The Sales Performance Suite

5 Reasons "Cost of A Sales Call" Doesn't Measure Sales Efficiency

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Why "Cost of A Sales Call" Won't Work

Much discussion has taken place on blogs, social media sites, and boardrooms on the actual importance of measuring the cost of a sales call and sales efficiency. From the discussions that I have participated in, the most significant points of contention have been:

• Differing opinions as to the definition of a true sales call (f2f or a telephone conference)
• The varying formulas involved in calculating costs (many do include cost items like worker's compensation or interdepartmental overhead charges)
• Inclusion of such items as lost opportunity costs (no one seems to be able to clearly specify what these are or how to calculate them)
• The impact of erroneous reporting on calculating the mean cost of a sales call
• Tying the cost of a sales call into the concept of sales efficiency

Unique Formulas Present A Barrier

Every company seems to have a unique way of calculating its own cost of a sales call. For internal measure purposes, this may seem quite adequate. However, unique formulas do present a barrier to creating industry wide best practices thereby affording companies a true comparison to their own efficiencies against their competitive peers.  

The "Sales Efficiency Index" Is A Better Method

The "sales efficiency index" (SEI) is a much better way and more meaningful method of ranking the sales efficiency of your individual sales reps and sales regions. It provides a uniform measure within industries for individual competitors to assess their performance against others. It totally eliminates:  

• Need to define sales call
• Erroneous sales call reporting
• Impact of lost opportunity costs

SEI Is A Universal Formula Based on Good Accounting Practices

Sales efficiency indices are calculated using a universal formula that focuses on good accounting practices to determine true ROI. SEI is a indicator with which you can stack rank your sales team by efficiency. Also, SEI should be at the top of your dashboard on your CRM reporting tool. 

Photo Credit: Hribar

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