Today, career in sales is very lucrative for many due to the challenges and reward it possesses. Moreover, every organization makes sure that it has top class sales performance in order to meet its financial as well as strategic objectives. Hence, the concept of Sales performance Management has received considerable importance in today’s business world.
What is an SPM system (SPM): The Concept?
A Sales Performance Management is a business concept that deals with the overall sales operations of the organization. Achieving the net sales target and the desired profit are the ultimate outcomes of sales management, which firms wish to pursue. SPM involves tasks such as setting strategies, recruiting the right salespeople, forecasting sales, deciding compensation plans, preparing formal sales plan, generating sales reports, etc.
Thus, most organizations have established a Sales Performance Management System in order to make sure that their sales operations and activities are streamlined. It is a system that embeds the concept of SPM, helps in making the SPM’s tasks and activities smoother and conducted in an efficient and effective manner.
How the SPM system can help?
A well-implemented Sales Performance System can benefit the organization in many ways. Some of the potential benefits of this system are as follows:
• Helps in managing compensation plans in a much accurate and efficient manner
• It helps is driving sales of the organization and reducing operational costs by saving firm the time, money and effort
• Allows the organization to achieve its desired level of revenue performance by aligning its sales processes
• Helps in bringing the right sales people on board
• Helps to achieve the desired behavior and performance among the salespeople and hence results in better sales resource management
• Makes the organization proactive rather than a reactive one
• The system allows a more efficient channel of communication between all layers of management as well as between managers and employees
• Helps in increasing revenues in the form of increased sales and employee productivity
• Helps organizations in forming a structured process of setting sales goals, tracking performance and finally analyzing the performance in achieving those goals
• Allows the salespeople to keep a check on their own individual performances
• Through the analysis and reports generated, the managers can point out what goes wrong in team performance and can thus prove coaching accordingly
Sales Performance Management System Challenges
SPM system is not without challenges. Certain challenges pose a threat to the effective utilization of this system. Companies surely do realize that hiring the wrong person for the right job or the right person for the wrong job never turns out to be good. One bad hiring could mean loss in terms of money, time and your valuable sales. So hiring is one factor that can have a deep effect on all the other sales operations.
Another most important factor is knowing what motivates your sales force so that you can establish a lucrative compensation plan for them. This understanding along with proper hiring can overcome a lot challenges in the implementation of the SPM system.