March 22


How to evaluate sales performance

By Ralph Varcoe

March 22, 2021

If you’re hoping to increase the sales of your business, regular and thorough sales performance evaluations are essential. While this may seem like an overly simplistic statement, I am shocked time and time again at how many businesses fail to complete sales performance analysis or do not have the skills or expertise to complete effective sales performance reviews. In this blog post, I outline how to evaluate sales performance effectively.

To ensure you evaluate the performance of your sales team effectively, a dual approach is needed.

Step one: Face value

1. YTD goals vs. YTD actuals

In today’s digital world, managers and business owners can quickly find themselves drowning in sales data about the performance of their team. Instead of overwhelming yourself by looking at countless spreadsheets and graphs, I have found it is always more effective to simply analyse YTD goals against the YTD actuals of your sales team.

Setting YTD goals is relatively straightforward. Simply consider how many sales your sales team should be making on a daily, weekly or monthly basis and multiply that number by the number of days/weeks/months you are in business over the course of a year and you will have established your YTD goals.

Compare the YTD goals that have been set for your sales team against your YTD actuals and this will help you to clearly and conveniently see if your sales team are reaching the necessary targets. You may also wish to make YTD goals and actuals comparisons for individual team members, as this will help you to identify who is underperforming. You can also create a sales forecast for the rest of your year by multiplying the actuals by the remaining months left in your business year, to give you an overview of what your company can expect in the future.

2. KPIs

If you have found that analysing the YTD data of your company has revealed some major issues with your sales team, don’t worry. The purpose of the evaluation is to identify limitations within your sales team and solve them, so keep going and see this evaluation through to the end.

If you desire more numbers and statistics to explain potential problems within your sales team, look at the key metrics and key performance indicators (KPIs) of your sales team. Some KPIs you may wish to consider include…

• Initial communication to deal close time length
• Quote to the closure of deals ratio
• Average sale quantity/size between each salesperson
• Sales performance of individual products
• Sales performance by location

If you have evaluated your KPIs and YTD goals vs. actuals and still feel like you are missing insight into your sales team and don’t have an in-depth understanding of their performance, you would be correct. While I find many businesses are comfortable completing the above evaluations, delving deeper into your sales performance reviews can truly unleash the potential of your sales team. Even if your initial analysis suggests your sales team are functioning optimally and achieving their sales targets, there are always benefits to helping your sales team improve on their fundamental selling skills.

Step two: How to evaluate sales performance beyond face value

The issue with step one of this evaluation is that it provides a snapshot in time only. Whilst using actual YTD data will help you to create a sales forecast and provide some indication as to how you will end the quarter/year, it does not provide any certainty or answers to how to actively increase your sales.

Numerical data and numbers also tell you nothing about whether a member of your sales team is reaching their potential. For example, if a salesperson is consistently reaching their targets, looking at numerical data alone will not offer insight into whether or not this salesperson could be achieving even more sales with the right motivation and guidance. So, how do you know whether your sales team has the capacity to deliver more? If a poor seller is in the wrong role? Why your team is not reaching its targets?

1. Evaluate 21 core competencies

Evaluating your team against 21 core competencies will help you create effective coaching and training programmes based on the specific needs of your sales team. The 21 core competencies are not based on opinion, but tried-and-tested formulas that ensure you put your team members in the right roles to maximise their best competencies while coaching and training them to improve in other areas.

For example, if a seller scores low on the ‘Hunter’ selling competency and yet they are in a new business role it stands to reason why they might be down on their numbers.

2. Sales coaching

Once you have considered how your team match up against 21 sales competencies and potentially re-shuffled your sales department, sales coaching can be used to help individuals and teams improve at their core competencies and reach their full sales potential.

In my opinion, no salesperson who is willing to work on their performance is a lost cause. Instead of instantly cutting underperforming salespeople, consider what you can do to support them and help them reach their sales goals. This may be by providing them with one-to-one coaching or transferring them to a new department/sales role based on their skill set.

Increase your sales potential today

In order to truly evaluate and understand the sales potential and sales performance of your team, you must not only consider numbers and key metrics, but you must also evaluate the core competencies of your sales team and provide them with the support and motivation they need to not only reach sales targets but exceed them.

If you would like to learn more about evaluating sales performance and how I can compare your sales team against 21 sales competencies, do not hesitate to contact me today and unlock the true potential of your sales team. I teach sales leaders to coach their salespeople based on scientifically proven frameworks and my success rates speak for themselves.

Ralph Varcoe

About the author

For over 20 years, Ralph has run sales and marketing teams across large enterprises and smaller start-ups, at companies such as Orange, Tata Communications, Virgin Media, Spirit Ai and others. He brings a wealth of experience in personal and professional development with a laser focus on enabling people to achieve more than they thought possible. He's a published author and musician with a passion for creating - be that change, the right solution, exciting campaigns, the right environment for customers to succeed, or podcasts, videos and written content.

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}