Sales efficiency 101: 15 key strategies for success

Updated August 8, 2024

Although SaaS companies collect an abundance of sales data, effectively visualizing and leveraging that data can be quite a feat. Measuring customer satisfaction, churn, and revenue is relatively straightforward, but sales efficiency and effectiveness are tougher nuts to crack. Yet, knowing precisely which activities make your team more productive is crucial to achieving and maintaining sales KPIs, especially as the market shifts and teams are asked to do more with fewer resources. 

Too many companies still consider sales more of an art than actual science, relying on gut instinct or a few rockstar sales reps to hit the magic number. But we’re here to tell you that sales effectiveness and efficiency are measurable — and should be a significant component of your growth strategy. 

Below, we’ll clarify and define sales efficiency and sales effectiveness (yes, there’s a difference) and break down how to improve sales efficiency into 15 strategies to consider as your company scales.

What is sales efficiency?

Sales efficiency compares revenue to sales and marketing spending in a given period. Think of sales efficiency as a way to demonstrate the payoff of investing in sales and marketing. For example, SaaS companies tend to reserve a great deal of their budget for product promotion, events, and sales enablement and want to be confident that this hefty investment drives returns in the long run. Unlike typical growth metrics that plateau over time, sales efficiency should continue to improve as companies scale.

When companies start to hit their go-to-market stride, their sales efficiency skyrockets. As organizations invest in revenue operations, they can better identify and close process gaps. In turn, those businesses can spend less to attract new customers and invest more time nurturing existing ones. This means external-facing teams can deliver more long-term value to customers, and drive more revenue.

But the math isn’t always that simple. Scaling sales workflows takes time and practice, and sales efficiency should be analyzed in tandem with other metrics like growth margin, salaries, commissions, and ad spend. Taking a more holistic approach to sales efficiency can provide more detail and highlight areas for improvement.

Why sales efficiency matters in 2024

It’s clear that sales efficiency directly impacts your bottom line — but there’s no one-size-fits-all approach to improving efficiency. To meet the growing demands of today’s buyers in 2024, sales teams need to bring a new level of rigor to the sales workflows they use to sell every day. (Don’t worry, we’ll share lots of ideas and examples below to help you get started). 

In the long run, a more efficient sales team drives steady growth and higher profits, helping your business thrive long-term, even as competition gets tougher.

Sales efficiency vs. sales effectiveness 

While the terms are often used synonymously, sales effectiveness is not the same as sales efficiency. Whereas sales efficiency measures a sales team’s output, sales effectiveness measures a sales team’s ability to complete the right tasks at the right time. To be effective, your go-to-market teams need to be productive, using workflows that serve them and move them toward a common goal. If sales effectiveness is lacking, sooner or later, sales efficiency will suffer.

At the most basic level, we recommend framing sales effectiveness as the average output per salesperson, where “output” is a KPI associated with a specific company goal. Output could be faster sales cycles, higher conversion rates, dollar increases in ACV, or something else of high priority. Sales processes, goals, and overall strategy differ from organization to organization, so the way sales effectiveness is measured differs as well.

Here’s what that could look like in practice. If your company is interested in expanding into a new vertical, you might measure the number of new opportunities each rep closes within that category every quarter. If your goal is to increase average ARR, you’ll want to assess each rep’s ability to bring in more business every quarter.

The sales efficiency calculation

Gross sales efficiency formula

Gross sales efficiency is a key metric that indicates how effectively your sales team converts resources into revenue. It’s calculated by dividing the total revenue generated by the sales team by the total sales and marketing expenses. Here's the formula:

Gross Sales Efficiency = Total Revenue / Total Sales and Marketing Expenses

For example, if your team generates $1,000,000 in revenue and you’ve spent $500,000 on sales and marketing, your gross sales efficiency would be:

Gross Sales Efficiency = $1,000,000 / $500,000 = 2

A ratio of 2 means that for every dollar spent on sales and marketing, two dollars are generated in revenue, demonstrating high efficiency.

Net sales efficiency formula

Net sales efficiency goes a step further by considering the cost of goods sold (COGS). It provides a clearer picture of profitability by focusing on the net revenue. Here’s how to calculate sales efficiency with the total cost of goods sold in mind: 

Net Sales Efficiency = (Total Revenue - COGS) / Total Sales and Marketing Expenses

For instance, if the COGS is $300,000, the net revenue would be $700,000 ($1,000,000 - $300,000). If your total sales and marketing expenses are $500,000, the net sales efficiency is:

Net Sales Efficiency = $700,000 / $500,000 = 1.4

A net sales efficiency ratio of 1.4 indicates that for every dollar spent, the net revenue generated is $1.40, providing a more nuanced view of efficiency.

The sales efficiency ratio

The sales efficiency ratio quantifies how effectively your investment in sales and marketing translates into revenue growth. So, what is a good sales efficiency ratio? A ratio between one and three is generally considered favorable. When this ratio exceeds one, it signals that your sales efforts are generating a positive return on investment. 

Conversely, a ratio below one points to inefficiencies that require strategic adjustments. This might involve refining your lead qualification process, updating your sales training, or reevaluating your overall sales approach to maximize efficiency and boost returns.

Related sales efficiency metrics

While the sales calculations mentioned above provide a high-level overview of your organization's overall efficiency, there’s no single sales efficiency metric that tells the full story. To gain deeper insights, optimize performance, and drive growth, you’ll need to drill down into specific areas of your business. 

Here are a few more key sales metrics that give organizations a more comprehensive view of their sales operations:

• Customer acquisition cost (CAC) measures the total expense incurred in acquiring a new customer. This includes sales and marketing costs and is calculated by dividing the total acquisition expenses by the number of new customers gained during a specific period.
• Customer lifetime value (CLV) quantifies the total revenue a customer is expected to generate over their lifetime with the company. CLV helps in understanding the long-term value of customers and aligning sales strategies to support them.
• Lead response time reflects the average time it takes for sales reps to respond to potential customer inquiries. Faster response times often correlate with higher conversion rates, as prompt engagement can significantly improve the chances of closing a deal.
• Sales pipeline velocity provides insights into the speed at which leads progress through the sales funnel. This metric is calculated by multiplying the number of opportunities, the average deal value, and the win rate, then dividing by the length of the sales cycle. It helps identify bottlenecks and optimize the sales process for faster conversions.

What are common barriers to sales efficiency?

Common barriers to sales efficiency include outdated processes, lack of alignment between sales and marketing teams, inadequate training, and insufficient use of sales technology. Other, more tactical obstacles can be poor lead qualification, slow response times, and a lack of data-driven decision-making. These barriers can lead to wasted resources, missed opportunities, and lower overall performance. 

Identifying inefficiencies is the easy part. The real test comes in overcoming them. But fear not, we've developed strategies to guide you.

15 key strategies to improve sales efficiency 

Boosting sales efficiency requires a strategic approach. Consider these recommendations a starting point as you refine your sales process.

1. Set SMART goals

To drive meaningful improvement, vague objectives like "increase revenue" or "get more customers" just don't cut it. Instead, consider SMART goals as a framework to clearly align your sales efforts with overall business objectives. 

First, let's break the SMART acronym down:

• Specific goals leave no room for ambiguity. Instead of "improve sales," try "increase new customer acquisitions in the manufacturing sector."
• Measurable goals give you clear metrics to track progress. "Boost revenue" becomes "increase monthly recurring revenue by $50,000."
• Achievable goals stretch your team without breaking them. Be ambitious but realistic.
• Relevant goals align with your broader business objectives. Every goal should contribute to your company's overall mission.
• Time-bound goals create urgency and prevent procrastination. "By the end of Q3" is much more motivating than "someday."

Regular check-ins and adjustments are crucial. As you hit milestones or face unexpected challenges, don't be afraid to refine your goals. A framework isn't meant to be rigid — think of it as another method to keep your sales team focused, motivated, and moving in the right direction.

2. Know your ideal customer profile (ICP) 

Casting a wide net might seem like a good strategy, but in sales, precision wins over volume. Enter the Ideal Customer Profile (ICP) — a detailed description of the perfect fit for your product or service. 

To create an effective ICP, start by analyzing your current top customers. What industry are they in? What's their company size? What problems did your solution solve for them? Bring your customer success or revops team into the conversation, too — they often have invaluable insights about what makes a customer "ideal." 

Once you've crafted your ICP, use it to guide every aspect of your sales process. It should inform your lead scoring, shape your messaging, and influence your product development.  Regularly revisit and refine it based on new data and market changes, too. As your business evolves, so should your ideal customer profile.

3. Streamline your sales processes

Efficiency thrives on simplicity. Take a hard look at your current sales processes and identify areas of redundancy or unnecessary complexity. Are your reps bogged down with manual data entry? Automate it. Is your pipeline cluttered with stale leads? Implement a regular clean-up routine.

Consider adopting a sales methodology that aligns with your team's strengths and your customers' buying journey. Whether it's MEDDPICC, Challenger, or Solution Selling, a consistent approach can help account executives navigate deals more effectively. Remember, the goal is to create a smooth, repeatable process that allows your team to focus on what truly matters: building relationships and closing deals.

4. Effective sales coaching 

Great sales coaches don't just tell; they show. Implement a robust coaching program that goes beyond occasional call shadowing or performance reviews. Regular one-on-one sessions, tailored to each rep's needs, can help reps identify and make progress on specific skills. Common conversation intelligence features like AI-summarized call recordings and team trends help provide specific, actionable feedback.

But don't stop there. Encourage peer-to-peer learning by setting up mentorship programs or facilitating team knowledge-sharing sessions. When your top performers share their secrets, the whole team levels up. 

5. Use sales tools and technology

The right sales tools and technology can have a transformative impact on your team's efficiency and productivity. By leveraging a robust sales execution platform, you can streamline workflows, automate repetitive tasks, and equip your reps with intelligent guidance on the best next steps.

These platforms leverage AI and analytics to capture and analyze data from millions of customer interactions, uncovering insights that can inform your sales process and coach your reps in real time. Reps get intelligent recommendations on the optimal cadence and content to prospect and manage accounts, saving them time and effort. And with advanced task and deal management capabilities, teams can easily prioritize high-value activities and keep deals moving forward efficiently.

Beyond just automation, the right sales tech stack provides conversational intelligence features that allow you to truly understand what's happening in customer interactions. With AI-generated call summaries and insights, sales managers can provide targeted coaching to help reps improve their skills and approach. This continuous feedback loop ensures your team is always leveling up and adopting best practices.

The right sales technology stack can be a game-changer for sales efficiency. By eliminating manual busywork, providing strategic guidance, and surfacing crucial data, modern sales execution platforms help teams to focus on what they do best — building relationships and closing deals.

6. Align sales and marketing teams

It's time to end the age-old rivalry between sales and marketing. Frankly, we’re tired of hearing about it. To ensure these two orgs see eye-to-eye, establish shared goals and KPIs. Regular joint meetings can foster understanding and collaboration, ensuring that any marketing efforts directly support sales objectives. When these teams work in harmony, magic happens. 

Create a feedback loop where sales insights inform marketing strategies, and marketing intel enriches sales conversations. For example, if sales can surface common customer objections, marketing can create targeted content that addresses these concerns head-on. This alignment not only boosts efficiency but also presents a unified front to your customers, improving their overall experience.

7. Invest in sales training

Continuous sales training helps keep your sales team at the top of their game. The sales landscape is constantly evolving, with new techniques, tools, and market trends emerging regularly. By investing in ongoing training, you ensure that your reps stay updated on the latest best practices.

Sales managers can also use technology to scale onboarding and coaching. Using conversation intelligence that records an analyzes sales calls, teams can get quick insights into rep performance and customer interactions. Sales managers can use these insights to offer personalized coaching, highlighting areas of strength and opportunities for improvement. AI-powered call summaries and feedback make it easier to provide specific, actionable advice.

Regular training not only enhances individual performance but also fosters a culture of continuous improvement within your sales team. Encouraging a growth mindset and providing opportunities for professional development can significantly boost morale and motivation, leading to better sales outcomes and a more cohesive team.

8. Focus on data-driven decisions 

In today's data-rich environment, gut feelings alone won't cut it. Empower your team to make informed decisions by providing them with the right data at the right time. Train your reps to interpret essential metrics like conversion rates, average deal size, and sales cycle length. Use this data to identify bottlenecks in your pipeline, forecast more accurately, and personalize your approach for different customer segments — or save yourself the trouble and use sales execution software like Outreach to do it for you. But remember, data should inform decisions, not dictate them. The most successful sales teams blend data-driven insights with their critical judgment and relationship-building skills.

9. Improve customer onboarding 

Don’t neglect the post-sales experience either. First impressions matter, and a smooth onboarding process sets the tone for your entire customer relationship. Gartner research shows three in five software buyers have recently experienced regret after a software purchase. Issues like hidden costs, slow implementation, and mismanaged expectations were the most commonly shared complaints among respondents. Nearly a quarter (24%) of regretful buyers canceled their contract, and a third (33%) replaced their software.

To set your account up for success from day one, invest in a well-designed onboarding program that guides customers seamlessly from purchase to value realization. Personalized training, dedicated support resources, and clear communication make all the difference. 

10. Build a culture of continuous improvement

The quest for sales efficiency is never "done." Foster a culture where improvement is an ongoing process rather than a one-time event. Encourage your team to constantly question the status quo and suggest ways to work smarter, not harder.

Set up regular review sessions to evaluate your processes, tools, and strategies. Review what's working well and what needs improvement. Be open to experimenting with new approaches, but always measure the results. 

11. Enhance lead qualification processes

Lead qualification is all about focusing your sales efforts where they matter most, as you figure out which potential customers are most likely to buy from you. Think of it as separating the serious buyers from the window shoppers. When you qualify leads effectively, your sales reps spend less time on dead-end prospects and more time closing deals with customers who are ready to buy. 

Efficient sales organizations use a clear, objective set of criteria for qualified leads, based on factors like budget, authority, need, and timeline (BANT), or a custom framework tailored to your business. 

At the rep-level, equip your team with targeted discovery questions designed to efficiently uncover crucial information. Consider implementing a lead scoring system that automatically ranks prospects based on their behavior and characteristics, enabling your sales reps to prioritize high-potential leads.

12. Foster a collaborative sales environment 

Sales doesn't have to be a solo sport. A collaborative sales environment is one where teamwork is rewarded just as much as individual competition. When sales, customer support, and account management teams work together, everyone benefits from the collective experience and insights of the group. When a rep faces a tough challenge, they have a whole team to brainstorm with. When someone discovers a great new tactic, everyone learns from it. This approach not only boosts individual performance but also strengthens your entire sales organization.

13. Develop a consistent follow-up strategy 

Maximize every opportunity in your pipeline to increase win rates and optimize customer acquisition costs. With a clearly defined follow-up strategy, you'll keep hard-won leads engaged and moving through your sales process. Automate routine tasks like scheduling and data entry to free up your sales team's time for higher-value activities. For tasks that require manual tasks, create a step-by-step plan outlining when and how to follow up, ensuring no lead slips through the cracks. 

Keep in mind that sales engagement software can do most of the heavy lifting here. Platforms like Outreach help you tailor your approach to each prospect's persona or title, industry, use case, stage in the buying journey, and more. Once you’ve secured a meeting, you can also use conversation intelligence software to draft personalized, actionable follow-up message in minutes. 

14. Leverage customer feedback

Your customers' voice is the most authentic guide to improving your sales process. Set up regular touchpoints to gather feedback, from quick post-call surveys to in-depth quarterly reviews. Pay attention to both the wins and the losses. Why did a customer choose you? Why did a prospect go with a competitor? Use these insights to fine-tune your pitch, handle objections preemptively, and identify gaps in your offering. From there, share key learnings across the team and use them to inform your coaching strategies too. 

15. Personalize at scale with account-based selling

We’re strong advocates for persona-based sales engagement. Account-based selling (ABS) has the highest ROI go-to-market strategy, driving close to a 75% increase in ACV on average, and over 150% in LTV. For every five accounts targeted, a new opportunity in a target account is created — that’s a 20% increase in opportunity rate.

This approach naturally lends itself to personalization and we all know that the more personalized you can get in your content the better the engagement — and more conversions. 

How Cisco’s team improved sales efficiency with Outreach

In the world of enterprise sales, efficiency is key. For tech giant Cisco, with a global sales force of over 1200 sellers, streamlining processes across diverse teams presented a significant challenge — especially when every team has its own processes and habits. As Head of Global Sales Effectiveness, Donna Sanborn’s goal was to drive global consistency across the team in order to track activity and performance in their sales engagement software. 

By integrating Outreach with tools like ZoomInfo, LinkedIn Sales Navigator, and Cisco's internal tools, sellers can now evaluate their entire territory, create plans, and immediately take action all within Outreach. And they're seeing results: When evaluating its success, Cisco saw 85% more activity coming from the reps using Outreach. 

Take the next step to greater sales efficiency

Sales has only gotten more competitive in 2024, but you don’t have to go it alone. If you’re searching for a better way to design, measure, and execute the workflows your team rely on every day, Outreach can help. Whether your goal is to generate more pipeline, harness actionable data for better coaching, or build a data-backed, achievable revenue plan — it's all within reach. 

Take a quick product tour to try out the platform for yourself. Or, for a more personalized consultation, request a demo.

Additional sales efficiency FAQs

What is the ideal level of sales efficiency?

The ideal sales efficiency ratio generally ranges between 1 and 3. This consensus indicates that for every dollar spent on sales and marketing, your team is generating between one to three dollars in revenue. A ratio within this range suggests your sales processes are effective and your resources are being well-utilized. A ratio above 3 is exceptional, signifying outstanding sales performance, while a ratio below 1 indicates there is room for improvement in your sales strategy.

How to improve sales efficiency?

Improving sales efficiency starts with implementing the strategies outlined above. These strategies provide a solid foundation for enhancing your sales processes, reducing inefficiencies, and boosting overall performance. Focus on streamlining workflows, leveraging data-driven insights to optimize decision-making, and continuously refining your sales techniques. Regularly assess your sales processes, invest in training, and utilize technology to automate and improve various aspects of your sales operations.

How do you build efficient sales teams?

Let’s break down how to build efficient sales teams into three steps:

1. Hiring the right talent: Look for individuals who possess the skills, experience, and mindset necessary for success in your sales environment. Prioritize candidates with a proven track record and the ability to adapt to your company's sales culture and goals.
2. Providing thorough training: Equip your team with comprehensive training programs that cover product knowledge, sales techniques, and the use of sales tools. Continuous education ensures that your team stays up-to-date with industry trends and best practices.
3. Establishing clear performance metrics: Define clear, measurable goals and performance metrics for tracking sales efficiency, including your team's progress. Regularly review these metrics to identify areas for improvement and to recognize and reward high performers.

These elements are crucial for developing a high-performing sales team that generates predictable revenue.