10 Success Factors for Sales Performance Management

10 Success Factors for Sales Performance Management

Sales Performance Management (SPM) solutions have proven extremely valuable. A solid solution will reduce payment errors, cut processing times and significantly improve the efficiency of your sales operations.

Just that the road to a successful SPM implementation can be challenging. You must align multiple objectives and stakeholders from sales, HR and finance; address technical issues such as multiple data inputs and integrations between systems, and also pay close attention to project management, coaching and other behavioural issues that can significantly affect success or failure.

Here are 10 factors that will help you maximize your success in selecting and implementing an SPM system.

#1 Prioritize your requirements

A strong Sales Performance Management (SPM) system addresses all of your company’s unique needs. To ensure a complete picture of these requirements, you need to start the analysis with a survey of your internal stakeholders. Consider what you really want to accomplish with the SPM system:
  • Streamline manual processing.
  • Reduce overpayments.
  • Incentivize your salesforce.
  • Ease your payroll processing.

Prioritize these requirements and consider releasing the solution in phases, focusing on your must-have needs first and minimizing risk. For example, plan to demo multiple solutions multiple times, in order to guarantee the most complex requirements are met.

#2 Scope the implementation project accurately

You need a deep understanding of your existing SPM plans. Pay particular attention to exceptions and try to minimize them as much as possible before you move ahead with the project scoping. One sign that a project may not be well defined or well scoped is if you receive vastly different bids from vendors in response to an RFP. When this happens, it is often because of differing assumptions regarding the amount of work involved. In order to avoid unpleasant surprises, be sure to ask the vendor what assumptions shaped the submitted bid and include these in the Statement of Work for the implementation phase. At all stages of the process, remember to involve your internal teams.

A trusted partner can also help you determine the level of effort required from your internal teams during implementation, advising you on what is reasonable to expect. This will save you time and money in the long run.

#3 Ensure compensation plans can be easily changed

The best systems allow business users to easily change compensation plans and business rules, without the need for support from IT, the software vendor, or external consultants.

Depending on the solution selected, building new plans can be complicated and time-consuming, so it’s important you understand how this is done. A simplified interface is essential to making that possible, giving you the power to change comp plans easily. To complete the process most effectively, ensure that your subject matter experts (SME) are involved and comfortable with the SPM implementation.

#4 Consider total cost of ownership

Licenses are just a small part of the overall cost of implementing an SPM system. When evaluating a system, consider the cost of the expert services needed during the implementation, the cost of training, hardware and infrastructure, as well as the price of future upgrades. You should also consider the commitment and planned availability of internal resources, depending, for example, on your preference for on-premises or cloud-based solutions.

Also, evaluate the cost of future compensation plan changes. Many companies plan for expenses related to managed services or consultants hired to apply complex changes each year, under strict timelines. Furthermore, as your solution evolves, you may want to expand and explore additional SPM capabilities and analytics of year-over-year data.

#5 Select a solution that will scale with your business

Business requirements always change. As your system grows, you might be selling through additional channels, applying more complex workflow processes, and using different technologies. The SPM system you select today should therefore be flexible enough to support your future needs and grow with your company. In practice, this means adapting to new sales processes and supporting ever increasing volumes of data.

Speed and performance are also critical. Consider the complexity of sales crediting, quota assignments and large data volumes in sales incentive plans. Looking forward, make sure your system can scale and efficiently provide the increased analytics, modeling and reporting capabilities needed by compensation analysts, managers and sales reps. When evaluating any SPM system, conduct a scalability and performance test based on your estimated future requirements.

#6 Verify data quality prior to implementation

Incentive payments need to be trusted. The best incentive plans and processes can be rendered useless if the underlying data is not accurate, reliable, and consistent.
Prior to implementation, invest the needed time and resources to verify that your source system is providing complete, coherent data in a useful format for compensation calculations. This will not only improve system precision, but also eliminate the need for manual intervention later on.
For example, make sure that:
  • Transactional data attributes map to your various compensation plans.
  • Reference data is complete and consistent within your source system.
  • Hierarchies are accurately reflected.

In addition, identify how often the source data changes or receives updates, and plan the frequency of your compensation plan feeds accordingly.

#7 Assign a strong internal project manager

A good internal project manager (PM) is crucial for the success of your implementation. Your implementation partner — whether the solution vendor or a third party — should also have a strong PM. This will help you avoid any missteps that can result in additional expenses during implementation and additional support costs once the system goes live.

Your internal PM should have good communication and interpersonal skills, in order to control timelines, manage resources, and keep the project on track. A good project manager will be strong enough to keep personnel on task and on schedule, and will also have a realistic view of what and when resources – internal, vendor and third party - are available. This will ensure the project is completed on time and on budget.

#8 Transform behavior using coaching

Coaching is an essential SPM capability. According to Aberdeen, companies providing sales reps with targeted coaching achieve 20% better quota attainment. Unfortunately, most sales executives lack one of the most effective management skills – being a good sales coach.
One of the key pitfalls for sales managers is adopting a “one size fits all” approach, instead of diagnosing each rep’s particular area for improvement. A solid SPM solution should help you perform guided coaching on an individual basis, in order to promote step-by-step, measurable improvements in performance and motivation.

A built-in coaching model includes ongoing tools and assistance for scheduling coaching sessions with each sales rep, defining tasks, providing immediate feedback, and analyzing coaching results. An innovative SPM system can also meet coaching needs by providing real-time reports, charts and graphs.

#9 Leverage real-time metrics to motivate payees

Good reporting can lead to great performance. According to Gartner, “sales performance monitoring solutions that use big data and business graph techniques improve how companies monitor, analyze and enhance their sales execution.”
Detailed compensation statements showing exactly how pay was calculated cut down on disputes. When warranted, a powerful SPM system allows payees to file disputes directly from their mobile devices through an automated inquiry management tool.

Real-time quota or goal attainment reports help payees know where they stand at any given time, giving them a clear line of sight to their personal goals. Dashboard views and an array of standard out-of-the-box reports are also essential for providing clear direction for payees, as well as actionable management information. These standard reporting capabilities cut down on the follow-on costs of developing customized reports.

#10 Don’t skimp on training

Training should begin earlier in the SPM implementation process than most companies realize - after requirements gathering, but before user acceptance testing; and certainly well before the actual “go live” of the new system.

Power users should have a good grasp of your sales compensation practices and processes before the initial training. These users should approach training as an opportunity to understand how the SPM product will function in your unique environment. This is crucial to a thorough user testing process, ensuring that the product will work the way you intended. After implementation, you should plan for ongoing user education as well. Notably, while general training can be helpful to learn standard practices, in-house training, in the users’ actual environment is the mark of successful SPM implementations.

To learn more about our approach and capabilities, view a demo of our Sales Performance Management solution.