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Friday, October 21, 2022
Sales Performance Management: 11 Best Practices to Achieve Success
Sales performance management (SPM) is critical to your sales strategy. It can significantly impact your bottom line. Due to its importance, sales performance management can be complex and daunting, especially for companies that are new to the process.
Businesses worldwide seek advanced software solutions to overcome this challenge, automate the process and make it more straightforward. If you're just starting with sales performance management, Wonderway is one solution you can use.
Our sales performance platform includes operational and analytical functions. It relies on machine learning and provides you with sales training ideas to maximize the revenue potential of individual sales reps.
Wonderway helps your sales team improve performance by identifying skill gaps, providing personalized training, and reducing ramp time by 50%. If you want to learn more about Wonderway, start your free trial or get a demo today.
In this article, we will explore the best practices for sales performance management and give you tips on setting goals, tracking progress, and providing feedback to your sales team. We'll also share some insights on the latest trends in SPM and explain how to use Wonderway to optimize sales performance management.
But first, let's explain the term.
What is sales performance management?
Sales performance management is a strategic tool used by sales leaders and executives to track, measure, and improve sales performance.
It allows teams to assess their performance against industry benchmarks, identify strengths and opportunities for growth, and pinpoint areas for improvement.
By understanding which metrics are essential to your business and making adjustments as necessary, you can ensure that your team is performing at peak efficiency.
What is sales performance management software?
Sales performance management software helps sales teams track and analyze data in one central location to improve operational efficiency. It allows you to easily record sales activities, such as calls, emails, face-to-face interactions, etc.
You can also keep track of the impact these activities have on your KPIs and revenue, which helps you make more informed decisions and create accurate forecasts.
You can use Wonderway as a sales performance management software and improve your sales team's performance to survive and thrive in a downturn. Start your free trial or watch a demo to learn how.
What is a sales performance management process?
A sales performance management process is a set of systematic activities designed to help you consistently, accurately, and effectively measure and improve sales performance.
It consists of six key activities:
- Planning
- Measurement
- Analysis
- Improvement
- Communication
- Control
Each activity is essential, but it is crucial to understand how they fit together to get a complete overview of your business results.
Sales performance management makes you achieve your sales goals and align your efforts with your business strategy. It helps you make improvements that will have a lasting impact on revenue generation.
What are the most significant sales performance metrics to track?
Some key sales performance metrics include:
- The average revenue per customer
- Lead-to-opportunity conversion rate
- Customer lifetime value
- Sales quota attainment
- Average contract value
- Total revenue
- Win rate
Tracking all these metrics seems like much work, but it is necessary to understand your sales team's performance. Here’s why.
4 reasons to track the performance of sales teams
Tracking the sales team's performance lets you understand whether your team is hitting its targets. It’s vital for the following reasons.
1. It helps sales reps strengthen their skills
A strong sales performance management strategy is crucial at each stage of the sales team development. It helps those new in the field and seasoned sales reps improve their skills and operational efficiency and master more advanced selling techniques.
2. It helps you forecast future sales trends
Sales performance management helps you forecast future sales by observing historical trends and analyzing the current sales climate. It allows businesses to forecast future revenue based on sales data from previous periods and compares that data to actual sales figures.
By identifying patterns in sales activity and taking into account historical trends, this method lets you predict future demand, identify areas for growth and make decisions about resource allocation.
3. It helps with compensation planning
A performance management system allows managers to look at the past performance to predict future success and helps with compensation planning. How well a salesperson performed in the past indicates what they might accomplish in the future.
You can use data to decide whether to provide performance bonuses to your salespeople or whether they are already over or underpaid.
4. It reduces turnover
While sales performance management can be effective for many reasons, one of its main benefits is that it helps reduce employee turnover. It allows managers to identify challenges before they become serious issues, which can help them prevent costly losses.
By tracking and reviewing sales performance data, managers can identify areas where employees are underperforming and determine which employees need additional training or support.
12 Best practices to succeed with sales performance management
The first step in building a successful sales performance management program is understanding the key factors that drive success. A good sales performance management program should include the following practices.
1. Define success and set sales goals
Identify what success looks like for you and set business priorities. Whether it's to hit $10,000 in revenue or to increase sales by 10 percent each month – define how you will achieve that goal.
You may want to set business objectives by defining specific revenue targets for each channel you use (e.g., sales platforms, your website, and your offline channels), or you may want to set targets for the sales team, like boosting revenue by 20% yearly or increasing customer retention by 10% in the current year.
2. Clarify which sales mistakes to avoid
You can approach selling in many different ways. Even if you choose the best one, common sales mistakes can occur along the way.
For example, you could be trying to sell someone a product that does not match their needs or making promises you can't keep.
Based on your experience, you surely know specific mistakes that often occur, and it's a good idea to communicate them to your team in advance and discuss how to reduce them beforehand.
3. Determine the best sales performance management platform for your team
There are many reasons to choose sales performance management software. It helps you track your sales data, analyze trends, improve sales processes, monitor KPIs, automate tasks, and measure employee performance.
You can also use a sales performance platform to distinguish your team's low and top performers.
In addition, sales performance management software helps you stay organized, plan sales activities, and manage clients that require follow-up.
Have you heard about Wonderway?
Wonderway, our sales performance platform, helps you improve sales effectiveness and achieve your overall business objectives by providing personalized sales training to your team based on revenue opportunities.
We can speed up your sales team development by showing you where sales reps need to improve and providing the best examples to learn from. We select these examples from your call and messaging systems and implement them in your training.
With our onboarding program designed specifically for the world's fastest-growing sales teams, you can automate the process and save time on training new hires.
By streamlining the onboarding process, you can ensure that your new hires are getting the most out of their training and that your company is making the most efficient use of its resources.
Would you like to see how ATLAS works? Get a demo or start your free trial.
4. Build a process to track sales activities at the individual level
Sales activities at the individual level can be challenging to track. You can use a CRM to track not only sales data but also customer data. It allows you to see who is buying your products and understand why they're buying them. It helps ensure that the data is accurate and up-to-date.
Finally, create a process for reporting on sales activities at the individual level. It helps you identify trends and patterns that you can use to improve sales strategies and provide appropriate training to your team.
5. Have clear roles and responsibilities for your team members
You must define roles and responsibilities for each team member to manage your sales team successfully. It ensures everyone knows what you expect and works towards the same goal.
The sales team members should be responsible for generating leads, making sales calls, and closing deals. They should also be responsible for keeping track of their performance and reporting to the sales manager.
6. Provide ongoing training, coaching, and education
Sales training improves your sales reps' skills, keeps them up-to-date on best practices, and helps them learn how to think like a customer and create a great experience from start to finish.
Using Wonderway, you don't have to guess what kind of training your sales reps need. It employs machine learning to recommend you the most effective program for each sales rep based on their skill gaps. They will quickly improve their sales qualities and learn the best techniques to deal with clients and close more deals.
Wonderway sales onboarding
You can also use Wonderway to create a perfect sales onboarding plan to help new joiners reduce ramp time and quickly improve their sales productivity.
You can enhance your existing onboarding process or create a new one using our training templates created by industry professionals. You can also automate repetitive training sessions and add interactive elements to make them more engaging.
Wonderway certifications
Our advanced sales performance analytics helps you lead your team to success. With Wonderway, you can issue certificates and ensure your team is fully aligned. We reduce the time to market by 50%.
7. Measure your most important metrics and KPIs
Image source: Pepper Cloud
KPIs are essential because they show the results of your sales efforts and help ensure your sales team grows in the right direction.
You can see which sales strategies are working and what you need to change by tracking your KPIs. This information is crucial for adjusting your sales approach and tracking your sales performance.
Wonderway helps you track your most important metrics in many ways:
- You can monitor skill and KPI development each quarter
- It shows reps how they improved and helps them identify the next challenge
- It allows you to track data in CRM and use quarterly bookings and revenue to separate high and low performers
- It analyses conversion rates to see where you’re dropping deals
All that information helps you optimize your sales performance and identify areas you need to improve.
8. Set up a reporting structure that empowers your team
The best way to improve your sales team's performance is by empowering them with the resources they need to succeed. That starts with a clear reporting structure that gives your sales team clear goals and accountability.
A good sales reporting structure should include revenue, pipeline size, close rate, and average order value. It should also include KPIs like conversion rate, the average number of daily calls, and the average number of emails sent.
Wonderway uses the data-informed approach to show your team's strengths and weaknesses. It brings all your performance data related to calls, emails, and training progress into one place. You can use these reports to discuss them during team meetings and readjust your sales strategy.
9. Establish a feedback loop with sales reps
Performance feedback loops, such as customer surveys, sales calls, and product usage, provide information about what is working and what is not.
There are many benefits to establishing a feedback loop with sales reps:
- It allows managers to identify and solve problems early before they become significant issues.
- It allows sales reps to improve their skills and increase sales.
- It builds trust and collaboration between sales reps and managers.
When a feedback loop is established, it is crucial to set clear expectations and define what type of feedback is acceptable. Feedback should be timely, specific, objective, and actionable.
The feedback loop should be ongoing, with regular check-ins to continuously improve the product or service.
10. Increase transparency and collaboration
Having a high level of transparency and collaboration among your team is essential. Your employees should feel like they can trust each other and work together towards a common goal.
You can increase collaboration by holding regular team meetings to brainstorm sales ideas, give updates, and assign tasks. You can also use Wonderway to align your team, share product and process updates, and track if your sales reps read your most critical messages.
It keeps everyone on the same page and helps you achieve your goals more effectively and efficiently.
11. Celebrate success and learn from failure
It's important to acknowledge every minor achievement on your path to success and learn from each mistake to move forward. Even if you fail, you can use the failure to figure out what went wrong and how to improve your sales process.
Tracking sales performance and productivity metrics wastes a lot of time and energy, but with the help of advanced software like Wonderway, the process becomes incomparably easier. It helps you uncover small wins and learn from your mistakes.
Now that you know what perfect sales performance management looks like let's wrap things up.
Sales performance management: the bottom line
Sales performance management is essential in any business as it helps you maximize revenue and meet your business objectives. By effectively managing your sales team, you can increase productivity and efficiency.
An effective sales performance management system, such as our Wonderway, will help you identify areas where your sales team is underperforming. It will also help you to set targets and goals. By continuously monitoring and evaluating your team's results, you can provide adequate training to improve their performance.
To see how Wonderway works, get a demo or start your free trial today.
Sales performance management: FAQ
1. What is sales performance management?
Sales performance management is an umbrella term that covers a range of activities. These include sales planning and forecasting, sales organization and optimization, sales management, and sales incentive compensation management. It aims to identify areas for improvement in sales performance.
2. Why is sales performance management important?
It is essential to understand that sales performance management is not simply about keeping track of sales numbers. Instead, it involves looking at all the different components that go into making a sale, from the initial contact with a customer to closing the deal.
By understanding various aspects of sales performance (like sales insights, sales forecasts, and incentive programs), sales leaders can manage them properly. They can also implement techniques and strategies to make their sales organizations successful.
3. How do you describe low sales performance?
Low sales performance is a percentage of sales that falls below the sales goal. Low sales performance is often referred to as a "Sales Problem" and is one of the companies' most challenging issues.
4. What factors affect sales performance?
Among many factors that affect sales performance, the main one is the company's product. If the product is good, then it will sell well. Another factor is the sales reps' skills. The higher their productivity, the closer the company is to its overall business objectives. A third factor is market competition. If there are many competitors, selling your product and dealing well in your sales territories will be challenging.