Sales Efficiency: Analysis, Measurement and Performance

Any trading business constantly needs to increase the growth and development of its structure. The level of sales performance significantly affects the core business and success of the company. We will learn how to correctly evaluate all the important criteria in work and build a successful business strategy from this article.

The concept

The very concept of “sales performance” is a determining 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, it means a lot of questions related to customer acquisition, sales methods, evaluation criteria, financial turnover and overall productivity. But in a concrete sense, we can designate this as an indicator of the company's competitive level in the market or of any specific strategy.

Rating

First of all, it is necessary to group expenses by sales channels, as well as collect all sales data. This will be needed to create an accounting system and analyze the relationship between the cost of the product and sales.

Distribution channels can be divided into several categories:

• Direct - employee salaries, insurance premiums, purchase or production.
• Additional - transport, telephone, Internet, travel, etc.
• Specific - premiums for sales, input money for the sale of goods, if necessary, etc.

The effectiveness of sales channels helps to determine the following indicators:

1. Gross margin - the difference between revenue from sales and the cost of the product, accounting for profitability and loss-making.
2. Margin profitability - the difference between sales revenue and variable costs, taking into account margin income to revenue through the sales channel.
3. Total profitability - net profit.
   

Social and personal indicators

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

• employee motivation;
• psychological resources;
• staff satisfaction level;
• relationships in the team;
• lack of staff turnover;
• corporate component (team spirit);
• competent 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 personal level of compliance with the developed business plan.

Main characteristics

Key sales performance indicators:

Analysis

To analyze sales performance and growth in the sales economy, several key factors need to be assessed:

• assessment of the performance of sales managers;
• number of employees in the sales department;
• focus on the target audience;
• number of buyers;
• the number of regular, potential and lost customers;
• targeted use of company funds;
• target distribution of all company resources;
• general economic indicators;
• highest income
• reasons for the failure of potential customers;
• level of communication between the manager and the buyer.

Other factors that have an impact on performance also play a special role:

• high motivation and desire of staff to work;
• company development and innovation;
• fruitfulness of work;
• comfortable working conditions for employees;
• organizational internal system;
• individual motives (material, social, collective, encouraging, 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 volume of work, it should be understood how well they cope with professional duties. To understand the performance, you need to consider the following criteria:

• Costs and time for finding new employees.
• The number and quality of implementations.
• Contractual conditions, convenient sales system for both parties.
• Data on the work of managers.
• Sales department structure.
• Additional motivation as a reward for a good level of work.
• Retraining of specialists, the possibility of development and career growth.

Sales

Productivity is shown by conversion. This is an indicator of the level of effectiveness, called the sales funnel, and specifically, the marketing model that represents the stages of product sales before the transaction is concluded.

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

1. Weak. When a manager sells by persuasion, empty promises, fraud, attempts to appease and flatter a client. At this level, sellers are not particularly fond of their activities, work for a salary without a personal interest in the process, may experience discomfort, depression and even in some cases humiliation.
2. Level of struggle. The seller by any means “forces” the potential customer to complete the transaction, convinces him of the need for this, and not always in positive ways, but rather by psychological pressure. Such a purchase usually happens without pleasure and the likelihood that the buyer will contact again is practically zero.
3. The game. At this level, specialists with extensive experience or specially trained professionals work. Here, the sale has a favorable character, built on a respectful and confidential contact with the client. The seller becomes a loyal customer assistant in the selection of a product and a reliable partner.
   

Increase efficiency

To change the situation in order to increase sales efficiency, many aspects are considered. To analyze current issues, you should pay attention to such important categories of activity as:

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

Sales effectiveness also depends on the established goals and development methods of the organization. In order to develop the necessary skills, form your own convenient sales system, as well as highlight the strengths and weaknesses that you need to work on to improve efficiency, you need to analyze the following aspects of work:

• Defining goals and priorities.
• Market requirements.
• Consumer interests.
• Service model, features of the provision of services and sales.
• Marketing plan.
• Analysis of information received from the customer.
• Product presentation.
• Product offer strategy for customers.
• Specificity of offers.
• The behavior of the manager and contact with the buyer.
• Unique offer that distinguishes the company from competitors.
• Negotiation.
• Design advertising materials.
• Work with objections.
• Customer support.
• The image and reputation of the company.
• Effective advertising.
• A wide range of distribution channels.
• Staff training, education.
• An individual approach to the buyer.
• Preparation and style of business documentation.
• Participation in contests and events.

A detailed study of all aspects will help achieve effective communication with customers, help compile statistics on sales, evaluate sales performance, create a customer base, prepare an assortment and promotional materials, find out how motivated employees are, minimize errors, attract new customers, increase professionalism.

Promotion 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 on the product in an affordable way, and establish strong contact with the buyer.

For sales efficiency, you can use different methods, given the problematic aspects of the company. To enhance the productive work of the activity necessary:

1. Regular training for employees, test for effective performance of tasks. Negotiating, working with objections, with the ability to establish trusting relationships with the client, familiarizing yourself with the rules of business communication is an important part of the work.
2. Work regulations. Drawing up standards, rules and working methods to be followed by staff.
3. Competent distribution of labor and motivation between employees.
4. Increasing the number of meetings with customers and transactions.
5. Testing different methods of product presentation.
6. Promotions.
   

Distribution channels

Distribution methods are an important component 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.

• Classical sales. In this case, the company has several retail outlets in which it supplies products. In this chain, it can mediate. Buy goods from the manufacturer and sell it yourself, entering into cooperation with individual outlets.
• Multichannel marketing. When the manufacturer company independently sells the 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, independent organization of promotions and events dedicated to a particular product can be attributed. It is possible to rent outlets in public places when the company introduces everyone to its products in free space.

Nowadays, it has become urgent to engage in the distribution of the assortment through online platforms and popular social networks.

The following types of trade are considered depending on the needs of the company:

• wholesale;
• small wholesale;
• retail.