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Sales Performance Management is Key to Sales Team Success

Sales leaders continue to face challenges in hitting revenue targets. That's no secret. Pressure is coming from increased competition, better-informed buyers who are doing internet research—and more buyers overall. Leaders have various levers available that can improve a team’s chances of hitting targets. They include ensuring that the territories, quotas and incentive schemes all align with company plans, while also maintaining focus on metrics and analytics. Aligning these factors contributes to a shared understanding of overall pipeline health and of the accurate status of in-progress sales opportunities, resulting in forecasts that are more reliable. This approach is referred to as Sales Performance Management (SPM).

SPM is a crucial business process for helping to ensure that sales targets are linked to organizational objectives, that sales teams have balanced territories, that quotas are attainable, and that incentives and compensation align the sales teams with an organization’s revenue targets. It’s essential to remember that sales teams are typically compensated and incentivized in ways that differ from other employees within an organization. Core compensation for sales teams is inherently variable, based on a combination of commissions against sales transactions, and often overlayed with rates tiered by quota attainment or other factors. Furthermore, sales teams’ incentives are continually being adjusted to address changing market conditions. This is unlike the compensation structures for the majority of employees, who typically are reviewed only annually. Because of this difference in compensation structure, it is very important that the SPM process and supporting systems include other departments such as Finance and HR to ensure that sales organizations are integrated with the overall company and planning process to avoid potential conflicts and misalignment.

 
 

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About the Author

Stephen Hurrell Image Cirlce

Stephen Hurrell

VP and Research Director
Ventana Research

Stephen Hurrell is responsible for the overall research direction for the Office of Sales at Ventana Research, including the areas of digital commerce, price and revenue management, product information management, sales enablement, sales performance management and subscription management. His focus areas include product and CS leadership, data-driven applications in sales enablement, financial reporting and planning, and billing and monetization platforms.