Sales productivity is a relatively simple concept. It’s the relationship between a salesperson’s input (i.e., their efficiency) and their output (i.e., their effectiveness).
Sales productivity can be simplified by looking at it as the number of deals that a sales rep closes per the hours that they put in, though this is not always the most effective way to look at it is dependent on the product, service, or sales pipeline.
Sales efficiency is a key performance metric that measures how effectively a brand’s sales team generates revenue through sales activities. In other words, it measures how effectively the sales team converts leads into customers. The more revenue a sales team generates from limited resources, the more efficient it is.
Let’s say, for example, a sales team spends $25,000 generating $5,000 in sales. That’s a sales efficiency of 20% because 80% of sales expenditure is being lost. If the same team spends $25,000 and generates $50,000 in sales, their efficiency is 200%.
Several factors can influence sales efficiency, including:
Sales productivity refers to how effective a sales team's input is in generating revenue. It measures how well sales teams utilize their time and resources to close deals and achieve sales targets.