Sales Best Practices

Sales Performance Management: How the Right Software Drives Success

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Serena Miller

Editor, Sales Best Practices

Sales performance management is an essential process that aims to boost employee effectiveness, operational efficiency, and, ultimately, revenue. It’s become somewhat of a buzzword among organizations looking to maintain a competitive advantage and help their reps meet (or exceed) their goals.

But successful sales performance management requires much more than just offering incentives to salespeople or investing in a new, shiny sales tool. Getting it right means providing the right resources and support to your reps at every turn, measuring and analyzing key data, and making informed, consistent improvements along the way.

Here, we’ll dive into the components of sales performance management, why it’s crucial for organizations, and how the right software can improve the process.

What is sales performance management?

Sales performance management (SPM) encompasses a variety of interrelated sales processes, all of which work together and impact one another. According to Gartner, SPM capabilities include (but are not limited to) sales incentive compensation management, objectives management, quota setting, advanced analytics, gamification, and more.

That all sounds like a whole lot of sales jargon, but at its core, SPM is about making sure your sellers actually have what they need to achieve and surpass their goals. Thanks to a constantly growing, competitive global marketplace and increased customer expectations, the art of sales has evolved. Thus, the techniques to manage sales performance have needed to evolve as well.

Long gone are the days when simply throwing incentives at reps was enough to ensure success. Today’s sales organizations need a strong, holistic approach and powerful tools to optimize each, individual part of the larger business operation. SPM technology offers the tools needed to increase sales productivity through data-driven decisions.

It’s no surprise, then, that the global sales performance management market is expected to reach $3.2 billion by 2026. Businesses who fail to leverage SPM tools and strategies will likely be left behind by their forward-thinking counterparts.

Components of sales performance management

An organization’s sales performance management strategy is built upon three major components. Each of these factors helps sales managers and leaders determine how they’ll drive performance to remain competitive and profitable:

Sales insights 

By properly measuring overall sales efforts and individual sales activities, you can start to understand what works and what doesn’t. Sales insights go far beyond whether or not reps are meeting their quotas; they also help you identify the specific things that drive the right outcomes (like positive interactions, meetings, and pipeline). How well are your messages landing with target personas? Simple metrics like reply rate won’t give you the full picture, but comprehensive insights backed by powerful data can help you accurately gauge buyer sentiment and make meaningful improvements.

Sales planning 

Creating an effective sales plan requires a detailed breakdown of previous data, objectives, strategic direction, capacity, forecasts, and more. This is essential for determining account segmentation, territory allocation, and goal-setting, and it helps you prepare your teams to stay ahead of market changes. A proper sales plan doesn’t operate in a vacuum: it’s used collaboratively with marketing and business plans to reach both broad and specific goals.

Sales incentives

While incentives alone are not enough to ensure maximum performance, they should certainly be a part of the larger SPM puzzle. By analyzing real-time data, you can better align your sales compensation plans with your goals. Whether you’re looking to acquire new accounts or boost sales of a particular product, it’s important to incentivize reps around the results you want to achieve. A sales performance management solution helps you understand how your current compensation plan drives performance and pivot when goals change.

To adopt a modern SPM strategy, and organization needs some kind of sales transformation initiative. Digital sales transformation drives sales performance because it focuses on aligning processes, technology, and people in an effort to scale both efficiently and productively. That readiness to adapt and evolve helps ensure a stronger sales performance management practice, and one that’s backed by the right tools and processes for streamlined operations.

Why is sales performance management important?

SPM impacts each department within an organization and—reciprocally—each department within an organization can impact the sales performance management strategy. Because sales performance management uses key data to help leaders build robust strategies, companies who implement the approach can benefit in a variety of ways:

Creates goals for reps that align with corporate objectives

Sales performance management focuses on using reliable data (along with automation, centralization, and other transformation initiatives) to develop goals for sellers that align with company objectives. Sure, it’s important for reps to reach their own sales quotas, but it’s even more essential that teams collaborate cross-functionally to work toward the same goals.

SPM helps companies to do just that. A strong strategy helps you understand and improve day-to-day operations (for both back-office workers and sales reps alike), so everyone is always on the same page. The result is a more productive, efficient workforce that has everything they need to reach those collective goals.

Provides visibility into sales performance and other analytics

Implementing a sales performance management strategy means leveraging technology that offers pipeline transparency. Some SPM tools offer easy-to-access dashboards that shed light on daily sales activities and performance across the entire pipeline. And when you can see exactly what’s going on in real-time, you can course-correct any issues before it’s too late.

A key part of any good SPM strategy is collecting and analyzing actionable metrics (e.g. deal size, rep forecast, engagement activity, etc.), so investing in a tool that supports the process gives you a bird’s eye view of all things sales.

The visibility that comes from successful SPM also encourages recognition and support among team members. When reps see that their colleagues are performing well or struggling with certain tasks, they can motivate, congratulate, and learn from one another. That level of connectedness creates a strong, growth-minded company culture and drives engagement, retention, and performance.

Drives operational efficiency

Accurately predicting future sales trends, eliminating workflow bottlenecks, reducing data silos, and making data-driven business decisions are all critical parts of a healthy sales operation. SPM gives structure to the processes your teams follow, and measures their efficacy along the way. You can then use that knowledge to make consistent improvements that streamline operations for a more efficient, productive business.

Intelligent SPM tools eliminate manual data entry, which increases accuracy and saves time. They centralize data, automate workflows, and provide complete transparency so your teams can spend less time on burdensome, administrative tasks and more time selling. They also support consistent, accurate forecasts that help you efficiently plan for demand, modify your sales process, adjust employee compensation, and close more deals.

How to implement a sales performance management process

If you’re just beginning your sales performance management journey, it can seem like an overwhelming feat. But there are some tried-and-true steps to help get you started with implementing a successful process:

  • Determine business priorities and needs. Is your organization looking to launch a new product? Perhaps you want to target a new market or expand the size of your sales team. It’s important to hammer down these details before you build your SPM strategy. Your short- and long-term priorities, coupled with what you need to tackle those priorities, will help you identify which workflows need to be improved and what kind of growth you’ll need to support.
  • Create a structure with feedback loops. Effective feedback loops are vital for understanding which actions drive the best results. It can be helpful to create a strong loop between your marketing, sales, and revenue teams by using tools that provide visibility. For example, SPM software gives revenue teams a real-time view of how reps are communicating and whether or not customers are responding in a positive manner. Then, marketing can tweak messaging prior to it ever reaching an external channel, giving reps a leg up moving forward.
  • Communicate goals with stakeholders. For SPM to be successful, it’s vital that everyone is clued in on what they’re working towards, both individually and as an organization. Sales leaders and managers should clearly communicate performance objectives to reps and allow them to provide feedback or voice any concerns. Remember: this should be a collaborative effort that explicitly outlines how individual goals align with broader business objectives. Then, share your goals with external stakeholders, along with specific details regarding how you plan to reach them. This will help you get buy-in for any technology investments or process changes that support your SPM strategy.
  • Collect feedback and performance metrics. To get the most out of your SPM process, sales managers need to provide and collect regular performance feedback to and from reps. This will help reiterate expectations, uncover potential issues that are hindering their success, and identify areas for growth. It can also help managers to determine which reps need additional training (and in what areas) and how well their current tools and workflows are supporting their performance. Don’t forget to assess performance metrics, too, since they’ll give you quantitative information that can help you glean further insights. Individual quota attainment, conversion rate, and sales productivity metrics can all be used to measure individual sales activities against larger business objectives.
  • Iterate. Sales performance management isn’t a one-and-done, magical shift that makes your company instantly profitable. It’s about continuous measurements, data-driven, strategic improvements, and offering tools and resources that best support operational efficiency. As your business and the market in which it operates change, you’ll need to be flexible and informed enough to adapt with confidence and speed.

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What to look for in SPM software

Modern sales organizations know that manual methods for sales performance management just aren’t going to cut it—they need intelligent, robust tools that help take the guesswork and inefficiencies out of the equation.

As you evaluate your options, it’s important to remember that SPM software should meet your unique business needs and challenges. In short, don’t buy a solution just because it offers flashy capabilities.

To ensure a greater ROI, choose software that promises:

  • Integration of sales platforms - Your existing sales technology (like your CRM system) is essential to your process. Make sure you look for SPM software that easily integrates with other tools, so you’re not stuck with disparate systems that cause silos, bottlenecks, or duplicate data. Strong platforms can work with other sales technology to offer a unified approach to performance management, so nothing falls through the cracks. They also connect all your essential data in a single place to make reporting and forecasting a breeze.
  • Real-time data - Accurately tracking the effectiveness of sales activities requires real-time data. Find a tool that gives you a clear, comprehensive view of data and metrics as they’re collected, so your leaders are never behind on measuring performance. Robust software acts as a single source of truth, so managers don’t need to spend time tracking and managing data from disparate sources. Armed with both historical and real-time data, sales managers can make swift decisions that help their team track and meet their objectives.
  • Predictive analytics - Sure, workflow automation alone is great, but when combined with predictive analytics, your team’s performance can skyrocket. This gives you the ability to collect ` fresh data on relevant prospects so reps can quickly engage with those prospects before competitors ever have the chance to. Then, that data is inserted into the workflow for automated, predictable, and repeatable steps that are proven to garner positive results. The software you choose should make your workflow data-aware for improved efficiency, productivity, and, of course, performance.

Leverage intelligent software for successful sales performance management

A strong sales performance management strategy can increase efficiency, boost employee effectiveness, and drive revenue. By implementing the right process and tools, your business can easily measure and improve performance for a competitive edge.

Outreach's Sales Execution Platform supports sales managers with powerful tools that provide complete visibility into key deals, sellers, and teams across the the sales pipeline. With Outreach, managers can understand how reps are tracking against their goals, see where they need to adjust to hit their revenue targets, and take action — all within the same platform.

Learn more about how Outreach can help boost your sales performance management practice, or request a demo today.