A Rising Focus on Sales Performance Management (SPM)

A Rising Focus on Sales Performance Management (SPM)

A successful salesforce can be a double-edged sword. Sure, more sales usually mean additional revenue and a healthy growth curve, but it can also bring unwanted attention. Top performers are constantly being poached by competitors who offer new opportunities and better compensation packages. Holding onto talent falls to compensation managers who are often underappreciated, forced to wear multiple hats while working for various internal clients with often competing interests.

In fact, creating the appropriate compensation packages requires a delicate balancing act between sales, finance, operations, and HR. At one end, you have the sales leadership that wants to do everything it can to motivate, reward and keep its top salespeople. On the other, you have the finance team that views compensation—especially commissions—as an expenditure that needs to be monitored and tamed. Operations and HR are caught somewhere in the middle—each with their own focus and priorities. In order to achieve a balance, all four need to work together to plan company growth, set sales quotas and allocate appropriate resources.

Unfortunately, it doesn’t always work that way.

All too often, compensation administrators are left on their own, out in a silo, trying to guess how to strike the right balance. They have essentially become customer relationship managers, working closely with each salesperson about deeply personal and private aspects of their lives, listening to their hopes, aspirations, and complaints. The compensation analysis team is working longer hours and is struggling to manage its time and expectations. The result is a compensation strategy that relies on its ability to react to events through the rear-view mirror rather than proactively assessing and anticipating likely outcomes through the front windshield.

Fortunately, the right Sales Performance Management (SPM) solution can help streamline compensation and make administrators more responsive to real-time conditions. They can do this by integrating CRM, ERP, HR and finance systems on a central compensation platform, helping managers and administrators from across the company take control of operations while eliminating surprises and making strategic choices for their territories, quotas and incentive programs. This frees up time for compensation analysts, allowing them to focus on more strategic tasks that proactively influence salesperson behaviors.

SPM Solutions Provide Actionable Information Across the Organization
In order to be proactive and truly responsive to current demands, SPM solutions need to feed real-time compensation information to analysts, to the sales force and to the management team making strategic business decisions.

Analyst Calculation Validation
Most people don’t realize that compensation can be extremely complex. At large organizations, it’s not uncommon for a single sale to generate more than 40 different commission transactions across the company as various salespeople, managers and executives cash in. With some companies processing thousands of sales per day, the sheer volume can be overwhelming as administrators need to make sure the right people get paid the appropriate amount.

Providing the appropriate compensation tools to analysts and administrators is vital to making sure everyone is content with their current compensation state. How these tools are implemented also makes a big difference as they require careful integration across so many different business systems from finance and payroll to CRM and ERP. It’s important to work with an integrator that has experience with your SPM solution to iron out all the common integration pitfalls that may occur. Implemented correctly, your administrators should have the information they need to analyze compensation packages, proactively monitor your current compensation state and answer any questions that arise.

Salesforce Reporting
Sales reps are always going to have questions. Can you blame them? Compensation packages are complex and are extremely important to each individual. Easy access to dashboards can go a long way toward keeping salespeople informed while proactively resolving any issues that arise. Seamless reporting can reduce salesforce requests by half, freeing up time that compensation administrators and analysts can use to model better plans that drive sales behaviors.

Business Analysis and Planning
The management team is responsible for optimizing operations and eking out the highest margins possible from the business. They need real-time compensation information at their fingertips that allows them to evaluate the right balance between rewarding top performers and maximizing margins. SPM solutions can provide easy-to-read, high-level dashboards, and charts that make it easier to grasp exactly how different compensation packages affect the bottom line and drive various sales behaviors.

SPM solutions can also help managers detect trends that may help with future planning or uncover a previously unseen market opportunity. There are very real reasons behind why a particular group of sales reps is able to sell specific product lines to certain customer groups in a single month. The right SPM solution can create a predictive data model of what is needed to maximize sales.

Compensation administrators and analysts wear too many hats today, wasting much of their time on manual processes that fail to uncover actionable information. The right SPM solution can centralize and integrate pertinent information from across the organization in a single, intuitive compensation reporting and analysis platform that saves time while optimizing sales performance. A proactive compensation strategy enables companies to better manage performance, motivate behaviors and better scale best practices across the sales organization.

Ready to learn more?
Config Consultants is a systems implementer focused on creating Digital Transformations strategies. Our A5 methodology modernizes your lead to cash process and makes your supply chain lean by leveraging industry-leading packaged software, such as Salesforce, Oracle, Apttus, and Anaplan.

Interested in migrating to a modern SPM solution, contact us to schedule a consultation.


By Vijay Bhamidipati