Sales performance management (SPM) is how businesses use data and insights to help evaluate the performance of their sales team, plan quotas, map sales territories, and map out future sales strategies. Intentional SPM efforts help drive robust performance of sales team members, plan team goals, and foster excellent sales performance.
How Sales Performance Management Works
Sales performance management is an integral part of sales management and an intentional way of measuring how individual sales team members and the whole sales team is performing. Some small businesses don’t think they need a system in place as they get started selling, but they often regret not having established a way to monitor metrics from the beginning.
This is because metrics are critical for understanding the health of a business. For example, if a business doesn’t set up a system for measuring performance early on, it won’t be able to measure month over month or even month over yearly progress. Having a clear plan for measuring performance makes it easy to identify your top performers, learn which sales reps need more help or coaching, and look for any ways to streamline your sales process.
What Sales Management Looks Like in Different Sales Organizations
Sales performance management is an excellent idea for small, growing sales organizations as well as larger organizations. SPM helps sales managers and CEOs measure performance, incentivize employees, and find solutions to performance issues.
- Small, growing sales organizations: Small sales companies, such as startups, need a way to measure sales performance just as much as larger organizations. This sets the stage for success and expectations as the company grows and new sales hires learn their roles.
- Established sales organizations: Sales businesses that have been around for a longer period of time are naturally going to experience ups and downs in performance. They need to have a performance management process to help identify barriers to optimal performance, see variations in productivity, and find innovative ways to improve sales performance when issues arise.
- Board members and investors: Board members and investors are a huge part of the lifeblood of many sales organizations. They often help secure the funding that keeps the business going. While they may not be responsible for conducting individual performance reviews, they certainly need to be continually informed with sales performance management reports.
- Sales managers: Regardless of the size of the organization, every sales manager needs a crystal clear way to measure and manage the performance of individual sales team members and their team as a whole. Furthermore, without an established record of sales performance, they have no evidence to point to poor performance or reward high performers.
Many sales leaders feel lost when learning how to measure sales performance and conduct performance reviews inconsistently. In addition to creating confusion about goals, this can become an even bigger problem for team morale if reps discover one sales manager is evaluating his or her reps differently than another. This is why we recommend you establish a template that will serve as the basis of reviews again and again for all team members.
Tips to Better Manage Sales Performance
Many sales organizations struggle with how to better sales performance, especially if they are constructing a sales strategy at the same time. Here are some of our top tips on how to manage sales performance:
Motivate Your Sales Team
Understand each sales team member personally. Have each team member take a personality test, such as a free one at 16.personalities.com. Taking the time to understand how each person thinks, learns, how they are motivated, communicates, and accepts feedback is critical to team rapport and development.
“We bunk the normal rules of commission and bonuses as we find it gets all too predictable. All our sales staff fill out a likes and dislikes questionnaire when they start. It gives us a wealth of personal information about each employee, which allows us to use it for both ours and their benefit. For incentives and bonuses, we give them rewards specific to what we know they like. This adds a personal touch and they realize we regard them as a person and not just an employee. Salespeople working toward a target and bonuses they want is much more motivational.”
—Ethan Taub, CEO, Goalry
Continually Train Your Sales Team
Offering opportunities like professional development and in-house coaching helps your sales reps feel like you’re invested in their success. Train sales reps on things like how to establish rapport with prospects, how to build trust, and how to overcome potential objections from customers.
Keep a Keen Focus on Your Company Values
People succeed at places they like working, and with sales managers they respect. Don’t just paint your company values on the wall and put them in the organizational handbook. Live them out. For example, respect, care, accountability, trust, and the customer experience are great values to live by for any sales organization.
Foster Transparent Sales Performance Objectives
Don’t just set goals for your sales reps and expect them to blindly follow your lead and achieve them. Build rapport and buy-in by getting your sales team to work together to develop appropriate goals and objectives. The sales manager may have their eye on the bottom line, but making it a collaborative process is a definite team-builder that makes everyone feel involved in the overall sales success of the company.
Don’t Leave the Customer Hanging When the Deal is Done
A big part of excellent sales performance is what happens after the sale is done. Make sure your new customers have a rewarding and easy onboarding experience and receive continual customer care to ensure they become loyal brand advocates. Create a sales environment that fosters creativity and teamwork.
Sales managers, reps, and account managers should all work together to create sales strategies, encourage one another, and collaboratively find ways to improve performance. Encourage the entire sales team to work together, rather than having reps be told what to do without the chance to give any input to build team rapport and trust.
“It’s important to provide an atmosphere of inspiration and creativity from the moment you hire an employee to be on your sales team. Always encourage brainstorming, and encourage your sales team to stop in the middle of a meeting and throw around some ideas. The thing is that you never want to inhibit the feeling of teamwork, as that can be the biggest motivator you can have. Additionally, give your sales team responsibility, as well as the freedom to explore new ideas and strategies. As Steve Jobs said, it doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”
—Angela Ash, Sales and Marketing Manager, Upflip
Why Sales Performance Management Matters
Sales performance management is one of the bedrocks of creating an excellent sales culture that drives results in any organization. It establishes agreed-upon goals and metrics, sets expectations for sales reps and managers, and helps sales teams establish and improve strategies that help keep them ahead of their competitors.
The Key Benefits of Sales Performance Management
Every sales performance management process will vary from organization to organization. However, many of the essential components will be the same. Some of the main benefits of having a well thought-out sales performance management process are:
- Benefit #1: A good performance management process helps sales managers identify top performers. Then, they can be rewarded, promoted, and trained to help new sales reps.
- Benefit #2 – Sales performance management doesn’t just identify your high performers, it also addresses gaps in training and low performance. For example, it lets you know which sales reps need more training, coaching or a different type of motivation.
- Benefit #3: A robust performance management strategy provides transparency across the organization, especially when partnered with one or more of the SPM tools discussed below. It also ensures equitable assessments of teams and members because the metrics are objective and quantifiable.
Pitfalls to Avoid in Managing Sales Performance
While there’s no one way to do sales performance right, there are mistakes sales organizations can be aware of and strive to avoid. Some of the common drawbacks of managing sales performance include:
- Pitfall #1: Sales managers can’t reward and recognize every person on the sales team all the time in an effort to boost motivation. Set standards for recognizing and rewarding high performance so expectations are clear—and to help mitigate conflict among sales reps.
- Pitfall #2: If expectations aren’t clear, sales performance management can feel demotivating to some team members. Ensure everyone knows what their goals are, provide consistent training and coaching, and learn what motivates each team member.
- Pitfall #3: Let’s face it, most sales performance management software isn’t cheap and many small businesses, such as startups, run on a tight budget. However, an expensive tool isn’t always necessary if you set up a good SPM strategy in-house with spreadsheets or a dedicated sales performance policy manual and templates if you don’t have the budget for SPM software.
Sales Performance Management Tools
Many small companies take a manual approach to sales performance management—mostly because they aren’t familiar with the tools and software available to make it easier. However, using SPM tools allows sales managers and leaders to spend more time helping reps close deals, find opportunities for improvement, and reward top performers.
A few great sales performance management tools include:
Xactly Incent is sales incentive compensation management (ICM) software. It helps teams foster sales behaviors that align with your sales objectives to increase trust and create fair and effective sales compensation plans. It also drives motivation in sales reps by giving them potential commission earnings in real time on mobile devices. They offer a 30-day trial and pricing starts at $40 per user, per month.
Trakstar helps sales teams set performance expectations, create custom performance reviews, and fosters employee engagement. It even allows sales managers to learn what motivates their sales reps with company “pulse check-ins” as well as improving robust communication between team members, including surveys. It offers a free trial, but you have to contact its sales team for a custom quote.
Ambition gives sales teams the tools they need to set custom goals and encourage healthy competition with the option to display live sales performance dashboards on big screen TVs. You can also set fun competitions between reps or territories and initiate metrics-driven conversations with team members. Companies need to contact the sales team for custom pricing options.
LevelEleven fosters team motivation with real-time leaderboards, achievement alerts, and on-demand “gamification” tools. It also offers a personalized sales scorecard for reps, an early warning system when performance lags, manager scorecards, and more. It offers a free trial, but you need to contact sales for a pricing quote.
Hoopla is a popular sales motivation platform that boosts employee engagement. It offers tools such as “Hoopla TV” that broadcasts sales achievements on a dashboard and a mobile app that helps sales reps and managers monitor rankings with a leaderboard and sales activities in real time. You need to contact its sales team to get a tailored quote for your organization.
Frequently Asked Questions (FAQs)
Why is sales performance management important for sales organizations?
Having a sales performance management process in place helps sales teams set and reach goals, reward high performers, address low performance, and customize their sales and coaching process.
What are the key attributes of an effective sales performance management process?
Open communication, transparency, continual coaching and professional development, motivation, rewarding high performance, and team buy-in are aspects of nearly every effective SPM strategy.
Are sales performance management tools expensive?
They can be, and they certainly help teams effectively measure sales performance while even making it fun with “gamification” features. However, many SPM software companies offer free trials to help to figure out what works best for you and will custom-tailor a quote for your budget.
The Bottom Line – Sales Performance Management
Developing and following a robust sales performance management strategy is critical for every sales organization to reach its goals and improve its overall performance. An excellent SPM strategy fosters motivation and team rapport, transparency, clarifies expectations, coaches sales team members effectively, and provides useful feedback for sales reps and managers alike.
Most sales organizations use a CRM to help them manage sales activities and sales performance. For example, HubSpot allows sales teams to transparently enter sales activities, report opportunities won or lost, and record customer conversations. Additionally, sales managers can pull customized sales reports to analyze performance. Sign up for a free account.