Sales performance 101: The new manager's guide

Sales performance is a key barometer for the health of any company. It reflects an organization’s ability to anticipate and meet market demands while building a sales team that’s equipped to engage customers and drive revenue growth. Developing a competitive sales process is more complex than ever before, but with the right sales performance management platform, it’s within reach for every organization. By tracking and analyzing sales performance benchmarks, your company can better tailor its sales strategies to meet customers’ needs and work with its reps to achieve new levels of success.

If you’re interested in boosting sales performance at your business, you’re in the right place. Let’s dive into what quality sales performance looks like, the many ways it can impact your organization, and a few key metrics and strategies you can start using today.

How to measure sales performance

While sales key performance indicators (KPIs) vary across industries and even within them, certain metrics provide valuable insights into the health of almost any sales operation. Here are several metrics that serve as important sales performance benchmarks.

1. Conversion rate

Your organization’s conversion rate represents the percentage of qualified leads that ultimately become paying customers. It’s one of the simplest ways to evaluate the efficiency of your sales funnel at a glance. Average conversion rates will vary significantly by industry and the type of customer your organization is targeting. Benchmarking against your organization’s current or previous peak conversion rate is likely to yield more meaningful results than relying on alleged industry averages.

2. Average sales cycle length

Average sales cycle length measures the speed at which deals move through your company’s sales pipeline. It encompasses the time taken from initial contact to closing a deal. Optimizing this metric leads to faster revenue generation and gives your sales team more time to pursue new leads. Your organization’s sales cycle length will tend to increase with the complexity of the deals your company prioritizes, from self-service and mid-market sales to enterprise-level deals.

3. Customer acquisition cost

Customer acquisition cost (CAC) quantifies the expenses associated with acquiring a new client. Keeping your company’s CAC as low as possible helps maintain a healthy balance between sales and marketing expenses and the value derived from each new customer. Customer acquisition costs can range from several dozen dollars for e-commerce businesses to hundreds or even thousands of dollars for SaaS and B2B companies.

4. Average deal size

Average deal size measures the mean value across all closed deals, providing insights into the revenue potential of each sales opportunity. Together with your organization’s average number of deals per month or per year, it helps with sales forecasting and lets your organization better evaluate whether it needs to pursue more high value prospects. According to 2022 Hubspot survey, around a third of organizations saw average deal sizes of under $500, another third had average deals of between $500 and $10,000, and the remainder closed deals of over $10,000 on average or didn’t track average deal size.

5. Churn rate

Churn rate measures the proportion of existing customers who fail to renew. Reducing the churn rate is a key part of improving sales performance, as even a small increase can result in significant additional revenue. Research indicates that churn rates average from approximately 5% to 10%, depending on the industry.

6 strategies for improving sales performance

Improving sales performance improvement is a long-term process that involves holistically evaluating your organization's entire sales process and then implementing strategies tailored to the unique challenges your company faces. Let’s take a look at six sales performance strategies that can help improve results in almost any industry.

1. Communicate sales goals clearly and get buy-in

Every company should strive to transparently communicate expectations and goals to their sales team. Clear communication fosters alignment and a shared understanding of organizational objectives. To ensure sales representatives buy into your company’s sales goals, involve them in the sales planning process and collaboratively define targets everyone believes are meaningful and achievable. This gives reps a sense of ownership and motivates them to succeed, boosting sales performance.

Sales leaders should continue to communicate these goals and touch base on how representatives are progressing towards them in regular team meetings, one-on-one sessions, and asynchronous check-ins. Develop a culture where open, honest dialogue is welcome, so reps feel comfortable expressing concerns and suggesting adjustments to your sales strategy that can further boost performance. Adopting a sales performance management platform with reporting and communication features is a great way to keep feedback channels open and ensure everyone is on the same page regarding where performance stands.

2. Create a sales pipeline structured for your sales team and target audience

A sales pipeline gives structure to the sales process, organizing it into stages that reflect your sales team's workflow and are tailored to meet the needs of your target audience. It provides a roadmap that helps sales reps navigate deals from initiation to closure. Building a pipeline starts with a thorough analysis of how buyers advance through your organization’s sales process and their own customer journey. Then it’s time to collaborate with stakeholders to define the stages of the pipeline, set criteria for progression from one stage to another, and cover key actions sales reps should take at each step. Leveraging a sales solution that includes features for visualizing and tracking progress across all stages of your company’s pipeline is a great way to see where prospects fall off and address those areas to improve performance.

3. Align sales and marketing efforts with sales enablement

Sales enablement synergizes sales and marketing efforts, providing sales reps with the content and messaging they need to connect with prospects while giving marketing professionals insights into what your organization’s target audience really wants. Marketing teams should communicate frequently with sales personnel on the types of content prospects are looking for and how to adjust the organization's messaging to attract more high quality leads. Establishing cross-departmental meetings between sales and marketing are another great way to keep these teams aligned. Finally, your company should also ensure its sales enablement platform can act as a centralized knowledge base and collaboration hub for both departments.

4. Coach your sales team

Leaders play a critical role in boosting your sales team’s performance by offering guidance as reps work to overcome challenges. They should adopt a coaching approach to management, striving to help sales personnel succeed and overcome challenges rather than trying to fruitlessly micromanage them. By supporting team members rather than undermining them, coaching gives team members the confidence they need to explore innovative solutions and actively engage with constructive feedback on areas for improvement.

5. Create an exceptional sales onboarding process

A sales onboarding process equips new hires with the necessary knowledge, skills, and tools to become productive quickly.  It accelerates the integration of new rep into the sales team, aligning them with organizational goals and processes. Your company should establish a structured onboarding program that covers product knowledge, sales techniques, and company values. It should also establish a mentoring program to provide ongoing support to new hires, helping them seamlessly transition into their roles.

6. Leverage the power of a sales performance management solution

With a sales performance management platform, you can analyze real time data on the performance of your sales team and take concrete steps to improve it. These solutions help with everything from tracking key metrics, to setting performance goals, to unearthing actionable performance-related insights. They automate data collection and empower organizations to make informed decisions regarding their sales strategies. Look for a solution that incorporates features touching on every aspect of sales performance, from rep coaching and mutual action plans, to sales engagement and forecasting, to deal management and AI-powered data analysis.

Take the next step: Improve your team's sales performance

Sales teams need a platform that allows them to build, measure, and improve the workflows they rely on every day. Outreach is a comprehensive sales performance management solution. Whether you're a sales manager looking for actionable recommendations to help your team close more deals or a new hire looking for a seamless onboarding experience, Outreach provides the capabilities needed to elevate sales performance. From automating repetitive sales tasks to consistently delivering actionable insights to your sales leaders, Outreach empowers your sales team to perform at their highest potential. See how Outreach can help your sales team drive more revenue by requesting a free workflow audit.

Sales performance FAQ

What is sales performance?

Sales performance is the evaluation of how well a sales team meets organizational objectives. The best methods for assessing sales performance vary from company to company due to different goals and industry-specific dynamics. However, metrics like customer acquisition cost, sales velocity, and average deal size are common ways to measure the efficacy of sales efforts. 

By identifying, tracking, and analyzing the most important sales metrics for your organization, you can better leverage areas of strength and start prioritizing aspects of your sales process that are holding performance back. Whatever metrics you adopt, ensure that you have a sales platform with a dashboard that tracks them in real time, giving you a comprehensive view of where your organization's sales performance stands.

Organizations should recognize that factors beyond the control of sales professionals influence their performance. Everything from the quality of your organization's products and services to the effectiveness of its marketing campaigns can significantly impact sales outcomes. Companies should account for and address these external factors in their sales performance strategy by implementing practices like sales enablement that empower sales personnel to effectively navigate these potential roadblocks.

Why does improving sales performance matter?

A high-performing sales team can have a transformational effect on your organization’s present and its future. Achieving and maintaining high sales performance levels translates into increased job satisfaction and engagement for sales professionals. Frequent sales keep your workforce motivated and help generate a culture of positivity, contributing to further success. Recognizing the contributions of high-performing sales personnel is a great way to turn them into strong advocates for your organization during their term of employment and afterwards, boosting your company’s employer brand and attracting top talent.

Sales performance directly contributes to revenue generation and your organization’s financial health. A high-performing sales team can significantly boost your company's bottom line by consistently meeting or exceeding sales targets. These additional financial resources let your business make strategic investments that it might otherwise have to pass up. A reputation for success in sales enhances your company’s image and builds trust among customers and internal stakeholders.

A high-performing sales team is also a valuable source of insights into market trends and customer pain points. Marketing teams can use this information to create targeted campaigns and optimize messaging to better resonate with your organization’s customer base. Product teams benefit from a deeper understanding of customer needs and preferences as well by aligning product development to meet market demands.

How often should sales data be reviewed to optimize performance?

Reviewing sales data should be an ongoing process, with periodic check-ins at least weekly or bi-weekly. This allows sales managers to stay updated on team performance and intervene promptly to address challenges. For strategic planning, a more thorough analysis should be conducted monthly or quarterly to identify trends, adjust strategies, and set new goals based on data insights.