Handbook for Sales Performance Management

Types of Sales Organizations

In this ever-changing market scenario, it is imperative to first try and understand the various kinds of sales organizations and their working pattern.

It is not very difficult to see , as sales organizations evolve, they start giving maximum importance to Lead Generation and Sales Pipeline activity, Discipline of Sales force and Sales Process that they follow, Sales Moral, Sales Leadership, Sales Talent and Sales Training in that order of precedence.

The Sales Performance Pyramid

  1. At the bottom of the sales performance pyramid, the sales activities are most important. These activities, as shown above, are categorized separately for the representatives and managers respectively.
  2. The right activities lead to a the right “Revenue Sources” in the form of new customers, new markets, more customer retention, more products/solutions sold. These are the Sales Objectives.
  3. Attainment of sales objectives are measured by Sales Metrics in the form of Win/Loss ratio, Sales pipeline, Deal Size/Margin and Cross sell / Upsell Rate and many more.
  4. The end result of sales performance pyramid is ROI, Profit and Revenue.

Sales performance pyramid very clearly shows that performance is driven from bottom to up in the pyramid. SME CEO’s who sit at the top of the pyramid trying to drive profitability without going through the sales activities resulting in attainment of sales objectives will never see sales revenue!

S.No. Insight into Sales Performance What it means?
1 Top salespersons are 2.5 times better in qualifying leads. Choose the team member entrusted with lead qualification and increase your performance by 250%.
2 Only 60% of salespersons are able to emphasize with customer pain Salespersons who can emphasize with customer pain are 28% more likely to achieve sales targets
3 50% of salespersons are able to close less than 40% of opportunities Ask yourself how to minimize the loss of more than 60% opportunities which could have been closed.
4 67% of salespersons miss their sales targets All your targets will be achieved by 33% of sales team. Have you identified them?
5 46% salespersons update their CRM with leads and sales pipeline. 54% of leads are dissipating from system due to lack of awareness of salespersons to do so.

Pitfalls to Sales Performance Management

1) Operations

a) External Effectiveness

Prospecting

  • Sales Process
  • Sales pitch
  • Sales Script
  • Effective negotiation and closing
  • Closing skills

b) Internal Efficiency

  • Internal Customer satisfaction and motivation
  • Process to motivate team

c) Department and Work Centers

  • Quality
  • Delivery
  • Cycle Time
  • Waste Management

d) Business Operating Systems

  • Flexibility
  • Customer Satisfaction
  • Productivity

e) Metrics

  • Marketing
  • Sales
  • Financial

 

f) Vision of company

The Shaded portion in the above diagram is the main pitfall for sales performance management in any organization. If we are able to plug this pitfall, sales performance is ensured from the back end.

For best performance, the inverted pyramid of sales shown below must be prepared for every sales team member and closely tracked for results.

Handbook for Sales Performance Management

Sales Performance Management

The market scenario is constantly changing from the few suppliers and a lot of customers 50 years back to a lot of suppliers and a lot of customers 20 years back to a lot of specialist suppliers and core buyers today.

Types of Sales Organizations

In this ever-changing market scenario, it is imperative to first try and understand the various kinds of sales organizations and their working pattern.

Good sales organizations

It is not very difficult to see , as sales organizations evolve, they start giving maximum importance to Lead Generation and Sales Pipeline activity, Discipline of Sales force and Sales Process that they follow, Sales Moral, Sales Leadership, Sales Talent and Sales Training in that order of precedence.

The Sales Performance Pyramid

Sales performance pyramid

 

  1. At the bottom of the sales performance pyramid, the sales activities are most important. These activities, as shown above, are categorized separately for the representatives and managers respectively.
  2. The right activities lead to a the right “Revenue Sources” in the form of new customers, new markets, more customer retention, more products/solutions sold. These are the Sales Objectives.
  3. Attainment of sales objectives are measured by Sales Metrics in the form of Win/Loss ratio, Sales pipeline, Deal Size/Margin and Cross sell / Upsell Rate and many more.
  4. The end result of sales performance pyramid is ROI, Profit and Revenue.

Sales performance pyramid very clearly shows that performance is driven from bottom to up in the pyramid. SME CEO’s who sit at the top of the pyramid trying to drive profitability without going through the sales activities resulting in attainment of sales objectives will never see sales revenue!

sales performance

S.No. Insight into Sales Performance What it means?
1 Top salespersons are 2.5 times better in qualifying leads. Choose the team member entrusted with lead qualification and increase your performance by 250%.
2 Only 60% of salespersons are able to emphasize with customer pain Salespersons who can emphasize with customer pain are 28% more likely to achieve sales targets
3 50% of salespersons are able to close less than 40% of opportunities Ask yourself how to minimize the loss of more than 60% opportunities which could have been closed.
4 67% of salespersons miss their sales targets All your targets will be achieved by 33% of sales team. Have you identified them?
5 46% salespersons update their CRM with leads and sales pipeline. 54% of leads are dissipating from system due to lack of awareness of salespersons to do so.

 

Pitfalls to Sales Performance Management

pitfall sales performance management

  • 1) Operations

a) External Effectiveness

  • Prospecting
  • Sales Process
  • Sales pitch
  • Sales Script
  • Effective negotiation and closing
  • Closing skills

b) Internal Efficiency

  • Internal Customer satisfaction and motivation
  • Process to motivate team

 

c) Department and Work Centers

  • Quality
  • Delivery
  • Cycle Time
  • Waste Management

 

d) Business Operating Systems

  • Flexibility
  • Customer Satisfaction
  • Productivity

 

e) Metrics

  • Marketing
  • Sales
  • Financial

 

f) Vision of company

The Shaded portion in the above diagram is the main pitfall for sales performance management in any organization. If we are able to plug this pitfall, sales performance is ensured from the back end.

For best performance, the inverted pyramid of sales shown below must be prepared for every sales team member and closely tracked for results.

A closer look at the pyramid above, suggests that unless the right “Actions” are not taken by Sales Manager in Tier III, even the sales team with best personality and Job Description/behavior will fail.

To climb the sales performance pyramid, the following actions are suggested:

  1. Field Coaching for each salesperson must be given because 67% learn by seeing others do.
  • 3%learn by listening
  • 67% learn by seeing others do
  • 20% Some learn by doing
  1. Everyday role-play session of 30 mts. with all salespersons standing in a Hubble.
  2. Assist sales team in lead generation from back end.
  3. Ensure that CRM is updated everyday by filling DSR (Daily Sales Report) everyday.
  4. All “Sorry” and “Thank you” letters to be communicated before end of business every day.

The Marketing Pyramid retrofits into Sales Performance

The in depth understanding of the marketing pyramid is important to drive sales performance.

If the marketing essentials are not in place, any Sales Manager can ensure no sales performance.

The Salesperson sits at the top of this pyramid to ensure that sales happen once the organization has done its Marketing Essentials and Marketing Strategies properly.

Types of Sales Performers

a) Dealmakers

  1. High Quota Attainment
  2. Less Sales Skills

 

b) Top Performers

  1. High Quota Attainment
  2. High Sales Skills

 

c) Pipeline Builders

  1. High Sales Skills
  2. Low Quota Attainment

 

d) Underperformers

  1. Low Quota Attainment
    1. Technology
    2. Talent management
    3. New digital media
    4. Business Models
    5. Process Alignment
    6. Change management
    7. Customer SegmentationLow sales Skills 

      This scatter diagram for a case study done on various salespersons clearly suggests that for driving sales performance , one needs an even mix of  “Top Performers” and “Pipeline Builders”.

      The “Pipeline builders” are like “work in progress” elements. Without them, the top performers cannot be so effective.

      It thus makes lot of sense for top Sales Managers to make a team which comprises of  Pipeline builders and top performers. They should not be asked to report to each other but complement as two functions into one. This will maximize Sales Performance of the sales team.

      Sales Performance is a team effort.

      a) Top management must invest in performance drivers, as shown above.

      1. Customer Value
      2. KPI
      3. BI
      4. Product and Pricing
      5. Customer Satisfaction Index
      6. Customer Loyalty Quotient

       

      b) The GTM(Go-To- Market) plan for each market segment is a salient growth initiative of top management.

      1. New product development
      2. Insight Selling
      3. Sales Effectiveness

       

      c) In today’s era “Customer Segmentation” after having done “Market Segmentation” has become very important. CRM plays a vital role in this.

      d) The E-channel has already become a decisive factor in lead generation today. The sooner we master it the better it is.

      e) The Business Strategy must suitably embrace Technology and talent management for it to sustain growth in the market.

      In a Nut shell

Let us summarize

The Sales Performance management model will surely depend on the types of sales organizations.

  • High Performing
  • Average
  • Underperforming

The Sales Results always sits on the “Sales Objectives” derived out of “Sales Activities” taken up by any sales team.

Sales managers driving successful sales teams must know the following 5 things while managing their teams

S.No. Insight into Sales Performance What it means?
1 Top salespersons are 2.5 times better in qualifying leads. Choose the team member entrusted with lead qualification and increase your performance by 250%.
2 Only 60% of salespersons are able to emphasize with customer pain Salespersons who can emphasize with customer pain are 28% more likely to achieve sales targets
3 50% of salespersons are able to close less than 40% of opportunities Ask yourself how to minimize the loss of more than 60% opportunities which could have been closed.
4 67% of salespersons miss their sales targets All your targets will be achieved by 33% of sales team. Have you identified them?
5 46% salespersons update their CRM with leads and sales pipeline. 54% of leads are dissipating from system due to lack of awareness of salespersons to do so.

 

The pitfalls to a sales management and its performance is always driven by imperfections in either operations or Business Operating systems. The same has been explained in detail in this blog earlier.

Achievement of sales vision is very closely linked to Territory and Quota Mapping as well as the sales compensation plan for performing sales teams.

This blog also clearly explains how the marketing pyramid retrofits into the sales performance pyramid almost making the two complements of each other.

The types of sales performers and the business drivers which will catapult Sales teams into high levels of performance is what sums up this blog on a conclusive note.

Watch out for my upcoming blog on “What not do in Sales Management?”. Signing off with a firm belief in “The Religion of Sales!” practiced by all of us at Strategic Concepts (I) Pvt ltd, Nagpur.

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