Here is a great answer to this question that I found on Quora written by Michael Critelli former CEO of Pitney Bowes. His answer includes everything that I believe that you as a business owner should do to track the performance and effectiveness of your sales team, even it's only you and a couple others. You may think that the suggestions of a big multi-national company CEO are overkill for your small business and a few of the things may be but modify them and tweak them and they'll work for you too.
"Every sales environment has unique wrinkles, but my experience leading a company that was based on business-to-business direct sales would suggest the following:
"Every sales environment has unique wrinkles, but my experience leading a company that was based on business-to-business direct sales would suggest the following:
- Track not only the volume of sales, but the mix and diversification, and the gross margins; is the sales compensation plan and the marketing plans driving the behavior you want?
- Track activity and pipeline; every sales organization has more prospects that are not converted to customers; being able to determine what percentage of leads and prospects convert to customers and how quickly they convert is a critical performance metric.
- Track existing customer retention, whether your sales professionals are responsible for account management or not. If you see a pattern of sales that result in cancellations or of dissatisfied customers, you may have a sales professional that is making commitments on which you cannot deliver.
- Track the process of getting from a letter of intent to a signed order to see if it is simple or complex and expensive. Many sales professionals are great at selling the sizzle and getting the initial commitment, but leave a lot of wreckage in their wake because they go after the more challenging customers that no one else wants. Particularly determine if there are service issues related to delivery and installation, or after the sale.
- From the standpoint of sales management, look at whether you are getting broad and balanced performance, or you just are succeeding with a few heavy hitters. Very often, sales managers assign too many accounts or the best accounts to the best sales people. That is a great short term strategy, but it cripples the ability of an organization to get scale and longer term growth, since so few good sales professionals are developed.
- Check your sales turnover. Too high a turnover suggests that something is wrong; too low a turnover compared to your industry suggests that you are not setting the bar high enough."
