As someone who leads a sales team, your role is to motivate and resource your team to ensure it’s able to reach its goals. That can seem like a huge challenge, but the good news is there are tools and strategies you can use to help maximize your team’s performance. In this article, we’ll cover some of the most effective sales performance management practices that you can implement with your team today.
Sales performance management (SPM) is the processes and systems businesses use to evaluate the performance of their sales team, plan sales quotas, map territories, and create future sales strategies.
How Sales Performance Management Works
Sales performance management works by creating goals for your team, and then providing them the systems and tools they need to reach those goals. Most effective SPM systems also include an intentional effort to track and evaluate performance on a regular basis, and provide feedback and coaching to sales reps to help them improve.
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, they 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.
In essence, sales performance management involves:
- Consistently setting and measuring progress toward sales goals
- Providing training, coaching, and feedback to sales team members on a regular basis
- Using tools (which we will cover more in-depth later in this article) that help streamline the sales process as well as measure performance
What Sales Performance Management Looks Like in Different Sales Organizations
While every sales organization is different and has varying needs, creating an effective SPM plan can help sales managers and CEOs focus on their most important goals and generate the most revenue. Here are a few examples of what it might look like in your business, whether you are a startup, a larger business-to-business (B2B) organization, or a business-to-consumer (B2C) company.
- Small, growing sales organizations: Small sales companies, such as startups, need a way to measure sales performance just as much as larger organizations. Rather than just jumping into selling blindly, they need to develop intentional sales performance plans to set the stage for success and expectations as the company grows and new sales hires learn their roles.
- Established B2B 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.
- B2C companies: Rather than selling products and services to other businesses, B2C organizations sell to individual consumers. For example, if you run a retail clothing store, you should set performance goals for each sales rep on the amount of revenue you expect them to generate and which products they should be focusing on promoting.
Many sales leaders feel lost when learning how to measure sales performance, and so 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 improve 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
It’s important to understand each sales team member personally to help them stay motivated. Have each team member take a personality test, such as a free one at https://www.16personalities.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.
For example, some sales reps thrive and are motivated best by shadowing more experienced team members and practicing with them, often known as “learning by doing.” However, some people are motivated by attending sales training courses, honing their skills through individual coaching, and reading sales-specific literature. As a sales leader, it’s your job to learn how to help each sales team member do their best work and improve over time.
Finally, many high-performing sales reps are motivated by their compensation plan. Be sure to develop a plan that adequately rewards team members for reaching milestones, team goals, and individual goals.
Continually Train Your Sales Team
Making sure your team has the skills and experience they need to effectively serve customers helps them be more effective in reaching their sales goals. You can make sure your team is growing and developing those skills by offering opportunities that help them learn and grow.
Doing things like encouraging 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 Focus on Your Company Values
People succeed at places they like working at, 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.
Visit our comprehensive article about sales plans to learn more and download a free template.
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, because this ensures your new customer feels supported and is more likely to stay loyal to your company and generate referrals. 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.
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:
- Identifying top performers: A good performance management process helps sales managers identify top performers. Then, they can be rewarded, promoted, and trained to help new sales reps.
- Learning which reps need more coaching: 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.
- Fosters a culture of trust and transparency: 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:
- Lack of recognition and rewards: 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 help mitigate conflict among sales reps.
- Unclear expectations: 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.
- Not using the tools that help you succeed: 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; 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.
Here are a few example of sales performance management tools that can help streamline your SPM process:
Pipedrive helps manage contact and sales opportunities, and moves them through your sales process with a visual pipeline tool. It ranges from $15 to $99 per user, per month, billed monthly.
Showpad is a sales training tool that helps deliver sales content and coaching in a simple, cloud-based environment. Pricing is available upon request from their sales team.
Zoom is a video conferencing tool that includes a free plan, allowing team members to collaborate about performance as well as meet with clients and prospects remotely. Paid plans range from $14.99 to $19.99, per user, per month.
Hurrah! is a sales performance management tool that allows you to create gamification leaderboards to foster healthy competition among sales reps and reward them appropriately. Pricing is available upon request.
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 figure out what works best for you, and will custom-tailor a quote for your budget.
Developing and following a robust sales performance management strategy is critical for every sales organization to reach their goals and improve their 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 customer relationship management (CRM) tool 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 productivity reports. Sign up for a free account.