Businesses – Use Ratios To Gauge Your Sales Force’s Performance

Brian SingletonBlog, Old Site, Watch Your Wallet

It’s vital, these days, to make sure you’re getting the most out of on-premises sales staff. If goals are being met and revenue is where you want it to be, you may not need to use any measuring devices.

But if there is a problem, the following ratios, if applicable to your particular business, may help you pinpoint the problem, analyze it, and take action. The ratios can be applied to your entire business, to a division or department, or to one employee. Progress can be measured by comparing numbers from one month to the next.

Ratio 1: Total sales compensation ÷ gross sales = direct selling costs (%).

Ratio 2: Gross sales ÷ total hours worked by salespeople = sales dollars per hour.

Ratio 3: Number of sales ÷ number of full-time-equivalent sales people = number of sales per salesperson.

Ratio 4: Gross sales ÷ number of full-time-equivalent sales people = sales dollars per salesperson.

Ratio 5: Gross sales ÷ number of sales transactions = average sales dollars per transaction.

Tip: The numbers you get from these ratios might also be used to develop sales quotas or targets.

Tip: Companies hire us to help them get these measurements quickly and make them meaningful to their operations. Give us a call if you’re interested.