Sales Performance Benchmarking: To Benchmark… Or Not to Benchmark?

That is the question that I’m posing to any sales leaders reading this post.
Over the past several months I have been studying sales performance benchmarking with two goals:

1. To better understand if and how OpenView’s portfolio companies can benefit from sales benchmarking.
2. To identify the benchmarks for what I think are the key metrics for measuring sales and outbound lead generation performance and capacity:
   1. Outbound Lead Generation Metrics
      1. Number of Calls per Day per Rep
      2. Call to Conversation %
      3. Conversation to Appointment %
      4. Appointment to Opportunity %
      5. Lead to Opportunity %
   2. Sales Metrics
      1. Number of Open Opportunities per Rep
      2. Pipeline to Goal % (Coverage)
      3. Opportunity Win Rate % (New Customer Deals)
      4. Pipeline Slippage % (New Customer Deals that Push)
      5. Number of New Customer Deals Won per Rep per Month

I like data, so going into this I didn’t have any doubt that OpenView’s portfolio companies would be able to benefit from sales performance benchmarking. Over the last few years I have found myself in so many situations where someone asks me, or I ask myself “isn’t there a benchmark for that?”

Questions Sales Performance Benchmarks Can Help You Answer

Here are just a handful of the questions that benchmarks can help answer about your sales and outbound lead generation team:

• How many calls should my outbound lead generation reps be making?
• How many outbound lead generation reps should I hire?
• How many opportunities should my sales reps be able to carry at any given point?
• What is a good call to conversation conversion rate?
• When should I hire an additional sales rep?
• What is a good opportunity win rate?

These are questions that as a sales and lead generation consultant I am faced with on a regular basis. The truth of the matter is that the correct answer to all of those questions is: it depends. It depends on variety of factors such as the product market maturity, buyer profile, market segment, average deal size, and the list goes on. Good for one company could be bad for another.
However, a number of those factors can be controlled for given a complete enough sample, and there are a number of interesting reports published every year that share sales and lead generation benchmarking data from a number of different industries that get a lot of buzz and many of the sales leaders that I spoke with in my research find valuable and compelling.
At the same time, I spoke to number of experienced sales leaders who were skeptical of the value of sales performance and competitive benchmarking for expansion-stage companies. This surprised me.

What the Skeptics Say about Sales Performance Benchmarking

Sales benchmarking is different from the more commonly used financial benchmarking, which uses standard guidelines like generally accepted accounting principles (GAAP) to define the metrics they are benchmarking.
With sales benchmarking, there aren’t standard definitions.
Every company has its own definition of a qualified lead, and even something like “Closed Lost Opportunity” needs to be defined in order to get an apples-to-apples comparison for the Win Rate. One company might define a “No Decision” as “Closed Lost,” while another company leaves “No Decision” as an open opportunity.
Furthermore, you can’t compare one company’s metrics to another. The skeptics don’t care what the top performing company benchmarks are because they believe their business is probably different, so the numbers might be completely arbitrary.

Why I Find Sales Performance Benchmarks Helpful & Valuable

Personally, I love having hard data to refer to when I’m trying to answer some of these questions. No matter what, when I’m working with a portfolio I always start with their historical data, and build a model to see what performance levels they have had historically — the goal is to always improve.
However, many of the companies we work with do not have historical data on which we can base any assumptions for those metrics. In those situations, having sales benchmarks can be incredibly helpful.
Having sales benchmarks can also be helpful if sales teams think they are doing well, but have no idea if other companies are having more success. Outbound lead generation and sales benchmarks gives me and our portfolio companies a general idea, or an acceptable range, of what performance levels other companies have been able to achieve for similar metrics. I find this helpful and valuable. At the very least, it’s a good sanity check.
I want to ask readers: Do you use lead generation or sales performance benchmarks? Do you find these types of benchmarks valuable? If you had benchmarks for the metrics laid out above would that be valuable to you?
Please leave your answers in the comments below.