Sales Performance Management: Where do I Start?
As a sales leader, you’re responsible for a lot of different things in the sales department at your company. You will handle quote setting, forecasting, possibly evaluating new technology, hiring, pipeline management, finding new ways to streamline and improve operations, and dozens of other duties.
Without a well-designed sales performance management system in place, your company will often struggle to reach maximum effectiveness. Ensuring you have a complete sales performance management program in operation will pay dividends in a variety of ways: from increased revenue to happier employees.
Why is Sales Performance Management Important?
Now that we know what sales performance management is, let’s talk about why it matters.
In today’s world, having a great product isn’t good enough.
Customers get bombarded with things vying for their attention all day, every day. Marketing is ubiquitous. In fact, modern humans see more marketing materials per day than at any other time in human history. That trend looks likely to continue.
So, if great marketing and a great product aren’t enough, what is?
To find real success, we need great sales people. Unfortunately, great sales people seem to be getting harder to find…or at least harder to keep.
Turnover in sales currently sits at 35% on average. Contrast that with an average turnover rate of 13% across all industries and jobs, and you can see a problem.
There is no shortage of reasons for why sales professionals leave jobs, but many of those issues could be addressed by better sales performance management on the part of the company.
And the investment is worth it. Hiring new sales professionals costs companies tens of thousands of dollars per employee. Add in lost sales during onboarding and that number can balloon to over six figures.
Your sales performance management program can help prevent this turnover by ensuring your team members are getting better training, better guidance, and help when it comes to reaching their goals and quotas.
These things make employees happier, and more likely to not only stay in a position, but thrive in it.
Beyond that very human face, sales performance management can help you in other key ways as well.
Predict Future Sales Trends
Forecasting is a key element of sales management. It allows you to not only plan for the road ahead to ensure you have proper inventory and staff levels, but also allows you to plan for compensation.
Helps Build Training for Sales Reps
We mentioned how important sales performance management is for helping your reps find success. One of the key ways you can reach this goal is by building focused training programs.
Sales teams that go through regular recurring training outperform their colleagues by an appreciable margin regardless of industry.
A training program can cover anything you feel would benefit your team, but here are some common examples:
- Product training
- Sales enablement training
- Time management training
- Motivational training
- CRM and software effectiveness training
There are countless other areas where you can provide extra coaching and continuing education to make your team better. The goal here is simple – to help your reps develop their skills.
Better Compensation Plans
A well thought out sales performance management plan will make setting up your compensation structure a breeze.
Because of this, you will avoid over or under-paying by creating compensation plans that are aligned with company goals.
Better Sales Rep Pipeline
With a structured compensation plan that clearly links payment with objectives, you’ll also have an easier time filling your sales team.
Whether you’re looking to shift your current employees around to best take advantage of their talents, or looking for new hires, a good sales performance management program is key.
This will help you better understand what you need from each individual employee, while also making your company attractive to sales pros outside of your organization.
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How to Implement a Sales Performance Management System
If you’ve read this far and realized how implementing a sales performance management program could benefit your business, great!
For this next section, we’ll take a deep dive into how to set up your own sales performance management system and start reaping the rewards in terms of revenue and employee happiness.
1. Select the Metrics You Will Track
Odds are, your sales department already has its big goals for the month, quarter, and year clearly defined. Now it’s just a matter of taking those bigger goals and breaking them down for your individual team members.
The key takeaway here is that beyond the goals, you’ll also want to create trackable metrics so you and your sales team can see at a glance how they’re doing. Create performance metrics that track how an individual’s activities and actions contribute to the goal to get employees to buy in.
Here are some metrics to consider:
Your sales team is already well aware of quota tracking. They’re probably already tracking how they’re progressing on their individual quotas as well.
Because of this, quota attainment will already be familiar to your team.
The beauty of this metric is that it’s a great benchmarking tool across the board.
If an employee or your team as a whole is having a hard time reaching quota goals, the quota is probably too aggressive.
If they’re hitting it easily, it’s probably too low.
Beyond that, recognizing which individuals are struggling to hit goals allows you to better help that employee by scheduling time to discuss where they’re struggling and devise training plans to help them get back on track.
Having sales professionals reach their quota is great. Having them reach their quota ahead of schedule is even better. This is where sale productivity metrics come into play.
The faster your team members hit their quota, the more productive they’re being with their time. Here are some of the ways you can measure that productivity:
- Percentage of closed-won deals
- Percentage of hours spent in CRM and administrative data entry
- Percentage of time spent prospecting
- Number of meetings booked
- Average deal size
These are just a few of the ways you can measure sales productivity. Tracking these metrics will give you greater insight into how your team is spending their time. Beyond that, you can also see what activities are providing the best ROI and prioritize those duties.
Odds are, your sales team is already familiar with this metric too.
Understanding how many of your leads turn into paying customers provides valuable insight into the quality of your lead generation. It also will allow you to see how good your team and individual sales professionals are at nurturing those leads through the funnel.
With this knowledge, you’ll be able to determine several things:
- Is your lead gen working?
- Can your sales team better lead prospects through the pipeline?
- Are there other tools or materials that could increase conversions?
Armed with these insights, you’ll not only have the ability to make your sales numbers increase across the board, but to help the individuals working for you find success more often.
With your metrics set, now is the time to explain your new objectives to your sales team.
Communicating objective serves two key purposes:
- It lets everyone know what the new goals are
- It encourages feedback and buy-in
If your team doesn’t know its goals, it’s hard to achieve them, which is why communication is so important.
Beyond that, explaining your new sales performance management program will allow you get buy-in from your sales team. If they understand why the program is being implemented, along with the ways it will benefit them, it’s an easier sell.
When doing this, there will often be pushback in regards to some goals. This is to be expected, and provides you a valuable opportunity to examine feedback from the guys on the frontline.
Remember, this new plan isn’t set in stone. Be open to discussion – there could be great ideas you hadn’t considered.
Coach Reps on How to Better Achieve Success
With the new plan locked and loaded, it’s now time to put the sales performance program into action.
Invariably, you’ll find areas where your team is coming up short and missing the mark. Armed with this data, you can now devise ways to coach them so they’re more successful.
This is one of the key goals of your program – cultivating more efficient and effective sales people. Find their shortcomings and teach them how to be better.
Finally, you’ll want to be sure you’re scheduling regular sessions with your team where you can go over results and provide feedback on how they’re performing.
Typically, we can break feedback down into several different categories:
Feedback on long-term goals
It’s often best to start with the big picture. How is the employee doing on their yearly goals? Are they on pace? Are they falling behind? Looking at the overall picture will allow you to help your employees get the lay of the land. It’s easy to lose sight of the forest for the trees of the weekly and monthly goals.
Completed project or goal reviews
Another area to focus on lies in completed projects or goals.
Did your employee hit his quota for the last quarter? Did he close a big deal? Success leaves clues, so be sure to go over these projects too. Do the postmortem and figure out what worked, what didn’t, and what might improve things moving forward.
Praise their skills
Every employee has things they are good at. Oftentimes, it’s easy to overlook those skills and focus solely on what needs improvement. This is a mistake.
Reinforcing an employee’s strengths not only make them feel good about their performance, but can spur them into finding ways to utilize those strengths in ways that hadn’t occurred to them before.
Performance reviews have a negative connotation because we often spend most of the review focusing on things that can be better. Shift gears and spend just as much time on things your employees do well.
Help them identify weaknesses
It’s nice to hear what you do well. Few people want to spend much time hearing where they could be better. Frame this conversation as one about identifying weaknesses for better buy-in.
Even Superman has his struggles, so make it clear that you don’t expect your employees to be perfect. Sit down and have an honest discussion of where things could improve. Ask your employee what he thinks his weaknesses are.
If you think of performance weaknesses less as problems and more as opportunities for growth, you’ll find your team is much more receptive to them. Avoid presenting it as criticism – frame as a development opportunity. Your team will work harder to turn the weaknesses into strengths.
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Sales performance management could be the thing that takes your sales team from average to exemplary.
Companies lose sales professionals to turnover at a rate almost three times higher than any other field. Some of this is the nature of the profession, but a lot of it is because sales managers aren’t setting their teams up for success.
A good sales performance management program will help you help your team become better at their job, spurring increased employee happiness, higher quote attainment rates, and a healthier bottom line.
If you don’t have a sales performance management program in place, you’re missing out. This guide can get you started – and if you have any additional questions, reach out. We’re here to help.
Accent Technologies is the first and only SaaS company to bring together Sales AI and Content Management in a true Revenue Enablement Platform. We provide both sales and marketing with better visibility into the performance of their teams. This drives revenue through intelligent recommendations for complex sales scenarios and provides the data for rich analytics that power better coaching, forecasting, and long-term customer support. Learn more about our solutions or request a live demo to see it in action.