• August 7, 2009
  • By Patrick Stakenas, founder and chief executive officer, ForceLogix

Sales Performance Management Is the New Necessity

CRM has shaped the way companies manage their customers and processes, but offers little help in managing our salespeople. Let's face it -- even the best artillery in the world is worthless if soldiers don't have the skills to operate the machinery. In a corporate setting, sending your salespeople out to sell your products or services unarmed with the skills and knowledge to do so can be highly damaging, albeit less brutal.

Research has shown that organizations are able to acheive significant benefits with the following sales-team management efforts:

  • tracking,
  • managing,
  • monitoring,
  • ranking, and
  • coaching.

These efforts can drive not only efficiencies in selling, but effectiveness in individual salespeople, thereby increasing volume and, in turn, improving top-line growth. However, what's often missing is technology-based support. When used properly, CRM may be able to provide structure around customers, calls, pipelines, and forecasts, but CRM will not -- it cannot -- help you improve the quality of your salespeople. Only sales leaders can manage and guide their teams, and they need technology other than CRM to do it.

Companies that implement sales performance management (SPM) systems to compare and track CRM data against other stores of data (e.g., leading and lagging indicators) enjoy a much higher CRM-adoption and -utilization rate among salespeople. Moreover, integration with SPM can significantly enhance returns on CRM investments. Leading organizations that were early adopters of CRM -- such as Lenovo, Corning, Innovex, and Motorola -- are now leveraging SPM capabilities to empower their sales management teams.

In a 2009 study by Aberdeen Group entitled "Optimizing Sales Performance Management Through Data Integration and Analytics," 59 percent of survey respondents ranked managing sales performance as a high or top-three priority in their organizations.

According to a statement by Ian Michiels, research director of Aberdeen's Customer Management Technologies Group (CMTG), SPM "is not just about technology. It's about using the technology to support performance management practices and processes which tie operational execution to business objectives. The Best-in-Class [companies] demonstrate an affinity for data-driven decisions. SPM initiatives will continue to grow as organizations start to realize that technology alone is only one ingredient to superior performance."

"Lack of automation around sales management means manual processes become cumbersome and costly, and it's difficult to rapidly adapt to market volatility," says Alex Jefferies, senior research associate in Aberdeen's CMTG, in a statement. "All respondents want sales to be selling as much as possible to get their share of the opportunities. This means sales must be compensated with realistic incentives that are in line with the business strategy, and not wasting time on shadow accounting or selling the wrong products. The holistic SPM approach uses elements of [incentive and commissions management], process optimization, and business goals to identify exactly what products or services to sell, how to sell them, how to incentivize the sales force to maximize the opportunity in the market, and how to maximize resources to meet business objectives."

Many industry consultants argue that applying technology to a broken sales management process will merely automate that flawed process. On the contrary, there is technology in the market today that targets the broken processes themselves, with the intent of correcting them. 

As with CRM, adoption and utilization of SPM hinges on the effective use of data. The technology, for example, has to be accessible during the coaching session. The critical abilities to coach on the spot and track progress will enable immediate follow-ups with the salesperson, will increase accountability, and will help create an ongoing dialogue between coaching and leading. This combination will make salespeople more effective and more productive.

CRM was a necessity. SPM is the new necessity. Tracking, monitoring, and managing your customers daily is now a given -- but salespeople need to be tracked, monitored, and managed just as much, and the technology to do it is available.


About the Author

Patrick Stakenas, founder and chief executive officer of ForceLogix, a provider of sales performance management solutions, is a frequent guest lecturer on sales performance, CRM, and enterprise technology. He has an Executive Management Certificate from Northwestern's Kellogg School of Business and a BA in Business Management. He can be reached at pstakenas@forcelogix.com.

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