When you work in sales, it’s not enough to just meet your goals. You want to exceed them, expand them, and then exceed them again. To truly maximize revenue, the sales team requires a style of management that uses collaboration, analysis, and a proactive approach.
This is where sales performance management(SPM) comes in. In this article, we’ll define just what SPM is, how you can use it to measure (and improve) performance, and how it can help your business not only to achieve, but to smash revenue and business goals.
What Is Sales Performance Management?
Sales performance management is a series of interconnected and optimized sales processes that are used to improve a business’s overall sales performance. This includes targeting things like sales productivity, efficiency, and effectiveness through analysis and a true understanding of the needs of both consumers and the sales team.
Sales performance management ensures that a sales team has a good grasp on what works, what doesn’t, and how they can best maximize leads to sales.
Why is Sales Performance Management Important?
Sales performance management is important because it offers planning, control, and direction for the sales team. A random group of sales reps, no matter how personally talented, are not enough to create a strong, steady increase in sales. Sales organizations need the ability to analyze data to optimize planning, improve sales processes, and align stakeholders across all of your sales functions to ensure that everyone is working in concert to smash sales goals.
Talent is great, passion and drive are great, but direction is also needed to maximize business. Sales leaders offer that direction. Through hiring, training, analysis, and consistent follow-up, a good sales manager can help and ensure salespeople hit individual sales quotas.
How Do You Measure Sales Performance?
The most important aspect of sales performance management is measuring — you guessed it — sales performance. You need to create a roadmap to move forward. Sales performance has been defined in a variety of ways: a philosophy, a practice, an art…but the bottom line is, you can’t practice it without first understanding where you are and where you want to go to improve sales performance.
Identify Your Drivers, Benchmarks, and Goal KPIs
Sales performance can be visualized as a pyramid. The base of the pyramid is where you find your performance drivers: meetings, leads, referrals, sales plans, coaching, sales strategy, etc. Above that, you’ll find your key performance indicators: Sales targets, revenue sources, and metrics. At the very top are your performance goals and sales results.
These are the basics, and you’ll want to personalize each section to match what is relevant for your own sales organization. Your drivers may look completely different from another company’s drivers.
Track Your Metrics
Sales performance management tracking can provide valuable data, enabling you to improve accurate sales forecasting, operational efficiency, and drive faster, more informed decision-making. Some sales metrics you’ll want to analyze include:
- Annual plan and quarterly updates
- Number of leads
- Number of calls, emails, or conversations
- Proposals submitted, proposals accepted
- Referrals given, referrals received
- Events attended
- Percentage of closes in the sales pipeline
- Sales cycle lengths
- ROI on sales enablement and training
Create and Maintain a Sales Performance Management Process
A sales performance management process allows you to put in place more structured and targeted people training and development initiatives. It is a holistic approach that visualizes sales as a river, with a series of stages that must be kept smooth for an effective sales process. By working with your sales team to create and maintain a smooth performance workflow, you will be able to quickly identify and repair any issues along the chain.
How do you maintain excellent sales performance?
1.) Create an Efficient System
First, you want to create a system that is tailored to fit your particular product or service. Use the basic model of a sales pipeline, but make it your own. Set up a series of metrics that you want your reps to adhere to. For example, a target for length of time in the pipeline. Or how many leads need to be on deck. Or whether there’s a greater emphasis on cold call or on LinkedIn social media campaigns. Find what works best for your team.
2.) Open Communication
As a sales manager, you need to continually talk to your sales force. As the people actually in the trenches, they should have helpful feedback and can be an enormous help in creating strategy. Be open to ideas, and keep your sales pipeline flexible so that you can incorporate new concepts.
3.) Track the Data
A sales team is only as good as its analytics. Even the best sales rep in the world can’t bring maximum results if they aren’t completely familiar with a variety of sales data. Each team member should have a list of numeric goals to hit, based on extensive research of the sales pipeline.
To track data, you’ll need to find a sales performance management solution that best meets your needs. Sales performance management software capabilities can cover sales incentive compensation management (ICM), quota management and planning, sales territory management, and gamification.
Highspot gives real-time data that allows you to track, identify, and reinforce winning behaviors. Our data-driven sales coaching model is built to give you the insights you need to increase confidence and improve performance with leaderboards and tailored sales rep scorecards and dashboards.
4.) Follow Up
Gathering data won’t do much good if there is no follow-up on the results. Each week you should have a meeting with each member of the team to go over goals for the week. For example: calls made, meetings attended, good leads, and proposals made. Praise the numbers that look good, and identify any areas of opportunity.
5.) Automate the System
You don’t want to waste time tracking markers by hand. Use a good software system that integrates with your CRM to track your end-to-end sales performance management process to streamline and maximize your workflow to build a sales center of excellence.
Be available to your team. They should feel that they are all a part of the big picture and that their input is important. Sales performance management is a part of every stage and is impacted by every position. Collaboration is the key to results.
What Are Some Benefits of Sales Performance Management?
Gain Control of Quota Management
Once you know the numbers you need to monitor performance, understand them, and know how to drive efficiency using these metrics, you’ll be able to harness the power of your sales team and create a more effective sales environment. To add, by gaining control of your sales quota management, you allow for the easier creation, allocation, and management of sales targets.
Keep the Process Flowing Smoothly
Sales performance management allows you to identify areas of need, by giving you a larger view of the process. If there is a problem in one area, it will affect everything else downstream. By seeing and resolving a problem quickly, you improve your sales overall.
A Holistic Approach
In sales, as in medicine, a holistic approach is the best way to ensure a healthy whole. By understanding and seeing every part of the sales process, you will have a better grasp on where and how to improve.
There is more to sales management than just being a good sales representative. It’s about really understanding the sales concept, your target audience, and how to motivate and drive your team members. Sales performance management allows you to take a view that includes all of the working pieces and analyzes the metrics of each of those pieces. By addressing sales through the performance metrics, you can easily conquer and expand your revenue goals.