Sales performance management (also referred to as SPM) is the process of tracking and managing your team’s sales activities to improve overall performance.
Of course, there’s more to it than that. There are several stages to sales performance management and various ways to improve sales performance.
We’ll clear things up and help you figure out how SPM can benefit your sales team, as well as give tips on how to implement it.
If you’re hoping to improve your sales team’s efficiency, productivity, and profitability, there’s no better place to start than sales performance management.
With sales performance management, you track and compare your sales performance to the sales goals and key performance indicators (KPIs) you set for your team. This entire process helps you spot areas for improvement so you can preemptively take corrective action.
If it’s not clear yet, sales performance management is an essential process for any successful sales force hoping to stay agile in an ever-changing economy. It’s an integral tool for sales leaders to craft strategies and optimize sales processes.
Sales performance management can also do the following for your team:
A good sales performance management process helps you grow your team’s potential and unlocks new opportunities in terms of prospects and markets. It’s also a great way to identify new selling strategies to add to your playbook and to provide additional chances to coach your reps on more effective ways to sell.
With careful planning and execution, you can successfully incorporate a sales performance management process. Some basic tips to help your team adjust to this new process include:
After you’ve laid a foundation, you can tackle the rest of the process step-by-step. The sales performance management process can be broken into five steps:
Start your implementation by identifying the sales goals and KPIs for your entire team as well as for individual salespeople.
Aim to identify realistic short-term and long-term goals — the SMART goal framework is an excellent way to choose achievable goals. You should also ensure your team’s goals align with greater company goals.
Along with identifying your target sales metrics, gather real-time data about each salesperson’s quota attainment. This helps you create a benchmark for the team and individuals to get a better view of progress.
Once you set goals for your team, be prepared to provide regular feedback and coach your team on new strategies and sales plays.
This could look like weekly one-on-ones or group coaching sessions. Whatever you choose, this consistent feedback helps everyone on the team stay motivated and on top of their game. It also gives sales managers a chance to suss out any roadblocks and provide resources to overcome the challenge.
Next up is sorting through your data and looking for insights from various sources. These could be customer surveys or even metrics derived from machine learning and AI built into your sales performance management software.
Compare your results to your team and individual benchmarks, as well as industry averages, to determine whether progress is being made. This assists you in critical decision-making tasks, such as sales territory management and determining sales quotas.
Once you’ve pulled your data together, start assessing whether or not your current strategies are effective for improving your team’s sales performance.
If progress toward the metrics and KPIs you set in step one is lacking, you may need to re-forecast and manage individual sales rep quotas until results are optimal.
When adding a successful sales performance management process to your sales team, here are some additional tips to improve the overall success of your team:
Commission plans and bonus structures are common ways to motivate your salespeople to push toward their sales performance goals. But there are other ways to keep your team motivated, including shouting out wins and using gamification for friendly competitions.
Since complicated commission structures can actually be less incentivizing than simple plans, we created a guide to help you build and implement a motivating, simple sales compensation plan.
For any team to perform well, it’s critical that each individual within your sales organization feels comfortable collaborating.
Foster a space where any idea is welcomed and no one feels shut out or unheard. This can help your team brainstorm and unlock unique strategies.
Good sales performance software also helps foster collaboration by making data available across teams. Some also allow for communication within the software platform, including sharing notes about prospects and sales asset sharing.
Investing in an SPM solution can give your team a serious leg up when it comes to hitting sales targets.
This type of SaaS typically lets you automate the more tedious tasks that come with managing a sales team, as well as provide real-time analytics dashboards and reports. (Time to ditch the Excel spreadsheets.) This saves you valuable time that you can instead use to develop and manage your strategy.
Specialty sales performance software may even offer additional features, such as gamification. These features may help you offer more incentives, challenge salespeople to meet goals, or even track your sales metrics in real time.
For example, Arcade lets you design contests, races, and challenges that boost team morale — incentivizing performance through fun. It even lets you offer tangible rewards for sales reps who meet their goals.
Along with sharpening existing skills and learning new ones, professional development improves confidence and job satisfaction. Make sure your salespeople have the resources they need to pursue additional learning. This could include company-hosted courses or workshops or a team subscription to an online course site like Coursera.
To provide your team with a clear path toward any career goals they may have, be sure you have regular career pathing chats with them. Outline the key skills needed for them to progress to the next level or earn a raise, then come up with a plan together to achieve those skills.
Clear communication is vital for relaying your sales strategy and progress to stakeholders, but it’s just as important when you’re outlining goals for your team. Make sure you not only identify the goals and KPIs each team member is responsible for, but also the role they play in achieving them.
Additionally, you’ll want to repeat team goals often — or at least keep them in sight for everyone as a reminder. And don’t be afraid to share analytics with your team so they can see where they stand in terms of success.
Harvard Business Review also recommends these tips for communicating with your team:
Don’t let successes slip by — show your employees appreciation by celebrating their wins to keep motivation high.
This doesn’t mean failures should get a bad rap. Instead, keep morale and growth high by encouraging your team to use mistakes as learning opportunities.
Get more sales performance management tips for teams and individuals.
Using sales performance management software helps streamline your workflow by automating tasks and tracking progress. A good software package gives you insights into trends and data to forecast and refocus your strategy when needed.
This frees up time for more selling and coaching, making your team an efficient force to be reckoned with. Sales performance management software also helps you maintain communication channels across multiple teams, not just your sales team.
On top of that, it puts real-time data in your hands so you can quickly react if progress isn’t meeting expectations. Many companies that offer this type of software also include predictive analytics through machine learning or AI, which are invaluable for forecasting or testing new strategies.
According to Gartner, some highly rated sales performance management software include:
For any business that wants to outsell its competition, sales performance management is an essential tool. Thankfully, creating and implementing an effective sales performance management process doesn’t have to be rocket science. You just need to follow these five steps:
Motivation is, of course, key throughout this process. So if you find your team is in a slump and not hitting those goals, it may be time to swap out incentives.
Don’t be afraid to spice up your sales department with a little fun. Arcade’s contests and leaderboards keep your sales team’s eyes on the prize while making work feel like…well, not work. If that sounds too good to be true, why not book a demo with us and see for yourself?
Tap into a sense of friendly competition to encourage higher performance.