When it comes to boosting sales performance, your team’s sales effectiveness is crucial to driving revenue and fostering growth throughout the organization as a whole. Sales effectiveness directs key decision-making, problem-solving, and strategic imperatives for the sales function, making the organization’s overall sales efficient and profitable. If your sales effectiveness functions are poor, it can result in subpar sales performance, decreased revenue, and even increased sales rep turnover.
When 81% of sales and marketing teams don’t take the time to review and correct their sales processes, ensuring you have sales effectiveness in place to evaluate your processes and optimize your sales function helps you stay ahead of the competition. So… how can you tell that your sales effectiveness needs improvement? Below, we’re sharing all the telltale signs that it’s time to overhaul your sales effectiveness function.
What is Sales Effectiveness?
Sales effectiveness defines your team’s ability to win at each stage of the deal. This combines sales enablement and training with the operational processes of the business, ultimately resulting in higher revenue. You can measure sales effectiveness through key KPIs, like your team’s up- and cross-selling rates, average deal size, sales cycle length, time spent selling, and more.
By combining and analyzing these KPIs, you’re able to quantify performance and determine precisely where your team struggles. For instance, say you notice that your team’s sales are declining rapidly, implying that your sales effectiveness functions are lagging. You evaluate various KPIs to pinpoint the issue that’s slowing down sales, and notice that while win rates have remained consistent, the sales cycle length is much longer than you’d like. This lets you know that shortening your sales cycle length through tactics like mitigating admin tasks that slow down your sellers, investing in technology to reduce time searching for content to send to buyers, and more will help improve your sales to the level you want.
Now that we’ve gone over what sales effectiveness is, let’s dive into some key signs that your sales effectiveness is underperforming.
1. Your Overhead is High
One of the first signs that you need to improve sales effectiveness lies in your overhead. When you have high costs just to run your sales function, your sales team has to work that much harder to generate enough revenue to turn a profit. If the end goal of sales effectiveness is to increase revenue (and therefore, profit), that goal can be easier to achieve by lowering overhead. In fact, research estimates that a 5% reduction in operational costs offers the same impact as a 30% increase in sales. Since sales effectiveness streamlines processes, enhancing your team’s effectiveness can lower overhead costs and allow them to generate a higher ROI.
For instance, let’s say you’ve provided your sales function with three enablement tools: one to help organize sales content, one to automate CRM data input, and one to track seller data. You realize that your content organization platform already offers seller data tracking baked in — so it’s a no-brainer to eliminate your superfluous data tracking software and narrow down to only two enablement platforms. This instantly cuts down on your overhead, making it that much easier for your reps to turn a profit — increasing sales effectiveness.
2. Sales Performance is Low
The role of a sales effectiveness team is to help the sales team grow at a sustainable pace. In order to continue growing, sales performance needs to be strong. Just as you wouldn’t put an addition on a house with a weak foundation, you wouldn’t want to expand a sales force with poor sales effectiveness. Tracking your team’s KPIs — like win rate, lead-to-close ratio, quota achievement rate, and more — directly indicates how well each rep is performing. When data shows low performance, it could indicate that your sales effectiveness function is missing a beat.
For example, if your team has a low lead-to-close ratio, it can indicate that their sales effectiveness is lacking due to their inability to communicate value effectively to leads at each stage of their buyer’s journey.
3. Manual Tasks are Eating Into Seller Productivity
While it may sound shocking, sales reps only spend about 40% of their time actually selling. They often spend the rest of their time working on repetitive administrative tasks, like CRM data input. This slows them down, giving them less time to perform the revenue-generating activities their job entails. Your sales effectiveness team keeps these tasks from taking up such an outsized amount of time by:
- Automating administrative tasks to save reps valuable time
- Continually improving sales processes to expedite strategic sales plans
- Looking to the future to predict and mitigate roadblocks before they arise
The sales effectiveness team limits the time spent on administrative tasks from all fronts. By lowering the time spent on communication with marketing, communication with other sales professionals, inputting CRM data, and more, reps gain some of that time back.
4. Your Salesforce Database is Dirty and Outdated
How often do your reps get bogged down when searching through your CRM for the data they need? If your Salesforce database doesn’t maintain a hygienic, organized structure, the database only serves to slow down your sales reps. With an outdated Salesforce database, reps are left fumbling through confusing layers of data for the one piece of information they need. One of the biggest benefits of the sales effectiveness team lies in Salesforce database upkeep. It’s up to them to maintain a consistent, organized database in which reps can quickly and easily find the information they need when they need it.
It’s especially important for reps to access data in your CRM quickly during sales meetings to capitalize on the prospect’s time and interest. For instance, imagine that your sales rep is speaking with a prospect in a sales meeting, when the prospect shows interest in a particular product feature. Since the sales effectiveness team maintains a hygienic Salesforce database that’s integrated with your content management system, the rep is able to find the content on that particular feature’s benefits quickly, allowing them to devote more time to selling during the meeting and less time to searching for relevant talking points.
5. Your Sales Forecasts are Inaccurate
If your team isn’t accurately predicting what’s incoming on your sales pipeline, your sales effectiveness drops. A sales forecast allows you to predict incoming funds and make data-driven decisions about any incoming costs. When you aren’t prepared for incoming costs, your team has to work that much harder to turn a profit — and everyone struggles. So how can you know if your forecasts are accurate? You can measure sales forecasts by:
- Finding the mean of actual demand
- Subtracting the mean of the actual demand from the forecast demand
- Adding all of the errors together
- Dividing by the number of data points
This formula allows you to understand how much your forecasts have deviated from the actual demand. Ideally, you want your forecast accuracy to be above -5%. This is typically considered excellent forecast accuracy, while anything above -10% is considered good. Below -10%, experts consider forecast accuracy terrible. Top-performers (only 21% of companies) forecast their sales accurately within 10%. When accuracy falls, it means your sales effectiveness team isn’t accurately predicting your earnings… so maybe it’s time for an overhaul of your forecasting.
Sales effectiveness is critical to ensuring your sales function is operating as smoothly as possible and driving revenue growth. As a team dedicated to streamlining the sales process and spearheading decision-making and problem-solving, if your sales effectiveness function is underperforming, your sales are underperforming.
Learn how to measure and improve your sales effectiveness by downloading our latest white paper, Enhanced Sales Effectiveness: Key Performance Indicators to Consistently Monitor and Track Sales Success.