Sales Performance Management is a crucial business process in the sales cycle - it involves monitoring, measuring, guiding salespeople to achieve their sales quota, close more deals, and generate revenue. The critical part of this process consists of educating and motivating them to set goals and achieve those goals to satisfy customers.
What are Sales Performance Management Software?
Sales Performance Management software helps to streamline various activities including broadly
Hiring and onboarding,
Territory and quota management
Incentive compensation management
It also includes a set of tools that help to aggregate and analyze various sales data through BI, dashboards, and leader boards to visualize and take action. SPM software also includes sales gamification software that involves motivational tools like contests, quizzes, among other things.
What are the key benefits of Sales Performance Management Software?
In any organization, the result achieved by sales reps varies considerably, applying Pareto principles, 80% of sales quota met by 20% of people. Often the results are not commensurate with the effort put by sales reps, and very often, sales leaders need to get involved to unblock sales reps, guide, and motivate them to achieve results. Consistency in the adoption of best practice, adopting a data-driven approach across the organization, helps sales teams predictably achieve their goals thereby achieving sales targets and organizational revenue goals. SPM tools play a significant role in accomplishing this.
Sales organizations have an abundance of sales data generated from various sources and tools. Challenge is to know how to aggregate them for meaningful dissemination and what to track. SPM analytical tools help to identify leading and lagging indicators and KPIs, which help sales leaders take appropriate action. These tools thus can help to better predict more accurate sales forecasts, revenue, and profit every quarter. Sales Performance Management tools can steer the organization to adopt a data-driven approach to monitor and improve sales performance.
Better Pipeline Management
With SPM tools, sales leaders can better manage sales rep performance, which in turn leads to better pipeline management, opportunities, and clear next steps and predictability in closing deals. At the organization level, it helps to predict sales trends more consistently and sales incentives which results in better finance management.
Improved Sales Productivity
Sales reps will have the necessary tools, training, and resources to perform their job better, qualify the leads better, thereby improving the chance of closing more deals. Consistent adoption of best practices and organization processes results in improved sales performance across board thereby increasing overall productivity.
SPM tools help in accelerating onboarding and ensure sales readiness with ongoing training.
Sales reps build their skills with ongoing training and coaching. Ongoing training helps build High-performance sales teams. Focus on skill-building boosts employee morale and employee development is a vital motivational tool. Motivated teams contribute to higher sales thereby boosting revenue.
Optimized Territory and Quota Management
Territory and quota management and incentive management are tightly linked. The crucial part of the sales planning cycle is to define territory and assign to each salesperson based on skill and expertise and other local factors and assign a quota to achieve or exceed. Data based approach to establish territories and assign will help sales leaders to optimize the territory management and meet revenue goals. Usage of sales analytical tools will help sales leaders to determine the right combination of territory, quota, and incentive.
More accurate Performance Based Incentives
Organizations that employ SPM tools provide more accurate data based incentives to their sales reps based on their performance. Tools help to calculate more accurate incentives, thereby avoiding over or underpayment of employee incentives. Having a set sales performance plans results in keeping compensation structure and business goals aligned, and in boosting the employee morale.
What are the business problems solved by SPM Software?
Sales Planning is a critical business process within the Sales Organization. Companies that adopt manual ways to do this significant activity tend to treat it like a one-time planning activity with ad hoc input that goes into planning. Given the complexity involved in the manual process, companies tend to compromise on not keeping this current by not making dynamic adjustments to the plan once published. In such cases, it becomes only an annual exercise.
SPM touches many aspects of Sales Planning, and it includes sales coverage modeling, territory planning, quota planning, and sales capacity planning.
Sales Coverage Modelling
Sales Coverage Model is about aligning the right resources with the right target customers so that the organization can achieve revenue goals in the most effective manner. From a customer engagement perspective, it defines how the sales organization engages with the target customers at the ground level.
SPM analytical tools provide the necessary insight into the sales leaders to do this. Organizations that have disparate tools have an abundance of data that are scattered around. Good integrated sales analytical tools pull these together to provide a cohesive picture, meaningful insights that are relevant to the sales leaders to make sales modeling effectively.
Sales Territory Plan involves creating a workable plan that targets the right customers with the right resources with an implementation strategy that drives sales revenue growth over some time. Sales Territories can be created based on geographical location, industries, customer types, and other segments.
Territory Management tools that are part of SPM help in automating this process of territory design using a data-driven approach. Poorly planned and imbalanced territories result in mismatched quota allocation, thereby missing revenue targets. Companies have to ensure those territories are appropriately balanced between sales rep capacity and sales potential so that quota allocation is achievable.
Companies who adopt a manual process of quota management tend to allocate quotas either based on their desired targets or based on past performance data; this can be suboptimal. Too less quota allocation results in missed opportunities and less than desired sales productivity. Too aggressive results in employee morale issues. Adopting a data-driven approach and adoption of SPM tools eliminates this problem. Sales leaders can quickly make adjustments to quota allocation based on the data. Both historical data and product and territory design contribute to defining quota allocation.
Sales Capacity Planning
Sales Capacity Planning is a key process through which sales leaders measure and quantify the current capability of the team, compare that capacity to the sales goals to be achieved and come up with a plan to bridge the gap. This plan would include hiring/recruiting combined with sales training/coaching to augment the skills and improve productivity.
SPM tools provide a mechanism to do this at scale with a data-driven approach
Sales Performance Monitoring
Sales leaders need to monitor the progress once the Sales reps start executing on the Sales plan. Sales leaders need to measure and track sales rep performance and guide them on a need basis to achieve the goals. Sales leaders need visibility to all KPI and performance metrics of all sales reps to do this. They also need insight into what behaviors are causing performance bottlenecks and take appropriate course correction to either correct/halt such behaviors. Sales gamification software helps in those cases where employee motivation is an issue.
SPM tools provide various dashboards, Leader boards, and measurement tools integrated with other sales tools to provide this visibility.
Sales Incentives Management
Sales Incentives are a key part of sales performance strategy, and this determines how companies incentivize their sales rep for selling a mix of products. For eg. Product X is easy to sell and it is into volume business with low margin. The company has introduced a new product Y which is expected to be low volume but with a high margin. Managers need to incentivize sales reps to sell more of Y than X and provide the right mix in their quota; done by offering a higher commission for Y than X.
Incentives can be further tailored for different territories and segments. Overall this leads to more complex compensation calculations. SPM tools provide automated ways to calculate thereby lowering errors. Human errors can be expensive to deal with and also lead to low employee morale.
What are the critical capabilities of Sales Performance Management Software?
These are key tools for sales leaders to monitor all key sales performance metrics from a single place. These metrics could be related to sales activities and individual team member performance. Data is pulled from various sources and displayed in a meaningful manner to provide insights so that leaders can take action. SPM software typically provides multiple dashboard templates that can be customized for every organization and group need.
“Sellers want transparency across the entire revenue organization. Where is the team sitting for the month? Why did my quota go up? How long of a runway do we have if we aren’t hitting our numbers? As leaders, we need to take this to heart and make the numbers visible and easily accessible to all.”
Sales Gamification software provides various features like Leaderboards, Contests, Quizzes, Badges that can be used to motivate sales reps, create a competitive environment, energize, and reward employees. Leaderboards provide visualization of key metrics that helps leaders to track sales performance. It also showcases metrics that individual sales reps can view and take action. Specialized gamification tools provide numerous reward and recognition mechanisms that can be used as great motivational tools.
Contests can be a fantastic way to motivate your team. You can think of it as a strategic mix of public recognition and sales bonuses
One size does not fit all. Organizations need the tailoring of reports to suit their needs. Most SPM tools provide custom report templates for this purpose.
Sales Analytics is about going beyond basic CRM reports. Sales data is consolidated from multiple sources related to sales, revenue, customer, forecast, and pipeline into one single consolidated view. Different cuts and slices of data view provide insight into customer, sales performance, individual sales rep performance, pipeline view, historical trends. It offers insights to sales leaders on which prospects to focus on, opportunities not worth pursuing, win/loss insights, and deal scoring. Based on the strength of the opportunity, leaders can take corrective action and/or provide necessary intervention to take it forward. Getting insights and viewing all data in one place improves the decision-making process.
Predictive Analytics is part of the Advanced Analytics and data mining technique that extracts information from data and uses it to predict trends and behavior patterns. Many techniques from data mining, statistics, and Artificial Intelligence are used to predict trends - particularly useful in Sales Management for leaders to predict which deals have a higher probability of closing, which prospects need reps attention, what next steps are required to close the particular deals and what is the best approach to close them. In B2B scenarios, where buyer involvement mainly drives deal progress, predicting customer behavior patterns and next steps needed helps leaders to apply sales resources appropriately to increase the chance of closing deals
Most SPM products support multiple channels like email, website, phone, and mobile for various sales activities and for viewing dashboards and reports.
Which are the industries that benefit from Sales Performance Management Software?
Sales Performance Management tools are used across all major industries - Computer Software, Telecommunication, Manufacturing, Healthcare, Banking & Finance, to name a few.
Who are the users of Sales Performance Management Software?
SPM tools cater to all the roles within the sales organization. Sales Leaders, Front line Managers, Sales Reps, and Account Executives benefit from SPM software.
Sales Leaders can use the tools effectively to do data-driven sales planning that involves territory and quota planning, sales forecasting, and compensation planning. On an ongoing basis, they can use the tools to do pipeline management.
Front line managers use the tools to align the sales team performance to organizational goals, ongoing training, and coaching. They can motivate and align employees with a set of fun-filled competitions, real-time progress tracking, recognition mechanism; this helps to create a culture of high performance.
Sales reps can use the learning tools and resources to upskill and build expertise and track in real-time their progress.
The Sales Management team gets access to various insights that give a comprehensive view of competencies and capabilities, sales pipeline trends that help them both in their planning and execution.
AI in Sales Performance Management
Artificial Intelligence plays a key role in enriching some of the software capabilities
Sales Management efficiency and success depend on getting meaningful insight from the vast amount of data that comes from various sources, on making key decisions.AI plays a key role here with machine learning and sophisticated data processing abilities. Sales Dashboards backed by AI act as powerful decision-making tools for Sales Managers. Sales managers can determine who is going to meet the quota and who is not and hence take necessary corrective action. They can also use this information to provide essential intervention for individual reps.
AI-backed tools extract and process data from CRM, CDP to provide territory mapping much faster. They can design territories that are balanced and optimized for travel efficiency, balanced opportunities for sales reps to achieve quota, and drive growth. They can even predict how many sales reps required to cover each territory and help in capacity planning.
One of the most significant benefits of having AI is to be able to provide predictive trends and insights which could be used for a variety of purposes like sales forecasting, sales capacity planning. Predictive analytics can throw trends that help Sales Managers to determine the overall capacity to meet revenue targets and also set meaningful quota goals for reps.
Personalized Performance Coaching
Using Sales Analytics data that is derived from sales rep performance data and pipeline data, sales managers can get insight into individual performance trends, using which they can provide highly personalized and contextual coaching. Also, looking at the overall performance trends, they can plan for team level training, skill-building, and coaching sessions.
AI-based Sales Assistants
AI-based Sales Assistants can play a significant role in automating many of the mundane sales activities and also provide relevant, contextual guidance to sales reps to perform their job more effectively. e.g., during deal progress, they can provide compelling content in real-time to engage with customers, proactively set up meetings, nudge them to engage and communicate.
Buyers Guide - Guide to choosing an SPM Software
Point Product vs. Suite
SPM software covers very many business processes, and if your need is to cover all aspects end-to-end, it would be good to consider products that are all in one suite. Some products include only point solutions like gamification, territory management, and training. If your organization needs to cover specific business processes, it is worth considering a point solution to start with, but good to have a roadmap strategy to include other processes over time.
Integration and Data Migration Capabilities
An essential requirement for SPM software is the ability to pull data from multiple sources and applications related to sales, customer, revenue, pipeline. SPM should provide integration hooks or out of box integration with all popular CRM.
SPM tools are backed by several technologies like AI, machine learning, NLP. Such tools provide a significant advantage over other tools - automating several mundane sales activities, thereby freeing sales rep time to focus on customer/leads, ability to process a large volume of data and generate trends and insights. AI can provide more hyper-personalized information to leaders to deal with rep training/coaching or to deal with specific customers/deals. These are a few of the advantages, but the possibilities are enormous.
Ease of Use and TTV
Depending on the size of your organization and need, you might have to look at the usability of tools, dashboards, and reports whether the sales team can be ramped up on the product within a short time. Ease of use, customization, and ability to get it installed, integrated, and get going play an essential role in the selection of products.
Depending on the size of your organization, you will have to look at factors like reliability, scale, performance, security, and compliance capabilities of the product before deciding on the adoption.
What are the challenges in adopting Sales Performance Management Software?
1. The software adopts a data-driven approach and provides guidance and support to make performance-related decisions based on data. If the organization culture is not tuned to the data-driven decision-making process, but more used to Adhoc, intuitive and person skill-based approach, then it requires a culture change. Organizations must be prepared for this culture shift before rolling out the adoption of tools.
2. The software selection should fit into the overall sales strategy of the organization. The organization should have a comprehensive and overarching sales strategy that includes a view of technology, tools, and training needed to support the strategy and the processes that are associated with it. If the software is chosen, especially point products, without a strategy backing it, then the result obtained may not be in line with the expectations.
3. Sales Analytics which is a key component of Sales Performance Management needs a lot of organization data that needs to be pulled from various data sources. These data could pertain to sales reps, customer, market, revenue data, pricing, discounts and forecast data. This requires data to be pulled from the various sources, consolidated and managed. If the organization has data silos that makes it difficult to achieve this, then the overall effectiveness will be reduced.