What is Sales Performance Management (SPM)?

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Driving profitable sales is top of mind for many executives. However, sales leaders face the challenge of increasing sales effectiveness to coax greater revenue from their sales forces — a process that has been treated more like an art, instead of a science.

Business challenges to sales effectiveness include:

  • Inability to plan and model effectively — planning sales quotas, forecasting incentive spend, and modeling territories on disparate multiple spreadsheets, often with out-of-date information
  • Changing systems to reflect new sales initiatives — multiple systems that are inflexible and costly to change, meaning sales incentives are misaligned with corporate initiatives
  • Inability to align sales with corporate initiatives — employees and the distribution channels do not have a clear understanding of how they are being measured, which means sales days will be lost due to shadow accounting and finance will spend too much time handling disputes
  • Inability to analyze performance and make mid-course corrections — without analytical tools, your company can't identify opportunities, make timely mid-course corrections or pre-empt financial surprises

Sales Performance Management (SPM) is an integrated framework that enables organizations to plan and model sales strategies and ensure timely execution of sales initiatives, while ensuring both front-line sales people and decision-makers have visibility into performance.

 

"Sales performance management represents the next generation of best practices for sales. It establishes a strong foundation for improving sales execution."

— Gartner Inc., "Introducing the Concept of Sales Performance Management" by Michael Dunne, 21 June 2006

 

Without a sales performance management system that can meet the complex information demands of a fast-changing sales organization, organizations face key obstacles to success in maximizing sales effectiveness and overall revenue performance. SPM uses technology to improve the integration, orchestration and effectiveness of territory management, sales quota management, Enterprise Incentive Management (EIM), and related analyses.

 

"I don't need to guess — I can now go back to management with a game plan that I feel confident in to get there."

— Terry Gilbert
VP of Compensation Infrastructure and Incentive Management, Wachovia

 

Business benefits of SPM include:

  • Better sales targeting through a better understanding of market trends and better targeting of sales across territories.
  • Reduced sales turnover and improved productivity by allocating sales opportunities more fairly.
  • More timely and realistic quota setting with reduced risk of attainment shortfalls, or un-forecasted sales incentive exposure.
  • Compelling, timely, and measurable sales incentive plans that successfully influence sales behavior.
  • Better management of sales resources to ensure to target higher revenue generating activities cost effectively.
  • More sales satisfaction through faster deployment of sales plans, more equitable territories and quotas, and improved confidence in their pay for performance.
  • Improved agility in understanding market drivers and the ability to make mid-course corrections.
  • Reduced turnover, improved resource allocations, better sales effectiveness.

 

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