Choice, Partner, Rekener, Sales Development, Sales Management 0 Comment
Why You Should Be Scoring Sales Reps
Sales managers need a way to rank their Sales Development Reps (SDRs) on performance. Having a scoring system in place for SDRs and other sales reps gives clarity to both managers and reps on how they should be prioritizing their time and how they stack up against their colleagues.
On average, we’ve found companies are tracking 7+ KPIs for their SDRs. These metrics may include
- Connect rate
- Demos set
- Demos completed
- Opportunities generated
- Cadences run
- Pipeline Created
and many more. While each of these metrics is useful for understanding a particular piece of a rep’s overall role, it can be overwhelming to try to understand who is performing the way you want, when you’re assessing reps on 7+ KPIs.
If there is no single metric to track how a rep is doing overall, sales managers end up having a difficult time figuring out where to spend their time coaching. They also have a difficult time top-grading the team, since they don’t have a clear picture of who just isn’t cutting it.
The best way for sales leaders to evaluate reps is by boiling all 7+ KPIs down to one score. That way, a manager can stack rank the team by score, and know exactly who is at the top, who is at the bottom, and what the range and variance between reps is.
How to Create Your Scoring System
The best way to create your system for scoring reps is to look at your historical conversion rates, and work your way down from the top-level metric you are trying to have your BDRs / SDRs drive.
The place to start, since we’re talking about sales reps, is… you guessed it – sales! You want to start with a revenue number.
Let’s say your goal is to have an SDR responsible for generating enough quality to drive $50,000 worth of sales per month. You need to think about your ASP that comes from the SDR channel, and divide that $50k by your ASP to get the number of deals that translates into. If your ASP is $10k, then it’s 5 deals.
So now we know an SDR needs to be driving enough new opps to feed 5 deals. The SDR isn’t actually closing the deals, so the number of deals isn’t a factor in their score. But the SDR opens the opps that turn into deals.
That means the next number you need to know is your average close rate. This tells you how many deals you get per opp you create. If your close rate is 33% (a pretty common win rate), then you’ll need an SDR to generate 15 opps per month, of which you will win ⅓, which is your 5 deals.
Ok, so your top level metric now is the 15 opps. That’s what SDRs are striving for. I will tell you this: they won’t hit it every month. So now you need to incorporate the sub-metrics that feed into the 15 opps, and we’ll weight and score them according to how valuable they are.
Most SaaS businesses have their SDRs trying to set demos. Those demos, if they go well, turn into opps. So your next ratio that you need to track down is demo to opp conversion rate. Let’s say on average, if you set 100 demos, you generate 80 opps. That means your conversion rate is 80%. Cool. Keep that number in hand.
We now keep going backwards through other activities. There might be a step before the demo, which is a qualification call. You need to know how those qual calls turn into demos. For our example, let’s say 75% of the qual calls turn into demos.
Last, we need to know how reps get the qual calls. Well, they do that through sales activities. These include calls, emails and possibly social outreach as well. You need to know how many of those activities translate into one qual call. A not uncommon rate we see is that it takes about 50 sales activities to generate a qual call.
Figure out the points
Let’s look at this hypothetical funnel as a whole, but this time in the reverse direction:
- It takes 50 activities to produce a qual call
- 75% of qual calls turn into demos
- 80% of demos turn to opps
- 33% of opps close
- ASP is $10k
Now we can use this data to weight each of the different components an SDR is responsible for.
We can start with opps, since that’s the last thing that the SDR has control over. Let’s give them 100 points for opening an opp.
How many points should we give for a demo? Well, we know 80% of demos convert to opps, so we should give 80% as many points to demos as we give to opps — so 80 points.
We do the same thing for qual calls, where 75% of these turn into demos. Therefore a qual call is worth 75% as much as a demo, which would by 75% of 80 points = 60 points.
Last is activities. It takes 50 of these to get a qual call. So we’re going to divide the value of a qual call by 50, which will be 60 / 50 = 1.2 points per activity.
Our whole point system looks like this:
Using the scoring system
The key to using the scoring system is that it allows sales managers to quickly stack rank their SDR team, to find top and bottom performers.
Of course, when the manager is looking through their reps, they also want to be able to expand out the details of that rep.
For instance, if you’re focusing in on bottom performers in terms of their score, you then want to figure out why their score is so low. Here is where you unpack all of the 7+ KPI’s for that particular rep: calls, emails, connect rate, conversion rate to qual call, to demo, and so forth.
The unpacking of the metrics allows you to figure out where in the process the rep is having difficulty, so you can coach them on that area.
But in terms of the regular monitoring of the team, I suggest you don’t get caught in the weeds of monitoring everything all the time. Instead, use the scoring framework above to stack rank reps. It will save you tons of time and allow you to coach your team to new levels of performance.
Also published on Medium.
This is a sponsored guest post from a Sales Hacker partner.