A few weeks back, I was chatting with different sales leaders to get insight into new best practices in the space.
I noticed that no one seemed to have a great way to measure the productivity of their sales team.
I heard a lot of jargon-y words like ramp time and time-to-first deal. Most people were strictly focused on results.
But there is so much more that goes into a great salesperson than revenue numbers at the end of the month.
It got me thinking — what’s the right formula for productivity?
As the Director of Revenue Performance, it’s my responsibility to proactively train our team to increase their chances of hitting their goals.
Therefore, I wanted to create a new way to measure sales performance.
The old way of measuring productivity
I was hearing from most of my peers that they measure the success or failure of an individual mainly based on sales metrics.
It was very black and white. So you either hit your sales quotas, or you didn’t.
One person I spoke with explained productivity as total sales reps divided by total deals.
The simplicity is nice, but it leaves out so many factors that make a good sales rep. It also doesn’t give any insight into how the individual is performing, just the team.
Enablement should be about helping people get better, not just the bottom line.
Why this way is broken
Revenue is a lagging indicator
Most companies track revenue on a monthly, quarterly, and annual basis.
By the time you notice a sales rep has missed their monthly or quarterly goals, you’ve already wasted a lot of precious time.
Our company is fast-paced with aggressive revenue targets.
If someone on the team is underperforming, we need to be able to catch this quickly so we can provide the necessary support and training to get them where the rep needs to be.
Only focused on outcome
As they say, you need to focus on the journey, not just the destination.
A similar rationale should be applied to sales. You need to focus on the process, not just the results.
The actions taken during the month or quarter are what will impact the numbers.
If you understand the process, you’ll be able to repeat it month over month to get your desired results.
Our new mixed-method approach
To address these gaps in measuring sales productivity, we recently implemented a new scorecard that measures sales reps on both quantitative and qualitative measures.
This has helped us get to problems within the team faster, focus on individual growth alongside company growth, and allows us to better align toward revenue.
We’ve created a net improvement scorecard template for those who are interested in implementing a similar approach.
How it works
The scorecard is centered around our culture of coaching and training to help each person improve.
For each criteria, myself, our VP of Sales, and the sales rep give a score. All of the criteria fall into the following categories:
Coaching and training (30% of total score)
Pipeline coverage (50% of total score)
Demo management (20% of total score)
Coaching and training
We have found that someone’s ability to implement feedback based on our company strategy has been paramount to success. That’s why it’s 30% of the net improvement score.
We use a couple of different ways to measure how well someone is performing in this category, including call scoring in Gong.
We also have weekly sales training sessions that cover topics related to sales improvement, and it’s key that people are taking the information provided there and applying it to their selling technique.
When I was chatting with another sales leader, Maria Bross at Rock Content, she agreed with the importance of coaching and training, saying:
“We know that adults learn best from their peers. We need to create opportunities for the team to learn from each other and collaboration is celebrated/rewarded. Then, we need to coach to the behaviors that move the needle forward. Less ‘let’s get in every deal possible for the quarter’ speeches and more coaching to develop skills needed to do just that.”
This category is the most heavily weighted at 50% because these behaviors are the most correlated with revenue.
Not only is it important that people are able to manage their pipeline, they need to be consistent over time.
A lot of account executives have massive peaks and troughs but in order to be consistently hitting targets you need to manage those types of spikes.
We measure self-sourced opportunities, close rate, and total revenue (both by month and by quarter).
We have developed an internal process for how to be most effective in demos, and this category measures how successful the reps are at implementing the process.
What we’ve learned is that being able to truly understand what a prospect needs and then showing how our product addresses those needs is way more effective than giving a full tour of our product offerings.
High scores in this area definitely correlate with revenue, as people that are best at demos can close the most deals.
How we use this score to coach our reps
Each sales rep ends up with a score out of 100.
Quarterly, we complete an exercise where we talk through their score. Both how they scored themselves, and how the VP of Sales and I have scored them.
What we typically see is that the sales rep really takes ownership of their score, and highlights for themselves the areas where they want to improve.
This drives ownership and feeds into our autonomous culture. People are able to say what they want to get better at, instead of me telling people explicitly what they need to improve upon.
It’s an awareness exercise so everyone knows where they stand and how they can improve.
Hopefully, this approach can help you better understand your team’s productivity.