Sales Performance Management (SPM) generally refers to the data-driven approach for better planning, managing, and analyzing an organization’s sales performance at scale. It provides valuable tools and best practices that enable and motivate sales teams, that drive results and achieve targets, and that maximize the return on investment in sales.
SPM is often broken down into the following three capabilities:
1. Planning and Forecasting
Sales Planning and Forecasting is the process of defining where and when the organization can sell their products, who should sell them, and how to best meet the demand expected for those products.
At this stage, it is about strategic segmentation and organization of accounts and territories, while allocating sellers and teams to optimize revenue generation. Being effective during this process is vital to ensuring that salespeople are informed and motivated to achieve their quotas and have the information they need to reach their accounts.
In a nutshell, planning, and forecasting boils down to setting optimal territory and quota assignments that maximize sales rep performance and help achieve better sales results. It also provides considerations for efficiently identifying and realigning sales territory coverage gaps or unassigned accounts to ensure that sales teams are not missing any opportunities in the marketplace.
Traditionally, most organizations use spreadsheet solutions to create and monitor their sales estimates. Considering how territory and quota planning is complex due to fragmented data metrics (e.g. historical and projected), complex hierarchies (e.g. products and territories), and require the input of various persons and teams, this method often limits the organization’s full potential. It is a very manual and slow process, provides relatively little visibility into important performance metrics and trends, all while being prone to the risk of data inaccuracy.
2. Incentives Compensation Management (ICM)
Commissions, bonuses, and other incentives are designed to provide sales teams with chances to grow and generate more revenue. They tend to be the backbone of sales teams – a well-designed compensation structure enables sales reps and provides that extra push to see sales through.
Just designing a great incentive and compensation program is not enough. It takes effective management and delivery to see performance metrics and achieve organizational targets. In today’s age, sales reps expect and demand transparency in their sales performance and incentive metrics. This establishes a layer of trust between them and the organization while also motivating the individual with information and insights.
When compensation processes are riddled with errors and issues, this trust can be damaged severely. As a result, sales reps tend to spend much time reviewing their metrics and submit a lot more inquiries – all time wasted that could be spent on chasing leads and closing opportunities.
With the inherent complexity and variety of compensation plans, effectively administering incentive compensation is not an easy process. The process entails large data sets that require rigorous validation, numerous and often complex steps and formulae to calculate bonuses and commissions, inputs, adjustments, and approvals from various personnel, and much much more. Additionally, without any reporting, this complex process becomes hard to digest and reciprocate. These common challenges are avoidable with the right technology solution designed to enable sales teams with automation, reporting, and much more.
3. Sales insights through Analysis and Reporting
With data analytics, organizations can achieve a deeper understanding of their data and performance metrics. You likely have a lot of data that can be analyzed to better understanding your customers, vendors, channel partners, sales cycles, products, and etc. Converting this data into relevant insights supports sales reps, teams, , departments and leadership personnel alike, and enables them to make informed decisions.
It’s worthwhile to do an audit of the data that is available and then consider what else you might want to measure. The data that you collect will depend on what you want to accomplish.
Some commons insights that can be drawn are:
Sales opportunities: Identify areas of growth for optimal channeling of sales reps and products to address market demand and development. With pattern and trend analysis, we can obtain a profound view of performance metrics in order to detect unmet demands and identify growth opportunities.
Buyer journey: Sales analytics shed light on where your prospects stand at each stage of the buyer’s journey. You gain knowledge about when and why people buy, allowing you to improve sales functions and make the conversion from prospect to a customer more efficient.
Product gaps: Sales insights help analyze your organization’s new and current product lines and how they are sold in the market. Where can current products expand their outreach? How can this valuable data be used to push sales further?
Pipeline performance: Sales insights enable you to see the performance of your sales team. Better performing sales reps translates to a robust pipeline filled with opportunities and a clear action plan.
While traditional reporting tools are adequate for static reporting, they fall short of providing access to real-time data or interactive dashboards that can be sliced and diced by end-users. This lack of real-time information impacts the sales team’s abilities to make decisions faster and gain a competitive advantage.
Here is where modern applications provide an edge for today’s sales organizations. They provide accurate reports and dashboards to enable your teams, but also couple the power of artificial intelligence (AI) and machine learning (ML) to provide predictive value by providing the best path to get to your sales numbers.
An ideal SPM solution provides a user-friendly interface where you can design and manage quotas, territories, administer, process and report on compensation metrics, drive complex workflows, and much more. It enables the organization in many ways by connecting people, processes, and data. If you want to learn more about how your organization can benefit from SPM solutions, download our FREE ebook on this topic and connect with our teams.