Sales Performance Management: What It Is, And Why You Need It

What Sales Performance Management Is, And Why You Need it Now | The Brooks Group

Sales Performance Management (SPM) is a structured approach to hiring, managing, and incentivizing your sales force to drive optimal performance. As no surprise, sales teams that implement SPM outperform sales teams in organizations that don’t. 

In this post we’ll outline what Sales Performance Management is, what it isn’t, its benefits, and techniques for building an SPM strategy within your sales organization.

What Sales Performance Management is – and What it Isn’t

Sales Performance Management is the practice of overseeing and guiding employees to improve their ability to sell products or services.

A key objective of the Sales Performance Management process is to educate and motivate sales professionals to set their own plan and goals—and reach these goals by following sales effectiveness best practices.

SPM is Not Just About Incentives and Compensation Management

Sales Performance Management is often confused with the practice of lining up incentives and compensation plans with organizational goals. Structuring your incentives and compensation to reward the correct behaviors and outcomes is important, but it’s only one element of a complete SPM system.

It’s Not Just About Software

Some sales technology software companies position their product or solutions as the quick fix to your Sales Performance Management challenges. The reality is that the technology is only a tool, and the tool is only as useful as the strategy and processes that it’s applied to within your business and cutlure. 

In order to effectively manage your team members’ sales performance and aid in their development, you must take a holistic approach and enable the most important players on your sales team—your sales managers.

Steps You Can Take to Implement a Sales Performance Management Approach

A complete Sales Performance Management system starts at the top with strategy, is executed throughout the company, and includes an analytics feedback loop that drives optimization.

Here are 5 key steps to building your Sales Performance Management system.

1. Start with a Strategy

Sales Performance Management should start at the top of the company with a buyer-focused sales strategy including go-to-market strategy, value differentiation, and a high-level view of the technologies, tools, processes, and training solutions necessary to support the strategy.

Gather stakeholders of your organization and come to a consensus on where your sales force stands today, and where they need to be in the future.

Our MISE approach can help you create the sales enablement strategy that will get you where you need to go.

2. Build on Structure

A clearly defined structure gives your organization the firm base or foundation on which to implement Sales Performance Management. This includes the sales process, hiring approach, Customer Relationship Management software, and other systems that support consistent execution across the organization.

3. Measure and Analyze the Right Things

Measurement and sales analytics are critical components of Sales Performance Management. With the right strategy and structure in place, you can measure information such as critical behaviors, activities, skills, and outcomes, and analyze the data to identify which factors have the greatest impact on performance.

Remember to focus on high-gain activities and in-process measurements so your sales managers can intervene with coaching to course correct if necessary to make the sale. 

4. Focus on Good Management

Armed with good metrics that provide insight into individual sales rep performance, sales managers can provide better coaching and management. If you have a formal sales process in place, it’s easy for leaders to see which stage each rep needs support in—and then provide the necessary coaching and skills training.

Performance appraisals become more precise and focused on what matters, allowing for more effective incentivization and compensation structure.

Additionally, managers can implement more effective hiring and firing practices that focus on critical success factors rather than making the same old hiring mistakes.

5. Include Feedback Loops for Optimization

The metrics and analytics provided by the SPM approach will give executives and managers a clear view of what is working and where challenges exist. With this insight, you can optimize the system to improve processes, methodologies, and incentive plans across your business so that they reward the correct activities and behaviors.

Benefits of a Sales Performance Management System

Implementing a structured approach to Sales Performance Management makes your team more effective. You can expect:

  • Stronger Sales Pipeline  As reps grow their skills and align with your strategy and process, their pipelines will reflect the improvements.
  • Better Qualified Sales Opportunities The same factors that improve sales pipelines, will also improve the quality of the opportunities in them.
  • Better Sales Analytics The right strategy aligned with the right technologies will make it possible to pinpoint critical leading and lagging indicators and KPIs, and to track them proactively.
  • Improved Forecast Accuracy. With the right analytics, you can better predict each quarter’s numbers.
  • More Effective Territory Management. A comprehensive SPM system helps your team learn what works in what territories, so you can assign reps and manage their performance more effectively.
  • Greater ROI on Sales Enablement and Training. When your entire sales system is aligned with your strategy and process, you can target your enablement and training investments to provide the optimal support for your teams. 
  • Healthier Profit Margins. In addition to higher win rates, your fully aligned SPM system will support your salespeople build value and promote the right solutions to the right customers, leading to better margins on sales.

Organizations that implement effective Sales Performance Management consistently outperform their peers. If you’re ready to reach the next level in your organization, your first step is to map your sales enablement journey.

Learn about The Brooks Group’s MISE approach, and request your complementary consultation today.

You may also enjoy this short webinar:

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David Tucker

David Tucker is a Business Partner for The Brooks Group. In his role he is responsible for developing strong, mutually beneficial relationships with clients, helping them to effect long term cultural change inside their sales organizations.

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