As a sales leader, you already know that effective sales performance management isn’t just setting lofty sales targets and then pushing your team to achieve them. It’s about creating a systematic approach to selling at scale.
Although SPM strategy varies by company and industry, the most effective sales performance management strategies typically involve a combination of the same core pillars. These pillars include organizational alignment, robust reporting, ongoing professional development, incentive compensation, and sales enablement.
Only when these components are carefully managed and integrated into your sales strategy, can you drive performance, foster a motivated sales team, and ultimately, achieve your sales goals.
Today, we’re exploring the benefits of sales performance management and unpacking each of these five pillars to provide you with actionable steps you can take to supercharge your sales team. Let’s get into it!
SPM Pillar #1: Organizational Alignment Around Shared Goals
Getting sales right is like a well-choreographed ballet. Every player needs to know their part, and more importantly, how their part works in harmony with the others. For sales leaders, this means aligning with other department leaders around broader organizational goals.
Alignment isn’t just a nice-to-have. When it comes to sales performance management, it’s a must-have. Let’s break this down further:
- Unified performance metrics: Alignment ensures that key performance metrics are consistent across departments, allowing for accurate evaluation and comparison of sales performance.
- Synergistic target setting: When aligned with other departments, sales targets are set in harmony with the overall organizational objectives, promoting balanced growth and more effective quota management.
- Incentive alignment: Shared goals enable the design of incentive structures that motivate sales reps while aligning with the broader success of the organization.
- Optimized lead handoff: Seamless alignment facilitates smoother lead handoffs between departments, reducing drop-offs and enhancing the conversion process.
- Holistic customer insights: Collaboration provides a comprehensive view of customer interactions, aiding sales organizations in tailoring their strategies to better serve customer needs.
Don’t just take our word for it, research has shown that companies with strong alignment perform better than those without, reporting 36% higher customer retention rates and 38% higher sales win rates (source).
Recommended reading: 5 Sales Quota Setting Methodologies Proven to Generate Revenue
SPM Pillar #2: Robust Reporting and Access to Critical Success Metrics
As the adage goes, “If you don’t know where you’re going, any road will get you there.” And, it’s true! When it comes to sales performance management, if your goals are your destination, reports and analytics are the GPS you need to get there.
And, the further you dive into sales performance management, it becomes abundantly clear that without access to robust reporting and critical analytics, sales performance management simply doesn’t exist.
You need a constant stream of real-time data to assess your team’s performance, conduct data-driven sales planning, identify areas of improvement, and double down on the strategies that work well. When this data is readily available, it becomes easy to:
- Spot trends and patterns in your team’s behavior
- Pinpoint opportunities for growth, improvement, or leadership development
- Proactively prevent future issues before they get out of control
- Make data-driven decisions regarding big-picture strategy
Let’s take a deeper look at some of the metrics we recommend tracking and reviewing on a regular basis:
- Pipeline metrics: sales forecasts, meetings booked, opportunities created, average deal size, etc.
- Sales cycle metrics: total length of sales cycle, length of time in any given funnel stage, pipeline velocity, conversion rates, win rates, etc.
- Individual rep performance metrics: activity levels, quota attainment, individual conversion rates, follow-up times, number of touch points, etc.
- Seller experience metrics: ENPS, sales turnover rate, employee satisfaction, engagement rates, etc.
Of course, this list is by no means comprehensive. We recommend working closely with your RevOps team to build out the reports and dashboards you need to monitor, assess, and improve sales performance within your own organization.
Recommended reading: Data Visualization: Putting the Design in Comp Plan Design
SPM Pillar #3: Ongoing Coaching and Professional Development Opportunities
The third pillar of effective Sales Performance Management (SPM) is arguably one of the most crucial: ongoing coaching and professional development opportunities. This focus on career progression and continual growth not only enhances team performance, but it also fosters a culture of learning within your organization.
Henry Ford once said, “The only thing worse than training your employees and having them leave is not training them and having them stay.” This mindset rings especially true when it comes to sales teams.
So, why is investing in professional development vital to the success of your sales performance management strategy? It’s simple. The sales landscape is constantly evolving, with shifting customer expectations, emerging technologies, and new industry trends. Utilizing routine coaching sessions allows your sales team to stay ahead of these changes, equipping them with the skills and knowledge they need to adapt and excel.
Exploring this deeper, investing in the development and growth of your sales team aids in the following ways:
- Up-to-date selling strategies: Regular coaching and training ensures your team is always up-to-date on the latest sales methodologies and practices.
- Job satisfaction: It provides a positive seller experience by focusing on individual growth and learning. In turn, this boosts morale and engagement in the workplace while also decreasing sales turnover.
- Consistency: It promotes consistency in sales techniques across the team, which contributes to a unified brand message and prospect experience.
- Performance Improvement: It provides the opportunity to explore weak areas and offer targeted training to improve sales performance at scale or on a case-by-case basis.
If you don’t yet have a formalized coaching or training strategy, start by working with your leadership teams and key stakeholders to conduct an analysis of both team performance and individual performance.
Then, prioritize the issues that are most widespread and costly. From there, build regular coaching, performance reviews, and training blocks into your team’s schedule. Remember, the goal is continuous improvement, so make sure to regularly review and adjust your program as necessary.
Recommended reading: Skill vs. Will: When Skill Just isn’t Enough in Sales
SPM Pillar #4: Strategic Sales Incentives and Compensation Strategy
It’s no secret that a well-structured incentive program can dramatically boost a team’s motivation and, as a result, improve sales performance. Consider these statistics:
- 90% of top-performing companies utilize incentive programs to reward their sales associates (source).
- Properly structured incentive programs can increase employee performance by 44% (source).
- Companies utilizing an incentive program reported a 79% success rate in achieving their established goals when the correct reward was offered (source).
But, when it comes to sales performance and incentive compensation, the right plan doesn’t just drive motivation, it can also have a profound impact on employee morale, engagement, and turnover.
Creating the perfect sales compensation plan isn’t easy. It requires careful coordination across departments, alignment around goals, access to data, and more. Because we’ve covered this topic extensively in the past, we’ll leave you with a few best practices to leverage when creating or adjusting sales comp plans:
- Clarity: Make sure your incentive programs and commission structures are clear and easy to understand. Your sales team should know exactly what they need to do to earn rewards.
- Alignment: Your incentives should align with your company’s strategic goals and the behaviors required of each team to hit said goals.
- Competitiveness: Your commission rates need to be competitive to attract and retain top talent. Research sales compensation benchmarks to ensure your rates are comparable.
- Recognition: Alongside monetary rewards, recognition plays a crucial role in motivating a sales team. Recognize and celebrate your top performers in team meetings or company-wide announcements.
The implementation of your sales incentive program is just as important as its design. Here are some steps to ensure successful implementation:
- Communicate the details of your program clearly to your sales team.
- Keep track of performance and provide regular updates.
- Deliver rewards promptly to maintain motivation.
- Audit your program regularly to ensure it remains effective and fair.
If you’re seeking additional resources about incentive compensation and sales performance we’ve compiled a list of our most popular articles below:
- Sales Comp 101: Using Stephen Covey’s Circle of Influence
- Creating Compensation Plans for Sales Engineers
- 4 Reasons to Automate Your Sales Commission Process
- 3 Keys to Building an Effective Commission Plan
- The Impact and Administrative Overhead of a Bad Sales Comp Process
SPM Pillar #5: Consistent and Thorough Sales Enablement
Sales Enablement not only fuels the effectiveness of the entire sales process but also fortifies the foundation upon which the other four pillars rest.
At its core, Sales Enablement refers to the strategic, ongoing process of equipping sales teams with the tools, resources, and training they need to excel. This can include everything from product knowledge and selling techniques to onboarding and tech stack training.
Sales Enablement, when executed well, carries significant implications for Sales Performance Management. Below are a few ways the right enablement strategy can impact your SPM goals and outcomes:
- Improves sales efficiency: With the right tools and resources at their disposal, sales professionals can streamline their efforts, thus improving efficiency.
- Boosts sales effectiveness: High-quality training enhances the skills and competence of a sales team, increasing their effectiveness in achieving sales objectives.
- Enhances prospect and customer relationships: Informed and educated salespeople build stronger relationships with prospects and customers, ultimately driving more wins, customer loyalty, and repeat business.
But, don’t just take our word for it! According to a study conducted by CSO Insights, companies with effective sales enablement strategies have, on average, 15% higher win rates than companies without (source).
So, how can you implement or improve your existing sales enablement strategy? We recommend starting small, with these steps:
- Equip your sales team with the right tools: This doesn’t just include sales performance management software. It may also include CRMs, prospecting tools, content libraries, gamification software, and more. It’s also important to teach your team how to leverage the tools they have access to. Doing so will increase effectiveness and sales productivity.
- Provide regular training: Continuous learning and development should be encouraged. This includes product training, sales techniques, soft skills development, and more.
- Implement a strong feedback system: Collecting constructive feedback will aid you in identifying areas of improvement and potential growth opportunities. Continue to adjust your enablement strategy and iterate as you get feedback.
Recommended reading: The Sales Leader’s Guide to Using Mutual Action Plans
Final Thoughts on Sales Performance Management
Ultimately, in sales, there will always be some degree of uncertainty– from market conditions to rep turnover there will always be factors outside of your control that influence sales performance. That’s why, as a sales leader, it’s important to focus on controlling the controllable.
Focus on the five pillars we covered in today’s blog post and you’ll be setting yourself up for success. But, remember, these pillars do not operate in isolation. They are interconnected, feeding into and off of each other as part of a greater sales performance management system. Constant iteration and refinement of each process will lead to a robust and effective sales performance management strategy.
About Spiff
Spiff is a new class of commission software that combines the familiarity and ease-of-use of a spreadsheet with the power of automation at scale- enabling finance and sales operations teams to self-manage complex incentive compensation plans with ease. Spiff is designed to facilitate trust across organizations, motivate sales teams, increase visibility into performance and earnings, and ultimately, drive top line growth. The platform’s intuitive UI, in-depth reporting capabilities, and seamless integrations make it the first choice among high-growth and enterprise organizations.
