How to Calculate the ROI of Sales Activity Management Software

calculate ROI of sales activity management

Looking to measure ROI of sales activity management software? You’re in the right place.

The case for sales activity management is clear: It automates the process of tracking day-to-day sales activities, which enables proactive sales management.

The system even provides scorecards for sales reps to keep track of goals and update them in real time, which research shows significantly increases your likeliness of achieving them.
But determining the ROI of sales management software can get tricky.

Here’s a step-by-step guide on how to calculate it for a sales activity management system.

Measure Sales Activity Management ROI in 4 Steps

1. Calculate the Cost of Your Sales Team

Calculate your investment in your sales team. Let’s say you have 30 reps, and each has a salary of $100,000.

30 Sales Reps x $100,000 Annual Salary = $3,000,000

Your annual investment in the sales team is $3,000,000.

Then calculate the cost of your investment in CRM by annual spend. For the sake of this exercise, we’ll estimate each CRM license is $150 per user, per month.

30 Sales Reps x $150 License/Month = $4,500 License/Month

$4,500 License/Month x 12 Months = $54,000

Finally, determine your total spend on annual investments in the sales organization.

$54,000 Annual CRM Cost + $3,000,000 Annual Sales Team Cost = $3,054,000

In this example, the annual investment in the sales organization is just over $3 million.

2. Look at the Sales Activity Metrics

Look at the operating metrics you manage your sales team around. For our example, we’ll use calls, meetings, new opportunities, proposals sent and deals won.

What are the current activity levels for those metrics? If you have accurate data in your CRM, pull reports for each activity metric over the previous month.

  • Calls:  500
  • Meetings: 50
  • New Opportunities: 25
  • Proposals Sent: 10
  • Closed Won: 3

Calculate your sales conversion rates between each step of the process:

  • Calls to Meetings: (100 x 50) / 500 = 10%
  • Meetings to New Opportunities: (100 x 25) / 50 = 50%
  • New Opportunities to Proposal Sent: (100 x 10) / 25 = 40%
  • Proposal Sent to Closed Won: (100 x 3) / 10 = 30%

Finally, determine your average deal size. If you brought in $30,000 in revenue last month, your average deal size is $10,000.

3. Use the Sales Activity Management Method

Sales activity management systems drive visibility into which activities reps should focus on, as well as how much of each activity they need to achieve goals. This visibility improves decision-making for each salesperson. It also allows sales leaders to course-correct performance when pacing falls behind by rallying reps around lagging metrics.  

When evaluating sales activity management vendors, ask for use cases of companies similar to your own. Find out how much their system, on average, increases activity levels. Let’s look at what a 35 percent increase would do for our example activities:

  • Calls: (500 x .35) + 450 = 625
  • Meetings: (50 x .35) + 45 = 63
  • New Opportunities: (25 x .35) + 25 = 34
  • Proposals Sent: (10 x .35) + 10 = 14
  • Closed Won: (3 x .35) + 3 = 4

Sales activity management also helps increase conversion rates between steps of the sales process. The system enables visibility into which reps struggle with particular activities. As a result, sales leaders can then coach reps around those activities, resulting in better performance and increased conversion rates.

Let’s you used sales activity management to focus coaching efforts around one particular activity meetings and saw a 25 percent increase in the conversion rate from meetings to new opportunities.  

  • Calls: 625
  • Meetings: 625 x .1 = 63
  • New Opportunities: 63 (.5 + (.5 x .25)) = 39
  • Proposals Sent: 39 x .4 = 16
  • Closed Won: 16 x .30 = 5

With your average deal size of $10,000, you’d bring in $50,000 for the month. That’s $20,000 more than last month – an increase of 60 percent in monthly recurring revenue.  

Sales activity management increases the efficiency of your current sales team, but now you know exactly how to measure it.

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