There is no shortage of blog posts and informational sites across the Internet about corporate and sales performance management software – all of which are filled with plenty of buzzwords but generally not giving much in the way of actionable insights to improve your sales team. 

Sales Performance Management (SPM) is one of these buzzwords that is highly recognizable. The market for sales software is highly oversaturated, and sales leaders are constantly overloaded with new software that is deemed critical to their success. 

So, what is SPM and is it truly critical to your success? 

In short, yes. But don’t worry, we’ll break it down for you. 

What is Sales Performance Management? 

Historically, SPM has been synonymous with Incentive Compensation Management (ICM). There are plenty of software vendors in the market that focus primarily on ICM. In reality, however, an effective SPM platform encompasses a whole lot more. In fact, in a recent SPM trends webinar with Dresner Advisory Services, only 4% of attendees deemed ICM as the most important part of SPM. 

In this vein, SPM is about planning, optimizing, and driving operational excellence with built–in analytics to quickly identify critical coaching opportunities. In the same way that finance organizations can’t rely solely on their ERP to effectively run their business, sales leaders can’t rely solely on their CRM. There is much more to it. 

Optimized territory planning 

SPM platforms help sales leaders overcome the challenges associated with the effective mapping of territories to create equal opportunity for all salespeople in their defined territory. Sales leaders must effectively and easily analyze all demographic, firmographic, and revenue related information on a single platform to effectively build equitable territories. 

SPM platforms provide the ability to create scoring algorithms to rank accounts based on their value in their sector and map territories for each salesperson accordingly. With a fast, easy-to-use interface, this information can be easily modeled to build optimal territories for each salesperson and hold them accountable to deliver their number. 

Today, most sales ops teams do this in Excel – which significantly limits the flexibility and scenario modeling capabilities. As a result, territories are not always equitable, leading to high employee turnover as salespeople simply don’t have enough opportunity within their territory to make their number. The right visualizations and modeling capabilities will allow sales leaders to easily build and optimize territories. 

Integrated capacity planning 

You know the drill. You’re given your annual target from finance and told to plan accordingly. 

But how do you do that? How many people will leave this year and when? What ramp assumptions should you factor in? How many people do you need to hire to hit your target? When do you need to hire them? 

These questions drive most sales leaders crazy – actually, these questions wind up driving sales ops crazy because they’re the ones who must build out these complex capacity planning models in Excel. It’s nothing short of torture and frankly built off assumptions (guesses) not based on historical data. 

And then what happens when finance decides to modify the target or headcount assumptions? Back to the drawing board to recreate another complex model that takes an enormous amount of time. 

An SPM platform allows both sales leaders and sales ops to integrate their sales capacity models with HR and finance, ensuring they are automatically updated when HR and finance make changes. For example, historical attrition models can be automatically applied to the sales capacity models to ensure they are based on accurate historical data. 

The ability to run multiple scenarios and test different predictive models to find the optimal sales capacity is critical and can only be done with the right SPM platform. 

Optimized Incentive Compensation Plans 

Although ICM is not the most important component of SPM, it is still vitally important. Compensation plans drive intended behavior and therefore must be optimized accordingly. The ability for sales leaders and CFOs to model different compensation structures that strike that perfect balance between the CRO’s desire to provide sufficient incentives and the CFO’s desire to control the cost of sales requires a comprehensive SPM platform. 

Again, this is primarily done in Excel today and creates unnecessary complexity without real-time integration to critical planning data that makes it nearly impossible to optimize compensation plans. 

Enhanced Business Intelligence and analytics 

Finally, and most importantly, SPM platforms must provide built–in Business Intelligence (BI) and analytics to drive data-driven decisions that allow sales leaders to act swiftly and efficiently when new issues arise. 

It is virtually impossible for a sales leader to identify critical productivity issues without the right data and visualizations. This requires a lot more than simple CRM reports – it requires integrating performance and activity data from HR, finance, and marketing with your sales and planning data to ensure a complete view of what is happening in your organization. 

With all data aggregated and visualized, sales leaders can quickly identify critical coaching opportunities for their teams and proactively pivot where necessary. 

Consider pipeline development as a great example: 

• Some salespeople are very proficient in turning leads into opportunities. Others are not. 
• Some salespeople are great at moving a new opportunity to a POC. Others are not. 

• Some salespeople are true closers that can consistently move from POC to close. Others don’t. 

But how can you determine where each salesperson is struggling? It requires extensive historical data from many different automated and manual sources. Built–in BI and analytics, within your SPM platform, allows you to aggregate this data and quickly identify where each salesperson needs additional coaching. 

Additionally, we must be able to forecast effectively and accurately. Built-in BI and analytics allow sales leaders to leverage predictive models to forecast their performance more accurately in real-time. Subjective forecasts from sales leaders are compared to predictive models, leveraging historical performance that improves the ability to effectively forecast. 

So, the bottom line is this – SPM is not just a buzzword! SPM software, such as Board, enables sales professionals to undertake all their planning and control, reporting, simulation, BI, and advanced analytics activities in a single platform. 

How to achieve long-term sales growth with SPM

Outdated processes and inefficient, often outdated, sales tools are common themes that run through sales divisions everywhere. These taxing issues contribute to a loss in revenue for many businesses. A modern Sales Performance Management platform is needed to empower sales across the organization by improving productivity and directly addressing these challenges. 

Download this whitepaper to learn how SPM software can help your organization drive long-term revenue growth.