The 7 Basic Elements of Sales Performance Management

Salespeople have a sales process that guides their approach to creating and winning deals. Sales managers have a cadence to lead their sales force so they can reach their goals. Sales leaders have elements of  performance management to build, maintain, and improve the sales function. Sales performance management is a holistic view of sales.

Larger sales organizations with multiple divisions that sell different offerings are likely to include more elements in their version of performance management. Smaller sales organizations may have fewer elements. To produce the best results for your company, you can start with the seven basic elements of sales performance management.

1. Strategy and alignment with the organization
2. Goals and objectives
3. Tracking and measuring performance
4. Coaching the sales organization
5. Development and training
6. Compensation and rewards
7. Technology and other tools

Strategy and Alignment with the Organization

The starting point of effective sales performance management is aligning the sales team and its processes with the organization’s overall strategy. This helps you focus on the clients best suited for the value your organization creates and how it is delivered. In doing so, you can develop a strategy and approach that will be most effective in serving your clients and supporting your organization’s strategic goals.

This element should not be limited to marketing. As a sales leader, you need to work with marketing, customer success, operations, and finance, aligning with these functions to ensure you are working in lockstep with the rest of the company. You may also have to help your peers in leadership to understand how they can help you succeed.

You may want to look at The Ultimate Sales Strategy Template for Enterprises and Startups

Goals and Objectives

The sales leader will leave the first element with a charge to produce the results their company needs. The first of these results is almost certain to be sales growth goals, an increase in net new revenue. But companies have other needs outside of revenue growth. These additional sales objectives might include increasing profitability, gaining market share, launching a new product, or winning larger, more strategic clients.

The alignment and the strategy must be able to deliver the results their company is pursuing. Good sales performance management recognizes the intersection of each element and the connections to the enterprise.

Tracking and Measuring Performance

We now have so much data about the sales force's activities, opportunities, and results, so it’s important to be selective about what you track. The first thing the sales leader needs to do when it comes to measuring performance is to determine what information they need and what they don't. You want to measure what matters. Most measurements look at sales activities, opportunities, and results.

The first reason to measure sales performance is to ensure you are moving toward your goals. The second reason is to determine what is working, what isn't working, and what you need to change. Looking at the connections between the data and the information can illuminate problems and challenges that need to be resolved.

CHECK OUT: The Ultimate Guide to Sales Forecasting.

Coaching the Sales Organization

B2B sales aren't easy. It's changed so dramatically that many sales organizations are struggling to find success, as the legacy approaches create too little value for buyers. The sales leader will need to coach their managers, who, in turn, will need to coach the sales force. This individual attention to helping every level of the sales function is continual.

This element is one of the most powerful ways to improve sales managers’ effectiveness and harness the critically important power of sales effectiveness. It is difficult to improve the elements of performance management without leveling up every person in every sales role.

Development and Training

To increase the performance of sales managers and salespeople, organizations must provide training in the core competencies needed to deliver their commitments. Better sales managers build better salespeople, and there is research that suggests you can improve sales results by training your managers.

To succeed today, the sales team requires competencies and sales skills that are much more challenging to excel at than what would have been required in the past. The training and development for salespeople now include things like business acumen, building consensus, leading prospective clients, and esoteric competencies like sense-making. If you want a clear view of what your sales force needs to do to succeed today, pick up Elite Sales Strategies: A Guide to Being One-Up, Creating Value, and Becoming Truly Consultative. A sales force that is not getting better is getting worse.

Compensation and Rewards

There may be nothing so difficult as getting compensation right. Sales organizations spend a lot of time changing their compensation plans, only to change them again a year later. Most sales organizations would be better off by having a stable, predictable compensation plan with variable rewards.

Non-salespeople struggle with variable compensation. They believe that everyone should be paid the same for doing the same job. The truth about sales compensation is that a highly effective salesperson is worth more because they generate more revenue and more profit for the organization. It’s also important to use recognition and gratitude, something that costs you nothing. Getting this wrong can cause bad sales behaviors.

Technology and Other Tools

While most salespeople complain about their CRM being Big Brother, you could easily turn yours into a strategic advantage. Because software is eating the world, there are more technological tools than can be counted. Sales leaders have been convinced to spend more money on technology, chasing productivity. This does not always lead to increased effectiveness.

You need a CRM to keep good records and measure performance, and a data source like ZoomInfo to give salespeople back the time they would have used to research their targets. You also need some platform that allows for virtual selling.

Conclusion

As a sales leader or a sales manager who is responsible for these seven basic elements of sales performance management, you need to consciously address each one. From year to year, as things change, you will need to examine one or more of these elements to determine if anything has changed that could cause you to do things differently. Depending on the size and complexity of your company and objectives, you may need to add other elements that ensure you achieve your goals.

Good sales performance management makes for better sales results and goal attainment.