The Pitfalls to Avoid When Implementing a Sales Performance Management Program

Why Sales Performance Management is Right for You

Sales transformation is big. Really big. And it’s important. Really important.

Gartner Research estimates in the Gartner Research 2020 Magic Quadrant for Sales Force Automation report 28 July, that in 2019 the market grew by $7.8 Billion¹.

With so many vendors in the space, promises made, and projects started, isn’t it in your best interest to consider the right strategies when considering a Sales Performance Management program? And wouldn’t it be reassuring to ask an experienced professional with more than 20 years of hands-on experience about the pitfalls to avoid?

This is where I can help. Here I am, sharing my expertise, and providing some critical steps you should think about before committing a single dollar to the project.

Let’s start with some common initial questions, which are likely to include: Does it pay off in the end? Is it worth the effort? When will I see an ROI? The short answer is yes, but only if done right.

You’re guaranteed to find two things on this page:

1. An honest assessment of the SPM lifecycle and
2. A map that indicates the major pitfalls to avoid. This map’s execution has already guided those that have walked its path to success.

Sales Transformation — it’s really big. I wanted to mention that one more time to let it sink in. Ideally, you want your sales force to be on the frontline, representing your brand in the best possible light. Supporting them (ideally) is the world’s best marketing team, feeding them leads and the right messages to connect with prospects. Alongside them is the customer success management team, providing the most incredible experience that keeps clients engaged, paying on-time, and renewing contracts. On paper, it all sounds wonderful. But getting to this ideal end game, consider that you need a full quorum, a team focused on shared interest and a collaborative approach for the direction.

The Life Cycle

With all your teams working towards a common goal, let’s focus on the right vision. This is the lifecycle you’re looking to embark on.

Plan

It would be best if you answered questions about the potential sizing of the offering. This can be realized by working in tandem with Revenue Operations, Sales Operations, Finance, and Head of Sales, to determine a plan covering the costs, territories, opportunity, and incentives for the product line.

Operational execution

The initial plan is in place and agreed upon, but do you know how your teams will deliver on this? Marketing, Sales Operations, Partner Management, Supply Chain, and many others, need to collaborate on the execution. The rollout of programs for filling the pipeline from lead generation, grooming the accounts, contracts, and opportunities are only a start. Engagement programs guide the seller, discoverable coaching, MBOs, and KPIs to track success through the right reporting.

Customer Success

Once the deal is closed on the offering, understanding a straightforward engagement, education, additional sales, services, and supportive programs is needed. Do you have quality programs that support the client community? Will they provide references and guide other prospects your way? How are you keeping score with these programs?

Even when the project lifecycle has been completed, you should always be looking to achieve more, do better, and understand that change is constant. This means there will be regular reshaping and improvements through changing conditions and marketing fluctuations.

The Right Focus

Earlier, I mentioned the need for the right vision. To successfully bring the entire team forward, you’re going to need to put into practice that shared vision and collaboration. The reason? Every stakeholder in the group expects outcomes from the announcement of the project onwards. Sales Performance Management implementation involves many departments — each with their own interests, methodologies, and interpretation of success. This project will need your leadership to have the right balance to achieve the vision through a concerted focus — focus on the right talents, focus on the right hand-offs, and focus on the right needs.

Let’s consider who is involved, what they are looking for in the project, and how best to move forward.

Vision

Each stakeholder and every group, carries a distinct set of the expectations from a Sales Performance Management engagement.

For Sellers and Sales Partners, it’s a desire for ease of tracking their payouts. You’ll hear the words’ accuracy, timeliness, and ability to project-manage when they’re stating their wish list.

Administrators are seeking automation. Focused on the daily processes and details, SPM administrators want an easier way to process, faster cycles, and iterations of work.

HR and Partner Relations want to reduce the type and frequency of disputes.

Technology teams are looking for faster implementation, a consistent upgrade path, and smooth integration with other systems to leverage prior and future investments.

Sales Operations are looking to improve the speed to market of new plans, as well as the utmost flexibility for new incentive structures. This is the competitive edge that Sales Ops is hungry for, as well as the ability to attract and retain top talent.

Sales Executives wish to access the right information that enables future decision-making and track alignment back to sales strategy.

With these many different, and sometimes competing agendas, it is critical to align on the vision and some of the common denominators, so all key stakeholders can agree on the SPM engagement’s success.

Intent/Lens

Sales Performance Management is primarily about the process, and hence the intent must always be “Process First.” Once the underlying business and technology process is efficient, the automation efficiency will follow.

Many SPM implementations take much longer or are deemed unsuccessful primarily due to the attempts to replicate legacy practices, methods, or artifacts. However, a closer examination may reveal the reasons to be the common cry of, “but that’s how we’ve always done it” or “this is what our business demands.”

Each requirement must also examine the materiality (financial, strategic, legal, or contractual compliance) to ensure if and how future implementations proceed.

Similarly, evaluating the existing pile of reports or audit trails, and how the new solution can address these more efficiently and appropriately, often yields surprising results.

At its heart, SPM implementation is a solution for efficiency and productivity — and its introduction is absolutely the right time to examine the inherited processes.

Further, suppose your final implementation might involve multiple releases (a Pilot followed by a full implementation, an MVP + enhancement releases, or a Line of Business before other BUs). In that case, it is critical to design for the minimum structural requirements – processes, data granularity, multiple locales (dates, language, currency), security needs, etc. This is akin to constructing a house, knowing you will want to expand once you move in. Having that portion of the foundation done now will involve some incremental effort. However, it’s not only multiple times cheaper and effective upfront instead of breaking the foundation later, it also helps later as you re-consider the extension. While you cannot possibly future-proof your implementation, accounting for the apparent needs will save you and your business partners significant heartache.

Communication

Aligning vision and creating efficiencies invariably leads to change. There may also be new reports and processes, and the SPM engagement may also be accompanied by streamlining of current incentive structures and practices (plan components, treatment of revenue, rounding, prorating, etc.)

Stakeholder change management (internal and external) is a crucial, yet often overlooked, ingredient for successful adoption of an SPM engagement.

The Right Definition

2 + 3 = 5

If you can get to that, we’re ready for our next project step.

Why start with a basic equation? Because if we can’t agree on that one thing, then we really do have bigger challenges to address.

Put simply, the equation is a simple and elegant illustration of an agreed mathematical outcome.

We agree on the terms. We agree with the language. We agree with the result.

Addressing the implementation pitfalls of an investment like SPM continues with the basic concept that if you put bad data into a good system, or good data into a flawed system, your results and output will be just that — all sorts of wrong. But maybe you’ll get those incorrect results faster. Understanding that 2+3 = 5 means that our definitions are aligned. Automation is a smaller part of our conversation than accuracy at this point. If you cannot get the accuracy right, why bother automating?

Our second look at this definition is a bit more complex. You expect 5 to be the answer. I expect the answer to be 5. We get the answer 5. In a more in-depth look, we didn’t use 2+3. Instead, we went another route, like 3+2, 1+1+1+1+1, 6-1, or a complex multi-step [∛8 + √9]. Same results, but the equation is different. Perhaps it’s more complex than needed? Or possibly, more prone to error because of the sources, the timing, and the variables involved? Mathematically, this is important to consider because of the confidence we need to have in all the systems (whether supplying the data or processing it).

What if the equation is 0+5=5? Acceptable until the keystroke error of + becomes x or * and zeroes out the model. Input error, data errors, and setup errors contribute to the largest of these problems. Data entry error at any step of the process further allows for the complications.

The Right Data, for the Right Function

Let’s revisit the common truth that humans are fallible. The same can be said of the systems they create — and compounded exponentially as more of these come together. Careful consideration of what makes good data into the right data, and therefore part of our process, must take a considerable amount of thought.

The right data is more challenging to resolve in systems that are not designed for growth or include the proper diligence for holding to naming conventions. Sales Performance Management solutions get fed by upstream data from HRIS, CRM, Salesforce Automation, ERP, and others depending on the company.

Set aside the equation for a moment. We’ll return to it. Ask, instead, what is the desired outcome? For SPM, extensive consideration is the driver and motivation of sellers taking the actions that contribute to growth. This frame of mind comes as part of the planning process. Planning can mean different things to a company. For our purposes, let’s consider planning to be the sizing for a market’s potential opportunity.

Before the operational execution of a plan, we need to build the right infrastructures and processes to support sales plans. Plans will evolve differently in each company and with each new business, merger, and/or divestiture. The SPM solution must be flexible enough to allow for changes, yet auditable enough to track the results of those changes. Standard definitions and dimensions are needed. In its most simple terms, these may include what is being sold, where, how, when it’s being sold, who is selling it, and what will be paid on the action of a sale. These are related to a time that could be days, weeks, months, quarters, or years. For our purposes, let’s call time a period.

The sales plan needs to include those dimensions. Commonly, the answers to those questions and specific fields are: product type; in the territory; under contract ABC; during a period; by account manager; will receive a dollar, percentage, or point.

From this simple example, you can see that we’re far beyond a simple spreadsheet or database just by taking into account the number of sellers in an organization, the variations of territories, and types of products.

Solutions considered in this example are purpose-built for this level of complexity and ease of use.

Back to that simple equation when we needed 2+3 = 5.

For a sales plan, the functions of payout are the string in this formula. Applying a clean dataset is the desired state. One area where most data mistakes occur is with naming conventions. For example, does AU stand for Australia or Austria? And is it the currency, or the country? Could it be a product? When selling to a company, do we call it IBM, I.B.M, or International Business Machine?

Good data hygiene, system expectations, the right feed, and planning will help avoid this implementation pitfall.

When we consider the right data, there is also an output of “the not right data.” I describe it this way because it’s not necessarily wrong, but it’s “not applicable.” Today, we have no lack of data. More often, we struggle to determine the applicable data.

My good friend Joel Shapiro, JD, Ph.D. is a clinical associate professor of data analytics and academic director of executive education at Kellogg School of Management at Northwestern University. When discussing data analytics in his article for Forbes entitled ‘Why Data Analytics Small ‘A-ha’ Moments Can Have a Big Impact’, he explains that our goal is to provide evidence². This evidence comes from the result of putting context, or a question, and applying that to data.

Let me ask, therefore, what are your biggest business challenges? If you’re reading this paper, those challenges are likely to revolve around the area of sales. Finding the right data, and the right definitions are going to lead us into the exploration of the results based on the context of business questions. How can we maximize revenue? Are we paying people the correct amount? Is there fair and equitable payment across the organizations? These answers can be found with the right information and the right context.

A different way to describe the conversion from your legacy system to the new processes and solution is “not applicable data”.

Here’s an analogy we can all relate to. Not so long ago, humans were nomadic people. They regularly moved on to locations for better resources or a more agreeable climate, and could only bring what they could carry on this endless journey. Efficiency was part of living.

The average American will move 11.4 times during their lifetime. When you move to a new location, whether that’s an apartment, townhouse, farmhouse, or houseboat, what are the things you carry forward with you? Moving a tangible object, such as a washing machine or chest of drawers from one home to another, cannot be compared to moving a folder of contracts. The former includes hiring a moving company, the other can be carried with my laptop.

The same thinking can be applied when transferring from a legacy system/infrastructure. Which data do you want to move? The answer is only that which is relevant for future calculations. If I am taking over larger volumes of transactions, there is going to be a tax called time. If there are special considerations, exceptions, or processes, you may introduce some of the same challenges you are trying to solve. Our goal is to be efficient. Always. Move only the right data (and at the right level) that we will be using for context — to complete the formula, to operate, to pay.

The Right Rules

It’s important to realize that SPM solutions can support successful implementation and still fail to be transformative or contribute to your organization’s success.

Failure is maybe too strong a word. More politely, it’s a poor investment or a missed opportunity without one thing — rules.

Business and technology need to align to support transformation. Neither can nor should try and do it without the other.

Think of finance: Accounts Payable (AP), Accounts Receivable (AR), and General Ledger (GL). Our products, in this example, are cell phones. The inbound and outbound streams of revenue are accounted for on the ledger. We have several ways to sell the phone — at a kiosk, in a bricks and mortar store, or online; via a channel we own or a partner-owned channel.

The cell phone sale at a kiosk seems straightforward. The seller and the buyer have a transaction. There is the level of complexity that the deal included an upgraded plan, an add-on of headphones, plus the premium service package. Finance will recognize the sale and reward the seller. In real life, something happens. It (almost) always does. A few hours later, there’s a return of the headphones. The rules of the deal have changed. The package the seller made in the transaction no longer qualifies for a bonus. Or the activation got stuck and the call center must help complete the activation — now it may be a “team sale” scenario.

Another level of complexity stands out when a sale happens online, but a return occurs at the bricks and mortar store. What’s the policy? An unhappy store employee may put the brand at risk. The brand is the brand, regardless of online or at the store for the consumer. A poor return policy has the makings for a poor brand experience.

One transaction’s complexity, based on the right data for territory, product type, and promotional bonus (sometimes called SPIFF), suddenly becomes highly convoluted and can put the brand reputation at risk because of complicated rules.

It’s not all unwelcome news. Rules that work help to smooth out the social impact and procedures for the store manager to make a refund easily. Rules help to apply the right data; with a headphone sale at the kiosk, that’s 10 points toward a bonus sale. Without it, it’s just another transaction for the week.

Systems need these consistent and well-thought-out rules to keep order in our commitment to sellers, which in turn motivate and reward the right behaviors and avoid gaming.

The Right Testing

As the right equations are defined, the correct data sources are in place, and the rules have been ironed out and established, we cannot lose sight of testing.

A test must apply stress to the system to discover weaknesses, but not apply so much pressure as to break and force you to start over.

My son loved riding his bicycle on a dirt path through the park, which he used as a short-cut home. It has rocks and pebbles in parts of the dirt rut. One day he came to me frustrated that his tires were both flat. He had to push the bike home. I hugged him and took him to the garage. Inside we took the wheel off, then removed the inner tube. In a few minutes, and a little soapy water in a bucket, the inner tube submerged, we could see the bubbles rise to the top. It revealed the source of the problem. Not just one, but several small punctures had made for a difficult day. Ten minutes later, with a little glue and a few patches, he was back to riding up and down the street.

Testing the inner tube, when you know what you are doing, can make the problems obvious. Fixes become clear in what needs to be applied.

For SPM solutions, we can apply testing to help ensure the right rules, data, and equations are aligned with our plans. Testing helps the deficiencies bubble to the surface for fixing. The solution’s integrity is true, and we just need to give time and care to make sure it’s ready for more.

Test Strategy and Planning

SPM implementations are unique. Unlike other implementations you’re likely to have worked through, this special variety of stakeholders affected, a confluence of data providers and recipients (HR, Sales, Planning, Forecasting, Finance, Reporting, Analytics, externals, etc.) and business/technology process changes required, will provide unique challenges. Combinations of business events add yet another dimension of complexity.

As a result:

• Test teams must engage from the onset of discovery to clearly understand the nuances of the business needs, and tailor the testing strategy (types, cycles, data needs, timing) in parallel with the technology solution and business process.
• The various stakeholder groups must be aware of and commit to this test plan, so their respective infrastructure can collaborate for any necessary end-to-end testing.
• A common pitfall missed in SPM is “break testing.” In every company, there are “edge cases.” Each edge case must be explored. Even if the team eventually decides not to build or test for it, bringing them to the surface for consideration and determination still needs to happen.

Test Data

If a car maker told you their car is tested thoroughly on rollers in a closed wind tunnel, you’d be right to think that sounds innovative. However, if that manufacture went on to explain they did this exclusively, never introducing the vehicle to real-world examples on a test track at speed, with the bumps and turns on a road you experience on a daily commute, you would never consider that car. Not even for free. Nor would you fly with a pilot that just received their license from only “virtual flying test” experiences, no matter how rigorous the virtual test was.

Many SPM engagements struggle with practical and virtual testing. Despite having passed earlier virtual test cycles, during practical user acceptance and go-live, they fail with real data. Mock and staged data have their place but are only part of a larger picture if they can actively contribute to success.

Smaller components are ideal for use of mock data. Part of your testing cycles must plan for and use the right data, to catch unique data scenarios, such as naming conventions like Hawai’i, Orléans, Phœbe, and L’Été.

Test Execution

If you’ve ever been interested in mountain biking, you’ll understand that the athlete is going downhill on a bike at an incredible speed, through natural obstacles, passing through a series of checkpoints, for successful completion at the best time. The athlete will go through a series of stages, or checkpoints called gates but asked to stay on the same trail as all the athletes who are competing.

SPM testing is like mountain biking. We want to all go down this trail. Some stages we might complete better and faster than the others. Natural trails provide options to go over a log, around a rock, or through a muddy puddle. Some riders fail to complete a stage. Maybe they fall, have a mechanical failure, or get injured. To qualify to win the race, you must complete each stage, make it through each gate. The winner is the one who completes all the stages with the best time.

Rather than natural trails, SPM has multiple scenarios at each stage. Stages are defined from gate to gate, but each must be completed. We can’t just start at the top and be at the end without traveling through the middle. In testing or training on a course, I can go back and repeat until I have mastered the stage before the real-life event.

For testing, here are some guard rails so you don’t go off course.

SPM testing is not only a pass/fail test. You go through this with a mindset of incremental improvements. Earlier, our checkpoint included the lowest common denominator of stakeholder needs. Our priority is to go live with accuracy, if a week later we need to return and change a button from black to blue, it is accepted as part of the incremental improvement.

What are your release plans and schedules? If you need to have a global go-live, are every language and currency part of that plan? If you start in one market, such as the United States, only one language and currency are considered. When you move to the next stage for Canada, both French and English are part of the consideration. Staged delivery can help to plan for the execution of staged testing.

What are the business strategies? In the first year, nearly all implementations focus on process improvement for accuracy. What is your goal for the second year? What advantages can you realize beyond accuracy that will help provide a competitive advantage? Many will look for revenue opportunities, enhanced executive insights, and bettering the behavior of sellers to pursue opportunities for unrecognized growth. Testing execution will help here as well for processes in place for the first phase, and can be leveraged in later stages. The iterative and agile process allows for changes in the market and augmented decision making.

Conclusion

Looking back over the last twenty years, I wish that someone had supplied me with this type of reflection and guidance early on. There were so many hours and passionate debates that now seem trivial upon reflection. Some of life’s lessons can’t be taught from reading a white paper or instruction manual. They need to be passed on to others like a trade.

In providing you with the map to avoid pitfalls, there is one other consideration. You do not need to do this alone. There are many talented teams in the SPM space today. Sales Performance Management and Sales Force Automation are mature enough to include the ecosystem to buttress the integration of the lifecycle you want to create and support your sales organization. The trick is finding the right people that will work with you for success. I’ll end with my final advice on the topic.

1. Find people with whom you enjoy working. There’ll be many late hours, definitely some touchy topics as well as heated conversations. But that’s okay. When you work with people you like, it makes the experience better for everyone.
2. Establish a process of tracking and communication that expresses each step. Effective communication is essential. Covered earlier, but important enough to repeat. In addition to that, write-up and track these communication milestones at every step for planning. You’ll go back to double-check or triple check and the teams that do this best are more likely to succeed.
3. Do not try to boil the ocean. This is a substantial change, and sometimes taking smaller pieces, such as a production pilot or minimal viable product (MVP), while keeping the eventual end-state in mind may provide a much stronger foundation.

It’s absolutely okay to ask for help. Albert Einstein needed to ask for help on his math. It took a team to help Thomas Edison invent and improve the lightbulb. Just like the software platform, look for the right partner(s) that help you build the skill and guide you through the engagement.

To help with the implementation process, please find the summarized checkpoints in this easy-to-use checklist. Take this to your team meeting to start your discussion on process improvements for Sales Performance Management today!

SPM Implementation Checklist

Your goal is to affect a transformation for the sales organization. This is a team effort. You need to have a clear vision, regular communication, and a collaborative mindset to succeed. The processes, procedures, and rules are not permanent. These are going to change over time. You’ll need to adopt an approach that allows for change.

• Vision: Your vision will span many people and departments. It’s easy to get stuck in deep and vested interests. Consider in the first review, the lowest common denominator to satisfy a collective interest.
• Intent: This is a process improvement practice. Be brave in examining and possibly dispensing of old and inefficient processes of the past. Did your discovery and foundational design consider the needs not being implemented immediately?
• Communication and change management: Strike the right balance between the broader vision and the individual stakeholder focus. Looking for efficiency will bring change. And not everyone responds to change in the same way.
• Garbage in gets garbage out: Critical to success is the accuracy of a shared definition across the project. Take time as a team to define sources, naming conventions, formulas, and expected outcomes. Agree on the hygiene of data and the processes required to maintain it.
• Efficiencies will tax you less in time and money: Convert only the data and files you need and anything else that applies to your future business context and strategy.
• Rule complexity should be saved for technology: Making rules simple, consistent, and executable improves behaviors and outcomes. However, solutions and regulations that support the structure and flexibility of rules can boost your brand.
• Testing and planning is everything: There are easy wins that you can identify in testing that will improve the experience and outcome of your investment. The right planning strategy allows you to use all the advantages discovered, and mitigate the risks learned from back experiences. Execution of testing from a good plan helps your team to win and recognize long-term opportunities that may not have been obvious. Strategizing for testing at the onset allows for more thorough and deliberate focus on testing.