Boosting your team’s sales efficiency starts with understanding how well they’re operating right now. To establish a baseline for your team’s current efficiency, you need to track the right metrics.
While you may already be monitoring your team’s performance, that doesn’t necessarily mean your current KPIs are centered around sales efficiency. Selecting the right metrics, and understanding what these KPIs tell you, can boost your team’s long-term efficiency and become the foundation of your sales strategy.
What Is Sales Efficiency?
Sales efficiency measures how much revenue your team generates compared to how much they spend to acquire sales. This metric offers insight into how well your team is performing, where you can improve your sales process, and what may be preventing you from hitting your goals.
Sales KPIs to Help Improve Sales Efficiency
Tracking the right metrics will generate valuable, actionable insights for your team that can be used to improve your sales process and scale efficiently. Using a combination of these top metrics, you can maximize your team’s productivity and optimize results through sales efficiency solutions like demo automation.
1. Sales Efficiency Ratio
To boost sales efficiency, you should first measure your team’s current performance. Using the sales efficiency ratio, you can compare your sales costs to revenue and find out whether your team is meeting expectations. If not, you can make changes to adjust accordingly.
To turn this number into a percentage, multiply the solution by 100. If your percentage is under 100%, that means your team is losing money. Your goal with this ratio is to be over 100% efficiency as this indicates a higher return on investment.
2. Sales Cycle Length
The length of time it takes to close a sale can be an indicator of your efficiency. The longer your sales cycle, the more resources you need to allocate toward a single customer. This increases your sales cost and may not improve your revenue.
Sales cycle lengths are generally getting longer due to an increase in stakeholders, according to the 2024 Sales Engineering Compensation & Workload Report. Enterprise deals may have even longer than average sales cycles, but the revenue per deal is often significantly higher and should balance out any accrued costs.
If you discover your average sales cycle is longer than your goal length, you may need to adjust your tactics to streamline this process.
3. Demos Per Close
Understanding how many demos it takes to close each deal will provide you with insight into how your resources are being used. The more demos each sale requires, the more time and effort is being spent per sale. Minimizing the number of in-person demos required to close can optimize your sales team’s efficiency and assist in resource allocation.
The solution to this formula will show you how much effort is required to close a sale on average. A high average number of demos will require more time and effort from your team, indicating a lower overall sales efficiency.
4. Customer Acquisition Cost
Customer acquisition cost (CAC) reveals how efficiently your sales team is securing leads on a buyer-by-buyer basis. This metric shows you how much your team must spend to acquire a single customer over a period of time.
If this number is too high, your team is not meeting efficiency goals and will have difficulty scaling sales. Streamlining your sales process will help lower CAC and improve your overall efficiency.
5. Customer Lifetime Value
The inverse of CAC, customer lifetime value (CLV) measures how much recurring revenue a single customer provides long-term. The higher this number is, the better your sales efficiency. To optimize this metric, your team needs to prioritize nurturing customer relationships and providing a quality customer experience.
Calculating CLV requires you to first find your customer value:
Using that information, you can then calculate your CLV:
Get a full picture of your efficiency through a single buyer lens by comparing CAC and CLV to see how much you’re paying per customer versus how much value they will offer over time.
Supercharge Your Sales Efficiency with Consensus
To optimize your sales efficiency and close more deals faster, it’s essential to leverage the right tools. Consensus’s Product Experience Platform empowers your sales team to reduce the number of demos required to close deals, shorten sales cycles, and ultimately increase your sales efficiency. Ready to take your sales performance to the next level?
Discover how Consensus can help you improve efficiency and drive better results.
