What components make up the Sales Productivity Formula?

What components make up the Sales Productivity Formula?

• A. Capacity × Close Rate × Profit per Sale.
• B. Marketing spend ÷ number of deals.
• C. Lead count × conversion rate.
• D. Revenue per customer × retention rate.

Answer: (A)

Sales productivity is about turning selling effort into real profit in a period. The idea is to combine how much you can sell (capacity), how likely it is that an opportunity becomes a sale (close rate), and how much profit each sale delivers (profit per sale). Multiply capacity by close rate to get the expected number of closed deals, then multiply by the profit per sale to get the expected profit. This captures both the volume of selling activity and the profitability of those sales, which is why this combination is the best fit. Other options describe different ideas but not the same measure. Marketing spend per deal is a cost metric, not total productivity. Lead count times conversion rate estimates deals but ignores how much you can sell and the profit from each sale. Revenue per customer times retention rate reflects customer lifetime value, not the period-to-period sales productivity.

Sales productivity is about turning selling effort into real profit in a period. The idea is to combine how much you can sell (capacity), how likely it is that an opportunity becomes a sale (close rate), and how much profit each sale delivers (profit per sale). Multiply capacity by close rate to get the expected number of closed deals, then multiply by the profit per sale to get the expected profit. This captures both the volume of selling activity and the profitability of those sales, which is why this combination is the best fit.

Other options describe different ideas but not the same measure. Marketing spend per deal is a cost metric, not total productivity. Lead count times conversion rate estimates deals but ignores how much you can sell and the profit from each sale. Revenue per customer times retention rate reflects customer lifetime value, not the period-to-period sales productivity.