Sales Performance: Analysis, Evaluation and Metrics

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Any trading business constantly needs to increase the growth and development of its structure. The level of sales efficiency significantly affects the core business and success of the company. Learn from this article how to properly evaluate all the important criteria at work and build a successful business strategy.

Concept

The very concept of "sales efficiency" is a defining indicator of a company's profitability. From this it becomes clear how much the company attracts interest from the consumer.

When it comes to efficiency, there are many issues related to customer acquisition, sales methods, evaluation criteria, financial turnover and productivity in general. But in a concrete sense, we can designate this as an indicator of the company's competitive level in the market or some specific strategy.

Rating

First of all, you need to group the costs by distribution channel, as well as collect all sales data. itwill be needed to create an accounting system and analyze the ratio of the cost of the product and sales.

Distribution channels can be divided into several categories:

• Direct - employee salaries, insurance premiums, purchasing or production.
• Additional - transport, telephone, internet, travel allowance, etc.
• Specific - bonuses for sales volume, input money for the sale of goods, if necessary, etc.

Efficiency of sales channels help to find out the following indicators:

1. Gross margin - the difference between sales revenue and product cost, taking into account profitability and unprofitability.
2. Marginal profitability - the difference between sales revenue and variable costs, taking into account marginal income to revenue through the distribution channel.
3. Total profitability - net profit.

Social and personal indicators

You can also compare the key performance indicators, since not only economic standards affect the overall performance. In addition to the financial side, subjective categories should be considered.

• employee motivation;
• psychological resources;
• staff satisfaction;
• relationships in the team;
• no staff turnover;
• corporate component (team spirit);
• proper distribution of efforts in activities.

Social indicators require control at the stages of planning and setting goals,during their achievement, as well as at the stage of the production process. All results together represent the individual's level of compliance with the developed business plan.

Key indicators

Key sales performance indicators:

Direction	Performance indicators.
Main trend	Implementation of the main functions. Availability of all necessary resources for implementation. Number of closed deals. Consumer attitude to product
Economic side	Competent budget planning. No unplanned waste of funds. Clear distribution of funds for the necessary purposes. Income
Personnel	Staff. The equation of salary for the number of employees. Professional development. Achieving the required level of professionalism

Analysis

In order to analyze the effectiveness of sales and the growth of the sales economy, it is necessary to evaluate several key factors:

• assessment of the performance of sales managers;
• number of employees in the sales department;
• focus on the target audience;
• number of buyers;
• number of regular, potential and lost customers;
• intended usecompany funds;
• target allocation of all company resources;
• general economic indicators;
• highest income class
• reasons for refusal of potential customers;
• level of communication between manager and customer.

Other factors that affect performance also play a special role:

• high motivation and desire of staff to work;
• development and innovation of the company;
• productivity of labor;
• comfortable working conditions for employees;
• organizational internal system;
• individual motives (material, social, collective, incentive, etc.).

Sales department work

The effectiveness of the sales channel definitely depends on the efficiency of the staff. In addition to the fact that the number of employees corresponds to the scope of work, it should be understood how well they cope with their professional duties. To understand the effectiveness of the work, you need to consider the following criteria:

• Costs and time to find new employees.
• Number and quality of implementations.
• Contract terms, convenient sales system for both parties.
• Data on the work of managers.
• Structure of the sales department.
• Additional motivation as a reward for a good level of work.
• Retraining of specialists, opportunities for development and career growth.

Sales level

Sales performanceproducts shows conversion. This is an indicator of the level of efficiency, called a sales funnel, and more specifically, a marketing model that represents the stages of product sales before closing a deal.

It consists of three important indicators: the number of visitors (a retail outlet or an Internet resource), direct requests from customers (live demand) and the number of sales. Sales performance is largely based on the interaction of the seller with the buyer. 3 main levels of employee preparedness are determined:

1. Weak. When a manager makes a sale by persuasion, empty promises, deceit, attempts to appease and flatter the client. At this level, salespeople are not particularly passionate about what they do, work for a paycheck with no personal interest in the process, and may feel uncomfortable, overwhelmed, and even humiliated in some cases.
2. Struggle level. The seller by any means “forces” a potential client to make a deal, convinces him of the need for this, and not always in positive ways, but rather with psychological pressure. Such a purchase usually happens without pleasure and the likelihood that the buyer will contact again is almost zero.
3. Game. At this level, specialists with extensive experience or specially trained professionals work. Here the sale has a favorable character, based on respectful and trusting contact with the client. The seller becomes a loyal assistant to the client in choosing a product and a reliable partner.

Improve efficiency

Many aspects are being considered to change the situation in order to improve sales efficiency. To analyze current problems, you should pay attention to such important categories of activities as:

• sales strategy and planning;
• pricing;
• product presentation;
• effectiveness of personal meetings with clients;
• telephone communication;
• business correspondence, participation in events;
• Efficiency in service delivery.

Sales performance also depends on the established goals and methods of development of the organization. To develop the necessary skills, form your own convenient sales system, and highlight the strengths and weaknesses that need to be worked on to increase efficiency, you need to analyze the following aspects of work:

• Setting goals and priorities.
• Market demands.
• Consumer interests.
• Service model, features of service delivery and sales.
• Marketing plan.
• Analysis of information received from the customer.
• Product presentation.
• Strategy for offering products to customers.
• Specific offers.
• Manager behavior and customer contact.
• Unique offering that sets the company apart from competitors.
• Negotiating.
• Design of promotional materials.
• Working with objections.
• Customer support.
• Image and reputation of the company.
• Effective advertising.
• Widerange of distribution channels.
• Personnel training, education.
• Individual approach to the buyer.
• Preparation and style of business documentation.
• Participation in contests and events.

Detailed study of all aspects will help to achieve effective communication with customers, help to compile statistics of calls, evaluate sales performance, form a customer base, prepare an assortment and promotional materials, find out how motivated employees are, minimize errors, attract new customers, increase the level of professionalism.

Boost Methods

The tasks of the sales department are clear - it is necessary to interest the target audience as much as possible, provide competent customer service, increase consumer demand, provide information about the product in an accessible way, and establish strong contact with the buyer.

For effective sales, you can use different methods, taking into account the problematic aspects of the company. To enhance the productive work of the activity, you need:

1. Regular training for employees, testing for effective task performance. Negotiating, working with objections, with the ability to establish trusting relationships with the client, familiarization with the rules of business communication is an important part of the work.
2. Regulations of work. Establishing standards, rules and practices to be followed by staff.
3. Competent distribution of labor and motivation between employees.
4. Increase in the number of meetings withcustomers and transactions.
5. Testing different product presentation methods.
6. Promotions.

Expansion of distribution channels

Methods of product distribution is an important part of any business. The more distribution channels a company has, the more successful and profitable it becomes, and, accordingly, the economic efficiency of sales increases.

• Classic type of sales. In this case, the company has several retail outlets to which it supplies products. In this chain, it can be an intermediary. Buy goods from the manufacturer and sell it yourself, entering into cooperation with individual outlets.
• Multi-channel marketing. When a manufacturing company independently sells goods through distribution and manages all distribution channels.
• Participation in tenders. When a company gets the opportunity to supply products, for example, to government agencies.

In addition, we can include the independent organization of promotions, events dedicated to a particular product. It is possible to rent retail outlets in public places, when the company introduces its products to everyone in free space.

In our time, it has become important to distribute the assortment through Internet sites and popular social networks.

Depending on the needs of the company, the following types of trade are considered:

• wholesale;
• small wholesale;
• retail.