry B

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Do you agree with these 4 key areas? Or do you know of any other important ones? Please share with us and the readers.

Cherry-O!

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