Sales Performance Management – What Is It & Is It Important?
Sales Performance Management is a regularly brought up topic in sales meetings and strategic papers; but what is it, and why is it important?
What are the benefits of having a Sales Performance Management system, and what should it entail?
In this article, we’ll look at what a Sales Performance Management system is, why it’s important, and what should be included.
Sales Performance Management – What Is It, And Is It Important?
Sales Performance Management is a step by step system in which:
- Clearly show your sales staff what their outcomes are
- How to manage them according to their performance
- What needs to be fixed to give your business its desired outcome
The desired outcome of having Sales Performance Management in your business, is to ensure that your staff are completely clear on what they need to achieve and know what to do to get there.
The reason Sales Performance Management is important, is because it let’s you know using logical data which sales staff are performing, and which aren’t.
This takes the emotion or gut feel out of the equation, and let’s both you and the salesperson know how they’re tracking.
This is also important because your salespeople can clearly see how they’re doing, without another person’s bias.
It’s difficult for someone to blame others or environmental factors on their performance, when others are doing well and they’re not tracking as well.
This transparency makes it easier to manage people’s performance, as it’s crystal clear to all to see what needs to be fixed, or where they need extra training.
Sales Performance Management Isn’t Just Software
Sales Performance Management isn’t just a software system, but rather is an approach and step by step process (or road map) that displays how people are tracking with their sales and other key metrics.
More importantly for Sales Performance Management to work; management should use it as a tool to clearly outline the steps needed for their staff to make more conversions, and then track each step and give sales training on how they can achieve it consistently.
Does It Work With Motivating Staff?
Sales Manager’s regularly add monthly incentives for staff to reach their desired goals and outcomes.
This works well, however shouldn’t be the be all and end all – as there are other ways to motivate your staff using your Sales Performance Management system.
When motivating staff, we recommend focusing on five key areas:
- Learn about their vision, and share yours
- Understand their goals, and share yours
- Focus on teamwork
- Stay away from micromanagement
- Get the right training
To learn more about each of these steps, check out the article below.
Related article: 5 x Ingredients To Enhance Your Sales Motivation
Metrics & KPI’s In Your Sales Performance Management System
Metrics and KPI’s (Key Performance Indicators) are an important set of ingredients to include in your Sales Performance Management Plan.
The reason being, is it gives numbers and desired data salespeople need to achieve to either receive compliance or reach their desired outcomes and goals.
Below are a number of KPI’s we’d recommend you track.
You don’t need to implement each one, and they are in no particular order; however, choose what will work for you and business.
- New opportunities created
- Calls and emails made
- Contacts made
- Conversion time
- Cost of acquiring a client
- Sales by region
- Sales by individual
- Lifetime value of each client
- Lead conversion rate
- Follow up attempts
To learn more about metrics and KPI’s, check out the related article below.
Related article: Why You Need To Be Focusing On Metrics In Your Business
What Should Your Sales Performance Management System Include?
So far we’ve looked at what a Sales Performance Management system is, why you should be transparent with staff, and what should be included from a metrics point of view.
Let’s look at what else should be included in your Sales Performance Management system.
We recommend that your salespeople know about your marketing strategy, as well as your sales targeting strategy.
A marketing strategy is the system you’ll use to learn about your potential clients and will speak to where they hang out and how to build awareness.
Your sales targeting strategy is the system you’ll use to target and reach your ideal clients.
Both are important, and a necessary part of your Sales Performance Management system, because it’ll outline what they need to do from a prospecting activity sense.
Once you have both mentioned strategic documents in place; how will your salespeople get leads?
Both are an important part of your Sales Performance Management system and depending on your type of potential client; your salespeople may focus more attention on inbound or outbound activities.
They should know their required numbers, and what activities to concentrate on – as well as how to conduct both.
Related article: The Two Types Of Sales Prospecting For More Sales
Their Sales Process
The sales process is probably one of the more important ingredients in your Sales Performance Management system; because what good are leads if you don’t know how to convert them into clients?
Your sales process should consistent of the following steps:
- Building rapport
- Setting expectations
- Asking questions
- Finding pain
- Learning about desires
- Talking about money
- Asking for the sale
- Handling concerns
We’ve written an in-depth article on each of these sub sections. Check out the article below for more detail.
Related article: The Sales Process – A Step By Step Guide
Once you have these in place, the next part of your Sales Performance Management system is to have regular meetings to discuss how people are tracking, what’s working, what isn’t, and share what the next steps should be.
This is a great way to have everyone on the same page, enhance communication, and share ideas.
I recommend doing these weekly and coming in with an agenda so that people leave with value, and don’t feel it’s just another repetitive meeting.
Check out our guide here on how to put together meetings your staff will thank you for.
Sales Performance Management is an important part of managing salespeople, and something you should implement in your business.
By implementing a Sales Performance Management system in your business, you’ll have better clarity on your data, better transparently and staff communication, and healthier margins.
It’ll also show you what areas your staff need further sales training, to enhance their sales performance.
To learn about enhancing your staff’s sales performance, check out The 5% Sales Blueprint here for more detail.