Sales is not magic – although a magical touch doesn’t go amiss! Succeeding in sales is about consistently exceeding set targets, over and over again. When you want to maximize revenue and go above and beyond, you need a proactive, collaborative and analytical approach. You may have a strategy but is it all encompassing, fully data-driven and holistic enough? In other words, you need a solid Sales Performance Management strategy. Here, we explain how it can help you reach even the toughest of targets.
What’s a Sales Performance Management strategy?
Using a Sales Performance Management strategy means that you’re using data to not only plan and manage, but also analyze sales performance. This is a solid growth management approach, using hard data to influence sales leaders’ decision-making.
Basically, Sales Performance Management is a series of processes to ensure sales leaders understand what works, what doesn’t and how you can best turn leads into sales. It includes, but is not limited to, analyzing sales productivity, efficiency and effectiveness and developing a deep understanding of the needs of both consumers and the sales team.
Sales Performance Management helps to ensure that each member of your sales team is working to achieve your organizational goals and objectives. It can include training and coaching sales reps, monitoring their progress and developing their skills over time.
It can include incentive compensation management, quota management and planning, territory management, advanced analytics, and even gamification elements to make the sales process more engaging and rewarding.
When you have to factor in account segmentation, incentive compensation, territory planning, quota setting, pipeline optimization and forecasting, plus how these all fit into one another, it can seem complicated. Now, we never said it was easy. The rewards can be endless, but getting there can be a bumpy road. As each of the interlocking parts of the strategy influence each other, what happens in each of them inevitably affects the others.
Therefore, you’re better off approaching your Sales Performance Management strategy holistically, and taking it for what it is, rather than looking at each part in a siloed way.
Why Is Sales Performance Management important?
We’re basically talking about streamlining your operations and unifying your sales ecosystem. You want to automate as much as possible, and a Sales Performance Management strategy helps to align processes and automate administrative and menial tasks.
It will solidify your planning processes and align a direction for the sales team. By using data to optimize planning, improve sales processes and align stakeholders across all of the sales functions, you’ll get everyone on the same page. By using this process to optimize hiring, training, analysis and adding consistent follow-up, a good sales manager can help salespeople hit individual sales quotas.
What does a Sales Performance Management strategy include?
Let’s break it down: The strategy is built on optimizing where, how and what to sell.
Sales planning & managing (where to sell)
This means planning where to sell and using data and automation to slice up the market and align your team to tackle market needs. Optimize this process by using advanced modeling to assess the potential of every account, territory and region. Then, you can allocate territories, set quotas and plan capacity accordingly.
You can manage this by getting and analyzing real-time data about reps’ outputs and quota achievement, so you can model potential outcomes. Thereby, you’re increasing deal wins, reducing attrition and managing day-to-day decision-making to ultimately close more deals.
Sales incentives (how to sell)
As a sales leader, you use incentives to create commission structures directing employees to sell certain products to certain clients. By using a Sales Performance Management strategy, you streamline departments for fast, accurate payouts.
You can optimize this by making the incentive structures easy to thoughtfully change when needed to adapt to new priorities, competitors or market dynamics. By, again, using company-wide data to understand how to accurately capture potential opportunities, you’ll ensure that your sales incentives are working at their best.
To further optimize, make sure that your incentive compensation plans incorporate four dynamics:
- A planning session starting a quarter before the implementation
- A review of the plan performance involving key stakeholders
- An implementation phase that communicates all new plans, targets, and accounts, aiming to get buy-in from salespeople
- An ongoing modification phase which allows space to reevaluate and amend plans based on market or business changes
Sales insights (what to sell)
When you want to measure and improve your business, you use pipeline management, pricing and discounting, sales forecasts and other KPIs. You can use machine learning and AI to create actionable insights as to how effective your sales forecasting and operational procedures actually are, in comparison with industry benchmarks.
This is where Sales Performance Management excels. With it, you can use advanced software to collect and process data and deliver it in an easily digestible way. By managing huge amounts of organizational data and analyzing it for insights, sales leaders can use accurate data intelligence insights to drive future decisions.
How to create a solid Sales Performance Management process
With a good and structured Sales Performance Management process, you can deliver targeted training and maximize development initiatives. Here are the steps you need to take to facilitate the process:
1. Identify relevant performance metrics
In order to make this your own and provide an effective process for your sales team, you want to simplify your overall business objectives, break them down and make them relevant to the individual contributors on your team.
Take into account the high-level success metrics your team is being measured against, and ensure you measure each person’s activities in relation to how well they serve overall business objectives.
Consider these metrics to measure:
- Individual Quota Attainment – How much of the sales target has been reached for each sales rep in a given month or sales period? Assign this as a percentage and use it when checking benchmarks.
- Conversion Rate – What percentage of leads each rep has converted to paying customers? Use this to understand your lead quality score and to know if your team has enough resources for lead nurturing.
- Sales Productivity Metrics – How long does it take for your reps to reach their quota? The faster reps reach their quota, the more productive they are. To measure sales productivity, look at the following, broken down in percent:
- Hours spent prospecting
- Hours spent on data entry
- Number of closed deals
2. Communicate goals and get buy-in
Communicating your goals and allowing salespeople an opportunity to feedback is important. Ensuring that teams understand how their goal impacts the overall business objectives is one way to manage any push back.
Adjust goals as needed, and work together with your team to make goals more achievable. If there’s space, allow reps to set their own development goals based on any areas of improvement.
By always communicating and talking with your sales force in a two-way dialogue, you can get helpful feedback from the people who are face-to-face with clients everyday. Be sure to keep your sales pipeline flexible enough to be able to incorporate new concepts.
3. Coach reps to build performance over time
When you’ve set the goals and got buy-in, you need to give your reps the tools and resources they need to succeed. Coaching is a great way to do this. Maybe they want to improve on prospecting techniques or presentation skills. You can hire an external coach or, if you have the time and the know-how, teach them yourself.
But ensure that they are held accountable and actually finish the training, that their training and progress is tracked, kept up to date, and recorded, and that they connect with more senior teammates to facilitate new learnings.
A sales coaching software can do all of these things for you.
4. Provide performance feedback regularly
Regularly give performance reviews, monitoring and tracking the success of your sales team so your reps keep developing. This way, your Sales Performance Management process will be more effective.
You could include the following in your performance reviews:
- All goals and objectives. Discuss how they’ve performed overall, what they think about their performance themselves and what they’d like to improve upon in general. Push them to be as specific as possible. Include previous feedback – have they implemented previous, constructive feedback or demonstrated growth in a particular area? If so, include that in the current review as a win.
- Include direct feedback on their successes. Discuss performance in terms of their strengths and give a few examples on how this has been demonstrated. If they’re great at presenting, explain how this has helped close a deal or supported the discovery process.
- Give constructive feedback on what they can improve. Discuss situations they could have managed differently. Give them resources which help with their improvement and growth. If they struggle with prospecting, provide a training or coaching course and encourage them by providing positive feedback when they do well in this area.
- Summarize the overall performance and what they can improve on. Consider giving a rating, on a scale of 1-5, which is confidential for everyone in the team.
Follow up regularly
Monitor results regularly and follow up to ensure that reps are on track with their goals. Have a weekly one-on-one meeting with each rep to align on goals. You can include calls made, meetings attended, good opportunities and proposals made. Give positive feedback for the numbers that look good, and identify any areas of opportunity and things for improvement.
Optimize your strategy with software
Using software for performance tracking is an easy way to keep track of progress throughout the year. Analytics are needed to be able to accurately understand how you and your team can improve. When analyzing the sales pipeline, you should provide a list of numeric goals to hit for each rep.
The worst thing you can do is to waste time tracking metrics manually. There’s space for human error, and it’s unnecessarily time-consuming.
To accurately track data, you need to find a sales engagement or revenue enablement software, integrated fully into your CRM, which includes sales incentive compensation management (ICM), quota management and planning, sales territory management, and ideally, also some gamification elements around coaching and training capabilities.
This will facilitate tracking and streamlining your sales performance management process to maximize your workflow and ultimately achieve commercial excellence.
Where many sales leaders go wrong
Using a single, siloed software which is not integrated with the rest of your tech stack, a so-called point solution, might help one individual element of your strategy. However, it won’t be able to evaluate any impact, negative or otherwise, on the rest of your sales projection. Leaders then become vulnerable to unanticipated changes, and the consequences can be massive.
If your software doesn’t collate company-wide data or can’t make complex calculations in real-time, you won’t have enough reliable data to make strategic decisions. You’re looking for software on one single platform that can support your entire sales strategy.
Benefits of optimizing Sales Performance Management strategy
Building your perfect Sales Performance Management strategy will help you get control of your quota management. It will be easier to create, allocate and manage sales targets. You’ll keep the entire sales process flowing smoothly, as it should help with getting a bird’s eye view. By using the strategy, it allows you to easily identify areas in need of help and act to resolve them quickly.
All in all, this type of strategy offers a holistic approach and easily knowledge of what works and what doesn’t. Happy selling!
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