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Industry News

Build a Scorecard for Medical Sales Reps

February 27, 2020

Setting goals is a must for all medical sales rep. And how will you know whether the goals are achieved if you don't have any means of tracking your sales activities to find out how effective they are and how they can create an increase in revenue.

 Tracking your sales reps sales activities will help you to determine if the reps are far against their goals and areas they need to improve to achieve those goals.

Want to know how effective your medical sales rep are performing? Then you need to build a scorecard that will help you to track the reps sales activities, whether they have increased performance and where each rep needs to improve.

Many important metrics need to be tracked and measured for higher performance. However, you will need to include only the metrics that are relevant to medical sales in creating a scorecard for your medical sales reps.

In this article, we will discuss four critical metrics that you need to build a scorecard for medical sales reps. These are sales Efficiency, sale velocity, results, and sales pipeline.

 

Sales efficiency

Sales efficiency means how a sales rep converts a qualified lead into a pipeline. Your sales reps have put in much effort and resources in qualifying a lead. Then, measuring sales efficiency indicates how those efforts convert into higher revenues.

The sales efficiency metrics that you need to track are:

Customer acquisition cost (CAC) and customer lifetime value (CLV)

Comparing your CAC and CLV will help you to determine the efficiency of your sales process and to determine how effective your resources are allocated. The value of the CAC must not exceed that of CLV. An efficient CLV to CAC ratio is 3:1, which indicates a sustainable sales process.

Lead response time

Measuring the lead response time will help you to track how fast and how often a rep responds to lead messages. A rep with a high lead response time is likely to attract customers with higher-performing leads that can be qualified. Low response time can also indicate a higher workload on the rep.

Sales efficiency magic number

Sales efficiency magic number = (Current Quarter's Revenue – Previous Quarter's Revenue) x 4

                                                                                           Previous Quarter's Sales Spend

A magic number of 0.5 -1.0 indicates that your sales process is sustainable and that your sales reps are efficient. While a magic number of 1.1 and above indicate increasing revenue.

Sales velocity

Sales velocity indicates the ability of a rep to close a deal faster successfully. The time spent in closing a deal contributes to whether the rep will have higher performance or not.

It indicates how fast the rep is making money and how quickly the number of leads flowing through your pipeline is increasing.

The key variables that must be tracked for measuring sales velocity.

The number of opportunities

It indicates the number of leads that the rep has worked through within a specific period either, weekly, monthly, or quarterly.

Average deal size: This is the dollar value of an average sale.

Conversion rate or win rate: This is the number of leads that turn into paying customers.

Sales cycle length or pipeline length: This is the length of time that was required for a lead in moving through the pipeline. It is average time it takes a rep to get a lead qualified and to close it successfully. A small sales cycle indicates ref efficiency in holding prospects.

Results

It indicates the number of goals efficiently achieved by the sales rep.

Here are the metrics you should track to measure your sales rep's results.

Booking: It is the number that indicates the total sales a rep has made either weekly, monthly, quarterly, or yearly.

Quota attainment: It is the percentage of the quota or goals that the rep has achieved. This value will help to track the rep's success consistency over time. It will also help you to determine if the rep will make success in the next quarter, or they will go down the line.

Sales pipeline

Here are the significant vital variables to measure in determining a sales pipeline

Number of leads or opportunities

The number of leads or opportunities consistently created by your rep indicates the number of prospective customers that can be turned into a paying customer. As the number of leads increases, it's an indication that there will be higher qualifies leads that can generate revenues later.

Number of pipelines

A higher number of pipelines indicate sales process efficiency and increased revenue.

The ratio of leads to qualified leads

If you generate a qualified lead of 25 out of 1000 leads, then the ratio of your lead to qualified leads is 25%. The ratio of leads to qualified leads is usually calculated in percentages.

Quote to closure ratio

This is the number of formal quotes issued to prospects and has been turned into actual sales. If a rep issued twenty quotes and was able to convert ten quotes to actual sales or payments, then your quote to closure ratio is 50%