What Is Sales Effectiveness? + 5 Top Tips To Boost Yours | Selling Made Simple
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Nobody’s perfect, especially in the world of sales. Even if buyers love you, your sales team and you’re building rapport within mere seconds of getting on the phone. Even if you’re blowing your quota out of the water every month. And even if you’re the undisputed leader in your industry… The fact remains, there’s always—always—room for improvement in sales performance. But the first step towards getting better is understanding how well you’re doing in the first place. That’s where measuring your sales effectiveness comes in. And the more you factor your sales effectiveness into your processes, the better poised you’ll be to take home some fat commission checks. So, what is sales effectiveness exactly? How do you measure it? And what steps can you take to improve yours? We’ll answer these questions and more in this guide. We’ll also look at specific metrics to consider, the importance of alignment, sales effectiveness versus sales efficiency, and much more. What Is Sales Effectiveness?  It can be tough to nail down a single, indisputable definition of sales effectiveness. Depending on your organization, it may be the amount of revenue a salesperson generates. For others, it could be leads generated in a new vertical. But ultimately, sales effectiveness boils down to one thing: “Sales effectiveness is the measurement of how well a salesperson achieves specific outcomes.” If that comes off a bit general, that’s intentional. Different businesses have different measures of success, especially when it comes to building a growth strategy. And while one sales department may be tasked with bringing in as many new sales as possible, others may be focusing on promoting a new product. It’s the overarching goals, then, that define sales effectiveness—not just revenue. Let’s look at an example to clarify this point. Understanding Goal Alignment: An Example Let’s say your accounting software company is trying to expand its customer base. Right now, they’re pushing to target the shipping industry. Breaking into shipping will lead to the following results: * Significantly greater revenue gains * Higher customer satisfaction rates * More diversified revenue streams Making this shift is beneficial in the long run. As such, your sales department’s goal for this quarter is to increase product sales to businesses within the shipping industry. Now let’s say a salesperson made an astonishing number of sales this quarter. They generated record-level revenue. But they only made sales in the current vertical and none in shipping. So despite pulling in some great numbers, this salesperson would have low sales effectiveness as a result. It’s essential, then, to base your sales effectiveness on the specific departmental goals that have been given to you rather than just revenue. Otherwise, you may be undermining a well-constructed strategy built to ensure more tremendous success later. A Few Stats About Sales Alignment So, how important is sales alignment really? After all, isn’t the end goal of hiring salespeople to make more money? Why can’t we just shoot for more sales? As it turns out, tightly aligned businesses tend to be far more successful than unaligned ones. Have a look. * Organizations who measure sales effectiveness and have tightly aligned goals enjoy 36% higher customer retention rates, and 38% higher sales win rates (MarketingProfs). * Better alignment can help your company become 67% better at closing deals (a href="https://blog.marketo.
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