What is SPM and SPM Software?
Sales performance management (SPM) is the practice of monitoring and guiding personnel to improve their ability to sell products or services. A key objective of the sales performance management process is to motivate salespeople through a goal setting, achievement and reward cycle. Common SPM Practices include:
- Territory Management and Quota Assignment
- Monitoring Sales Rep Performance
- Recognizing and Rewarding Achievers
- Performance Reviews & Establishing Actions Plans
SPM software offers functions that automate, streamline and consolidate administrative operational sales incentive processes. An SPM software solution is implemented to improve sales execution and operational efficiency, as well as encourage behavior that drives sales.
Territory Management and Quota Assignment
Managing territories and setting quotas are processes that organizations typically undergo on an annual basis. The processes involved can be slow, inaccurate and prone to errors. One of the major causes of frustration stems from the management of incremental updates and re-alignments to territories and quotas. These adjustments can occur several times within the sales year. Further complicating matters are inaccuracies which stem from an over reliance on manual processes. This can lead to reduced effectiveness when trying to collaborate between departments.
Once territories and quotas have been finalized, they will need to be pushed across for use in incentive compensation calculation. Failure to ensure data integrity and a lack of transparency is a common problem for organizations that rely heavily on multiple systems to perform complex compensation calculations. An effective way to remove these challenges is to adopt a single SPM software solution that provides the functionality for implementing a workflow-based solution, which can allow for added visibility to these processes. These solutions offer reps more visibility into their targets and territories by eliminating the need to manually send and receive spreadsheets.
Monitoring Sales Reps Performance
Tracking important sales performance metrics is an essential part of any SPM practice. A key metric to focus on is quota attainment. The number of sales reps achieving or exceeding assigned quotas is a great indication of whether quotas are set too high or too low.
Aligning performance with organizational goals requires finding a balance between challenge and complacency. Being too ambitious with your quota setting can cause an increase of sales reps failing to achieve targets. Consistently missed milestones stemming from misaligned expectations can potentially drain team morale, leading to unwanted turnover. However, a low success rate could also indicate that you need to review and adjust current compensation plans to further incentivize underperforming sales reps.
On the opposite end of the spectrum, combating complacency should also be prioritized when quota setting. If a significant majority of your team is consistently achieving their quotas, it might indicate that your targets are being set too low and your reps are not being challenged or utilized to their fullest potential.
To manage the quota setting process more effectively, SPM software suites often include quota setting capabiltiies. These functions provide users with robust data manipulation tools that feature configurable scenario modeling, reports and data capture layers. The visual appeal of quota setting tools adds a fresh look and feel that makes data analysis more effective. Bar charts, pie charts, line charts, and gauges can be utilized to tweak quotas and associated targets.
Recognizing and Rewarding Achievers
It is important for top performers in any team to be recognized among their peers. Team-oriented leaderboard reports that display rankings and performance can be created in most incentive compensation management solutions and made available for access to the entire sales force.
Not only can reps monitor how they are performing against their own goals, but they can also track how they compare to their peers, promoting a sense of friendly competition that drives sales.
Incentive compensation management software can also improve compliance while simultaneously minimizing disputes from sales reps. Since everything is tracked and accessible through logs, instead of scattered across dozens of spreadsheets, the resulting solution simplicity will also create fewer discrepancies. When conflicts arise, the resolution process can be streamlined and managed using built-in workflow capabilities that allow for inquiry and dispute management.
Consider these key benefits of implementing SPM software:
- Increased accuracy of incentive compensation calculations
- Better management of the incentive compensation process
- Ongoing recognition of top-performers
There are many different Incentive Compensation Management software solutions currently available in today’s marketplace. However, not all ICM software solutions are beneficial to your unique requirements. Intangent has created an ICM Vendor Evaluation Kit specifically designed to equip you with valuable information necessary for making the best decision.
Performance Reviews & Establishing Actions Plans
Up to this point, the conversation has been focused on how SPM software does an excellent job of recognizing top achievers. SPM software solutions can also enable organizations to accurately reveal underachievers. By allowing organizations to gain more visibility through interactive data reporting capabilities, management can effectively identify negative trends and patterns related to poor performing sales reps.
Armed with this knowledge, management can now introduce corrective measures designed to correct under-performance. Successful progress executing against a performance improvement plan can be linked, measured and managed using a combination of workflow and reporting capabilities.
Sales Performance Management software is becoming more widely adopted by organizations everywhere, but most teams are not yet realizing the full potential of these solutions. Having your SPM processes and practices automated can greatly improve accuracy, visibility, audit-ability and over-all user experience, making the use of an SPM software a worthwhile investment.
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