It is critical that your sales representatives sell as many products as possible in order to increase revenue for your company. Their performance must be consistent with the goals and objectives you wish to achieve. In more formal terms, this means you’ll need to effectively and efficiently manage your sales performance processes.
Now, managing their compensation and developing commission plans that motivate and drive them to perform better and sell more products is an important part of this. But it goes even further than that. You’ll need to map out territories, calculate and pay commissions, set quotas, and optimize resources in addition to developing effective compensation plans.
Understandably, this could become difficult, especially if you have a lot of reps. SPM software can help with this.
What Is the Definition of Sales Performance Management Software?
Although most people think of sales performance in terms of numbers such as the number of leads won, sales made, or revenue generated, it extends far beyond this. As a result, sales performance encompasses all of the interconnected processes required to build and manage effective sales teams, increase sales, and generate revenue.
Sales Performance Management (SPM) is the process of planning, implementing, and optimizing all of these interconnected processes to maximize their effectiveness. And, in this case, Sales commission software provides you with the tools you need to do so more effectively and efficiently.
What Is the Difference Between SPM and ICM?
Before delving deeper into Sales Performance Management, it’s critical to understand the distinction between SPM and ICM or Incentive Compensation Management, as these terms or concepts are frequently used interchangeably. There is, however, a significant difference.
You have an entire sales ecosystem within your company. This ecosystem includes all of the people, systems, processes, and technology that you use to acquire new customers, sell products, and generate revenue for your company. As previously stated, Sales Performance Management refers to the methods and strategies used to ensure that all of these processes run smoothly.
Incentive Compensation Management, on the other hand, is the process of managing your sales reps’ incentives in order to motivate and drive them to perform better and make more sales. As a result, it is a key component of the larger Sales Performance Management concept.
The SPM Components
Now that we’ve reviewed what Sales Performance Management is and how it differs from Incentive Compensation Management, the next step in comprehending SPM is to comprehend its individual components. Keep in mind that this is a high-level overview of these components, and their implementation may vary depending on your company’s specific circumstances and needs.
Performance Metrics Definition
The key performance indicators (KPIs) you’ll use to track your sales performance are the first major component of SPM. These KPIs must be defined for several reasons.
For one thing, it allows you to track your performance and progress toward your goals, which we’ll discuss further below. Furthermore, your KPIs enable you to establish a baseline of performance, which demonstrates how any sales strategies you implement affect your sales performance. Finally, your KPIs have an effect on your decision-making processes.
When it comes to KPIs, there are several that you can use and define for your entire business, your sales team, and individual sales reps.
Whatever sales key performance indicators you choose, they must be measurable and relevant to your specific business. Otherwise, they will be ineffective.
Choosing Goals and Objectives
After you’ve defined the metrics you’ll use to measure and track your sales performance, you should set goals and objectives based on these KPIs. In other words, you must determine what levels of these KPIs you wish to achieve.
For example, you might decide that you want to make a certain amount of money or sell a certain number of items. You could also set more specific goals, such as selling a certain number of products or generating a certain amount of revenue in a specific territory.
Elevate HQ is the best platform for managing your company’s sales compensation structure and taking care of sales leads using Sales Commission Structure Templates; visit the website now.