The Full Guide to Sales Performance Management
You want your sales team to outperform the competition, right? Your sales performance management strategy can make that happen.
Of course, if it was super easy for sales leaders to improve sales performance, every team would do it. If you want a top-performing sales strategy, you’ll need to do a little more than what your competitors do.
In this blog post, we’ll talk all about the sales performance management process and help you build a sales performance management solution for your team. You’ll determine what to do, how to do it, and what needs to happen first.
Let’s dive in.
What is sales performance management?
The term sales performance management refers to the process of enabling, overseeing, and guiding your sales reps and leaders to do their jobs more effectively and efficiently.
In other words, it’s exactly what it sounds like — you manage your sales team in a way that improves performance.
You’ll accomplish those lofty sales goals by empowering your people to achieve their personal bests. There are a lot of strategies that can help you create that kind of environment, but sales performance management focuses on some specific actions that have the biggest impact.
The importance of sales performance management
You might be wondering, what makes sales performance management important for sales organizations?
The truth is this:
You’re probably already doing some things that qualify as performance management. But without an overall strategy to improve sales performance, those efforts won’t be as effective as they could (and should) be.
Sales performance management can help:
- Level up your sales reps’ skills so that they — and your company — make more money.
- Reduce employee turnover and all the headache that comes with replacing reps.
- Build a stronger pipeline that leads to higher sales productivity.
- Drive operational efficiency so that your sales leadership can focus on their top priorities.
All of these things combine to create one important result: you reach your sales goals more consistently.
Components of sales performance management
Your sales performance management strategy needs three parts to be complete.
Everything from your approach to hiring to your choice of sales performance management software contributes to the ultimate success of your strategy.
Consider your procedures, your product, and the way you train your reps to handle the sales process. When you look at all the moving pieces of your sales organization, how do all the pieces fit together?
Sales planning is probably already on your radar. As you incorporate it into your sales performance management strategy, make sure that you’re considering all of these factors:
- Territory management
- Your go-to-market plan
- Quota management
- Your sales efficiency strategy
- Your pipeline management strategy
- The sales performance management solutions you use to keep your sales process consistent
As you map out your overall strategy, look for gaps that could be causing performance issues. Your sales managers are a great resource for this. They’ll tell you what they need to help reps reach bigger and more lucrative sales goals.
You already have a compensation plan. Have you deeply considered how it affects your sales performance?
The bonuses, commission structures, and other incentives you offer lay out a path for your sales organization to follow. If you want them to focus on certain products or goals, incentives make that happen.
Just as importantly, well-designed incentives mean that reps make more money. The more money they make, the more you make, too. Top performers are more likely to stick around — that’s the reduced turnover we talked about earlier — and everybody wins.
Creating that kind of incentive plan is the goal. It might be harder than it sounds, though.
Incentives should be flexible enough to adapt with new learnings and market changes, but not so changeable that it leaves your sales team confused and frustrated.
Start by aligning your sales incentive compensation management plan with your specific sales goals. If you’re incentivizing the wrong things, then your team will stay focused on those lower priorities because their income depends on it.
From there, implement your new plan methodically and keep the lines of communication open. Everyone should know what is expected. Keep an open mind — and ear — so you can adjust when your incentives don’t work exactly as you planned.
Smart sales decisions are always built on a foundation of real, accurate data.
The third key component of your sales performance management strategy is the way you use your analytics data to inform decisions and track progress.
What are your current KPIs? Do they tell you what you need to know about sales performance?
More importantly, consider the data to which you and your team have access. It should be easy to find, easy to understand, and actionable. If you have the data, but don’t have a way that you and people on the sales team can easily visualize it, then it’s not doing you much good.
Data accuracy is a common problem, especially when you rely on sales reps to manually update sales data in your CRM. If you’re using Salesforce CRM, you can take advantage of a tool like Weflow to automate these kinds of updates and keep your insights clean and useful.
How to implement an effective sales performance management process
Now that you know what goes into an effective sales performance management strategy, it’s time to start building yours.
This is going to be an important change in your sales organization, so be methodical about it. We recommend this 5-step approach to get you there.
1. Decide on your performance metrics
Performance metrics are data points that tell you whether or not you and your team are meeting business goals.
Logically, that means that you should choose metrics that are directly related to the business objectives you want to achieve.
You probably have access to a lot of sales data, and you can cross-reference it in nearly infinite ways to draw specific insights. The trick here is to spend less time looking at metrics that don’t help you drive performance and instead build a set of KPIs that give you as much actionable information as possible.
In other words, if your top priority is increasing average deal size, then you probably don’t need to dig deep into territory data on a daily basis.
Some of the most common high-level performance metrics are:
- Quota attainment
- Closing rates
- Sales productivity scores
2. Set goals and objectives
We just talked about choosing your performance metrics based on your business goals. Now, it’s time to set your specific sales goals and team objectives that support those top priorities.
What do sales reps need to accomplish to move your business in the right direction? Those are the things that you should incentivize.
Make sure that sales goals are clear, measurable, and realistic.
An average team member should understand exactly what result they’re after and what they need to do in order to get there. Plus, they should believe it’s actually possible to achieve — objectives that are too much of a stretch are actually demotivating and will hurt performance.
3. Implement a coaching and training program
Don’t just show your sales team where you want them to go; help them get there.
Training and coaching are crucial for sales team performance, and not just when you onboard a new hire. Invest in the growth of your people and they will grow your business in turn.
Take a two-pronged approach for best results.
Offer formalized group training opportunities for things like sales techniques, the use of technology, and any skill gaps that you spot throughout the sales team.
On top of that, sales management should offer plenty of one-on-one coaching to address individual needs. Your analytics will help sales leaders spot those opportunities, and that brings us to the next step.
4. Track performance
Until this step, you’ve been setting the trajectory for your performance plan. Tracking performance is how you know whether or not you’re actually on that track.
The team and individual performance metrics you defined in the first step are a great starting point. Consider building a data dashboard that has stats you check on a daily, weekly, and monthly basis to keep your finger on the pulse of your sales performance.
From there, empower both your sales leaders and every sales rep to check their own performance, too. They should be able to plot and correct their own courses to meet the goals you defined.
Watch out for other metrics that can tell you whether your overall performance management strategy is working. You might find that the metrics you defined in step 1 need some refinement.
5. Provide regular performance feedback
Knowledge is power, but only if it can be shared and applied.
You’re tracking performance. Make sure that you’re sharing those results with the team so that they can make informed decisions, too.
Regular feedback is obviously important so that your sales team can improve over time. It also builds trust and respect within your team, and it helps you create a culture where reps feel empowered to act.
Double those benefits by asking for feedback, too. Nobody knows what’s happening on the front lines like the people who work there.
5 strategies to improve sales performance
Building your sales performance management process is a huge step in the right direction. Once you’ve done that, you have a framework that amplifies your results.
Now, let’s talk about some specific strategies you can use to get a boat in sales performance.
1. Build transparency
As you’ve read through the rest of this article, you’ve probably noticed a theme. Transparency is a huge factor in team performance. Without it, you’ll always struggle with trust issues and communication breakdowns that hurt sales performance.
Creating a transparent culture can be a major undertaking if you haven’t ever tried before, but it’s well worth the effort.
We encourage you to read more about developing transparency in your sales team. For now, here are a couple of tips to help you make immediate progress:
- Start from the top down – Asking your team to be transparent with you requires a big leap of faith if you don’t set the example first. Start by adopting transparent practices in management, then ask for more openness from your team.
- Give avenues for anonymous feedback – You can prove that you’re serious about creating a more transparent sales team by using tools specifically designed to collect feedback anonymously. When you acknowledge and act on those comments, you’ll build trust.
- Make compensation plans fully transparent – Do you scale your incentives based on performance? Great. Everyone on the team should know how pay works, what they need to do to reach a higher level, and whether or not they’re getting paid fairly compared to their teammates.
Speaking of incentive plans…
2. Design an effective incentive plan
In top-performing sales teams, reps are financially incentivized to achieve. Your compensation plan should point team members in the right direction and tie their financial success to your financial growth.
The most obvious way to do this is by scaling compensation and offering bonuses for meeting performance goals.
You can also offer other types of incentives like opportunities to earn shares in the business, chances to share in company profits, extra time off, special recognition, and even major contest prizes. Consider what motivates your sales reps and be willing to test creative ideas.
As you build this plan, consider how much of their pay will be their base salary and how much will be incentivized pay. If you offer spot incentives based on performance, how often will you use these to drive results?
Finally, carefully consider things like eligibility, payout frequency, and overall cost. The goal is to increase motivation and tie a financial reward to good results in a way that makes financial sense for everyone involved.
3. Give sales reps the content they need to close deals
Have you ever tried to finish a job that you didn’t have the right tools to do? It’s frustrating, isn’t it?
Sales enablement content is a vital tool for your reps. It creates credibility, helps inform prospects, and reduces the amount of time and effort it takes to move prospects through the pipeline.
If you don’t already have a content strategy, now is the time to develop one. Ask your reps what kind of content they need to get the job done.
If you do have content, find out if your team is using it the way you intended. Content management is another area where sales teams lose a lot of efficiency, and that drains performance. Consider using a sales tool to help your reps find, customize, and send content when they need it.
4. Encourage friendly competition
Healthy competition is at the core of many high-performance sales teams.
This kind of friendly, motivating competitiveness can only happen when:
- Sales reps feel confident that they can reach their goals
- Teams have the tools they need to do their jobs well
- Everyone has access to performance information
- It’s easy to track results
That’s where a sales leaderboard can make a huge difference. Posting performance results where everyone can see allows peers to push each other (and themselves) to do just a little more.
Amplify the effect by hosting an incentivized contest where an individual or team has a chance to earn a reward for top performance.
5. Take advantage of sales automation
Your sales organization will find it much easier to perform better if you take all the hurdles out of their way.
Think about how much time an average sales team spends on busy tasks that aren’t actually selling. Manual data entry alone can eat up hours every day, and when you calculate the time your team spends filling out form fields in a month, it’s staggering.
Use automation to your advantage. Sales automation tools have never been better and the cost savings are higher than ever.
Just by automating manual tasks, you can see an immediate boost in productivity and a shorter sales cycle for your prospects. Plus, you’ll see fewer errors in your data, and your reps will make more money.
Weflow is a great example of an automation tool that makes a huge difference in sales performance. It automatically tracks your reps’ sales activity, including notes and emails, and syncs it to your Salesforce instance. This not only saves time for reps, but also ensures your CRM data stays clean, which, in turn, enables more accurate forecasts.
Another time-saving feature of Weflow are note templates, which you can set up to help reps take notes faster and ensure they follow your sales methodology. Finally, Weflow’s deal signals let you know when deals are at risk of falling through so you can take appropriate action.
Taking on a sales performance management plan might seem like a huge undertaking, but you’re probably already doing most of the things you need.
The key difference in a formalized strategy is that you’ve considered performance from all angles and built a plan that allows all those pieces to work together.
As you continue to evolve your performance management strategy, keep introducing more of those performance-boosting techniques. Bookmark this post to remind yourself to check back later.
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