If you want your company to be successful, you need to optimize your sales and lead generation processes. The only way to make a sales strategy better is to understand it better, in terms of how it performs and how it could perform with hypothetical changes, and everything starts with measurement.
Why It’s Important to Measure Sales Performance
It’s not enough to blindly rely on your salespeople to maximize your sales flow; they may put together good proposals, and they might see a decent number of closed deals, but only by directly and objectively measuring their performance will you be able to accomplish the following:
First, you’ll be able to calculate your sales strategy ROI objectively (at least somewhat). When you know exactly how many of your proposals closed, and how much new revenue they bought, you can compare that increase in revenue to how much you’re spending on your sales reps and other sales strategies currently. With that knowledge, you can identify whether your strategies are bringing in more money than they’re costing you—and if they aren’t, you can find out why.
You’ll also be able to evaluate individual sales reps’ performances against one another, and in comparison to your broader goals. For example, if one rep seems to have a lower close rate than the other members of your team, you can take a closer look and find out what they’re doing differently, as well as how you might correct it. The reverse is also true—you can find your top performers and learn to replicate their success.
Determining points of weakness.
Measuring your process, from start to finish, can also help you identify the weak points of your campaign. For example, are you submitting proposals left and right, but suffering from abysmal closing rates? Are you able to secure deals with one type of client relatively easily while almost never closing proposals with a different type? You can use this information to isolate these weaknesses, and work on improving them or compensating for them.
Basic Indicators of Sales Performance for Proposals
There are two basic indicators of sales performance when it comes to proposals:
This refers to the number or significance of proposals submitted, and correcting the problems here are relatively easy. If you find you aren’t submitting as many proposals as you’d like, you can take efforts to secure more proposal opportunities, either by giving your sales reps more resources to find those opportunities or broadening your reach in some way.
Your close rate refers to the number of proposals you’ve submitted that have actually closed as formal sales. The higher your close rate, the better your performance, though this is co-dependent on your submission rate as well. Ideally, you’d have both a high submission rate and a high close rate, but close rates are affected by far more variables than submission rates, and are less controllable. Still, deviations in close rates, such as one individual performing better than another, can clue you in to major sections of your sales strategy that may need an overhaul.
The best way to measure your sales proposal performance is by use of a singular, mutually accessible system, such as CPQ software. With the right software, such as iQuoteXpress, you can include all your sales reps in one platform, using the same formatting and submission procedures to minimize variables and giving you transparent access to data at every step of the project.
Unfortunately, there are a number of variables that can interfere with the otherwise straightforward process of monitoring sales performance. You can’t simply look at a close rate and tell everything there is to know about your sales process (or know what to improve). You’ll also have to take the following into account:
The size of the deal.
Each proposal is going to carry a different weight in terms of its dollar-value significance. On a straightforward level, some proposals bring you more money than others. Digging deeper, some proposals will bring you indirect values, such as new relationships or an open door to future opportunities. When you’re evaluating close rates and looking at individual performance, bear in mind the significance of each deal.
The pricing of the proposal.
In addition to the overall price, it’s likely that each proposal will carry a different degree of profitability. Again, there are straightforward and deeper layers of significance here. For example, you might have a higher profit margin on your quoted work on some proposals. You may also have spent more time building a relationship before submitting key proposals.
Initial chances of success.
Some deals will grant you higher probabilities of success from the outset, before your salespeople ever even enter the game. For example, if a potential client already has an established relationship with one of your competitors, you can’t exactly blame your sales rep for not closing the deal.
Other sales strategies.
Finally, you have to realize that proposal submission is not an isolated process. You’re likely making sales through other means, and even if you aren’t, you’re at least engaging in an ongoing branding and marketing program that can seriously affect your overall chances of success.
The Bottom Line
Evaluating sales performance based on the submission and close rates of proposals isn’t purely objective, but it is one of the best tools you have to improve your revenue and mitigate potential weaknesses in your sales strategy.
If you’re in need of a better tool to manage, monitor, and evaluate your sales proposals, consider signing up for a free trial of iQuoteXpress’s CPQ software. With it, you’ll be able to keep your salespeople using consistent formatting, and track all your proposals, from start to finish.