A sales company is not just about delivering a great sales pitch and creating leads. If you are a sales company and want to succeed, you need to add more bullets to your sales gun - you will need an excellent product, a well-trained sales team, and a system. Most sales organizations miss creating a Sales Performance Management system.
Creating a flawless system and managing it is of utmost importance. The global pandemic of the past year has demonstrated that it's not the biggest companies who survive in times of uncertainty, but those that are best able to adapt with minimal disruption to their operations.
Inter-Relation of Sales Ecosystem And Sales Performance Management
In fact, your entire company can be regarded as a sales ecosystem, which includes your people, processes, and technology that are responsible for revenue generation.
Data-driven decisions are made in a healthy sales ecosystem, and all strategies are aligned towards larger business goals. In order to achieve this, you need one source of truth, where all stakeholders can access the same data and use that insight to collaborate, model scenarios, and plan effectively. This is where Sales Performance Management, often complemented by Management by Objectives (MBO), comes in to ensure clear alignment and goal-driven sales strategies.
What is sales performance management?
Sales Performance Management (SPM) is a set of analytical and operational functions that help you automate and unite back-office operational sales processes. In this, you create and follow a data-informed approach to plan, analyze and manage the sales performance of your company. It is also about ensuring that every member of your sales team works to achieve organizational goals and objectives.
Purpose of SPM
When an organization undertakes significant endeavors such as launching a new product, it is driven by a vision and purpose. This same principle applies to sales performance planning, where specific targets and goals are established for the sales team. Implementing sales coaching tips aids in achieving these objectives effectively. If you don't do so, tracking performance would be difficult. If you don't track, the performance management system will be of no use. The purpose of sales performance planning is to have clear aims so employees can understand and connect with them.
Why is Sales Performance Management important?
Sales Performance Management helps you to achieve success in several ways. With a sales performance management system, you can forecast sales trends easily with the valuable data you hold. When you know your sales projections, it helps you in making informed decisions on the right sales rates and commission structure.
A sales performance management plan adds accountability and structure to your training process. Whether you have sales reps who have newly joined or seasoned sales employees, everyone in the team learns advanced selling techniques when the sales performance management is in place. It allows sales leaders to manage the various aspects of sales performance (insights, incentives, forecasting, and so on), and implement new strategies and techniques that help their sales organizations succeed.
5 Steps Towards Good Sales Performance Management
Have a SMART goal - To accomplish something, you need to have a goal. Goal setting is an important step in creating good sales performance planning. Your sales goal has to be SMART - Specific, Measureable, Achievable, Realistic, and Time-bound. When you create a goal for your team, it has to be specific and measurable, for instance: 100 sales in a month.
You lose out on plenty of business opportunities when you don't use data-driven and smart planning to manage quotas, sales territories, and compensation plans. It is estimated that the organizations will miss the equivalent of up to 10% of annual sales lost opportunities because of poor planning towards the achievement of goals set.
Decide the performance metrics - Once goals are created, you need to have a mechanism to track them. You can track performance using the below metrics-
Sales attainment - This refers to the total per cent of the sales target that is achieved. You can track this for each sales representative as well as for the whole team. It will give you a clear picture of what your team is doing.
Rate of conversion - Out of total leads, how many become paying customers is denoted by the rate of conversion. You can track this individually and also across the sales team. By calculating the rate of conversion, you know the quality of the leads that have been generated. If the conversion ratio is on the low side despite the good quality of leads, you may want to check if your team needs additional resources to get to high conversion.
Once you have clear measuring metrics, the team knows what to do and how much minimum is expected from them.
Define responsibility properly - If the employees in your company are not in the right job role, not only their performance will suffer but the entire organization will suffer. So every sales rep in your team should have a correct and accurate job description. You cannot assign and give the role to any employee unless - you know their weaknesses and strengths, are aware of their area of interest and understand their competencies and skills. So have a process in place to record the above data pointers.
According to a study by Salesforce, 57% of sales reps are expected to miss their quota this year. Between poorly designed plans and lack of adequate selling time, sales teams aren’t being set up to succeed. But, with the right focus and right responsibility alignment, you can get yours back on the right track.
Develop skills of your sales team - As per a recent study, 59 per cent of employees had no training during the onboarding process. It means they bring to the organization self-taught skills. Now the question is -what if they learned the wrong thing? For sales employees, onboarding and regular training are very crucial for growth. You have to invest time and effort in coaching them. You have to analyze the skills your existing team is lacking.
In line with the company's objectives, consider organizing seminars or training sessions to enhance the specific skill set required. If your team excels in pre-sales but struggles with closing sales, it is crucial to seek the expertise of a professional specialized in sales closing techniques. By strategically planning and implementing such initiatives, you can empower your team to become highly efficient and effective in sales, contributing to the achievement of your company's business objectives.
Provide the necessary tools and resources - No matter how good your sales reps are if you don't give them the necessary tools and resources to go out and do sales for you, closing sales will be difficult.
For example, your sales rep needs to go out and explain to customers about your product on a device - you need to give them a tab and ensure they have a good internet connection. You will have to figure out everything your sales rep needs. To know, you can conduct surveys, have a direct conversation with sales reps and managers and understand their perspective on what all tools they need to increase their performance.
If you have to be successful as a sales organization, you need to have a sales performance management system. In sales performance management everything is interdependent, and hence you have to ensure no pillar of the process fails. For if it does, the whole company fails. As a sales leader and business owner, you need to put in the effort and invest some time in creating the sales performance management. In the end, it will all be worth it!!