What is Sales Performance Management (SPM)?

Oct 14, 2019
5 min read
Businesses need access to accurate data insights to drive performance. Learn how sales performance management (SPM) helps you plan effectively and efficiently.

Sales performance management (SPM) is a data-driven approach to capacity and quota planning, territory mapping, incentive design, and continuous analysis to help organizations plan more effectively and maximize performance.

For many companies, the immediate response to SPM is—we already have tools and processes in place, we don’t need it. You might be cruising smoothly for now, but are you ready to compete at a lightning-fast pace in the changing sales world?

The business landscape is becoming increasingly competitive, and the fast growth isn’t slated to slow down anytime soon. As a result, companies are having to set more aggressive goals to compete in their industries. Here’s the problem: on average, only 69% of organizations hit their revenue goals, and the average quota attainment in 2018 was a disappointing 54%.

So I’ll ask again—are your current planning and forecasting processes designed to drive the performance needed to outperform your competition?

Missing content.

The Data Problem

Poor performance trends across the board create a difficult sales planning and forecasting situation for many companies. How can you plan aggressively to hit higher goals if your current plans aren’t performing well enough? Or if your plans are performing well, how can you ensure you’re operating at peak performance?

You need access to data insights to plan and forecast accurately.

Seems easy enough right? Not so fast—because more than 75% of companies rely on spreadsheets and homegrown systems to manage their performance data, planning, and forecasting, they face a huge setback.

When your data lives in different systems, your sales planning, forecasting, and performance suffer.

Manual data management means that your company lacks a single source of truth. When everyone accesses different data sources, no one is on the same page, planning takes up 75% percent longer, and you can’t proactively adjust plans and forecasts if a problem arises.

What is Sales Performance Management and How Does is Help?

According to Gartner, "Sales performance management (SPM) software comprises tools and process functions that automate and unite back-office sales processes. It is implemented to improve sales execution and operational efficiency."

In short, SPM helps your organization operate as an efficient, profitable sales machine by using your data effectively, aligning teams, and continuously analyzing and tweaking plans and forecasting as needed.

The Sales Performance Management (SPM) Journey

However, implementing sales performance management isn’t a one-step overnight process. It is a commitment to transform and reinvent your sales organization over time—and the long-term benefits are absolutely worth it.

Looking at it broadly, there are four levels within sales performance management implementation:

  1. Level 1: Manual
  2. Level 2: Automation
  3. Level 3: Data-driven
  4. Level 4: Optimized

Level 1: Manual Sales Performance Management

Who: The Laggards
What: Using spreadsheets, homegrown solutions, and other manual processes
Common Problems: scalability, efficiency, errors/data accuracy, little to no data insights

The Reality: Organizations ranking at Level 1 in SPM are slowpokes behind the rest of the pack. These companies rely on manual processes and often suffer from inefficiencies, have trouble scaling with growth, and struggle with inaccurate, error-prone data.

At this point in the SPM journey, your organization is looking for a way to operationalize processes, administer incentive compensation, design sales capacity and quota plans, and report on performance.

Next Steps: These organizations are falling behind the pack and lack the necessary tools to grow. They need to begin looking into automation before they even are capable of competing effectively in their industry.

Key Resource: Learn more about the benefits of automating your processes in our guide, "The True Cost of Manual Processes.

Level 2: Automated Sales Performance Management

Who: The Automators
What: Have created a single source of truth and automated their processes
Common Problems: lack of strategic insights for planning, inability to proactively identify issues and adjust plans

The Reality: Organizations ranking at Level 2 in SPM have moved beyond the dark ages of sales performance management but are still slightly behind. These companies have automated their sales capacity and quota planning, territory design, and/or incentive compensation design, but still lack the insights to strategically plan. 

At this point in the SPM journey, your organization is looking for a way to increase efficiencies and scale to support growth so that you can focus on strategy instead of tactical execution.

Next Steps: These organizations are making progress but still lack the necessary insights to plan strategically. They need to begin utilizing their data to drive strategic planning before they can compete effectively in their industry.

Key Resource: Learn more about data-driven sales planning in our "Complete Sales Planning Handbook." 

Level 3: Data-driven Sales Performance Management

Who: The Data Masters
What: They’ve automated processes and are using their performance data to drive strategic planning
Common Problems: designing plans that drive consistent high performance, limited visibility into progress towards goals, limited ability to course correct in real-time for unforeseen changes

The Reality: Organizations ranking at Level 3 in SPM are beginning to use their data effectively to strategically plan and forecast. These companies are focused on designing data-driven plans, aligning across the organization, and real-time optimization of sales plans and performance.

At this point in the SPM journey, your organization is understanding the opportunity data insights to ensure plans drive the right sales behaviors and are aligned with company objectives, territories are balanced, and you have the right capacity resources in place.

Next Steps: These organizations are realizing the power and competitive advantage that data provides. They need to begin benchmarking their plans against their industry peers to ensure incentives are competitive and internally evaluating plans and comparing individual team performance to make strategic adjustments as needed.

Key Resource: Discover the impact of benchmarking incentive data in our guide, "The Impact of Pay Mix." 

Level 4: Optimized Sales Performance Management

Who: The Leaders
What: They mastered data-driven planning and are continuously optimizing
Common Problems: need to integrate seamlessly across all systems

The Reality: Organizations ranking at Level 4 in SPM are leagues ahead of their competition. These companies have their processes automated and are using their data to continuously improve their sales planning, forecasting, and performance.

At this point in the SPM journey, your organization is fully equipped to optimize your sales planning and forecasting—you’ve become a stronger, smarter, data-driven sales organization—and are looking for even more ways to continuously optimize your sales plans and performance.

Next Steps: These organizations are leading the pack. They can begin optimizing their plans further by integrating across all other internal systems and exploring artificial intelligence and machine learning to help predict and reduce sales rep attrition and plan more intelligently.

Key Resource: Uncover the benefits of integrated sales performance management and hear from real SPM users in our white paper, "The Business Case for a Comprehensive Sales Performance Management (SPM) Solution." 

Getting Started—The Xactly SPM Platform

No two companies are in the same situation when it comes to sales performance management implementation—and the first step is understanding where your organization stands. Understanding what level of SPM you’re currently in will help you best identify the next steps. Discover where you stand by taking our 60-second assessment and then uncover your next steps in our SPM workbook.

The Xactly Sales Performance Management (SPM) Platform is designed to help you optimize your sales planning, forecasting, and processes. Each Xactly SPM solution—from sales capacity and quota planningterritory mappingincentive designbenchmarking, and performance optimization—seamlessly integrates with Salesforce and your additional existing CRM, ERP, and other tools with Xactly Connect.

It’s time to get ahead of the pack and ultimately, helping you become a data-driven sales organization. Kickstart your SPM journey today and learn more about the Xactly SPM Platform today.

  • Sales Performance Management
Karrie Lucero
Karrie Lucero
Content Marketing Manager

Karrie Lucero is a Content Marketing Manager at Xactly. She earned marketing and journalism degrees from New Mexico State University and has experience in SEO, social media and inbound marketing.