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What is Sales Performance Management (SPM)?

Aug 09, 2023
4 min read
Sales Performance Management (SPM) is a data-informed approach to plan, manage, and analyze sales performance. Discover why it’s a critical tool for today’s enterprises to improve decision making and sales agility.

Implementing sales performance management (SPM) could be the difference between being a master of the modern agile economy and falling behind. Now that digital transformation has taken hold, data-led approaches to sales strategy and measuring success are no-brainers. And, with real-time, hard data driving sales leaders' decision-making, growth-management is easier than ever.

What Does Sales Performance Management, or SPM, Mean?

SPM is a data-informed approach to planning, managing, and analyzing sales performance at scale. It can help drive revenue and sustain your company's position as an industry leader. With markets moving at record speed, it’s fast becoming an indispensable tool for organizations to achieve an agile sales ecosystem that's fully aligned with business goals.

According to Dell Technologies’ Digital Transformation Index, in 2022, 8 in 10 organizations fast-tracked part of their digital transformation programs in response to fast-paced environments. Dell Technologies also reported that nearly 80% of organizations are reinventing their business models by incorporating broader remote work capabilities, strengthening cybersecurity defenses, and delivering new digital experiences to customers and team members,

Sales Performance Management For Sales Leaders

Every business executive and leader with a product or service to sell can benefit from having a definitive understanding of what SPM means. Gartner, a world leader in researching SPM and its benefits for business, puts it succinctly:

Sales Performance Management (SPM) software comprises tools and process functions that automate and unite back-office sales processes. It's implemented to improve sales execution and operational efficiency.


The Evolution of Sales Performance Management Software

Effective SPM software empowers business leaders to accelerate digital transformation efforts so they can nimbly address marketplace and economic shifts. It facilitates effective collaboration between departments and teams, automates and integrates processes and improves sales outcomes by providing real-time feedback and course corrections. 

Xactly's SPM software takes the innovative approach of incorporating operational sales management (OSM). This means letting leaders efficiently design and manage quotas, territories, and incentives from one place.

This holistic view of processes and performance is the fuel required to power an agile sales ecosystem. Our state-of-the-art Sales Performance Management software helps ensure processes are:

  • Automated and seamless across all of your systems
  • Collaborative and aligned with every stakeholder team
  • Data-informed with insights for strategic decision-making
  • Continuous and allowing for course correction in real-time


Why Is Sales Performance Management Important?

SPM aims to streamline operations by unifying your sales ecosystem across all operational strategies. By automating menial tasks and aligning processes, senior decision-makers are free to strategize and top sales people are free to sell.

With fewer snags and streamlined processes, you'll foster an environment that encourages your best team members to stay put and grow within your organization. What's more, using data to drive decisions leads to better outcomes, making it easier to achieve business goals. 

What Are the Components of SPM?

Sales Performance Management can eradicate inefficiencies and improve sales performance. Additionally, it can boost sales ROI by accelerating close times.

Let's look at how:

  • Planning: Advanced modeling optimizes the potential of every account. Using data and automation to slice up your market, allocate territories, set quotas and plan capacity—you can increase closes and reduce attrition.
  • Managing: Generate real-time data about salespeople's output and quota achievement. SPM lets employees and managers model potential outcomes to manage day-to-day decision-making and close more deals. 
  • Incentivizing: Leaders can encourage specific commission structures that direct employees to sell specific products to specific clients. SPM streamlines departments for fast, accurate payouts.  
  • Analyzing: Machine learning and AI create eye-opening insights into how effective sales forecasting and operational procedures are, in comparison with industry benchmarks.
  • Forecasting: SPM software lets you solely rely on accurate data intelligence insights to drive future decisions. 
Wheel with three sections representing the pillars of agile go to market methodology: Plan; Perform; Predict. Outer wheel shows components of each (in order): Understand; Formulate; Decide; Implement; Incent; Support; Analyze; Forecast; Assess.

Key Business Benefits of Sales Performance Management Software

As every leader knows, a business is only as successful as its people—especially its salespeople. By connecting every department with sales, client-facing and back-office team members reap the benefits. Naturally, when the workforce is aligned on business goals, the result is more happy customers and increased revenue.  Sales performance management software provides different benefits to teams across the organization.


Better transparency and reliable, real-time data mean you can keep salespeople on track with specific business goals. Reducing payout errors means keeping your best staff, while better quotas, allocation and planning equal improved morale and less attrition.  


Seeing salespeople's capabilities and goal-achievement in real-time compared with operational procedures and management input is game-changing. Automated, integrated tools and trackable, standardized processes reduce complexity, making it easier to strategize and close deals.

What's more, you'll reduce payout issues, eradicate shadow accounting and spend less time addressing and fixing manual errors. 


Increased visibility means sales managers can quickly and accurately address performance needs and reward excellent work. Understanding employees from a data-led standpoint is the best way to meaningfully increase engagement. And the benefits of engaged employees? Increased retention, better recruitment ROI and a workforce that genuinely cares about business outcomes.  


Automating data changes that naturally stem from contract and employee events reduces errors and time spent by the finance team. Data accuracy and automated processes also aid with compliance, reduce risk and significantly improve forecasting capabilities. Some solutions also offer a holistic view into the complete lifecycle of commission expenses to better predict revenue.

Sales Performance Management vs. Incentive Compensation Management (ICM)

Sales Performance Management has had a few different meanings in the past, often being used interchangeably with Incentive Compensation Management (ICM). However, it’s important to note that these two are not the same.

Incentive Compensation Management enables leaders to automate and improve processes. It's a core component of the wider concept of Sales Performance Management, which uses data to optimize planning, improve processes and align stakeholders across all of your sales functions.

Digital Transformation Has Arrived

The interaction between empowered human teams and high-level digital tools was billed as the future of sales, and it's arrived. If you're looking for sales performance management solutions, be sure to choose an SPM platform you can trust.

Join companies like LinkedIn, Vodafone and MetaCompliance by investing in Xactly's world-leading SPM software—and the future of your sales team's success. 

  • Incentive Compensation
  • Sales Performance Management
  • Sales Planning
Kelly Arellano, Senior Content Marketing Manager at Xactly
Xactly News Team

Led by Editor-In-Chief, Kelly Arellano, The Xactly News Team reports on the latest products, events, and market trends taking place within Xactly and throughout the revenue intelligence industry.