Sales efficiency

Many companies are losing momentum after an impressive start. The dynamics of customer acquisition is lower than it used to be, the team is demotivated, and finally the sales efficiency drops. What can you do then? 

What influences sales efficiency? 

Efficiency is the result of the actions taken. Sales efficiency So it means if your efforts like communication strategy if branding translate into company profits. Many concepts in the field of marketing or management seem vague and little related to the realities of running a company. It's different here. Sales efficiency refers directly to what is most important to you: profit. 

The effectiveness of sales is influenced, among others, by: 

• process efficiency (customer acquisition, data processing, payments, transport, etc.), tools you use, as well as the efficiency and experience of your team, 
• customer's satisfaction (CSI indicator), 
• customer's shopping path, 

It is also influenced by the quantity and quality of your marketing messages, and therefore by how much you spend on sales support. However, as you will learn from the next paragraph, higher expenses alone without improvement in the area of processes do not always mean higher profits and improved efficiency. 

How to measure sales effectiveness? 

The declining sales performance is clearly visible in your revenue statements. However, it is also worth using models that will help you take a distance and assess sales effectiveness in the long run. One of the models allows you to assess how much profit is earned by each zloty you invest in sales and marketing. 

Sales efficiency

To know the result, you just need to: 

• to get to know value new the transaction performed within a specific period of time (e.g. all profit from new customers in 2020); 
• summarize all expenses incurred in sales and marketing at the same time; 
• to divide first number through second (transaction value: expenses) 

If, for example, you invested 10,000 in marketing PLN, and you gained 15 thousand. PLN, the sales efficiency ratio is 1.5. Is it a lot or a little? It is assumed that the range of 1-1.5 is optimal. This means that, aside from your old sources of income, your marketing efforts are paying off in the form of a certain amount of new customers. It is assumed that values of 0.5 - 1 give hope for the future: if the company is just developing, it is good that it generates at least such profits from new customers. A sales effectiveness ratio of less than 0.5 makes it clear that you are spending more than you are earning. If, for example, for marketing and customer acquisition you spent PLN 20,000 in a year, but you managed to gain only PLN 5,000 in new sales, the indicator is 0.4 and you are on a downward slope. These patterns look complicated, but they actually let you see in black and white whether you're spending your money right. 

NOTE: The formula above applies to most, but not all, situations. For example, if your income consists of 1-2 large contracts that you service each time for several years, such an analysis will not bring reliable results.

How to improve sales efficiency? 

Before you implement another expensive marketing campaign, think about whether this is the only way to improve sales efficiency. According to our experience, it is worth focusing on: 

• marketing audit – check first what works and what doesn't. 
• Process improvement - processes have been with you since the dawn of the company's history. There is no time to look at them in the daily rush. The prospect of "dropping everything" to deal with systems you haven't improved in years is daunting. Feel into the situation of the client and think if he is not discouraged by errors on the website, payment or communication bottlenecks, shortages in stock? 
• Improving Tool Efficiency - This could mean buying new or upgrading old tools. Here, it is especially worth looking at the competition that can use more efficient and easier-to-use methods. 
• Improving staff efficiency - whether in a hairdressing salon or in an international corporation - untrained staff stagnates and customers leave, discouraged by the lack of commitment. 
• Improving the customer journey - did you know that you can find out at which stage your customers most often abandon their online shopping carts? If you look at the problems at each stage of the sales funnel, you will soon improve the individual elements and thus - the experience of your customers. Their satisfaction will increase. You increase the chance that they will complete the purchase and then come back to you.

Tools that can come in handy 

The tools to improve sales efficiency include those that are used to analyze the current situation and gather ideas, as well as specific applications and programs that will help you improve individual processes.  

Analytical tools helpful in increasing sales efficiency: 

• SWOT analysis, 
• CSI index, 
• Porter's five forces analysis, 
• functional benchmarking,
• Kotler's competition analysis,
• churn analysis.

The categories of specific programs and tools include: 

• CRM systems - facilitate the creation of customer databases and maintaining relationships; 
• professional mailing - it allows collecting e-mail addresses in an organized manner and sending a professional newsletter; 
• tools for creating up-sell offers - "recommended products", "other customers also bought ...", creating sets - it is worth introducing them to the store, if you do not use them yet. 
• Automation programs, chatbots - facilitate contact without having to reply to each message; 
• programs for automating the shipping process - tracking packages, printing labels - all this minimizes the risk of losing the parcel and improves customer satisfaction; 
• data acquisition tools - e-mail addresses and contact details of people who visit your website or take part in a specific event - are worth their weight in gold. You don't have to get each one individually. 

Sales efficiency - examples

Such examples can be multiplied, because also new payment plugs or electronic systems for signing documents can translate into increased sales efficiency. First identify which ones are the main ones pain points of your clients. It may turn out to be small things such as no email contact with your company or the need to print documents. You will eliminate the so-called road blockiand customers will start to convince you. 

You can also use minor tricks like a large Call to Action button on the sales page, the right text structure, the right selection of photos, improved pricing policy ... Each of them ultimately adds up to a greater sales effectiveness. We will be happy to help you plan your efficiency improvement strategy.