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Sales performance management 101: Definition and strategies

A sales performance management process enables you to analyze and actualize your business' progress and move you toward success.

Door Donny Kelwig, Contributing Writer

Laatst gewijzigd October 17, 2022

The sales performance management market was valued at $3.1 billion in 2020 and provided an average of 204 percent ROI. The numbers don’t lie: having a thoughtful and solid sales performance management strategy is good for business. But if you’re unfamiliar with this terminology and process, it can sound like just another string of business terms.

In this article, we’ll unpack what sales performance management is, why it matters, and how to successfully implement this game-changing strategy into your business.

What is sales performance management?

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Sales performance management (SPM) is a process for planning, analyzing, and improving business strategies across an organization, with a special focus on guiding and managing your sales reps to help them achieve company goals and objectives. The overall aim of sales performance management is to improve how efficiently and effectively your business operates.

There are many overlapping parts to consider when putting together a sales performance management strategy. Some things to consider include:

  • Training staff and helping them set their own goals

  • Pipeline optimization

  • Forecasting

  • Account segmentation

  • Quota setting

  • Incentive compensation

  • Developing sales reps’ skills and monitoring their individual development

Each consideration affects another when put into practice, so it’s wise to think of the big picture when creating your sales performance management process. These aren’t isolated parts but many pieces of an overall puzzle that add up to a successful and efficient business.

Why is sales performance management important?

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Sales performance management benefits your business across the board. Using a solid SPM process will:

  • Significantly reduce processing time

  • Decrease operational errors

  • Allow you to track opportunities created by each sales rep

  • Enable you to track the number of client conversations each sales rep conducts

  • Create sales analytics and data that can help guide your business plans
  • Improve sales forecasting accuracy

  • Lead to better-trained sales reps

  • Improve your territory management

  • Create better compensation structures

  • Increase sales and revenue

  • Boost sales ROI

  • Accelerate close times

  • Eradicate inefficiencies

  • Automate menial tasks

Essentially, creating a solid sales performance management process will streamline your company’s operations, and thus improve sales performance. By aligning processes, you can get many elements of your regular processes working in tandem and significantly reduce mistakes and redundancies.

Components of sales performance management

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Part of what makes sales performance management such a powerful strategy is how much of your business it takes into consideration. This macro view of operations is divided into individual components that you’ll then analyze and optimize.

The main components of SPM include:

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How to implement a sales performance management process

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We’ve established that having a sales performance management process is worth the effort, and we’ve gone over all the components that compose such a process. Now let’s discuss how exactly you implement an SPM.

SPM implementation can be broken down into clear steps:

1. Make a plan

All successful policies begin with a plan. Think about what performance metrics you want to assess. How can you best measure these metrics? Think about your overall business objectives. How can you simplify them? How can you best distribute these objectives and goals to each member of your team?

Particular metrics worth measuring and evaluating for each of your sales reps include:

2. Share company goals with your team

Now that you’ve assessed your metrics and made a plan, it’s time to share the company goals with your sales team. You need to be communicative and invite your sales reps to buy into your plan. This is where it’s smart to solicit feedback. You want to be sure everyone feels heard; understands why the goals, benchmarks, and quotas are where they are; and feels ready to jump in.

Enable your reps to voice their concerns and set their own development goals within the general quotas. A concern may well lead to an even better idea, and your reps may already know what they need to improve upon. Involve them in this process even as you push them to reach their maximum potential.

3. Manage your sales reps

Once everyone’s performance plans and goals are set, make sure you’re providing adequate structure and resources to help your team meet them. Conduct regular check-ins. Offer training sessions. Connect reps with a mentor or a teammate who excels in an area they struggle with. Helping sales reps improve and succeed not only increases job satisfaction, but sales training can yield an ROI of 353 percent.

4. Provide feedback

Regular feedback and consistent performance reviews are the final part of implementing your SPM. All the insightful data you’re collecting and analyzing on team performance won’t mean a thing if it’s not communicated to your sales reps. How can they improve if they’re not told what they need to improve upon?

A helpful performance review should include:

  • The goals and KPIs each sales rep is being assessed on

  • Feedback on their recent projects/selling ability

  • Encouragement and acknowledgment for the things they’ve done well

  • Constructive criticism concerning the areas they can improve

  • A summary and/or rating of the rep’s overall performance

What to look for in a sales performance management software

magnifying glass

Great sales performance management software automates and integrates your processes and data to help improve efficiency and team performance in your company. The best SPM software has many of the following features:

  • Advanced sales performance analytics

  • Quota management (and forecasting)

  • Sales gamification

  • Sales territory optimization and strategic mapping

  • A platform for the documentation of your business goals and objectives

  • Sales incentive compensation management

  • Real-time data collection

  • A wide array of customizable automations

  • Easy integration with other software your company already uses

When selecting the right SPM software, prioritize a platform that provides the features you need, integrates easily with your existing tech stack, and can scale with you. Ultimately, sales management software should make it easier to connect your departments, provide management with the data they need, automate menial tasks, and help your sales reps focus on what they do best: sales.

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Every organization’s bottom line relies heavily on the performance of its sales teams. Great management is the key to activating and motivating your sales reps.

With Zendesk Sell, a sales manager’s job becomes easier. Our comprehensive CRM platform contains all the tools you need so that both managers and sales reps can perform more efficiently and productively. If you’re ready to improve territory management, sales forecasting accuracy, sales rep training, and compensation accuracy, start your free trial of Zendesk Sell today.

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