6 Reasons Why Performance Management is Required to Impact Sales

Riya Sen

, Business, Marketing

As a manager or sales leader, your ability to drive sales is essential for your company’s future success. Sadly, sales are one of those departments with the worst employee retention, and the reason boils down to downgrading sales performance.

Thus, when your sales team is developing the required skills required to be successful in their roles, they need to be confident and satisfied with what they are doing.

Here is where sales performance management comes into play. It is the process of ensuring each member of the sales team is working towards achieving organizational goals and objectives.


  1. Determination of Goals and Expectations
    One of the essential aspects of sales, success is to ensure all members of the sales team understand what is expected from them. During the training process, the trainer should clearly communicate the goals and expectations of each individual. With effective performance management, an organization can divide goals into smaller steps that together lead to the main objective. Sales goals are generally divided into three types:-

    Individual goals: How much an individual salesperson needs to perform every month or year.
    Team goals: How much does a team need to achieve as a whole.
    Company goals: How much does a company want to achieve.

  2. Coaching and Training
    Effective sales training is a crucial component of sales performance management. Selling involves more than just reading a mugged up speech to every prospect. It is a mind game that requires patience, understanding, and persuasion. While some people might be good at it, most people making sales for the first time need an adequate amount of time and training.

    A well-established performance management system ensures enough time and effort are invested in the reps to improve their overall selling skill.

    Sales skill development consists of two steps:-

    Coaching: It includes teaching reps about the offerings of the organization, including what to sell, how to sell, how to respond to rebuttals, and how to cross-sell and up-sell.

    Training: The training process involves mock selling sessions among teammates or with seniors.

  3. Onboarding
    Another challenge sales teams face is the amount of time taken for onboarding rep. Different organizations have varying onboarding periods, ranging from seven days to a month. However, there is a lack of effective indicators that enable the trainers and managers to identify which rep is ready to be on the floor.

    A performance management system helps overcome this hurdle by allowing trainers and managers to set indicators and goals to assess a rep’s performance during training. It also helps with evaluation as the trainer can continuously monitor a rep’s performance and identify where he is lacking. 

  4. Healthy Competition
    A salesperson cannot succeed if he is not competitive. Healthy competition is essential in a sales-driven organization as it motivates all reps to be on the top. But sometimes, this competitive system turns out to be detrimental where friendly competition becomes more of a race of life.

    A powerful performance management system can play a pivotal role in improving the sales environment by enabling managers to hold content, events, and reward programs. The urge to winning only what a few are eligible for brings the best out of people.

  5. Recognition and Visibility
    Sales teams are probably the hardest working bunch of individuals in an organization. However, many organizations fail to recognize and appreciate the top performers, which is a significant turn off for reps. Displaying final and achieving targets on a TV screen can be an excellent way to acknowledge the top performers.

    In addition, a performance management system also enables managers and team leaders to identify individual performance, along with analyzing bad behaviors of under performing reps. There needs to be transparency, which allows seniors to recognize where the reps are lacking, how it can be improved.

  6. Prediction of Future Sales Trends
    An underrated benefit of performance management in sales is to dig out valuable data that enables an organization to forecast sales trends and employee compensation rates, mainly for compensation structures that include commission with payroll. For instance, let there be a company that sells online courses. It has eleven courses, all priced between $200-1000. Close monitoring of sales can indicate which courses are the most in-demand, and which courses are the most underperforming.

Conclusion

Every organization, irrespective of its business model, needs a robust performance system. However, its relevance multiplies in companies that are sales-driven. Reps, in the beginning, might struggle with various aspects of sales, and the managers need to ensure they are taking the possible steps to help reps develop the necessary skills and overcome their hurdles. Performance HR software can further help with improving employee loyalty and retention, as well.