Measuring Sales Performance
Consider your business. Do you have these numbers?
Tip 4 of 7 – Contract size in comparison with company averages.
Knowing the average contract size of your individual salespeople as well as the average contract size of your company overall is important for several reasons. First of all, if you have one person who is making relatively low contract sales when compared to others, what is it he/she is doing differently. Are they leaving money on the table? Chances are they are if the others are bringing in larger contracts for the same services or products. Are they timid in asking for more? Can this person be emboldened to ask for more?
How about upselling? This is a legitimate service to the customer. Let’s just say you’re selling shingle roofs. There is a big difference in shingle prices, depending on which one you’re using. It costs just as much to install a quality shingle as it does a lower quality shingle, so why not sell the customer on the benefits of the better shingle and longer lasting roof? There have to be benefits to justify the cost difference, so upsell to the customer’s advantage.
Secondly, it is good to have checks and balances in your pricing. You don’t want your people to sell too high, gouge the customer. I’m not against getting high prices for your service; in fact, I’m for getting as much as you can get, as long as it is ethical, honest and serves the customer well. Otherwise you will start to run into uncomfortable situations where where someone sold something to one person and the next sold to the neighbor at a much different price. Your prices should be pretty similar for the same service.
You also should know the average contract size for both your budgeting purposes and for when you are setting up sales and marketing expectations. If you are buying marketing and expect to get a certain number of leads, you’ll need to plan for how many leads you’ll need for your sales people to close at their average closing ratio and average contract size. When you are creating your budget you will need to know approximately how many dollars in marketing it will take to get the sales at the average contract size and close rate.
This and more… Bottom line, start tracking your average contract size, and you’ll find how it helps you in a multitude of ways.
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Measuring Sales Performance Tip 1: Individual Salesperson Closing Ratio and Volume Per Advertising Source
Measuring Sales Performance Tip 2: Closing Ratio Overall in Comparison to Industry Averages, Company Standards, Goals.
Measuring Sales Performance Tip 3: Cost of Leads Sold per Individual Salesperson
Measuring Sales Performance Tip 4: Contract Size in Comparison with Company Averages.
Measuring Sales Performance Tip 5: Gross Profits on Dollars Sold Including the Cost of the Lead.
Measuring Sales Performance Tip 6: Numbers and Volume of Sales for Self-Generated, Previous Customers, or Referral Business (Unpaid Advertising).
Measuring Sales Performance Tip 7: Individual Salesperson Strengths/Weaknesses in Company Product Line