Sales ROIThe concept of being a metrics-driven sales organization sounds like a great idea because every executive wants to see more predictability in their sales process and know when and how they can scale their company. The board and investors don’t want subjective explanations about what’s happening in sales – they want data.

According to new data from Salesforce Research in their State of Sales Report, top-performing companies are using sales analytics and activity management at a higher rate as compared to their peers. High-performing companies are 3.5x more likely to use sales analytics than underperforming companies, and 75 percent of companies are either using or planning to use activity management sales technology in the next 12 to 18-months.

So all that sounds encouraging, and makes executives wonder if they’re missing out on something big that could unlock revenue quickly. The research says other people are doing it, but what’s the actual ROI? How does a company estimate an expected return, and how much they should budget for this sales technology?

At LevelEleven, we work with hundreds of sales leaders at companies like Pandora, HubSpot, Symantec and American Express. As they make investments in sales engagement technologies, we’ve found three common ways they’re justifying ROI, and finding budget:

Hire 1-to-2 Less Salespeople

When you are able to identify the key performance indicators (KPIs) you want your salespeople to be focused on day-to-day, and then use solutions like LevelEleven to keep performance front and center, it makes your existing sales team significantly more productive. Instead of expecting people to navigate around a sea of data in your CRM, you deliver personalized performance on their most important sales activities to each salesperson so they know exactly where they need to focus their time. This is also then delivered to the sales manager so they know where and how to coach their team in an objective way.

When you get everyone focused on what really matters, you instantly unlock productivity. Clients are seeing 15-35 percent increases in their key sales KPIs simply by identifying what’s most important and keeping it front and center. Here’s the math:

  • Let’s say you have 50 salespeople producing $500,000 in sales each year
  • Add in software that engages them around sales metrics, and those salespeople produce 15% more each
  • That’s the equivalent of adding 7.5 more salespeople to your team
  • If an average OTE for a salesperson is $100,000, that’s $7.5 million you don’t have to spend

So if you have existing budget to hire more salespeople, take a pause on one or two of them, and use those same dollars to invest in a sales performance platform to get your existing people more productive.

Audit Existing Sales Tech Spend

Over the last couple years, an amazing amount of sales technology has come onto the market. According to research from VentureBeat, over 300 sales technology companies were created in the last 25 years, and almost 50 percent of those were launched just in the last 5 years! Much of this technology can be easily purchased by the salesperson or a sales manager who can sign up for the technology online and with a credit card.

The issue is that there are small pockets of use at random places throughout a company, which means there isn’t a proper evaluation and rollout so that everyone in the company can benefit. Salespeople and sales managers are busy trying to hit their quotas, and can’t take the time to think about how to scale a small productivity improvement across the entire company. As a result, there’s an enormous amount of sales technology that’s already being paid for, but isn’t being used properly.

I heard the other day of a company, who isn’t very big, that over time had spent $500,000 on sales technology — most of which wasn’t even being used. The common theme of late is that companies are pulling out most of that software, and going through a “reset” to get back to the basics of properly managing a sales pipeline, focusing on the activities and behaviors that matter, and training frontline sales managers to be effective, metrics-driven coaches.

So the ROI point here is this: You’re probably already spending a lot of money on sales tech, and don’t even know it. Work with your finance team to run an audit. The budget may already be there.

Sell More

The two points above are some tips on how to find budget that already exists, and to reallocate it in a way to improve overall ROI. A third way to justify ROI is simply that you’re going to sell way more than you would otherwise. By identifying the primary metrics you want to focus your team on, you’ll make everyone dramatically more productive — your salespeople and your sales managers. Everyone will be rowing in the same direction and focused on what matters.

As referenced above, our clients typically see a 15-35 percent increase in productivity, which means the same group of people are able to produce a lot more. So let’s go back to the example above:

  • Let’s say you have 50 salespeople producing $500,000 in sales each year
  • Add in software that engages them around sales metrics, and those salespeople produce 15% more each
  • That’s an additional $75,000 per salesperson
  • Which is $3.75 million more sales per year

We’ve got some great case studies on how companies quickly unlocked huge amounts of value by simply getting people more focused on key selling activities or key company initiatives. Here are a few in particular:

Additional Benefits

So those are some hard ROI reasons, but there are several other benefits as well to keep in mind:

  • Make your frontline sales managers better – Typically frontline managers are former salespeople who are still learning how to be good leaders. By enabling them with helpful data, they can turn into metrics-driven coaches instead of just keeping track of what’s closing on a spreadsheet.
  • Create a culture of performance – By bringing key sales data front and center, everybody in the company can see what’s happening within the sales team, beyond just what’s closed. They can see how many meetings are happening, how many proposals are going out the door, how many new business appointments are being set or whatever the unique KPIs are within your sales organizations. Executives, in particular, love this.
  • Get more out of your CRM investment – Companies spend huge amounts of money on their CRM systems, software that connects into it, consulting firms that support it and sales operations staff to manage it. By helping salespeople and sales managers get more out of that CRM investment, you’re further leveraging money you’re already spending.

Your salespeople are making decisions right now on how to spend their time, but when they’re not engaged in the behaviors and metrics that matter to guide those decisions, revenue is slipping through the cracks.

Are you ready to build a world-class sales team? Hubspot told us how they did it. Get a copy of our latest case study to learn more:




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Summary
What’s the ROI for Engaging Salespeople in Sales Metrics?
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What’s the ROI for Engaging Salespeople in Sales Metrics?
Description
The research says other people are doing it, but what’s the actual ROI for investing in technologies that amplify your sales metrics?
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LevelEleven
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