Efficiency is vital when it comes to sales, as salespeople often just don’t have enough hours in the day. The more efficient the sales process is, the easier it is for salespeople to focus on what they do best: selling. This means that backend processes must be set in place that can help improve the effectiveness of selling and motivate and track salespeople.
Enter sales performance management, a way to track and manage data and processes to help your sales reps meet their goals. In this article, we’ll dig into what exactly sales performance management is, why it’s so important, and how to best do it, which can set your team up for sales success.
What is sales performance management?
Sales performance management, also referred to as SPM, is the process of analyzing and organizing business and selling strategies to track the progress of salespeople and help them meet their goals and achieve optimal sales performance. The more you can work to improve processes, the more efficient your salespeople (and their performance) will be.
The sales management process usually follows a general strategy that involves planning and prep; team management and monitoring; incentivizing; analyzing and measuring; offering feedback and making any needed changes; and forecasting, which leads to further planning and prep; then it starts all over again.
Throughout the process of sales management, sales reps should be meeting their targets and performing their best — or at least that’s the goal.
Why is sales performance management so crucial?
Ensuring that your sales team is motivated and engaged is essential. Happy, well-adjusted salespeople often have a higher quality of sales and are more likely to perform well and hit their targets and goals. In fact, according to Hubspot, “sales teams with high morale were found 21% more profitable and 17% more productive.”
Effective sales performance management can lead to more successful sales reps, as well as better ROI, decreased errors, better time management, and a smoother overall sales process.
Help your team succeed with sales management
Frequently analyzing data and results during the sales performance management process allows you to identify areas where your team needs help. When you know exactly where, when, and how your sales team is having issues, it’s much easier to provide coaching, guidance, and support, plus create solutions to help them improve.
When your sales reps are performing optimally, this means that you’re getting the most out of them, and everyone is happy. Sales performance management is a means of managing your team and managing sales performance that best benefits everyone involved.
How to implement sales performance management
Follow these steps to make sales performance management best work for you and your team:
- Set clear targets. Ensure everyone is clear on their goals and has the tools needed to meet them.
- Monitor performance. Keeping track of how your sales reps are doing is important. Certain tools, like Surfe, can help by automating tedious tasks and data entry and making sure everyone is focused on the important stuff, like actually selling. You can rest easy knowing nothing gets lost, and all the data is at your fingertips to see the status of the sales pipeline at any given moment.
- Provide coaching and feedback. Have your sales reps met their goals? If so, work on continuing to implement what best worked. Are your sales reps struggling? Offer feedback, make changes, and provide solutions.
- Consider incentive plans. Incentives are things that reward team members for their good work, like using bonuses or favorable commission structures. Motivated salespeople will do their best way, so keep this in mind when creating incentives.
- Use technology to your advantage. As we mentioned, automation, technology, and tools can really help you analyze data and automate processes so that both salespeople and organizations can meet their goals. From CRMs to LinkedIn to Surfe and calendar, video, and meeting tools, you’ll be able to store and manage data, automate processes, and streamline everyone’s everyday tasks in order to achieve better productivity and sales success.
How to best measure sales performance using sales performance management
You can use many different metrics (or key performance indicators, KPIs) to track sales performance. Metrics refer to data that represents performance — this can be the performance of sales reps, entire teams, or the whole company. Here are some of the best ones to track for optimal sales performance management.
- Sales growth. One of the simplest ways to measure sales growth is by revenue. Get more specific by considering the number of clients, amount of client sales, growth by units sold, profitability, or market share.
- Win rate. Calculate this by dividing the number of deals by the total number of deals over a given time. This will help you figure out what percentage of deals you’re winning. You can then try to figure out why you’re not winning certain deals and how you can increase your win rate.
- Average deal size. Sum up the size of each closed deal in a period and divide it by the total. This can help you understand what to expect revenue-wise when closing a deal. You may want to look at how you can close bigger deals with current customers, which will increase your revenue, even though your win rate may not improve.
- Sales cycle length. Add up the total amount of time it took to close each deal, then divide the total by the number of deals. Understanding this can help you take a hard look at your sales pipeline and figure out how long it takes to get revenue and ways to make this amount of time even shorter, which can increase revenue and/or revenue frequency.
- Customer acquisition cost. Divide your total sales and marketing costs by any new customers gained to get the average. This can help you see exactly what you need to spend to gain new customers, test ways to lower or higher the amount, and see how many customers you’ll gain.
Sales performance management for the win
Keeping your sales reps happy is almost important as keeping your clients happy (and the former will definitely ensure the latter). Satisfied, motivated sales reps pull in more clients and bigger sales and create an all-around more positive and efficient workplace environment for everyone.
Sales performance management is the best way to keep those sales reps happy, understand more about your data, and keep improving your sales process. Implementing it using just the right tactics and measuring these key metrics ensures your profitability and productivity should soar.