A guide to adopting sales performance management

By Brian Thompson,

Sales performance management can drive significant change in the way your company functions. To a large extent, an organization's competitive advantage depends on the effectiveness of its sales team. Therefore, any technique or technology that can improve your team's ability to sell your product or service should merit consideration.

The potential advantages of using sales activity to drive better guidance are numerous, but the wide variety of business models and objectives mean that not every company can or should use the same approach to sales performance management. It's imperative to approach the adoption process  with a clear and detailed view of your company's resources, objectives - and yes, its limits. Taking a measured and incremental path to deployment and evaluation can mitigate rollout hiccups, drive employee acceptance and position your sales performance management effort for consistently high, long-term ROI.

Where do you stand?
Being able to evaluate your current sales performance can help you identify both the points of strength and the blind spots that make your organization what it is. What do you value? Where do your resources go? How is the sales team organized? How does your organization deal with success? How does it deal with failure? Here are three key steps that can help inform your perspective on sales performance management in your future:

  • Define your variables: Identifying contributing factors to sales performance can help you target certain areas for improvement. To analyze sales, you likely combine several assessments - price to sales ratio, customer segmentation and point of sale systems among them, according to the Houston Chronicle. Your staff is another variable - what are their skill sets like? How is their approach affected by companywide production or customer retention objectives?
  • Figure out what you can control: As SmartCompany contributor Sue Barrett pointed out, up to 80 percent of the sale is really out of the salesperson's control. Unlike a sports team, which is built according to highly defined guidelines and expectations, sales are affected a great deal by outside influence. Identify areas you can control, and also be honest about how fast you can control them. If you can adjust rapidly to external influences without suffering a drop in quality, you could be better positioned for a deep dive into sales performance management.
  • Develop a method to your madness: Decide what elements of your sales performance you want to address - lead generation? Customer attrition? Client services? Then figure out strategies to measure your steps toward these objectives. Use sales performance management software tools to generate analytics that offer granular insights.

Building employee engagement
Getting employees on board is key. Unless they believe in the value of sales performance management, its effectiveness will be severely limited. One way to build engagement effectively is to combine the performance management rollout with an incentive compensation initiative. If employees see that there is a demonstrable connection between improved performance and meaningful compensation bonuses, they're more likely to adopt new software and tactics.

Of course, it's also important to make sure that employees are doing more than simply following the money. Explaining to personnel why changes are happening as they occur can help keep them in the loop. Or better yet, include them - hearing directly from your sales team about common issues or tactics can be a powerful motivating factor.

Evaluating results
An incremental rollout offers benefits for evaluation, as addressing one or a few areas at once through sales performance management can give you a better idea of what works and what doesn't in a way that a massive transformation could obscure. Additionally, the more you have employees on board, the faster you can implement improvements to your management strategy. This creates an environment dedicated to organizational efficiency and clear performance evaluations as a method of becoming more productive and profitable.

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Brian Thompson