9 Ways to Improve Your Sales Efficiency (+Metrics)
- August 29, 2022
Efficiency is the goal in virtually every business scenario. Companies want to ensure sales reps make meaningful use of the time and resources to drive deals, revenue, and client engagement. And while every sales operation has its own preferred ways of measuring performance, one thing remains undisputed – if you’re not measuring how efficienct your sales processes are, you’re never going to know how and where you can improve.
Sales efficiency provides insight into performance in the context of actual revenue generated. And depending on your number, consulting the sales efficiency metric may expose your operations as inefficient — which underscores opportunities for deploying a sales enablement strategy that boosts sales efficiency.
In this article, we’ll dive into what sales efficiency is, how to measure it, and what steps you can take to improve your sales processes.
What Is Sales Efficiency?
Sales efficiency is a method of measuring the impact of your sales processes and efforts. It’s usually measured within a specific timeframe, shows the speed of your customer acquisition, and allows managers to understand the direct revenue impact of each dollar spent on investments and acquisition.
Simply put, sales efficiency is a measurement of how many sales-related tasks a salesperson can accomplish in a given amount of time and the impact of those tasks.
Sales efficiency vs sales effectiveness
Sales efficiency and sales effectiveness sound like similar concepts, but they have distinct meanings and unique impacts on the success of your sales strategy.
Sales efficiency focuses on accelerating sales and automating tedious, time-consuming tasks to help sales reps work more efficiently. It is about accelerating a sale or minimizing the amount of time it takes from acquiring a lead to closing a deal.
Sales effectiveness focuses on making sure the actions of team members have a positive impact on the sales cycle – including making sure the team is prospecting effectively, securing enough first conversations, and closing enough deals. Sales effectiveness is all about the particular tasks performed and how effective they are.
Why Is Sales Efficiency Important?
Sales efficiency is a straightforward metric that serves as a starting point for deeper analysis of sales operations, especially your sales enablement efforts.
Here’s why you should monitor sales efficiency:
1. Gauge performance
Sales efficiency is a clear way to understand your company’s performance. It tells you how adequate your company is in maximizing efficiency and where your areas of opportunity lie.
2. Capture new revenue
By making your sales process more efficient, your sales team is empowered to properly nurture and convert more leads, resulting in new revenue streams.
3. Transparency
Sales efficiency makes it easy to draw the connection between your company’s sales efforts and generated revenue. It’s a straightforward, transparent KPI that serves as a springboard for deeper investigation into your sales operations.
How To Calculate Sales Efficiency
To calculate sales efficiency, add your sales and marketing costs for a given time period. Then divide the amount of new business revenue generated in that same time period by the costs.
If your sales efficiency number is above 1, that’s a positive sign and means your sales team is creating more revenue with each dollar spent. However, if your score is below 1, that means your team is having trouble selling efficiently with the resources and support they’ve been given.
For example, if your sales team generates $100,000 in a quarter after spending $85,000 on sales and marketing: $100,000 / $85,000 is equal to 1.2.
Use this formula to better understand both your individual and team-wide performance.
5 Sales Efficiency Metrics To Track
There are several existing and powerful metrics that allow you to track the performance of your sales processes and team, ranging from metrics that nail down to the nitty gritty aspects of the work your team does to overall business metrics that can be analyzed from a support perspective.
Here are the top five sales efficiency metrics to track:
1. Lead response time
Lead response time is the average time it takes for a lead to respond to a sales query. A lower first response rate means more satisfied customers and a higher lifetime value.
2. Customer acquisition cost
Customer acquisition cost is the amount of money your company spends to acquire a new customer. It helps measure the ROI of efforts to grow your clientele.
3. Customer lifetime value
Customer lifetime value is the total value a customer has to your business over the whole relationship period. It’s an important metric as it costs less to keep existing customers than it does to acquire new ones, so increasing the value of your existing customers is a great way to drive growth.
4. Average handling time
Average handle time is the length of time a call center agent or a customer rep spends on a customer call, starting when a customer initiates the call until it ends. AHT also includes the length of time spent on support tasks after the discussion, such as sending over requested information, filing documents, etc.
5. Number of sales calls per rep
By tracking the number of sales calls each rep makes, you can determine how much of your sales rep’s time is spent reaching out to prospects and current clients compared to their other sales tasks and responsibilities. Set a quota for your sales team and/or individual sales reps and monitor their outreach efforts.
9 Ways To Improve Sales Efficiency
Your sales team is crucial in driving revenue. When reps aren’t hitting their goals and meeting quota, it’s easy to assume the worst – that the effort isn’t matching expectations. But if you take a closer look, performance may be lacking because your team wasn’t given the resources for sales efficiency success.
Here are nine ways you can improve your sales efficiency:
1. Build a solid foundation during onboarding
Focus on efficiency in your training and onboarding processes. Solid onboarding empowers new sales reps with the right product knowledge training, instills foundational business values, and demonstrates how to access your company’s resources.
Consider bringing in your top-performing sales reps to share their tips and tricks with new hires, or have trainees complete self-guided learning on your sales process.
2. Implement personalized coaching
No two learners are the same, and a selling environment is no different. A generic blanket training approach won’t solve your sales efficiency problems – the key to sales efficiency is to deliver personalized coaching to individual sales reps to boost comprehension and performance.
Whatfix can help companies deliver personalized training for their sales teams at scale. Improve key feature adoption and productivity and boost sales efficiency with Whatfix’s smart and personalized contextualization features.
3. Prioritize sales enablement
Sales efficiency and sales enablement go hand-in-hand. If you ramp up your sales enablement efforts, sales efficiency will climb.
4. Audit your content library
Content is fundamental to the sales process, but too much time is wasted looking for the best assets at the moment of need. Auditing your content may uncover duplicates, missing assets, or other errors that are hurting your team’s efficiency. An optimized content library will support better sales efficiency.
5. Create a strategic sales plan
A sales plan focuses on the specific strategy that supports your business operations. Your sales plan should address your business plan, details about your team structure, sales and marketing strategies, revenue targets, and other helpful resources.
6. Align sales and marketing teams
Aligning your sales and marketing teams is one of the most impactful collaborative sales efficiency efforts your company can make. Create shared goals, strategies, and communication between sales and marketing teams, and watch your sales efficiency skyrocket.
7. Be strategic about sales territory assignments
Thoughtful sales territory assignments can reduce costs, boost productivity, increase overall sales, and improve territory coverage. However, an unbalanced territory plan or constant changes in territory assignment can harm productivity and client relationships.
8. Use the right tools
Using sales enablement tools can improve sales efficiency significantly by assisting your team in achieving the tasks in a timely manner, providing insights on your sales cycle, goals, strategies, and approach for accelerating your sales process.
9. Leverage sales automation
Investing in sales automation has massive potential for improving your sales efficiency. For example, sales automation tools can boost sales efficiency by filtering contacts based on their opportunity potential instead of by alphabetical order.
Improve your sales team’s efficiency by choosing a sales automation software with sales automation features like Whatfix. Whatfix helps sales reps boost their productivity by eliminating the time that’s usually wasted looking for help and support information, while task automation and real-time guidance can improve the quality of sales data.
Every modern, efficient sales operation relies on technology. But a cluttered combination of sales enablement tools could be actively damaging your sales efficiency. If your solutions can’t work together, you can’t expect your sales team to do the same.
Whatfix is a digital adoption platform that sales teams can leverage throughout the entirety of your sales process, from content to coaching and training. Whatfix unifies your sales enablement efforts and prepares your sales reps with the skills and content they need to sell efficiently.
Learn more about how Whatfix can support your sale efficiency efforts today.
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