Measurement Need

To measure how much each sales person generates in dollars per call.

Solutioni

Average sales per call measures the value in dollar sales arising from each sales call. The formula is:

Where

SPCavg = average sales per call

Tsalest = total sales in time period t

Tcallst = total calls in time period t

A small, upscale hotel company has a sales team that consists of two salespeople per property for each of the five properties belonging to the company. Each salesperson is responsible for group business (“group” is defined as ten or more rooms). Most of the salespeople conduct their own customer research and cold calling. The average number of sales calls (cold calls included) in a five-day work week is seventy-five, and the average total group sales per sales rep per week is $20,000. Therefore, the average sales per call is $267:

Each call generates $267 in revenue.

Impact

A quick review of these numbers will suggest that not every sales call results in revenue being generated. Instead, only a few of each week’s seventy-five calls lead to group books, usually four to five. Assuming five bookings is the average number of bookings per week, then the average sales-per-booking is $4,000, a more reasonable result given the price of rooms, length of stay, and size of groups.

Average sales per call helps sales management understand each salesperson’s performance both individually and compared to other sales people. Over time and repeated measuring, performance patterns will emerge that will guide future sales management decisions on customer account management, territory structure, pricing latitude, and target segments. Knowing the average sales per call will also help sales management understand the strengths and weaknesses of each salesperson with respect to the kinds of customers being contacted, thereby aligning account assignments more effectively in the future.

Data for average sales per call is in the sales and business development reports that track prospects and customers.

iDavid Carnes, How to Calculate Sales Productivity, Chron, N.D. Retrieved May 22, 2017 from http://smallbusiness.chron.com/calculate-sales-productivity-11118.html; Turaj Seyrafiaan, Effectiveness Indicators—Revenue/Call, Sales/Call, The Taylor Reach Group Inc., 2011. Retrieved May 22, 2017 from https://thetaylorreachgroup.com/effectiveness-indicators-revenuecall-salescall/