The rise in popularity of Sales Performance Management (SPM) software has turned even the most hardened Luddite into an evangelical believer. If there was ever an IT innovation that could visibly and swiftly transform a business, SPM would be up there with virtual meetings, smartphones, and the Cloud.
Joining up performance records, sales analytics, product performance, and territory reporting, a great SPM is the golden fleece of the sales world. Estimated by Gartner in 2018 to be worth $850 million per annum, short of brewing the perfect cup of coffee, your ideal SPM is not just big on relevant analytics but forms the evidential basis of performance reviews and how close an individual or team is to earning their compensation bonus. So, here’s the thing, if SPM software can achieve all that, how does it compare when pitted against some old-fashioned on-the-job human wisdom and training?
The Purpose of SPM
In its purest form, SPM is the suite of sales processes and disciplines that aim to enhance efficiency, effectiveness, and performance of sales forces, which can be measured on an individual, team, or business-wide basis, as well as metrics for products and territories. Whatever shape it takes, it uses data and metrics to provide accurate results that determine, among other things:
- Sales revenue
- Salesforce performance indicators and review for individuals and teams
- KPI’s and objectives
- Incentive and compensation management
- Quotas and territory setting.
That list did not evolve overnight. Whether it was trading livestock at a country market, merchants following the spice trail into the far east, or the doggedly determined door-to-sales folk hawking kitchen cleaning appliances in the post-war years, there’s been some sort of SPM plan in place, even if the numbers were being tallied on an abacus or the back of an envelope.
We’ve come a long way, salesforce!
That methodology was far from reliable and sales were difficult to capture. Even during recent times when spreadsheet applications became the norm, it was not uncommon for data entry to be inaccurate or cells to corrupt, rendering an extensive list of figures useless. The very possibility of an incorrect keystroke would be a strong case for virtually banning all humans from interfering with SPM. In addition to that, many of the SPM factors being monitored were often siloed and completed in isolation, which often meant a fractured picture of, for example, localized sales figures and total revenue for a product or individual.
The Case for SPM Software
Good SPM software brings together all the reporting tools and metrics and makes them accessible to managers and the sales force. Customized fields allow you to set the parameters, the regularity of reports, and who needs to see what. Not only is sales performance measured, but you’ll be able to measure and analyze this against KPIs, how successfully quotas are being handled and how close an individual or team is to achieving their commission against the Incentive Compensation Management (ICM) program.
The available dashboards and mapping are invaluable when planning and managing territories, or for creating sales leader boards, and the capability to create direct comparisons between members of the sales team eliminate most instances of massaging the numbers or favoritism. The same goes for quota distribution. Applying the right rules helps sales executives understand their targets better and remain incentivized and still leaves room for quota adjustment if necessary.
Want to know more from Varicent about the value of SPM software to your business? You can start by reading our blog.
But after all the value-rich data and metrics are out there and reports have been run, what next?
The Case for Human Intervention
Most of the output only gains worth when a real person picks it up and works with it. The machines may have taken over the number stuff (and that in itself is down to the genius of software developers, who were bona fide humans the last time I checked), but how that data is interpreted and applied still requires a living, breathing mortal.
- Training and coaching: Managers and training teams can use SPM software data to see if there are skills gaps, and as a result, plan development sessions.
- Performance Review: For better or worse, a manager can use the relevant output to inform and shape conversations with teams or individuals.
- Reviewing the Bigger Sales Picture: If the SPM data indicates a team is under-resourced, a product strategy isn’t working or high-achieving sales execs are missing their ICM targets, managers can use this information to take the appropriate measures.
- Helping other Business Areas: SPM reports are not just for the eyes of sales teams: HR needs to work with reports to know if anyone requires support; Recruitment or Hiring personnel may use the information to build a case for taking on new sales staff; Product and Marketing need the metrics so they understand how successful an item is and whether to position or market it differently and Finance, well, the better the sales, the more money there is in the pot.
And Finally... encouragement, confidence-building, and listening. No matter how much your voice recognition device may try and join in the conversation, no technology or SPM software platform will take the place of a manager or colleague that takes the data and transforms that into human interaction.
SPM software continues to evolve at a rapid pace, and although it’s a platform that needs to be budgeted for, it’s an investment that quickly pays for itself. But for now, at least, a turbo-charged tool is only as good as the users that benefit and learn from it.
Get your sales superheroes on board with SPM software today by visiting www.varicent.com or talking to your local Varicent representative.
