Evaluating the performance of a salesperson
Yes the turnover, but not only that!
We tend to associate a salesperson’s effectiveness with the amount of business he or she generates, the volume of sales he or she makes. But is this really the right way to evaluate his performance? Progress, sales profitability, the number of customers and new customers, the market share obtained with each of them, these are real performance indicators! A good manager does not only manage results, he manages an action plan for his sales team and a regular follow-up of their activities.
You may think you’re a good coach for your sales team… but are you really? According to a recent study, 79% of managers believe they are effective for their team, while only 38% of their team shares their view.
The same definition for all
The effectiveness of a salesperson cannot be evaluated solely on the basis of sales. That’s why it’s important to clearly define what efficiency is with your salespeople so that everyone is working with the same guidelines and the same information. What are the elements to measure? Several aspects are good performance indicators and allow us to go well beyond sales to define the expected efficiency and establish effective action plans.
- Year-on-year sales growth: an increase in sales figures for vendors is a testament to sustained efforts.
- The level of profitability of the sales made: it has a direct influence on the annual profits.
- The number of customers of each, but also of new customers: they demonstrate their proactivity.
- The market share obtained from each customer: this is a good indication of the level of trust they have in your company.
Identify strategic customers and products
Revenue and its evolution among good clients must be the object of sustained attention. Good customers are those who show good long-term development potential and with whom it is important to maintain a relationship of trust. The sales associated with these so-called strategic customers will have a better profitability or a faster sales cycle. These good customers are generally associated with a significant percentage of the turnover, so it is necessary to devote the necessary energy to them.
In the same way, revenue and its evolution with strategic products is a very important aspect to insist on with your sales team. The strategic products are the ones you want to push more, because they are the most promising for the company’s growth.
Set clear objectives
Once we have identified our performance indicators, i.e. those associated with the expected efficiency of our salespeople, it is then possible to set the objectives to be reached in terms of sales progression, customers, products and global turnover.
Let’s keep in mind that in order to be competitive, a company must set objectives beyond sales. The SMART method (Specific, Measurable, Attainable, Realistic and Time-bound) remains a good way to define objectives. On this basis, you can specify the distribution of sales in the different product and customer categories, which will allow you to establish priorities for action. In the same way, you will be able to determine the number of clients and new clients or projects targeted. These indicators will also allow you to measure the gaps between the objectives and the results.
Incentives must be provided to motivate your team, which will obviously be aligned with the objectives to be met. It is essential that salespeople understand the results expected of them and that they are rewarded when they achieve them.
Role of the Sales Manager
Coaching your sales team well means making sure that you inform, motivate and follow up on your salespeople’s results versus those expected. It is useful to create simple and effective dashboards and to set up good coaching tools with precise indications of where each of them stands in relation to the objectives.
The sales activity of your salespeople is a major element to examine. Being a good manager requires a good analysis of your salespeople’s activity in terms of the quantity and quality of service offers, presentations, calls, visits, follow-ups and negotiations carried out, as well as the direction of these, the focus on the right customers and products, the right contacts, etc.
To maintain and improve their performance, salespeople must never sit on their laurels, always move forward. Measuring their effectiveness helps them evolve, and is one of the key tasks of direct coaching. A good coach must ensure that the knowledge of his team is at the right level, their know-how and their interpersonal skills are up to expectations, in addition to keeping the troops motivated.
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