Although the average sales professional tenure moved up from 1.5 years to 1.8 years, you still have a ton of work to do as a sales leader to develop and retain your sales team.
To help your sales reps build the skills they need to feel prepared and successful in their roles — which makes them less likely to jump ship — you need a structured sales performance management process.
Let’s learn how to create such a process.
Now that you're clear on what sales performance management entails, let's discuss why it is essential to implement it into your sales team operations.
Having an SPM process in place is crucial for your team’s overall success. Sometimes, there can be a disconnect between the level of effort sales reps put into their work and the tangible outcome seen by sales management and the company at large. Let’s talk about why your organization needs to implement a sales performance management strategy.
Sales performance management tracking can provide valuable data, enabling your organization to forecast future sales trends and employee compensation rates — particularly for commission-based compensation structures. For example, if a sales rep earns a 15% commission for each deal they close and is projected to close $100,000 in sales for the quarter, your finance team will anticipate an allocation of $15,000 in commission payroll for that rep.
Whether you have sales reps on your team who are new to the field of sales or seasoned salespeople ready to learn more advanced selling techniques, employee development is a major perk of having a sales performance management process in place. A sales performance management plan adds structure and accountability to your training process.
Here are some elements that could be included in a sales rep development plan to help them build their skills:
Research shows that 58% of organizations experience an unusually high level of turnover among sales professionals. Although many things cause employee turnover, sales leaders can use a sales performance process to engage their sales team and look for progression or training opportunities to increase retention.
With structured performance management plans in place, your organization will have the framework to build a pipeline of sales reps who have the valuable skills needed to effectively and efficiently drive sales for your company.
In addition, having clear, visible goals and incentives builds well-rounded sales professionals.
Organizations with SPM processes report more accurate compensation figures. In addition, having a set performance management plan keeps your compensation structure and overall business objectives aligned, resulting in a more motivated sales team.
You now know the importance of sales performance management. So, let’s talk about implementing a sales performance management process that gets results.
To create an effective sales performance management process for your sales team, simplify your overall business objectives and make them relevant to the individual contributors on your team. On a macro level, you should already have a clear understanding of what high-level success metrics your team is being measured against.
Performance metrics should measure each individual’s tasks and activities in relation to how well they serve overall business objectives. Here are some performance metrics to consider for your sales reps:
Now that you’ve established what metrics you’ll use to understand your team’s performance, it’s time to communicate these goals to your team to get their buy-in. This is important for multiple reasons.
First, your team can’t reach their goals if they don’t know what those goals are. Second, this gives space for your reps to provide feedback on what and how they are measured.
If you experience pushback from reps about specific goals you’ve set, give them space to voice their concerns.
For example, reps may not agree with some of the benchmarks (maybe the goals are too aggressive or conservative) or may not agree with measuring some areas of performance at all.
If so, it’s essential to consider the concerns of your reps and ensure your team understands how their individual goals relate to overall business objectives.
In this situation, work with your reps to adjust goals as needed, or include your team in the goal-setting process from the beginning. For each rep’s performance plan, you can also allow space to set their own stretch or development goal based on areas they’d like to improve upon.
Some sample language you can use when getting rep buy-in include:
Once your team’s goals and development plans are in place, make sure your reps have the tools and resources they need to succeed. Many reps have identified skills they want to build or improve upon, such as effective prospecting or presenting in front of groups. Seize upon these interests and teach them.
You don’t have to be the person who teaches them, but you can be the person who creates space for your reps to learn and develop. That could include keeping reps accountable for attending training, introducing them to a mentor, or connecting them with a teammate who excels in the area they’d like to develop.
Consistent performance reviews should be held for your sales performance management process to be effective. Including performance reviews in your regular operating rhythm is important to monitor and track the success of your sales team. A well-rounded performance review should include the following:
You can use this sales performance review template to guide you through the process.
Using sales performance management software automates tracking your sales team’s progress towards organizational goals and identifies processes that promote and/or inhibit the effectiveness of your sales reps.
Sales performance management software automates and integrates sales processes with valuable data to improve performance and efficiency across the organization.
To implement sales performance management software, consider some of the following features in your search.
As more organizations make sales performance management a greater priority, more software solutions with a robust set of features will become available. Here are some recommendations.
Xactly seeks to automate and simplify the incentive compensation process for sales teams. They pride their software on being over 99% accurate for forecasting and performance management data.
With Xactly, managers can get all the information they need to design incentive programs that motivate their sales reps to be more effective.
Anaplan’s sales performance management software allows sales organizations to develop robust go-to-market strategies, using their team’s performance to drive planning.
The software’s proprietary Hyperblock™ technology allows users to make more sense of real-time performance and forecast future outcomes for better decision-making.
Varicent’s sales performance management software solution helps sales teams improve performance and operational efficiencies. Their areas of expertise include compensation planning and territory management.
Teams also use Varicent to reduce costs associated with the compensation process.
In addition, the software’s augmented intelligence solution, Symon.AI, helps users identify trends and outliers, among other things, to plan better.
SAP Sales Cloud focuses on helping sales organizations reach peak productivity. With tools to facilitate employee coaching, KPI tracking, and sales rep assessments, your sales reps will feel supported and included every step of the way.
As part of SAP’s solution for sale automation, Datahug helps sales teams maximize revenues with smart forecasts.
Oracle’s Sales Performance Management application highlights sales rep accountability, guiding reps through skill-building task lists and training modules.
The tool also features a white space analysis feature, so sales teams can focus on accounts with the highest revenue potential, allowing them to achieve revenue goals.
Optymyze offers a suite of solutions to help sales leaders and reps drive performance.
Their offerings include integrated compensation management, sales quota tools to keep reps engaged, and sales territory management software to maximize revenue potential.
Optymyze comes with an issue monitoring and notification feature that lets you know when any problem arises with your sales performance management process.
You need to improve your sales performance management process to drive efficiency, improve the overall effectiveness of your sales team, and increase how much revenue your business can generate.
Once you’ve determined the performance metrics you want to assess, communicate them with the rest of your team, coach your sales reps to improve their performance, and provide feedback where needed. With a sale performance management process to track your team’s progress, you’ll be well on your way to exceeding your sales goals.
Editor's note: This post was originally published in October 2019 and has been updated for comprehensiveness.