Sales Performance Management Best Practices Blog

Jaw dropping payoff's from Sales Performance Management investments

Posted by Jerry Hegarty on Thu, Oct 1, 2015 @ 14:10 PM

We came across a Sales Analytics presentation by the sales consulting firm AGI a while back which highlights many reasons why it is so important to consider any investmnts in improving sales performance. Simply stated, for investments in productivity tools such as Sales Commissions Software - The payback is astronomical. Below are six data points that jumped out at us from this presentation which highlight the importance of continuous focus on improving sales performance and the payoff for those who get it right.

  • On average, only 41% of sales reps hit quota.

How is your sales team tracking against its goals? Are you able to track this on a consistent basis by plan measure, region, and geography? What is it worth to your business to bump this by just a few points?

  • Reps classify only 24% of their time as "active, engaged" selling time.

What can be done to minimize the time they spend on non-selling activities? Surveys have shown that reps who do not trust the sales compensation process will spend up to a half day a month double checking the accuracy of their commissions/bonus checks. Eliminate this and you potentially bump engaged selling time by 20%!

  • Reps spend only 7% of their time selling new product.

Does your sales team have goals attached to new product sales? Should they? If so, can you measure how your sales team is doing against these new product sales goal? Taken a step further, can you quickly break down how your sales team is doing against this specific metric by region, geography, customer segment?

  • Managers spend only 13% of their time coaching.High_Performance_Sales_Team.jpg
Given some of the ramp time data below, it is important to have your managers focused as much on coaching as possible and less on ‘non-mentoring’ activities. The investment is every single one of your sales resources is significant and demands the attention of your sales managers if they are to reach their full potential..
  • Average cost per sales rep (fully burdened including ‘enablement’ costs) – $475K per year with a total amount spent on sales compensation is approximately 45% of total sales costs..

What’s your true cost of sales? A rule of thumb we can take from this is to double your direct sales costs to get your true sales costs. The investment adds up quickly driving the payoff of any productivity bump through the roof.

  • Respondents report that the average ramp time for new reps is 6 months with average voluntary and involuntary turnover of sales force is 12 %

How do you compare? With turnover of 12% and onboarding of new reps typically ramping over 6 months, what impact does any avoidable turnover mean to your success? With an average cost of almost $500K a year for each sales rep, the opportunity cost of sales reps ramping up is significant. Key – minimize turnover of productive sales people.

ROI Whitepaper CTA


Note that the data referenced above is from a 2014 Alexander Group Sales Analytics Briefing which includes aggregate data from their AGI Benchmark Database of 350 sales organizations.

Topics: EVP/Sales Leader, CFO/Finance Leader, CEO, ROI