If you are following this three-part series, you know the B2B SaaS world loves their car analogies.
In part I, we talked about how to measure the effectiveness of your revenue engine by looking at deal metrics. So we can take this a step further as we are measuring the effectiveness of our GTM engine.
Sales is a critical part of the engine. Sales reps qualify prospects, move prospects through the pipeline, and close deals.
Hello, revenue in the door.
But do you know how effective your reps are? What do you look for before the check engine light comes on?
Revenue Operations is a critical part of developing a rep scorecard. Leaders can use this scorecard to understand how their team is performing, areas for improvement, and impact the ultimate goal: more revenue faster.
What is Included in a Sales Rep Scorecard?
- Win Rate
- Average Deal Size
- % Quota Attainment
- Forecast vs. Actual
- Stage-by-Stage Conversion Rates
- Number of Opportunities/Deals Created
- Activity Metrics: Meetings Booked, Calls Made, etc.
You can adjust or add different metrics depending on the structure of your business.
But these are the basics.
In general, you can create the actual scorecard in any tool - Google Sheets, Salesforce Reports, Excel Spreadsheet - but you will want to make sure what you are measuring your teams on them is captured.
Looking to jump-start your rep scorecards? Download this template we put together and fill in the blanks with your own numbers!
Now let's break down some of the numbers.
Win rate is an easy one; it tells you how good your reps are at closing deals.
How to Calculate Win Rate
Total number of deals won/qualified deals created = Win Rate
As you go over your team reviews, look for trends in your reps' win rate week-over-week and averages for the quarter and year.
Revenue Operations and leadership will be looking at aggregate win rates and, of course, the win rate across the team. But it's also important to understand individual rep win rates as well.
Average deal size is another straightforward calculation, but it can tell you a lot about a rep's performance.
An individual rep may have a high win rate, but their average deal size might tell a different story if it's low compared to the rest of the sales team.
A low average deal relative to the rest of the team could mean your rep is discounting too much or just closing small deals.
A solution to this is a strong Deal Desk process and framework.
Regardless of your company's stage or size, implementing a Deal Desk is a critical strategy to making your reps successful, optimizing revenue, and building a scalable process.
RevOps Deal Desk Platform was built to help operators build a scalable Deal Desk process and provide the technological infrastructure needed for keeping reps successful and within guardrails.
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Discounting has a place in the sales cycle and shouldn't be eliminated entirely. However, providing rules of engagement (ROE) around discounting deals can do a multitude of things.
Most importantly, if reps understand when and where to use discounts, this can impact the average deal size as the number of discounts goes down.
Establishing guardrails around discounting and approval rules in which discounts over a certain amount must be manually approved will help your reps be flexible while not over discounting and making bad deals for business.
A second solution is a strong enablement strategy to provide sales reps training material that is centralized and easily accessible.
The best part is that the deal approval process should go smoothly from here because you've already operationalized your deal desk.
Quota attainment tells you if reps are meeting the goals set for them. You can have reps with a high win rate, but they have a low average deal size and aren't on track to attain their quota.
How to Calculate Quota Attainment
Actual bookings/quota in a time period = Quota Attainment
Usually, quotas are reviewed as monthly and quarterly goals. The impact of missing quota is very real for reps because it's tied to their compensation.
This is another metric that a strong Deal Desk process can positively influence.
Clearly defined rules for discounting, contract redlines, streamlined approval, and automated communication allow your reps to close more deals faster.
It also increases the chance they'll hit their quota.
Activity metrics are somewhat of a controversial topic and, depending on the industry. You might not even be tracking them.
Typically activity metrics are for Inside Sales, Sales Development, and Business Development.
However, if you have a full cycle sales team, your Account Executives will generate a sales pipeline, and measuring their activity metrics is equally important.
Without the entire scorecard, activity metrics should never be looked at because looking at them in isolation can paint a misleading picture.
For example, Rep A could have five meetings in a week but have the second-highest win rate on the team and 96% of their revenue quota attainment.
Conversely, Rep B could have 20 meetings in a week and 20% of their revenue quota.
The number of meetings booked should be measured against either weekly or monthly goals. You can get as granular as you want on this. You can track qualification meetings, demo requests, secondary meetings, etc.
It's also important to identify meeting types and properly train your team on when to use them.
I've been part of organizations where sales leadership wanted to know how many meetings of each type were held and the conversion rate; we didn't have it set up, so we couldn't track it.
The number of calls, similar to meetings, should be measured against weekly or monthly calls goals. There's much discourse, especially in the B2B SaaS space and the Linkedin community, around the effectiveness of cold calls and measuring performance on them.
Cold calls can be quite effective outbound for your sales team, as long as you have the proper enablement in place.
An important thing to consider when measuring calls is to look at the connect ratio.
If Rep A makes 200 calls and only connects with five people, there is something worth diving into there.
It could be the rep, or it could be a data issue.
There are enrichment and data intelligence tools to get reps accurate contact information to increase the likelihood they even have the correct number in the first.
Can you imagine calling a number and Domino's answers?
Speed-to-lead is the last activity metric affecting the entire cycle that I like to include in rep activity metrics.
Speed-to-lead is how quickly a sales rep reaches out to a lead in the funnel.
We live in a magical time where many tools automate lead routing and the first touch of lead follow-up.
First, you will need to set up some SLAs for the sales team and communicate them.
Second, you will need to build a tracking mechanism to know when a sales rep touches the lead. There are many ways to do this, depending on what tool you are using.
It's critical to understand if SLAs are being met; if they aren't, then why not?
The faster the lead response time, the more likely the lead is to close.
If the scorecard feels a bit like having a report card all over again, it kind of is!
Instead of telling a teacher if their class is likely to go on to the next grade, the scorecard tells an organization if its revenue engine needs tinkering.
Using revenue metrics and activity metrics together can be helpful.
But one without the other doesn't tell the whole story. So don't worry too much when you see your team has only booked five meetings for the month.
Revenue Operations is instrumental in providing data, defining metrics, and building processes, as the cards are being built.
And when it comes to diagnosing, Revenue Operations can also provide solutions to keep the revenue engine in working order.