Complete guide to sales productivity

What is sales productivity?

Sales productivity refers to how efficiently the sales team uses resources—like time, tools, and personnel—to generate revenue. Sometimes referred to as sales efficiency or sales effectiveness, it’s a measure of how much of a representative’s time is spent on activities that bring in more deals. 

You can’t eliminate 100% of inefficiencies in the sales process. However, there will always be areas where teams can improve and become better at detecting which leads and opportunities are worth pursuing.

Why is sales productivity important?

Measuring and tracking sales productivity allows a team to assess how much of their efforts drive tangible results for the business, and what portion of their time and resources is being bogged down by repetitive or routine tasks. In turn, they can pinpoint specific aspects of the sales process to optimize so they can grow the bottom line without a proportional increase in selling costs. 

The goal of optimizing sales productivity isn’t to scale down the number of representatives on your team and squeeze as many sales as possible out of each salesperson. Instead, it’s a strategic approach that encourages the team to maximize their finite resources for more favorable sales outcomes.

Benefits of improving sales productivity

At its core, better sales productivity gives organizations quantifiable outcomes like higher sales revenue and lower operating costs. But, it can also produce meaningful benefits for employee morale, work-life balance, and the customer experience, all of which we’ll explore in more detail below.

1. Accomplish more with the same team

One of the primary benefits of sales productivity is that you can deliver better sales results from your existing team. In other words, improving sales productivity helps a business scale sustainably without expanding headcount indefinitely to continue growing revenue. It’s a profitable way to grow sales while operating costs remain relatively stable. 

Even the most experienced sales representatives can improve productivity and find efficient ways to close more deals. So, no matter how small or tenured your sales team is, you should be able to drive better productivity and close more deals with your current resources. 

2. Employee satisfaction and work-life balance

Sales reps don’t need to spin their wheels or keep their calendars full of sales calls and client meetings just to appear “busy”. Again, the point of improving sales productivity isn’t to stretch the team thin and burn them out. Instead, it’s a way to help reps do more with less, freeing them up from tedious, time-consuming tasks and allowing them to focus on the selling activities that bring in more income. 

With better sales productivity, reps can focus on the most lucrative deals and activities that are worth their efforts, helping them close more deals while spending less time and resources overall. 

Not only is this beneficial for the business to profitably grow the bottom line, but it can also help sales representatives feel more satisfied with their work as they efficiently hit or exceed their quotas. This creates positive momentum for the team, helping sales reps become motivated as they earn higher commissions in less time.

3. Easier and more accurate sales forecasting

Even though seasonality and other macro factors create irregularities in sales performance throughout the year, efficient selling makes it easier for business leaders to forecast future revenue accurately. Teams that are dedicated to improving sales productivity monitor KPIs and metrics like conversion rates, average sales cycle length, average cost per lead, and more, providing business leaders with key data points and insights to base their forecasts on. 

A productive sales team has refined its methods and works like a well-oiled machine, producing more predictable results and formulas for success. In turn, leaders can set reasonable sales targets based on tangible team performance data.

4. Enhanced onboarding for the sales team

More efficient sales teams often have disjointed processes and better coordination between reps. These teams likely suffer from low sales performance and have a hard time getting current representatives motivated to close more deals. Throwing new reps into the mix only makes things more complicated. 

On the other hand, teams that work efficiently rely on proven processes and workflows that they know drive tangible sales results, making it easier to onboard new hires and quickly ramp up. Productive teams have fine-tuned their formula to success, so it’s much easier to plug new reps into the system. Plus, when newcomers see the productivity of current reps firsthand, they’re more likely to be motivated to start closing deals on their own.

5. Improved customer experience

Customers may not directly see the benefit of a productive sales process, but they can certainly feel the positive effects of a more productive sales team.

Rather than reaching out to customers merely to tick a box before rushing to the next task, productive salespeople can focus on fostering real relationships with leads and customers, building trust and loyalty. Over time, this supports better customer retention and a greater long-term value from each customer.

How to audit your sales productivity

Conducting a comprehensive audit of your sales productivity helps you identify opportunities to improve your team. Here’s a structured approach to effectively audit your sales productivity:

• Establish a clear framework: Outline KPIs such as sales volume, velocity, conversion rates, and customer acquisition cost. 

• Evaluate sales processes: Review each step of the sales funnel for bottlenecks. Aim to streamline processes for better efficiency.

• Assess sales productivity tools: Ensure the sales team's tools enhance productivity and are fully integrated, and incorporate sales training as needed. 

• Analyze team activities: Monitor time allocation and eliminate time-consuming tasks that do not directly contribute to sales.

• Collect feedback: Solicit insights from the sales team on processes, tools, and lead quality.

• Benchmark and set goals: Compare team performance against industry standards and set realistic goals with a targeted action plan.

How to measure sales productivity

You may have a general idea of whether your sales team is productive. But, without measuring and tracking specific sales performance metrics, you’ll have difficulty finding meaningful ways to help them improve and become more efficient. 

These sales metrics can provide an objective way to assess your sales team’s productivity and monitor their performance over time: 

• Average sales cycle length: Measures the amount of time between the initial interaction with a prospect until the deal is closed, helping to make more accurate sales forecasts.

• Sales per rep: Represents the total revenue generated by a sales rep during a given period, allowing you to evaluate the performance of individual salespeople

• Win rate: Shows how many deals are closed out of the total number of opportunities, helping you assess the effectiveness of your sales team

• No. of deals per hour worked: Tracks how many deals the team closes relative to the total number of hours spent on selling activities, assessing how effective the team is at bringing in revenue. 

Depending on your industry and the size of your business, certain metrics may be more or less relevant to measuring your sales productivity. For instance, there may be little overlap in the sales metrics that a retailer and a software company track to assess sales efficiency.

How to increase sales productivity

Improving sales productivity is not just a one-off project with a clear start and end. It’s an ongoing process that businesses must embrace to improve the bottom line and keep the sales team motivated. 

Fostering a culture of continuous improvement doesn’t happen overnight. However, you can implement the following strategies and tips to boost sales productivity.

1. Provide the sales team with proper training and resources

Set the sales team up for success by offering them adequate resources to succeed. Training and education shouldn’t end after a salesperson has completed their ramp-up. In today’s rapidly evolving landscape, sales teams that aren’t actively invested in continuous learning are at risk of becoming stagnant and obsolete, which can negatively impact their overall sales performance.

Determine the best training method for your specific industry and business needs. A simple, low-cost method is to set up weekly team meetings or email chains where reps can share their insights and new techniques they’ve found to be effective.

If you’re looking for something more hands-on, you might enroll the team in online training courses once a year where they can learn actionable insights for improving sales productivity. You may also find an industry conference you can attend as a team. 

2. Utilize the right sales tools and software

Sales software provides sales professionals the tools to effectively manage their sales activities and better prioritize which deals are worth pursuing. For instance, a CRM can improve sales productivity in many ways, helping teams visualize sales opportunities and target high-value leads. 

In addition to CRM, integrating social media platforms for social selling can provide a competitive edge regarding outreach. LinkedIn, for example, allows sales reps and your marketing teams to connect directly with potential leads, understand their needs through profile information, and engage in meaningful conversations.

Other helpful tools to add to your tech stack include workflow automation or sales intelligence software. When combined, these sales tools provide reps with a more complete view of their leads, the status of their deals, and other valuable features to drive conversions.

For optimal efficiency, look for software that integrates with your existing platforms. This makes it easier for sales reps to access the data and information they need to complete sales activities. If data is siloed between the various platforms you use, it could detract from their productivity rather than help them streamline their workflows. 

3. Use incentives

Incentives are always a powerful method to encourage and motivate sales reps. If salespeople know they will be directly rewarded for selling more efficiently, it could provide the boost they need to convert more deals or get out of a productivity slump.

Clearly outline the rewards or commission structure you’ll offer reps for hitting certain sales targets. Tie these incentives into your quarterly or annual sales forecasts to help align your salespeople’s day-to-day activities with the big-picture goal for your team. 

You can even offer rewards for other activities besides deal closings to encourage productivity throughout the entire sales process. For instance, you may have another incentive for reps who close a deal at a shorter sales cycle. Feel free to experiment with your incentive structure to find the right motivation and reward for your sales team.

4. Leverage AI and automation for sales

In today’s digital age, leveraging emerging technologies like artificial intelligence (AI), machine learning algorithms, and automation is a key way to help your sales team become more productive and streamline their workflows. 

These innovative technologies are much more efficient than humans at processing data and handling routine or repetitive tasks like scheduling meetings, sending follow-up emails, or entering data into deal-tracking software. 

When using these tools, salespeople can devote more time and energy to revenue-driving sales activities, with fewer resources spent on tedious and time-consuming administrative tasks. This means more availability to meet with leads and prospects to build relationships and close deals.

Project management tools vs. CRM for sales productivity

A CRM is likely a better option than a project management tool if you want to improve sales productivity. A customer relationship management (CRM) tool is a platform where you can store lead and customer contacts, automate workflows, monitor your sales pipeline, and track all customer interactions to help build strong relationships. 

On the other hand, a project management tool is a software program where you can organize and keep track of various tasks, projects, and deadlines.

Thus, a CRM can provide you with more in-depth information about your leads and customers and automate complex sales tasks for better efficiency. While a project management tool might help you monitor who is working on which tasks, a CRM provides critical insights about your leads and prospective deals that can help enhance sales productivity.

Enhance your sales productivity with Freshsales

Suppose you want to improve operational efficiency or cut costs. Boosting sales productivity might be the key to helping you enhance profitability without letting go of any of your sales reps.

Ultimately, sales productivity is what drives sustainable business growth, allowing your team to become more effective and bring in more deals, all while working less.