Adopting Sales Performance ManagementAdopting Sales Performance Management

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The demand for improving sales performance and ensuring higher levels of focus on revenue and customer relationships has become quite high on most organizations’ priority lists. Unfortunately, most organizations have not fully adopted the practices and methodology of sales performance management to ensure proper alignment of people, process and systems. Ventana Research believes that through leveraging existing investments in sales force automation (SFA) and focusing on new applications and information systems for sales performance management, organizations will begin the process of achieving greater value and performance.

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Improving sales performance is not a science, but an art of determining how to methodically and psychologically motivate a sales organization toward a higher level of effectiveness. This ensures that the entire sales organization gains efficiencies in their activities and processes, which can help attain a higher level of revenue and accomplishment of customer-centric goals and objectives. This is easy to understand in discussion, but the crutch point and focus for most organizations is in determining how to streamline their sales operations to achieve the higher levels of performance that we call sales performance management.

Sales performance management is the practice of managing the effectiveness and resulting efficiency of sales-related business activities and processes to a common set of customer and revenue goals and objectives. The key to adopting this focus is fully assessing your existing approach and building a baseline that can provide an understanding of where your sales organization should go. This self-assessment approach is critical in order to ensure that you can start analyzing issues typically found, like lack of process, limited alignment, scattered information, limited visibility, and lack of effectiveness.

Aligning people, processes, and systems will require an inventory of existing processes and systems that are part of sales performance management. The core application areas that are critical for sales performance management are: objectives and initiatives, compensation and incentives, territory and quotas, relationship management, forecasting and planning, referrals management, opportunity management, and market intelligence. These application areas require a strong foundation in the principles of business intelligence and process management that utilize a common foundation of information for aligning, optimizing, and understanding sales performance.

Ventana Research recommends leveraging the performance improvement process, "PerformanceCycle," which is comprised of three steps — understand, optimize, and align — as a simple method to assess your efforts in managing sales performance. This process directly connects to a strategy, planning, and execution management process that should be closely linked and managed within sales organizations. Utilizing this approach can quickly determine where improvements need to be made to ensure that people, processes, and systems are brought together for sales and for the outcome of improving customer relationships.

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Ventana Research sees the practice of sales performance management as the number one effort that sales and operations management should adopt to achieve corporate revenue and profitability targets, as well as customer relationship and satisfaction goals. Organizations looking to progress to the next level and achieve the next opportunity to maximize their investments in sales should determine what applications and information systems can improve their sales organization’s performance. To drive sales performance and process improvement, leverage a performance management methodology that can assess your existing efforts while driving a priority for areas to improve.

Mark Smith is CEO & Senior Vice President of Research at Ventana Research.

Ventana Research is the preeminent research and advisory services firm helping our clients maximize stakeholder value with Performance Management throughout their organizations. Putting research in a business and IT context we provide insight and education on the best practices, methodologies and technologies that enable our clients to leverage assets to understand, optimize, and align strategies and processes to meet their goals and objectives.