Five Keys to Successful Sales Performance Management

Picture of Walter Robinson
Regional Manager - Northeast

I’ve had the pleasure of meeting many members of the Sales Organization across various verticals and have identified five key pillars of success these companies share when it comes to Sales Performance Management.


1. Transparency

Transparency is a topic we all talk about providing. Often this is directed inside the organization. Its target is inside your company for the Finance, HR, and sales Operations Teams. We want data to be something they can quickly put their fingers on. But let's not forget the Sellers.

A Salesperson is actually getting paid compensation based on this data. Giving them visibility into their plans is critical to success. Salespeople need to be able to see what they're making, clearly understand how they're getting paid, and when they're going to get paid.

And that's the essential point of maintaining a motivated sales force. This transparency confirms that opportunities have closed, the PO processed, paperwork is complete. Each Sales Team needs to understand precisely what they're making. Sellers need to know how they're making it, or what it takes to meet their quotas, goals, and key performance indicators. This is what allows them to stay motivated. It is the leverage a healthy incentive compensation plan brings to the organization and a key contributor to successful Sales Performance Management.

To maximize the return on investment for your incentive compensation spend, it is in your best interest to ensure your team understands how they're getting paid. Transparency into variable compensation keeps sellers motivated and driven to continue to do their best for your company.


2. Payment Timeline

Something that has stayed with me since Sales Compensation 101 is for a sales compensation plan to motivate your Sales Team successfully, you want to pay early and often. By early and often, I mean, pay as soon after the deal closes as possible. Monthly is better than quarterly. Annually and semi-annually seem to have less of a motivational impact. The goal is to build a level of confidence and accuracy that is repeatable. To pay regularly, or as often as possible for your organization, is a good start. From there, consider the next year and where you can improve these timelines. Frequency and accuracy keep your team engaged.

Another consideration that is motivational is to remove "caps" from your program. When a Salesperson knows there is a limit to revenue recognition on a product line or in a timeline, it will be demotivational. Sellers want to earn as much as they possibly can. Putting limitations in front of them will stagnate the motivation for some of the most significant opportunities. I have even known some individuals that, once a cap gets hit, see a considerable improvement to their golf game.


3. Smart Quotas

By smart quotas, I mean developing specific quotas. Specific to a seller. These could be in consideration of a territory, individual capabilities, the ability to hit a particular number. Quotas need to be easily measurable. Ask yourself how many components you can track from a quota, what makeup that that quota is, and I will tell you that it's likely too complicated. Quotas need to be attainable. Quotas have to be attainable. If this is something where you are reaching for the sun, the moon, and the stars, something so unattainable, will demotivate the person right out of the gate. Quotas have to be relevant to a particular objective, a specific territory. Quotas need to be smart.


4. Alignment

The fourth element of my Five Keys to Successful Sales Performance Management is Alignment. You want to make your incentive compensation plan impact the behavior of the Sales Team to align with the goals of the company. These Key Performance Indicators (KPI's) align with the company goals, the organizational vision. They need to work down to the detail of the territory for the Seller.

I have worked at companies (and you may have too) where everyone had the same quota — a trend for a while to "simplify" the compensation plan. In my experience, quotas are based on a particular territory's capabilities. If your territory is the Great Lakes, that is going to have a different potential of opportunity than the southeast, Or Canada or Europe. Some of these territories have longer lead times, more red tape, less potential, regional challenges. Sellers might think, "Maybe I should have a bigger quota even though he has more states than I do." Or, "He has a larger geographical location than I do." The grass seems awfully green over there. It's a distraction from selling. The balance of these areas needs to be found in plans, territories, accelerators, or a mix of them all.

This mixed blend is the alignment of the company goals and vision carried down to the territory level expressed in the incentive compensation plan that takes into consideration all the knowledge and nuance needed to motive the seller: fair and reasonable equity in success.


5. Analytics and Evidence

Analytics is the ability to take all this data and make it into something understandable. There is this data-driven path we are on today. That being said, we have too much data and need to sort through it all to find the right information to take action. The data is historical, regional, market-driven, and comes from both inside and outside the organization. Data helps us to move away from gut decisions to fact-cased decisions, and when we add context to the data, we’re able to formulate proof that can support decisions in an Evidence Economy.

If we look at analytics as the ability to take data into something more understandable, Evidence allows for the ability to predict and forecast based on a synthesis of what makes a company unique, the "special sauce" if you will. Our Augmented Intelligence offering through Symon.AI helps organizations achieve this level of Evidence-based planning and decision making.

It is the continuous investment and evolution of the first Four Keys that make this Fifth one more powerful. If you can shape and groom the data that results in the first Four, Analytics and Evidence can be your best friend. Transparency allows the seller to see and understand the connections in place for the territory, goals, and vision. Timely and accurate payouts create positive reinforcement, "That is what worked last time, let’s go do some more of that again." How can I align with these to make the next deal bigger than the last?


All of these Keys are not static; they are dynamic. They are moveable objects that have to continually be looked at and analyzed and designed according to the current state of the organization. Follow these Five, and you will get Sales Performance Management right in your organization.

Tags: sales performance management, sales organizations, incentive compensation management, data and analytics, evidence economy

Picture of Walter Robinson
Regional Manager - Northeast

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