Measuring Performance of Sales Professionals

[Glen Callaghan]

Hi there,
I'm wondering do any members have good mechanisms in place for measuring performance of their Sales Managers/Consultants. We currently have an in-house generic performance management system which all our employees use for their interim & annual reviews, however I feel it is too generic for our Sales teams and would like to explore some more robust systems or look at ways of improving our own system.

Our sales cycles are generally long and quiet complex. Each sales person is set an annual target for new sales but yet we have people not reaching them and they are not being managed because
a) our performance management system doesn’t record “sales” information
b) in my experience sales directors do not want to deal with “managing” team members (I know a broad statement but unfortunately I’ve not met many that are good at sales management & people management)
c) they have good relationships with their existing clients and this is keeping the heat off them bringing in new sales –but this cannot be sustainable long term, sales targets must also be met.

If anyone has experience of designing performance management tools for Sales professionals and are able to share experiences I'd appreciate input.


Thanks
Glen

[Moz]

Glen,

I think you are right to be skeptical of a generic performance management system. You need to identify the key performance indicators that are relevant to your business.

Certain indicators could show what new business activity is taking place, and then there might be other indicators around current account management and repeat business. The former might include number of cold calls, visits to prospective new clients, orders taken from new clients. The latter might ensure that the sales person is keeping in regular contact with all on-going customers and that nothing is falling through the cracks. It's hard to be more specific without knowing your business.

However in my experience KPIs should be "indicators" only and they need to be defined with great care so as to not drive poor behaviour.

For example, I know some recruitment companies who are KPI driven have "number of CVs sent out" as a KPI. So as the measurement window for a KPI approaches, which is often weekly, the consultant just sends out a bunch of CVs to customers regardless of whether they are a good fit for the customer's needs. So if a performance management system is automated this consultant stays under the radar despite the fact that they could be damaging the reputation of the business.

The constant drive to develop 'new business' can result in current customers not being serviced properly.

I've seen many other examples of KPIs resulting in unintended and unwanted outcomes in both the sales and sales management.

At the end of the day however, actual sales (revenue generated) has to be in there, as does the cost of sales.

Personally I believe a holistic approach is required when managing the performance of sales people - because KPIs often don't tell the whole story.

As for your comments re sales directors not wanting to "manage" team members, this isn't surprising because many sales directors are in that position because they were a good sales person themselves. That doesn't necessarily make them a good sales manager. Whats more, if they still have their own accounts to manager and sales quotas to achieve, the "management" of individual sales people probably conflicts with what they feel they should be doing - selling!