Seven Tips for Effective Sales Performance Management

In many sales organizations, performance management sounds something like this:

"Are you going to make your number?"
"How many did you sell?"
"You need to get in front of five customers a day."
"You did great this year. That’s why I know I can count on you for an additional 10 percent next year."

By nature sales organizations are revenue and numbers focused. Whether or not these organizations achieve their numbers depends, in large part, on how well they manage and leverage their human capital – their sales people.

Performance management, when designed and executed effectively in sales organizations, boosts sales productivity and helps retain sales talent. Below are seven best practices for implementing performance management in sales organizations. How does your organization stack up?

1. Communicate company and sales organization goals, vertically and horizontally. Does every manager, salesperson, and support staff member know the sales organization’s strategies and goals – and where their department and individual goals fit? Test this by asking various people in your organization to explain the links to you.
2. Focus on manager behavior first. Define manager competencies by doing a validated job analysis. Make sure the competencies stress performance management behaviors, such as setting clear expectations, observing salespeople in the field, coaching, addressing performance problems, and developing talent.
3. Make sure all leaders talk about your culture and vision often. Do leaders just talk about numbers and revenue performance…or do they also talk about how to get those results? From the top down, send the message that your company expects people to get the "right results, the right way."
4. Define and communicate competencies for salespeople. If you already have sales competencies, review them. Do they read like a generic job description (self-starter, aggressive, closer) or are they specific and unique to selling at your company? Think about what distinguishes your best sales performers, in terms of both results and behaviors. Chances are, in addition to being good closers, they show adaptability, they’re open to coaching and feedback, they’re constantly learning, and they welcome the opportunity to coach others.
5. Focus your sales efforts, new products, and strategic initiatives. Avoid flavor of the month. When changes do happen, communicate them clearly and have an open dialogue with the sales organization. Not everything is equally important. When you introduce a new initiative or product, ask, "What can we take away or stop doing?" Confused salespeople = confused customers. They don’t know what to sell and can’t keep up with the changes.
6. Link sales training, selection, incentive, and performance management systems to your business goals and competencies. A rigorous, competency-based selection process will give you a clear profile of each candidate’s strengths and development needs. When you do make your hiring decision, use the selection process data to help you create a development plan for the salesperson, starting him or her off on the right foot. Fold this development plan into the performance management process. Coach the new hire to leverage his or her strengths and develop in other areas.
7. Hold managers accountable for coaching and managing performance effectively. Often managers are accountable on paper, but in practice…managers who make their numbers are "forgiven" for poor interpersonal skills, lack of coaching, or "not having time" to work with their reps. Decide if this is acceptable in your organization. If managers get their numbers, does it matter how they treat their salespeople, whether they have high turnover or whether they coach and develop their teams? If it does matter, put some teeth into your systems. Reward and recognize managers who develop salespeople and make their numbers. Assign consequences to managers who ignore or consistently mishandle the people side of management. And don’t forget to look at whom you’re promoting into management positions. Do salespeople get promoted to management as a reward or entitlement for good sales performance…or do they get promoted because they’re motivated to lead others and have the skill and patience to coach?

For more information or to contact Phyllis Roteman, President, The Loyalty Group visit www.theloyaltygroup.com/prodservsdescrp.html#twcc