What is Sales Performance Management?
Sales performance management (SPM) is, in its most simple terms, the practice of optimizing your business's sales team for increased efficiency and bottom line profitability. SPM includes a wide spectrum of processes ranging from sales planning to compensation management techniques.
Many business professionals assume that SPM is simply the implementation of management software or compensation management. Alternatively, SPM is not a single process but instead a complex system that incorporates a wide variety of performance management best practices and processes comprehensively.
Best practices for building your business's SPM system include-
- Creating a foundation- Formulate a SPM strategy alongside your stakeholders and any important decision makers at your business. Start at the top of your company, setting specific objectives and strategies.
Your sales strategy must be buyer-focused and cover processes ranging from management software implementation to sales training solutions. Of course, it is helpful to request feedback from your sales team regarding your established SPM strategy to make sure it is both realistic and actionable.
- Building your strategy out- Once the foundation of your business's SPM has been established, you can begin integrating additional processes. Make sure your objectives retain a focus on the buyer and support consistency across your entire organization.
- Evaluating system- Use data driven performance metrics and sales analytics to determine which factors are impacting sales performance. Technologically advanced tools including predictive analytics and management software can lead to better sales performance.
- Optimizing management techniques- Performance metrics and sales analytics are only effective if they are properly integrated into your business's sales management techniques. As management techniques cover everything from the hiring to the firing of sales reps, there are many processes for management to consider.
Hiring the best candidate for your sales force is much easier when your sales managers better understand what skills and traits the current sales leaders at your business possess. Sales training that is informed by your SPM system is also much more effective.
Management techniques for existing sales reps including sales coaching improve exponentially when sales managers know which sales reps require additional attention. Additionally, compensation management and incentive management are more efficient when performance appraisals are data driven and specific.
- Implementing feedback loops- Performance metrics and sales analytics provide feedback on what processes necessitate improvement and which processes are functioning optimally. Data driven feedback loops support your business continually striving for better sales and bottom line improvements.
Benefits of Sales Performance Management
Sales performance management provides rich benefits to your business, ranging from better customer experience to predictive analytics improvements. Various important benefits of SPM include-
1. Territory management improvements- When your sales team better understands what sales enablement techniques and best practices work best in a specific territory, your overall sales process is improved. Performance metrics and quota management are helpful for establishing a territory quota that is both realistic and attainable.
2. Predictive analytics- Data driven predictive analytics are useful for forecasting future sales. Both sales planning and operational efficiency are positively impacted by improved predictive analytics.
Sales managers can use predictive analytics to motivate each sales rep by forecasting sales compensation and incentives. Incentives and compensation can be used to foster healthy competition amongst your sales team and improve sales overall.
3. Sales force optimization- With SPM, sales managers know exactly what skills and qualities to look for when hiring and onboarding new employees. Standardized sales training techniques aim to produce sales leaders from the very beginning of employment.
Sales coaching will further develop top sales reps while addressing any sales enablement roadblocks. Linking sales leaders with struggling sales reps can result in invaluable performance improvements.
The best SPM system is focused on continual development throughout the entire sales rep career. Development opportunities are vast and may include attending a leadership seminar or supplemental reading assignments.
4. Bottom line profitability- A great SPM system will improve sales made by your sales reps while increasing the margins on sales. Sales planning that focuses on customer experience leads to better sales and bottom line profitability overall.
Additionally, when the customer experience improves, customer retention rates also improve. Encourage customers to leave reviews about their positive customer experience as these reviews provide your business with free advertising and potential new sales lead referrals.
5. Better feedback- Feedback is an essential component of any effective SPM system, including regularly scheduled and structured employee performance reviews. During performance reviews, make sure to provide sales reps with information ranging from compensation plans to suggested actionable areas of improvement.
6. Increased technology- Sales performance management software can greatly improve your SPM system and decrease the workload of sales managers. From quota management to sales compensation automation, management software simplifies and streamlines your business's SPM system.