With the right sales performance metrics, leaders can make their incentive compensation plans more effective. This is the art of Sales Performance Management (SPM)—reaching your company’s strategic goals.
But quality—not quantity—is key, says David Cichelli. a sales compensation expert at The Alexander Group. Separate the gold from the dross with the article, Sales Compensation: Get Performance Metrics Right. It appeared in Selling Power Magazine’s first custom edition, exclusively dedicated to SPM best practices.
Today’s sales managers have access to many SPM tools. Examples include:
- Sales funnel progression to determine the success of individual campaigns
- Supervisor coaching to test product knowledge
- Advancement programs to gauge leadership potential
The challenge is identifying which metrics are strongest for your organization. Here are some of the article’s suggestions:
- Mind your bottom line. Sales managers may want to reward reps for sales funnel progression. But only the final balance sheet really counts. Where possible, use your bottom line to measure sales performance.
- Pick and choose. When you use only a few metrics, you can be sure reps know each one is important. Use only three or four to measure sales performance. This is industry best practice for peak sales performance.
- Bring everyone to the decision table. Involve all department leaders in selecting metrics. This way, you know everyone will work towards the same goals.
- It’s all about visibility and control. Reps need to know they can directly influence their sales performance. Use metrics that measure results they can control. Give them real-time insight into their progression with commission software.
For a complete guide, check out the full article here.