Inside sales is "In" and "outside sales is "Out." Inside sales teams are experiencing explosive growth. According to InsideSales.com, inside sales is growing at a whopping 300 percent faster than field sales. The ability of inside sales teams to generate revenue more quickly and cost effectively is rapidly making inside sales the best candidate for the job. Consider these statistics:
- An outside sales call costs $308, an inside sales call costs $50 (PointClear)
- 46% of high-growth tech companies are growing via inside sales versus 21% using outside sales (Harvard Business Review)
- 37% of high-growth companies use inside sales as primary sales strategy versus 27% for field sales, 23% for internet sales, 8% for channel sales (Pacific Crest)
- 78% of decision makers polled have taken an appointment or attended an event that came from an email or cold call (DiscoverOrg)
With inside sales teams taking the lead, it's important to establish the right key performance indicators (KPIs) to measure success. Measuring key performance indicators is critical for sales performance management and building a predictable, repeatable revenue generation process. If you don’t have clear KPIs set in place, you may know that your reps are falling short of their targets, but you won't know why.
To help you improve the performance of your sales reps, here are 7 key performance indicators that you should be watching:
Undeniably this is the ultimate sales metric for most organizations, but be careful not to fall into the trap of becoming so focused on reaching your quotas that you lose sight of all other KPI's that have the potential to further improve sales performance and grow revenue.
2. Average Sale Price
You could increase revenue if each sales rep closed more deals each month. But, as a savvy sales manager you know that increasing the Average Sale Price (ASP) is another means to ensure your reps are maximizing their time and getting the most out of each call. The average sale price (ASP) is an important measure to indicate if reps are up-selling/cross-selling. A classic example: It's said that McDonald's doubled its profits when it started asking, "Would you like fries with that"? And then doubled profits again when it asked, "Would you like to supersize that?"
3. Lead Response Rate
A report from Harvard Business Review states that sales reps who contact a lead within an hour of receiving queries are 7 times more likely to have a meaningful conversation with a decision maker. According to the study, only 37% of companies surveyed responded to their lead within an hour. When measuring your lead response rate take a look at the percentage of your leads your sales reps contact within one hour. If this percentage is high, your team is most likely doing a good job of moving prospects to the next stage because of better quality conversations.
4. Rate of Contact
A study from AG Salesworks & BridgeGroup estimates that reps should be generating roughly 32 opportunities per 1,000 outbound calls. Sales reps should be able to provide the right information at the right time to move the sale forward. Look to technology solutions, such as performance support, that quickly identify sales opportunities by analyzing the customer profile and eligibility for sales campaigns while the call takes place.
5. Number of Times Reps Follow-up
A National Sales Executive Association survey found that 48% of the reps never follow up with a lead a second time. This is noteworthy as 10% of sales are closed after the fourth interaction and 80% of sales are closed between 5 and 12 interactions. To ensure you and your inside sales team are getting the most out of your leads, measure the number of times your sales reps are following up with prospects.
6. Average Call Duration
By examining the average length of time that each rep is spending on sales calls, managers can compare under-performing sales reps’ average call times with those who are hitting their targets. This can help gauge whether stragglers are either not spending enough time or spending too much time on calls.
See how Time Warner Cable improved their Inside Sales KPI with Performance Support in this presentation.
7. Usage Rate of Marketing Collateral
Sharing the right content can provide tremendous value for both sales reps and prospects. However, when information and content is buried in hard to find locations or can't be accessed quickly, it can be very difficult for a sales person – often with a customer on the phone – to respond in a timely fashion. In a recent study by Deloitte University Press, a startling 72% of respondents said that they can't find the information they need within their company’s information systems. Increase the usage rate of marketing materials by providing your sales reps with sales enablement tools that offer valuable buyer insights, just-in-time processes, and a frustration-free experience.
Keeping a close eye on your inside sales teams' key performance indicators enables managers to identify whether your company is on course to hit goals. Which KPIs are you tracking?
Looking for additional guidelines to improve your organization's sales performance and empower your salespeople for success? Claim your free copy of our newest eBook: An Insiders Guide to Top Sales Tools.