Tweet

Creating an effective sales performance management system

Guest post by: Sue Barrett

Article Overview: Following on from last week’s article about managing and measuring the right things in sales, I thought it would be worth looking at some of the key principles for effective sales performance management systems. The first place to start is to align your sales performance management system and subsequent key measures to your organisation’s strategy and goals. It’s then the job of the CEO and the Sales Leader to ensure the organisation (that means everyone else who supports the sales effort) is aligned to the sales performance management system. When this dimension is in place the organisation is best placed to sustain high sales performance.

Creating an effective sales performance management system

Following on from last week’s article about managing and measuring the right things in sales, I thought it would be worth looking at some of the key principles for effective sales performance management systems.

The first place to start is to align your sales performance management system and subsequent key measures to your organisation’s strategy and goals. It’s then the job of the CEO and the Sales Leader to ensure the organisation (that means everyone else who supports the sales effort) is aligned to the sales performance management system. When this dimension is in place the organisation is best placed to sustain high sales performance.

Issues arise when the non sales teams impose their ‘numbers’ or ‘tasks’ on sales teams which are unrelated to the effective sales performance. i.e.

• The CFO being critical of missed forecasts and not looking into or understanding the underlying reasons why
• The Executive team demanding more activity (i.e. make more sales calls) and not understanding the potential negative impact on effectiveness
• Marketing engaging in lead generation activities that either generate the wrong leads or leads that require out of scope qualification meaning they’re in the forecast prematurely.

This leads to competing motivation, confusion and reduced sales performance across the board.

Another key area worth noting is the importance of addressing and working with values and explicit behaviours. This is now much higher on the agenda of many businesses now, not just the outputs of performance as we discussed last week.

While the focus of this article is directed towards sales, this principles presented here can be applied to any role in your organisation. As you read through the items below, bear in mind that this is not prescriptive in nature and you should use only what works for you.

Principles of an Effective Performance Management System:

• Reflect an organisation’s values and strategy.
• Commitment to the system should be obtained from top management and communicated to all employees. Ideally input should be sought from all levels to gain their engagement.
• Business objectives need to be linked to team and individual accountabilities.
• Performance measures are developed for each function and individual to ensure that their performance is aligned with the needs of the organisation.
• Feedback is provided on an ongoing basis, not just during the annual performance review. For instance, this would include coaching conversations.
• Expectations and communication should be transparent and consistent at all times.
• Employee development and future behaviour are the focus of attention, not just past performance.
• A partnership between the employee and manager is developed based upon open dialogue, two-way feedback, and shared responsibility.
• Employees are encouraged to take accountability for their own performance and success.

Benefits of an Effective Performance Management System:

• Encourages open, constructive communication between managers and employees.
• Provides feedback on how people are doing on the job.
• Allows for mutual understanding (between manager and employee) of each employee’s job responsibilities and performance expectations.
• Facilitates identification of individual capabilities, strengths and areas for development.
• Identifies factors negatively affecting employee performance (e.g. work environment, job design, organisational policies and practices, personal issues, external factors, etc) so that action can be taken to alleviate them.
• A structured and documented process encourages objective evaluation and fair treatment.
• Assists in the achievement of strategic goals.
• A consistent way of setting goals, monitoring performance and formally reviewing performance.
• Self-managing for proactive individuals.

Remember everybody lives by selling something.

Related Articles
  Organizational Readiness To Performance Management
  TIME FOR BUDGETS BUT NO TIME FOR PERFORMANCE MANAGEMENT!
  Ten Strategic Actions To Improve Sales Staff Productivity
  Sales Training for Senior Manager Performance Improvement
  Designing A Performance Management System

Article Tags: bear in mind, behaviours, ceo, cfo, confusion, effective sales, executive team, generation activities, lead generation, li li, measures, motivation, negative impact, performance management system, performance management systems, rsquo, sales effort, sales leader, sales performance, scope



Related Forum Posts
Re: Franchise of a popular call center - If you have knowledge in running a call center and know how to manage it effectively then it sounds like it’s a good business for you. Workforce management relates to employee matters like payroll, HR, and employee training. Knowledge management relates to research, strategies, innovations and the effective use of technology. In both cases your prime clients are corporate sectors especially those who want to reduce their cost and increase performance at all levels.
Re: Increasing sales for online retailers - Hi, I am sure many people do use an inventory manager for marketing purposes. Most of our clients take advantage of this feature for inventory management purposes. Where it gets really tricky is when an online retailer needs an online inventory management system integrated with an offline inventory management system. If anyone knows any solutions please list.
Autoresponders! - Great suggestion Stephen! I use Awebber for my newsletter system and find that it's a pretty good system and very price effective. You get unlimited use for a really low monthly fee. I haven't used Autoresponders to date but might consider it after your post! Thanks!
Re: Let's Talk CRM - Unlike other CRM providers, Luxor CRM is a robust web-based application that offers businesses a wide range of CRM and SFA tools and capabilities within a single application. Specifically speaking, Luxor CRM provides your business with a dynamic set of Sales Force Automation tools, such as competitor tracking, deal expiration notification, forecast & quota management, lead management and routing, mail merge, opportunity management, quote generation and the list goes on. If you require systematic reporting, Luxor CRM provides you with advanced analytics capabiltiies, customizable reports, KPIs (key performance indicators), report export directly into Excel and many other features. In terms of functionalities and features, Luxor CRM provides an endless amount, but depending on what your business does and how it is structured, our system can be tailored to meet your specific needs. Recently, Luxor CRM has gained enormous attention from the Restoration Industry. In response to their demand, we customized the system to better suit the every day processes of a Restoration company. As a result, our developers created a restoration-specific format that includes claims and job management, alongside contact and schedule management, so to help these companies better manage their key accounts and close more business. Even if your company isn't within such a specific industry, we don't simply sell you a software that has a conventional template, instead we take the time to get to know your company and your needs, and from there we work to set out an action plan to implement the software in the most efficient and effective way. Though we serve clients as big as Air Canada and the National Bank, we specialize and appeal most to small businesses. Firstly, we are extremely affordable. We don't lock our clients into lengthy contracts and allow them to purchase the system on a month-to-month basis. We also pride ourselves on providing free-assisted deployment, free training, free requirements analysis and free data migration. All of these services are at an additional cost if you choose to go with a different CRM provider. The reason why we provide these services for free is because we want to establish a relationship with our clients. We want to know what you like or don't like about the system and what improvements we can make to serve you better. We strive to create a CRM system for our clients that works the way they do, because after all, the main purpose for CRM is to nurture and create relationships with clients and therefore we aim to do the same. Small businesses strive to work quickly and gain as much exposure from their specific industry or niche as possible. With Luxor CRM in place, less time is spent organizing and populating information and more time is spent on flourishing client relationships and of course, making money! Luxor CRM specializes in ensuring that no client slips through the cracks and does so with the use of proactive alerts. Let's say you just had a meeting with a client and need to schedule a follow-up appointment. All you need to do is login to Luxor CRM via a computer or cell phone, schedule a new activity under that client's contact information and then Luxor will remind you of when that appointment is and even better, Luxor will not erase that appointment until it has been completed. Our clients say that this is one of their most favourite features because they are able to stay on top of each and every one of their clients, maintain constant communication and close more business. Our clients also love how easy the Luxor CRM interface is to navigate through. It mimics a desktop tool, allowing users to quickly learn how to use our system and feel at ease with it. I hope that answers your questions. Let me know if you'd like me to expand on something a little bit more.
Has a coach helped you? - And is a coach different than a mentor? I don't really feel I need a coach... anything I need to know how to do I just find a book and read up on it. I would like to find someone to give me a quick and inexpensive lesson on content management systems (yes...I publish ezines without using a content management system!), but that's not the same thing, eh?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Why We MUST Reinvent The Wheel

When Living the Dream isn't enough!

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.