Sales efficiency is the revenue of a sales department, team or process relative to its cost. It is a basic financial metric based on the efficiency formula that can be used to benchmark sales efforts against a competitor.
CalculationSales efficiency is the ratio of gross revenue generated by a sales team as compared to the cost of the team including salaries, benefits, incentives, office space, training, software and other expenses.Sales efficiency = (revenue / sales cost) x 100For example, a sales team generates revenue of $12 million at a total expense of $2 million.Sales efficiency = (12/2) x 100 = 600%The sales efficiency metric can also be represented as a simple ratio without multiplying by 100 to make it a percentage. In the example above, this results in a sales efficiency of 6.
Similar MetricsSales efficiency is a financial metric that is similar to revenue per salesperson. For example, a sales team with 24 employees and sales of $12 million:revenue per salesperson = 12,000,000/24 = $500,000 per salespersonIt is also common to calculate revenue per employee for an entire organization.
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