The Measurement of Sales Performance

The measurement of sales performance is an essential part of any business. The success of a company depends on its revenue, which depends on sales. To stay in business, you have to make enough sales that you generate more income than expenses. Sales performance entails more than just how much you sell; it also entails how little you spend on generating sales. For example, if you spend twice as much money marketing a product as you gain from selling it, then you need to improve your sales performance. Since there are so many factors involved in sales performance, the measurement of it also entails more than just measuring how much you sell.

A great tool you can use for the measurement of sales performance is sales metrics. These metrics will also help in the creation of goals and incentives. With sales metrics, you can make sure that you place suitable expectations on your sales operations, because the metrics help you set goals that are realistic, logical, and attainable. Otherwise, you may set unrealistic and unattainable expectations, or even worse you may set the goals too low. Metrics can include any measurable aspect of your sales efforts, such as number of phone calls, number of leads, number of hours spent on sales, and so forth. Try to avoid overwhelming your sales department with excessive tracking numbers. Instead, focus on the few metrics of most importance to your business.

Another great tool that can assist in the measurement of sales performance is a scorecard. Scorecards are often written on spreadsheets. A scorecard is simply a template for tracking your efforts in reaching your sales goals. A scorecard is a concise report with a set of measures related to your sales performance. You associate each measure with one or more targets. You can fill a scorecard out as you go, so that you will not only have a report once it is filled out, but also you can determine the pace at which you are reaching your goals. This will also alert you when sales performance is failing.

You will also want to use a benchmark to help you gauge your success and determine where you could use improvement. Sales benchmarking is an important process in sales management. It compares your sales performance to the sales performance of other companies and to industry standards. A benchmark gives you a point-of-reference. It gives you a standard which gives context to your own sales performance. You cannot know how good or bad your sales are unless you have something to which you can compare them. A benchmark is that something. The purpose of using a benchmark is to identify opportunities for improvement of sales performance and also to focus your sales efforts.

Use these general tools and methods to aid in the measurement of your sales performance. Nonetheless, remember that the measurement of your sales performance depends on your industry and your specific company. You want to find ways to best rate your performance, which you can do by finding the variables of most relevance to success as your company defines it.