Sales performance management (SPM) is the technique and process of training sales personnel to improve their sales effectiveness and meet their goals and objectives.
New hire onboarding, goal setting, quota, and sales funnel management, which includes regular performance reviews, incentive and compensation, sales forecasting, activity management, coaching, training, and motivating sales representatives, as well as holding reps accountable to performance outcomes, are some of the key components of SPM.
SPM is all about inducing the desired sales behaviors that result in the desired results (goals). The idea, of course, is to tie everything together.
Sales Performance Management: Best Practices followed by Organizations
Let’s look at how top-performing sales organizations use sales performance management to improve sales effectiveness and create business success.
Common Attributes Among Top Sales Performers
Best-in-class sales performance management firms figure out what their top performers have in common. They identify the behaviors that are linked with their most successful salespeople, institutionalize those behaviors, and establish procedures to mold new salespeople around those behaviors, allowing them to quickly “ramp up” new employees and grow existing salespeople.
Laggard organizations, on the other hand, are made up of individual sales representatives, each of whom sells according to their own unique style and comfort zone. These companies often get 80% or more of their revenue from their top few representatives, with 60-80% of the representatives doing averagely and the rest underperforming. The deeper issue is that these companies don’t understand the common behaviors among their top salespeople and so can’t replicate them.
This is one of the main reasons why many small but growing businesses find it difficult to scale their operations. They’re at a loss on what to reproduce.
Formal and Structured Performance Reviews
Sales executives who use best-in-class sales performance management implement a formal and structured performance review and feedback process with their salespeople on a regular basis. These sales leaders have a set of performance measures and standards against which the rep is judged. Keep in mind that this process entails much more than the basic and all-too-common dialogue about “increasing your activities.”
Leaders Provide Positive and Public Recognition
Those that practice and lead best-in-class sales performance management are also far more publicly supportive of their sales teams’ achievement than those who lead underperforming sales teams. Sales organizations are more likely than all other organizations to perform objective win/loss analysis on completed sales deals, typically enlisting the help of a third-party consultant. This demonstrates that best-in-class sales organizations are considerably more willing to accept reality, including constructive criticism, to repeat success.
Centralized Repository of Sales Assets
Best-in-class sales organizations integrate sales, marketing, and operations to build and make best practices, sales assets, sales playbooks, and experts available to salespeople on a just-in-time basis. Sales organizations are now embedding their sales process, methodology, and assets within their CRM or ATS solution to empower their sales staff to execute best practices across each stage of the sales cycle, thanks to new technologies.
Individual sales reps “hoarding information” in the ancient days is quickly being replaced by millennia where sharing information and creating content is part of their core. And, if the research and real buyer behavior have taught us anything, salespeople need quick and simple access to the necessary sales assets in a centralized repository (preferably within their CRM) to conduct a meaningful conversation with a customer.
New Hire On-Boarding Program
Sales businesses that send their sales representatives to Presidents Club regularly are considerably more likely than those that don’t have a formalized new hire onboarding program for new sales reps. The faster you can get new sales reps to confirm and accept your cultural norms and performance standards, as well as learn the knowledge, attitudes, abilities, and behaviors needed to succeed, the more productive you will be. However, onboarding is more than “quickly ramping up new salespeople.” It’s also about establishing your brand and retaining employees.
If your new sales agent has to fill out fifteen different paperwork on their first day of work and doesn’t have access to a computer or email, it gives a terrible impression and sends the wrong message. A recruit onboarding program is also not a one-day or one-week event, but rather a process that begins during the interview process and can last up to 180 days. The faster new hires acclimatize and contribute to the business’s overall success, the more organizations can make them feel welcomed into the organization and prepared for their new role. This is something that best-in-class firms excel at.
Sales Dashboard and Analytics
Any sales leader or sales organization should recognize the value of sales performance dashboards. However, in my experience, sales dashboards are the exception rather than the rule among IT employment organizations. Most, if not all, CRM and ATS suppliers today give visually appealing visuals and data that answer fundamental queries like “Am I going to make my number?” and “Do my reps require performance coaching during which stage(s) of the sales cycle?”
Those sales organizations and sales representatives who have easy access to this information are more productive than those who do not. Customized sales reporting, such as sales funnel analysis, win/loss analysis, and sales forecasting, can help sales companies better coach and develop their sales representatives. Those who do not are faced with the challenging task of making critical business decisions based solely on subjective facts and their “gut.”
The Bottom Line
As you can see, sales performance management is far more than simply allocating a quota, conducting “shadow training,” and delivering a phone number and company brochure to a sales representative. Incenting, motivating, and coaching sales personnel are all part of best-in-class sales performance management. It’s also about equipping employees on the “front lines” with the sales assets they’ll need to complete each phase of the sales cycle successfully.
Finally, SPM entails imitating and rewarding ideal sales behavior, as well as employing data to make better judgments about pipeline management, sales forecasting, and quota management. When sales reps, managers, and owners use these strategies, they have considerably more success in terms of quota attainment, retention, and long-term growth.