What is Sales Performance Management (SPM) Software?
Sales performance management is the practice of applying corporate performance management tactics to sales teams and determining how to best encourage the kinds of behavior that drive sales. SPM is concerned with sales knowledge (best practices), sales rep motivation (incentives, commissions, and gamification), and sales accountability (projected revenue, corporate goals, etc.).
This type of software is closely related to sales incentive compensation management (ICM) software. In fact, sales performance management suites often include ICM capabilities. However, SPM solutions typically have a broader range of functionality and more advanced sales analytics capabilities. For example, many SPM tools include gamification capabilities, such as allowing managers to set up sales contests or keep track of sales goals on public leaderboards.
The goal of SPM is to educate and motivate salespeople to set goals and satisfy customers. Sales performance management software provides a way for managers to track sales performance on a per rep and team basis based on key performance indicators (KPIs). By linking performance and revenue analytics, SPM solutions enable sales leaders to monitor and guide sales reps in ways that improve their ability to sell. They also provide sales reps with insights into their own performance and the performance of others.
Most SPM products perform these five core functions:
individual and team-based sales performance tracking
Advanced sales analytics and reporting
incentive compensation management
Measuring Sales Performance
Sales performance management tools use sales key performance indicators (KPIs) to track, report on, and influence how well salespeople and teams are performing. SPM platforms aim to understand sales success factors, and how these factors influence the bottom line.
The key questions asked by a sales performance manager, and addressed by SPM software, are:
What makes a sales rep successful? What does success look like at this organization?
What is the impact of sales performance on revenue?
How can I adjust sales performance—through coaching, opportunity and workflow management, territory and quota assignments, goal alignment, incentive plans, etc.—in order to optimize revenue?
Sales Performance Management Software Features
SPM spans a major swath of the Sales Enablement platforms umbrella category. Depending on the approach a company takes to managing sales performance—namely, the relevant KPIs a sales manager is interested in tracking and optimizing—the most useful SPM software will offer a combination of features that enable a manager to view and fine-tune interrelated sales processes.
Most sales performance management solutions will cover these key capability areas:
Incentive compensation management (ICM)
ICM (Incentive compensation management) allows managers and reps to understand how earnings are related to performance and how changes in performance would affect earnings. It may also include functionality for commission/bonus accounting and fulfillment and might support non-monetary incentives.
From an SPM perspective, sales territories should be assigned and monitored so that they yield the most net new revenue. SPM platforms may allow managers to take into account sales cycle lengths and revenue yield by type of deal and by rep, revenue yield vs. incentive over a period of time, etc. Managers should balance territory assignments to facilitate improvements in individual rep performance as well as overall sales team performance.
Related to territory management, quota management involves planning for, assigning, and managing sales quotas across individual sales reps. Some platforms include the ability to set rule-based quotes, have top-down cascading quotas, or using Machine Learning (ML) technology to optimize quota assignments. The ultimate goal of quota management is to optimize quota assignments in a way that engages sales reps and enables them to meet their targets. Quota analytics help sales leaders track performance across reps and identify where quotas may need to be adjusted.
Sales planning and forecasting
Sales planning and forecasting includes goal planning and goal alignment features, as well as tools that help managers explore what-if scenarios and plan changes to optimize sales performance. This can also include mechanisms for managers and coaches to provide informal feedback to individual reps, or conduct performance reviews and job evaluations.
Analytics and reporting
Sales performance reporting and analytics, which tie together sales KPIs to provide a comprehensive view of the relationship between revenue and sales behavior, compensation, and pipeline management, as well as change over time. Many sales forecasting point solutions exist to help users generate expected deals and projected revenue reports; these tend to focus less on adjusting/optimizing sales behavior, and many are really BI tools with a sales use case.
Predictive sales analytics is another type of advanced sales analytics tool that can generate highly specific, highly accurate sets of expectations; however, predictive analytics tools for sales and marketing tend to focus on models that use machine learning to dynamically update expectations, which is very different than the type of overview sales forecast reports that are traditionally used in quarterly planning, for example.
Sales coaching analysis
This includes things like sales playbooks, skill development, call recording and coaching, onboarding/new hire workflows, etc. In SPM software, these capabilities are designed around best practices for optimal performance, and may be triggered by or tailored to a particular rep’s performance. Some sales training point solutions are HR or corporate learning management products, where “Sales” is a specific use case. Other products like Gong.io and Chorus.ai have been developed specifically for the sales use case.
Sales gamification features can contribute to ICM and/or sales coaching and goal setting. Gamification, along with compensation, plays a large role in the “motivation” aspect of SPM. This can help individual sales reps stay engaged and motivated, while also fostering a sense of team-based achievement. Features may include the ability to set up contents among reps or keeping track of rep performance on a leaderboard.
SPM Software Comparison
Before investing in a new sales performance management product, consider these key factors while evaluating your options:
Would it make more sense for your business to invest in a larger sales cloud that includes an SPM module, or a stand-alone SPM solution? Vendors like Oracle, Salesforce, and SAP all offer sales cloud suites that include sales performance management as a key capability. If your business has already invested in other parts of these sales clouds or will need to in the future, purchasing a larger sales cloud platform may be the right choice. On the other hand, if your business already has the other pieces of your sales or marketing tech stack in place and needs a stand-alone SPM solution, smaller solutions may be the best choice.
Some SPM-related tools specialize in sales coaching as a way to increase sales enablement. Products like Gong.io and Chorus.ai provide a set of robust coaching features, including call recordings and playback, call analysis and coaching, and delivering meeting intelligence. However, these tools typically don’t offer quota, territory, or incentive compensation management. With this in mind, is your business looking primarily for a sales coaching solution, or a fully-featured sales performance management platform?
Pricing for sales performance management software typically depends on a few variables; the number of sales reps to manage, the range of features required, and whether or not your business is purchasing a larger sales cloud suite that incorporates SPM or a stand-alone sales performance management solution.
Vendors that include SPM as part of their larger sales cloud offering may charge a higher price than SPM point-solution providers. Most vendors do not disclose pricing information directly on their website, but will provide a quote upon request.