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Sales Performance Management

Sales Performance Management (SPM) is a gamut of interconnected, operationalized sales processes that enhance the sales organization's efficiency, effectiveness, and performance. Simply put, SPM improves the operational effectiveness and efficiency of sales processes via centralization, automation, and more.

Sales performance management is a process that tracks, measures, and rewards the performance of sales reps. It involves analyzing sales data and identifying improvement opportunities to increase sales revenue. Sales managers use this information to evaluate their employees' performance and determine who has the potential for promotion or termination.

Sales Performance Management (SPM) can be broken down into three primary categories:

  • Sales force automation: Automates sales-force processes to track sales activity, forecast sales opportunities, and manage customer relationships.
  • Sales forecasting: Use historical data to forecast future sales volume and pipeline activity.
  • Sales reporting: Provides real-time visibility into sales results, including forecasts, actuals, forecasts by account or territory, quota vs. actuals, and other analyses that help you understand where your team needs help or how they can improve their performance.

What is sales performance management?

Sales performance management (SPM) is a group of analytical and operational functions that unite and automate back-office sales processes to enhance operational effectiveness and efficiency. The SPM capabilities include quota management and planning, incentive compensation management, territory management, gamification, advanced analytics, and more.

The main objective of Sales Performance Management (SPM) is to provide the tools necessary for salespeople to achieve their revenue targets while helping businesses to:

  • Track their sales pipeline
  • Measure sales effectiveness
  • Forecast revenue
  • Manage customer relationships
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Why is sales performance management important?

Here are a few reasons why sales performance management is important for a business:

  • It helps you to identify high-performing and low-performing reps.
  • It allows you to track sales rep performance over time to see how every salesperson performs compared to their peers.
  • It allows you to identify trends in sales rep behavior so that you don't have to guess where your problems lie.
  • It helps you identify top performers. This way, you know who is performing well and can reward them accordingly.
  • It helps you identify underperformers so that you can provide them with additional training or coaching to help them improve their performance.
  • It provides a complete view of what is working for your company and what isn't so that you can make improvements in the future.
  • It helps you understand where you're at and what needs improvement to reach your goals. 

What are the components of sales performance management?

A good SPM strategy is created on three priorities: what, how, and where to sell. When these priorities are well-defined and thoughtfully set up, the outcome is "outstanding sales." 

Sales performance management is often grouped into three main components:

  • Sales planning: It's how a business divides its target market and gets its sales team to align with it. Here, the activities include allocating territories, organizing accounts, setting quotas, and planning which team will work in which region.
  • Sales incentives: These are commissions that salespeople receive for selling certain products or services to customers. These are one of the biggest motivators for sales teams to work towards a goal.
  •  Sales insights: Sales leaders use sales metrics to measure the effectiveness of their sales and make relevant updates or changes. Here, the activities include pricing, discounting, sales forecasts, pipeline management, and other KPIs.

How to improve sales performance?

The following tips and best practices can help your business improve sales performance:

  • Create a well-defined sales process: If you have an organized, repeatable process, your team will know what they need to do and how to do it.
  • Rethink your selling strategies: Train employees on the latest selling techniques and technologies to sell better with less effort and wasted time.
  • Hold regular meetings with your sales team: You might be surprised by how much information you can gather by asking questions during a short weekly meeting with each team member. This is also an excellent way to keep everyone on the same page regarding goals and priorities for the week ahead.
  • Be proactive rather than reactive with your leads: A big part of exemplary sales performance is having a solid pipeline of leads at all times. Ensure your team has enough leads, so they don’t have to worry about missing out on opportunities or waiting for customers who aren’t ready yet.
  • Provide incentives: They are an incredible motivator to get your sales team to go the extra mile. Give your salespeople attractive rewards for meeting or exceeding established goals.
  • Add gamification to your sales process: Gamification has the power to ignite the competitive spirit in your sales team and provides a sense of competition among the team members, which in turn, helps them to strive for excellence.

Pro tip:

Boost sales rep performance with Compass, the all in one sales incentive management platform that helps you easily incentivize engagement, drive action, and get results.

How to monitor sales performance?

Measuring and tracking sales team performance is one of the most critical tasks for any business owner or manager. It's essential to know how well your team is doing so that you can set goals and make adjustments to improve their performance.

Here are some of the key factors you should consider when measuring sales team performance:

  • Sales revenue: Total revenue is the most obvious measure of success for any salesperson, which includes gross revenue and net profit. This is important to consider both when evaluating your team's sales performance. 
  • Average units sold per Day/Week/Month: This measure reveals how many units were sold during a given period.
  • Lead conversion rate: This metric shows how effective your sales team is at turning cold calls into warm leads and converting them into qualified customers who have signed contracts. 
  • Customer satisfaction score: This metric shows how satisfied your customers are with your brand. They will help you identify areas where you need improvement so that you can take steps toward improving customer satisfaction.
  • Sales cycle time: This refers to the time between when a lead comes in and when the sale closes (or doesn't close). A shorter sales cycle means a faster turnaround time for new leads, which increases revenue and lowers the costs per acquisition for each sale in the pipeline.

What is the difference between sales performance management (SPM) and incentive compensation management (ICM)?

The key differences between Sales Performance Management (SPM) and Incentive Compensation Management (ICM) are highlighted below:

Sales Performance Management (SPM)

  • Sales Performance Management (SPM) is about achieving the desired performance by tracking, measuring, and rewarding the performance of sales reps.
  • Focuses on improving the sales team's performance.
  • The goal is to increase both revenue and profit.
  • It improves the quality of the sales team's work and helps them improve at their job.
  • It is a method to set, monitor, and enhance sales goals for your sales team. It involves planning, budgeting, forecasting, and tracking the performance of your sales force.

Incentive Compensation Management (ICM)

  • Incentive compensation management (ICM) is about designing compensation plans that align employees' interests with the organization's objectives.
  • Focuses on improving the sales team's motivation.
  • The goal is to increase sales volume at a certain level of profit.
  • It motivates the salespeople by providing monetary rewards for achieving or exceeding specific goals or benchmarks.
  • It is a strategy used in sales to motivate teams to perform at a higher level than they usually would. They are often used as part of overall performance management systems to increase productivity or decrease costs.

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.


eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

What is sales performance management software?

Sales performance management software is a business intelligence tool that helps businesses track and manage every activity of their sales team. The system automatically collects data about every aspect of sales, such as phone calls, emails, meetings, and webinars, and provides a dashboard with a bird's-eye view of information.

The main reason why companies invest in this type of software is to improve their sales performance by understanding how they can do better and what they are doing right now. The system also helps you analyze your team's performance against competitors and set goals for each salesperson.

What should you look for in sales performance management software?

Choosing the right sales performance management software can be a daunting task. There are many options to consider, and each has its advantages and disadvantages.

Here are some factors to keep in mind when choosing sales performance management software:

  • Value-adds: Check if the SPMS (Sales Performance Management Software) can integrate with your existing systems. If yes, what kind of integration is available?
  • Reliability and security: How well do vendors support their products? Does their customer service respond quickly to requests for help? Is there regular maintenance scheduled for updates and patches? Are they PCI compliant or certified by any other security standards? These are all critical questions to ask when evaluating your options.
  • Your current processes: Assess your current sales workflow, as this will help you determine if the software can integrate with your existing systems or not. 
  • Service level agreements (SLAs): What kind of SLA does each vendor offer its customers? How long will they be backed up in case of an outage or problem with their service? Some companies provide 24/7 support while others might not.
  • Reporting and analytics: For your team to view their results in real-time, they need to do so quickly and easily without navigating multiple screens and menus. The best SPM tools will offer automated and manual reporting options while providing different metrics for measuring performance and real-time data about what's happening.

The best sales performance management software will also include features like:

  • Sales forecasting: Forecast your sales pipeline and predict how much money you'll make in the next quarter or year.
  • Budgeting: Know how much you have to spend on personnel, marketing, and other expenses.
  • Reporting: See how your team is performing against goals so you can make adjustments as needed.

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