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Use Metrics to Maximize Results From Your Sales Team Tracking key variables can focus, motivate and educate your staff, netting greater profits.

By Dave Lavinsky

entrepreneur daily

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As a business owner, you want to get the absolute most out of your salespeople. You'd like them to contact the maximum amount of leads as possible, issue the most proposals they can and close as many high-ticket sales as feasible..

To achieve this goal, there's one thing you absolutely must do: track their results. For instance, how can you ensure your sales staff is contacting the most leads possible, if you're not tracking this variable?

Related: The 10 Laws of Sales Success

Below are the five most important metrics to track in most sales organizations:

1. Sales by salesperson. Sure, the fact that you must track each salesperson's sales is pretty obvious, and most organizations do this. How open are you about these results, however? Having a dashboard or whiteboard showing each salesperson's sales generally motivates the entire team to perform better.

2. Profit per lead. There is a cost to every lead your organization produces, regardless of whether it comes from a referral, radio advertisement or your website. As a result, salespeople who generate the most profit per lead -- with profit defined as sales price minus cost of goods sold -- add the most to the company's bottom line.

3. Average close time. Let's say you have two salespeople. Both close 25 percent of the leads they get. But one's average close time is two months while the other's is four months. Which do you prefer? Clearly, you should prefer the former and so you should track this key metric.

4. Proposals issued. Tracking the number of proposals issued by each salesperson is important since it is a "leading indicator." For instance, if the amount of proposals issued this week is low, and the average prospect says yes or no two weeks after a proposal is prepared, then the number of sales two weeks from now will probably be very low. As a result, it's important to spot these metrics right away so you can correct them.

5. Proposal close ratios. One caveat to note with the last key metric -- proposals issued -- is that employees generally give you the performance you track or reward. As a result, tracking this metric will result in more proposals issued, which doesn't necessarily mean more sales. That's why you need to track the proposal-close ratios to make sure you win as many proposals as possible.

Related: Want to Hire Killer Salespeople? Follow These Steps.

Tracking and managing the members of your sales team by the numbers focuses them on the right goal: generating more sales. Knowing the numbers can also help you as the manager as you try to improve their performance. For instance, when a salesperson's number of proposals dips, you can sit down with that employee and try to motivate him or her to issue more.

Likewise, what you find out when tracking these metrics can and should be used for education and training. If Jane has an amazing proposal-close ratio and Rick's is poor, have Jane work with him to teach him and improve his performance.

One tool that many organizations use to track these metrics is a sales dashboard offered by companies like Guiding Metrics. The dashboards automatically connect to customer-relationship management systems like Salesforce.com and access and present the metrics you need in real time.

Related: Is Your Staff Sabotaging Your Pricing Strategy?

Dave Lavinsky

Author and Co-founder of Growthink and Guiding Metrics

Dave Lavinsky is the co-founder of Growthink, a Los Angeles-based consulting firm that helps entrepreneurs identify and pursue new opportunities, develop business plans, raise capital and build growth strategies. He is also the founder of Guiding Metrics, a company that tracks KPIs to help businesses grow faster and more profitably, and the author of Start at The End (Wiley, 2012).

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