If you can get the collective brain of your sales team wrapped around the concept of Effective Sales Capacity, you’ll have taken a massive step toward effectively measuring and continuously improving sales performance. In fact, if you don’t get the collective brain of your sales team wrapped around the concept of Effective Sales Capacity, you’re opting for dumb luck as your continuous improvement strategy.
And, frankly, it shouldn’t be hard to do so.
The logic is straightforward. Sales closed is a function of four factors:
- The Number of opportunities being worked at each stage of the funnel
- The $ Value of those opportunities
- The % Advanced to the next stage of the sales process
- The Cycle Time for each stage of the sales process
Right now this instant, your sales team has A opportunities in the funnel, potentially worth $B in sales, since C% of those deals will close in D days. With a decent CRM (that’s being effectively used!) it’s a simple matter to calculate your current sales capacity.
It’s even easier to figure out with this Effective Sales Capacity Calculator.
Plug your own numbers into the tool, then begin to ask the obvious questions:
- Should we be working more opportunities? (Or will that cause us to get bogged down trying to juggle too many deals?)
- Should we be focused on increasing the size of the opportunities we’re working? (If so, how? Will bigger deals take longer to close? Or should we focus on winning smaller deals really quickly?)
- Should we be focused on advancing more deals to the next stage of our sales process? (Or should we concentrate on qualifying opportunities and getting more dead weight out of the funnel sooner?)
- How can we do everything faster? (Why does it take so long to get an opportunity through Stage X of the funnel?)
And so on…
The discussions (and thinking!) prompted by these sorts of questions and the many others like them, is an exceedingly great way to identify the genuine “Sales Best Practices.”
Or you could rely on dumb luck.