A closer look at these two metrics could reveal what (if anything) has been holding Sales and Marketing back:

1. Return on expenses: A recent IHS study found that for every 1% companies cut out of their travel and expense (T&E) budget, they experience a 1.7% decrease in sales. With that in mind, if you’ve cut your expense budget over the past two years, it may be worth seeing if there’s a correlation between the budget decrease and sales results. More importantly, try to find out what type of return specific expenses are yielding. Could salespeople be making one trip rather than three? Which trade shows really yield returns? And, most importantly, can you make a case to upper management that cutting expenses in certain areas has actually hurt your ability to generate more profits?
2. Net profit (not to be confused with overall sales): A lot of prospects are pushing companies on price these days. Some sales organizations have responded by offering more concessions — like price breaks. It’s a short-term strategy, but it’s also a slippery slope that eats into a company’s profits. It also sets a precedent where prospects will always expect more for less. Idea: Managers may want to compare their department’s overall net profit, as well as their reps’ average profit per sale today versus what it was a few years ago. That’ll help determine what’s changed and why.

Are there any other metrics companies should be looking at? Let us know in the Comments Box below.

Tags: forecasts, goals, management, metrics, sales, success