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A Sales Rep’s Guide To Sales Performance Management (SPM)

Businesses make significant investments in their sales teams. Unsurprisingly, there is a huge expectation placed on sales teams to produce results and identify future sales trends, yet they cannot accomplish this on their own. Cross-functional teams must collaborate to achieve the same corporate sales goals in order for sales performance management planning to be successful.

Looking to boost sales while inspiring your salespeople to perform at the top of their game? You should begin using sales performance management (SPM).

An effective sales performance management strategy will provide you an edge in today’s competitive environment not only when it comes to reaching your sales projections, but it will also help you retain your greatest sales stars and help the entire team perform at their highest level.

Let’s take a step back to clarify important words and ensure we are all on the same page before continuing.

sales performance management software

What is sales performance management?

The capacity to meet sales objectives is referred to as sales performance, which measures how well the sales force performs in selling activities both individually and collectively.

Depending on the sales function and sales environment, many sales performance measures, such as sales revenue, customer retention rate, or number of net new customers, can be measured.

How about sales performance management, then?

The goal of sales performance management (SPM) is to increase operational effectiveness and efficiency through the automation and fusion of back-office operational sales activities.

Sales performance management capabilities include gamification, advanced analytics, area management, quota management, and management of incentive compensation.

Sales managers utilize tools and methods for performance management to increase the productivity and effectiveness of their employees.

It can be challenging to implement a thorough sales performance management approach. Each component of a sales strategy affects the others and is interconnected with the others.

A sales leader could uses various methods to evaluate and oversee his sales organization, including sales performance metrics, sales processes, sales rep development plan/compensation structure, pipeline optimization, incentive/compensation plans, sales planning, quota setting, account segmentation, and many more.

Each one’s events inevitably have an impact on the others. Because of this, the most progressive sales leaders take a holistic approach to sales performance management, viewing the sales performance management process as a single set of issues rather than a collection of disparate issues.

what is sales performance management

Why is sales performance management important to sales teams and sales leaders?

SPM is crucial because it enables sales teams to create strategies that address every stage of the sales cycle and impact every stage of the sales process.

Sales leaders can successfully implement new strategies and tactics that support the success of their sales organizations by effectively managing the many parts of sales performance (incentives, insights, forecasting, and so on).

1. The sales performance management process enables sales leaders to forecast upcoming sales insights.

Your business may estimate future quota targets and future sales patterns and employee pay scales with the help of sales performance management tracking, particularly for commission-based compensation models.

For instance, if a sales representative is expected to close $100,000 in sales for the quarter and earns a 15% commission on each deal they close, your finance team will plan to allocate $15,000 in commission payroll for that sales rep.

2. It enables sales reps to develop their abilities.

Employee development is a significant benefit of having a sales performance management plan in place, regardless of whether you have sales reps on your team who are brand-new to the area of sales or seasoned sales rep willing to acquire more sophisticated selling skills.

Your training program gains structure and accountability thanks to a sales performance management strategy.

To aid sales representatives in developing their talents, the following components might be included in a plan:

  • Instructional requirements for sales enablement tools
  • Informational interviews with the company’s sales leaders
  • Further reading from thought leaders in sales
  • Participation in a forthcoming conference or seminar

3. It eliminates employee turnover

According to research, there is an extremely high amount of turnover among sales leaders 58% of firms.

Although many factors contribute to employee churn, sales executives can use a sales effectiveness performance approach to motivate their sales team and seek opportunities for advancement or training to boost retention.

sales performance management tool

4. It promotes sales rep pipeline management and employee performance

Your sales organization will have the framework to create a pipeline of sales representatives with the valuable abilities required to successfully and efficiently drive sales for your business once organized performance management strategies are in place.

You will be able to tell how many salespeople are active and how many closed deals per rep. These employee performance metrics can work together to promote sales productivity.

The higher their productivity, the higher their chances to improve sales performance.

Additionally, having measurable, transparent goals and rewards helps develop well-rounded sales employees.

5. It increases the accuracy of commission-based compensation models

Sales performance management-enabled businesses report compensation data that is more precise.

A highly motivated sales staff is the outcome of keeping your remuneration structure and overall business objectives in line with a performance management strategy.

Five Keys to a successful sales performance management

1. Transparency

Everyone talks about the importance of offering transparency. This is frequently directed inside the company. Its intended audience is the Finance, HR, and Sales Operations Teams within your firm. We want the data to be something that they can easily access. Don’t ignore the sellers, though.

Actually, a salesperson gets compensated depending on this information. Success depends on letting them know about your plans. Salespeople need to see their earnings and know exactly how they are paid and when they will be paid.

And it is the key component of keeping a salesforce motivated. This openness attests to the fact that opportunities have closed, the PO has been processed, and the paperwork has been finished.

It is in your best interest to make sure your staff is aware of how they are being paid to maximize the return on investment for your incentive compensation spend. Transparency in variable remuneration inspires sellers to keep working hard for their businesses.

sales performance management solutions

Each sales team must be aware of their exact earnings. Sellers need to be aware of their financial situation and what is required in order to reach their quotas, objectives, and key performance indicators. This enables them to maintain their motivation. It is the organizational leverage that a strong incentive compensation plan provides and is a crucial element of effective sales performance management.

2. Payment schedule

You must pay early and frequently to encourage your sales team effectively. Pay as soon as the sale closes as feasible by using the phrase “early and often.” Better than quarterly; it should be monthly.

The motivational effects of quarterly and semi-quarterly seem to be lessened. The objective is to achieve a repeatable level of assurance and precision. For your organization, it’s a good idea to pay frequently or as often as possible.

Next, think about how you can make these timelines better in the coming year. Your team remains engaged with regularity and accuracy.

Eliminating “caps” from your program is another idea to keep people motivated.

It will be demotivating for a salesman to know that there is a cap on the amount of revenue that may be recognized for a product line or time frame. Selling parties aim to maximize their profits.

Placing restrictions on their path will kill the drive for some of the most important possibilities.

3. Smart Quotas

By “smart quotas,” we mean creating customized quotas for all the sales reps on your sales team.

These might take into account a region, a person’s skills, or the capacity to reach a certain quantity.

Your sales reps’ quotas should be simple to measure.

We’ll tell you it’s probably too complicated if you ask yourself how many components you can track from a quota and what that quota’s composition is.

Quotas must be sensible, realistic, and pertinent to a certain goal or region.

4. Alignment

Your sales incentive compensation management plan should influence the sales reps’ behavior in a way that is consistent with the organization’s objectives. These key performance indicators (KPIs) align with the organizational goals and company objectives. They must go into the nitty-gritty of the seller’s turf.

It’s possible that you’ve worked for firms where everyone was given the same quota as part of a push to “simplify” the remuneration structure. In our experience, quotas are determined by the capabilities of a specific location. Your possibility for opportunity will be different if your region is the Great Lakes than it will be if it is the Southeast, Canada, or Europe.

Some of these regions have slower lead times, greater bureaucracy, lower potential, or local difficulties. Although he has more states than I have, sellers might feel as though they need to have a higher quota. Alternatively, “He has a greater geographic area than I do.” There, the grass appears to be unusually green. It diverts attention away from selling. Plans, territories, accelerators, or a combination of them, must strike a balance in these areas.

The incentive programs that take into account all the information and nuances required to motivate the seller-fair and appropriate equity in success express the alignment of the corporate goals and vision down to the territory level.

5. Analytics and proof

The capacity to take all of this data and transform it into something comprehensible is analytics. We currently follow a data-driven path. Having stated that we must sort through a surplus of data to identify the pertinent facts before acting. The information is market-driven, historical, local, and more potent because the preceding four have undergone constant improvement and development.

Analytics and evidence can be your best friends if you can mold and groom the data that yields the first four. The seller can see and comprehend the links that are in place for the territory, objectives, and vision, thanks to transparency. Positive reinforcement is created through timely and precise payouts.

These keys are all dynamic rather than static. They must always be examined, analyzed, and designed in accordance with the organization’s current situation because they are mobile objects. If you adhere to these five principles, your company will have effective SPM.

Let’s now discuss software, which is the next essential component of successful sales management. Data enables us to make fact-based judgments rather than emotional ones, and when we add context to the data, we can create arguments that can be used as evidence to support conclusions.

Sales performance management software solutions

The software can play a significant role in SPM, but it is not the only aspect of it.

Simply said, the appropriate technology can enable you to acquire faster, more precise insights that will help you grow your business and greatly simplify the lives of your salespeople.

You’re losing out on a potent advanced software tool if your company has been stumbling along with nothing more than a collection of spreadsheets and a maze of emails.

Technology is an essential component of any sales performance plan since it can help you create a robust sales pipeline, enhance communication, and produce precise forecasts all in one.

When choosing sales performance management software to meet your overall business objectives, consider the following features:

Improved communication

Software that facilitates communication makes it simple to resolve conflicts and misunderstandings.

Sales management software allows you to say goodbye to all the email chains and phone tag games that are used to characterize compensation conversations, streamlining the process and making it more enjoyable overall. You can message through the software or chatbot to answer common questions.

Sales territory management

Need to determine who should be in charge of particular geographic regions or consumer groups, and how to compute their targets fairly? Planning might be tricky because some sales regions can be more difficult to handle than others.

However, with efficient sales performance management software, you’ll have all the information at your disposal to maintain the balance of your teams and territories and optimize potential.


It’s great to generate a lot of data, but you also need to put it to use.

You can determine whether your results are in line with your forecasts and make any required adjustments along the road with the help of real-time reports on sales across items, categories, sales territories, and individual sales operations.

Quota control

Don’t know where to begin when setting sales goals? Quotas must be set correctly; if they are too high, your sales crew will rapidly get demoralized; if they are too low, you will incur higher-than-expected commission charges.

You’ll have access to all the information you need to make an informed choice and establish reasonable sales goals if you use the correct sales performance management software.

Top 3 SPM advanced software

1. Oracle SPM software

oracle sales performance management

Oracle’s SPMt tool emphasizes sales rep accountability while directing representatives through task lists and training modules that help them develop their skills.

The platform also has a white space analysis capability that enables sales teams to concentrate on customers with the greatest potential for income generation, helping them to meet revenue targets.

Why it stands out

  • For sales organizations with different territories, it’s simple to set up, utilize, and maintain.
  • It is totally cloud-based and independent of a centralized data center.
  • Users can access and follow projects in real-time thanks to it.

2. Varicent advanced software

Varicent sales performance management

The performance management software solution from Varicent aids in increasing productivity and operational effectiveness. Their areas of expertise include territory management and compensation planning.

Teams can utilize Varicent to cut the price of the compensation procedure.

Additionally, Symon.AI, the software’s augmented intelligence solution, assists customers in better planning by assisting them in identifying trends and outliers.

Why it stands out

  • The software is simple to set up and use due to its shallow learning curve and intuitive design.
  • Your ability to boost quota achievement and reduce payroll tasks is made possible by the tool’s incentive compensation feature.
  • It is an excellent choice for large teams because it can manage massive data quantities at once.

3. SAP Sales Cloud

sap sales performance management

SAP Sales Cloud is concentrated on assisting sales reps to achieve maximum efficiency. Your sales reps will experience support and inclusion at every stage of the process thanks to technologies that promote employee mentoring, KPI tracking, and assessments of sales reps.

With the use of intelligent projections, Datahug assists sales teams in maximizing profits as part of SAP’s selling automation solution.


Having an SPM strategy in place is essential for effective sales planning, accurate sales forecasts, and operational efficiency, and helps the sales professionals put together a sales strategy that promotes and helps acheive business goals.

To raise productivity, your sales team’s general efficacy, and the amount of revenue your company can earn (revenue goals), you must enhance your sales performance management process.

Once you’ve decided on the performance indicators you want to evaluate, share them with the rest of your team, give your sales representatives performance coaching, and give feedback as necessary.

You’ll be well on your way to exceeding your sales targets and business priorities if you have a sales performance management plan in place to monitor the development of your sales team and give up-to-date reports to relevant stakeholders.