Understanding Sales Performance Management: Definition and Advantages

Understanding Sales Performance Management: Definition and Advantages

It is insufficient for businesses to merely produce top-notch products. To generate sales, a well-thought-out sales strategy is necessary. Sales Performance Management (SPM) empowers enterprises to devise sales strategies that cover the entire sales cycle and grasp the influence of each stage on the sales process. This article will explore the definition and advantages of sales performance management for businesses. Keep reading to find out more!


What is Sales Performance Management?

Sales performance management encompasses the planning, examining, and enhancing of business strategies throughout the company, particularly in managing sales teams to realize company goals and objectives.

The key objective of SPM is to heighten the effectiveness and efficiency of business operations. In today’s ever-changing business environment, SPM is an essential tool that helps companies construct a responsive sales ecosystem that is entirely in line with company objectives.

The Importance of Sales Performance Management for Businesses

Simon-Kucher & Partners reports that adopting SPM can boost productivity by 12.5% and shorten financial close periods by up to 50%. Financial close periods refer to the regular financial and accounting tasks carried out by a company, such as monthly, quarterly, and yearly book closures.

Sales performance management allows companies to implement new sales strategies and techniques to enhance their sales success. SPM also helps optimize business operations, leading to improved sales performance. By aligning internal processes, companies can work more efficiently, reduce errors, and eliminate redundancy.

The Components of Sales Performance Management

After understanding the importance of sales performance management for businesses, let’s delve into the components of SPM.

It’s essential to note that sales performance management is generally focused on three main aspects: where, how, and what is sold. The answers to these three questions will result in strategies for achieving success in the market.

Sales Planning

Sales planning involves business steps such as segmenting accounts, dividing territories, setting quotas, and more. 

Traditionally, businesses have had to manually create their sales territories, which can be error-prone and time-consuming. Such territories can become imbalanced or unclear, leading to negative impacts on sales and employee morale. 

With sales performance management, businesses can more optimally create territories and sales targets by merging data such as geographic data, postal codes, and sales history. 

SPM analysis results can help businesses balance sales territories and targets across sales teams, making employees feel fairly treated and improving sales performance.

Sales Incentives and Compensation

Sales incentives refer to rewards or payments given to sales employees who successfully achieve sales targets. Such incentives aim to increase motivation and morale among sales employees. However, providing incentives needs to be done wisely, as inadequate amounts can decrease employee morale.

Sales performance management enables businesses to quickly identify the incentive planning components that spend a lot of money but are not effective in generating revenue.

Sales Insights

Sales insights refer to a deep understanding and analysis of sales data, consumer behavior, and market trends of a company. Such insights can be obtained from pricing, discounting, sales forecasts, and more.

SPM helps companies collect and process data from all divisions of the company, and then present it in a suitable form for those who need it. Businesses can also leverage SPM to turn sales insights into actionable plans for improving sales.

Benefits of Sales Performance Management for Businesses

Sales performance management is a useful tool that businesses can use to enhance their sales accuracy and efficiency. This system enables businesses to make more strategic and profitable decisions while reducing unforeseen events. 

Here are some of the ways in which SPM can benefit businesses:

Improved sales forecasting

By providing insights into a company’s sales performance, sales performance management can help businesses project sales and budget for the future more effectively.

Assistance with compensation automation

SPM can assist businesses in automating their compensation process, which can save them money. This can be achieved by providing fast, accurate, and easily analyzable payments, which can increase payment accuracy, productivity, and revenue. It can also help businesses design bonus strategies for their employees.

Increased visibility into KPIs

Sales performance management can help businesses track their sales teams’ Key Performance Indicators (KPIs). These KPIs include employee performance, territory management, sales costs, customer satisfaction, and more. By monitoring these KPIs, businesses can gain insights into their sales teams’ overall performance, including monthly sales growth.

Make managing your business territories easier with LOKASI Intelligence

Every business has its own sales territories. However, manually creating and managing these territories can be inefficient and costly. LOKASI Intelligence is a geospatial analytics and location intelligence platform that simplifies this process by helping businesses visualize and monitor their sales territories.

In addition, LOKASI Intelligence makes it easier for businesses to create new territories by providing recommendations for the best areas based on the data inserted into the platform. With LOKASI Intelligence, businesses can save time and energy.

Learn more about how LOKASI Intelligence can help businesses by contacting email: sales@bvarta.com or WA: 087779077750


What does sales performance management mean?

Sales performance management involves planning, analyzing, and improving business strategies across the entire company, particularly in managing sales teams to achieve company goals and objectives.

What does KPI stand for?

KPI stands for Key Performance Indicator.

What are the benefits of sales performance management?

The benefits of sales performance management include better sales forecasting, assistance in compensation automation, and increased visibility into KPIs.

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