How to Create a Sales Scorecard for Sales Reps

Many sales managers and team members ask themselves the same question: how am I supposed to keep track of  progress in real time? A sales scorecard is the answer. It shows where everyone stands in relation to the goals set, on an individual level, at any given moment. Yes, there are tools like leader boards and dashboards, which are great for analyzing overall team productivity and providing motivation for top sellers. But a sales scorecard is your true best friend when it comes to understanding how a single salesperson’s efforts compare to those of the organization, industry, and even their past performance.

What is a sales scorecard?

A sales scorecard (AKA salesperson scorecard) is a visual method for evaluating the sales productivity of individual team members. Essentially, it’s a set of metrics that compare actual achievements to goals.

As with any metrics, you need a benchmark so that the manager and salesperson can tell if they are meeting the right standard. These benchmarks can be set according to things like:

• Planned goals from the sales team and/or upper management
• Historical organizational performance
• Industry standards (such as average revenue per salesperson)

What are the benefits of a sales scorecard?

A sales scorecard records metrics in real time so that a salesperson can frequently check to see how they are doing. If they seem to be lagging behind, either they or a manager can peek at their metrics to see where they need to improve. For example, if their closing rate isn’t meeting expectations, the scorecard might reveal that they haven’t made enough calls.

It also helps a salesperson understand what’s expected of them so that they know how much time to spend on different activities. If a scorecard states that a certain number of demos need to be made each week, then the salesperson might turn their focus to warm leads (due to their greater chance of conversion) instead of cold ones.

There are many scenarios where it’s also beneficial for a manager to examine scorecards:

• If the team is underperforming, a scorecard helps to analyze where individuals are having problems.
• During the time for performance reviews, the scorecard can indicate if the salesperson is meeting department goals.
• When a sales team member seems to be doing great, the scorecard will hint as to why. For example, they might be closing more deals despite making fewer calls ,and it turns out that’s because they are using a new cold calling script. In that case, maybe that means everyone should start using a similar script.

How do you create a sales scorecard?

An effective sales scorecard is based on metrics that are clear, relevant, and achievable. Telling a new salesperson that you expect a conversion rate that matches what your top performers are getting and then supplying them with a list of unqualified marketing leads simply won’t help anybody. In fact, it will probably have the opposite effect by de-motivating them.

Here’s a helpful flow that many companies rely on:

Set metrics

Select a set of goals that an individual salesperson can reasonably handle.  That means the number of metrics should be limited. This will enable your team to focus their energies.

Another rule of thumb is to combine “leading” and “lagging” measurements. Leading metrics are predictive measurements you expect to  produce a result, for example:

• Calls made
• Connection rate
• Emails sent
• Meetings scheduled
• Percentage of cold/warm/hot leads contacted

In comparison, lagging metrics are the results themselves. They are called “lagging” because they come after the activities that are described by leading metrics, i.e.:

• Demos delivered
• Sales closed
• Revenue earned

A typical scorecard setup of leading to lagging metrics is 2:1. This means that you should track two leading metrics for every lagging metric. For example,  you might compare number of cold calls and meetings scheduled to number of demos delivered.

Set goals

One of a manager’s biggest challenges is to decide on the levels of productivity that are required for the team, and how these translate to everyday tasks. For example, if your revenue target for the year is $1 million, what kinds of activities are going to get you there (such as emails, calls, and demo meetings)? And how much time should a salesperson spend on each? An experienced manager might have a feel for this mix, but it can also be a matter of experimentation.

Once you’ve decided on a strategy, it’s time to break it down into numbers. For instance, you might decide that the average salesperson on your team should aim for 30 personalized emails, 20 calls, and two demo meetings booked per day.

Then, you should also define levels of performance. You could decide that exceeding the target for demo meetings by 20% is outstanding, while missing it by 20% requires some kind of intervention. In general, you can’t expect that a salesperson will hit every target on the nose each time, so giving them a bit of wiggle room helps to reduce stress levels.

Adjust and assign metrics according to skill and role

Not every person on the sales team should receive the same scorecard. You could designate the type of metric and associated benchmark for each person according to:

• Level of experience
• Specialty (some salespeople are better at cold calls, others at demos)
• Development target (you might want a team member to improve at performing a certain function)

Account for timing

There are certain times of year when sales are more difficult to make. It’s common for late December success rates to lag due to holidays, and setting meetings in the summer vacation months can also be tough. Then there’s the budgeting factor, as some companies set yearly purchasing levels that might be exhausted near the end of their financial year. You’ll need to adjust your targets accordingly.

Help them get there

Not every manager has the time to check sales scorecards every day, but the more often you do, the better. By looking at your team’s numbers on a regular basis, you’ll be able to recognize and deal with problems before they harm both your success metrics and the salesperson’s motivation.

Even when a team member is doing well, you should still discuss their progress (for example, during a weekly one-on-one).

Lastly, give your team all the methodologies and advice they need to excel. Equip your sales teams with basic tools like an Ideal Customer Profile and a lead scoring framework so that they can target the right people and companies.

Key takeaways

• A sales scorecard is used for evaluating the sales performance of individual team members and is based on a set of metrics.
• Sales scorecards help salespeople track their own activities and assist managers in assessing and supporting the productivity of the team.
• Sales scorecards are created by setting different types of metrics and goal levels and then adjusting the scorecard for individual abilities and timing.