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Exclusive Q&A
What is Sales Performance Management (SPM) and why is it important?
In today’s challenging selling environment—with a broader buying population, better-educated buyers, disruptive economic situations and increased global competition—now more than ever, sales organizations need to be ensuring they are positioned for success.
Aligning sales teams to company objectives is vital. This is achieved through territory, quota and incentive compensation planning, and by monitoring progress against goals through pipeline management and forecasting. This overall approach is known as Sales Performance Management.
What are important planning capabilities for SPM applications?
The first key aspect of an effective SPM application is that it must support all the steps in creating, executing and adjusting (re-planning) the planning model, recognizing that markets are not static and organizations need to be responsive to changing conditions.
Specifically, the application should have the ability to create territories in a way that ensures equity across the sales team. Territory segmentation should not be only based on geography; other attributes should be supported. The application should allow for quotas to be linked to overall corporate financial targets and allocated accordingly. Similarly, compensation needs to be linked to corporate product and service targets instead of just an aggregate number.
How about monitoring and forecasting capabilities?
Why should an organization consider adopting a unified Revenue Management approach?
For many organizations, adoption of the subscription business model and the growth of additional selling channels (such as digital commerce) leads to a broadening of the number of roles directly involved with generating revenue. The economics of the subscription model result in a shift away from focusing exclusively on new business, to a broader view in which retention and expansion within existing customers is of equal importance.
This means that the approach and techniques used in SPM can be adapted and used for a broader revenue supporting team, including those roles involved with customer service and success, expansion teams and marketing.
Why is integration with Finance and HR important?
As initial targets and overall compensation are typically set in the Finance and HR departments respectively, integration is important not just for the initial annual targets, but also to enable any revenue projections and proposed adjustments to be incorporated into overall financial plans and HR reporting.
Forward visibility into future sales and revenue is important for all types of organizations, either for public reporting, investors, or executive management. Any adjustments to projections or costs need to be integrated into overall financial reports and projection.
And as the number of roles that are directly involved with revenue expands to include customer service and success, expansion teams, and marketing, the typical HR systems will not support the shift to variable pay based on revenue transactions and target attainment. This means an SPM platform should be used to compute the necessary payment information.
Exclusive Q&A
What is Sales Performance Management (SPM) and why is it important?
In today’s challenging selling environment—with a broader buying population, better-educated buyers, disruptive economic situations and increased global competition—now more than ever, sales organizations need to be ensuring they are positioned for success.
Aligning sales teams to company objectives is vital. This is achieved through territory, quota and incentive compensation planning, and by monitoring progress against goals through pipeline management and forecasting. This overall approach is known as Sales Performance Management.
What are important planning capabilities for SPM applications?
The first key aspect of an effective SPM application is that it must support all the steps in creating, executing and adjusting (re-planning) the planning model, recognizing that markets are not static and organizations need to be responsive to changing conditions.
Specifically, the application should have the ability to create territories in a way that ensures equity across the sales team. Territory segmentation should not be only based on geography; other attributes should be supported. The application should allow for quotas to be linked to overall corporate financial targets and allocated accordingly. Similarly, compensation needs to be linked to corporate product and service targets instead of just an aggregate number.
How about monitoring and forecasting capabilities?
Why should an organization consider adopting a unified Revenue Management approach?
For many organizations, adoption of the subscription business model and the growth of additional selling channels (such as digital commerce) leads to a broadening of the number of roles directly involved with generating revenue. The economics of the subscription model result in a shift away from focusing exclusively on new business, to a broader view in which retention and expansion within existing customers is of equal importance.
This means that the approach and techniques used in SPM can be adapted and used for a broader revenue supporting team, including those roles involved with customer service and success, expansion teams and marketing.
Why is integration with Finance and HR important?
As initial targets and overall compensation are typically set in the Finance and HR departments respectively, integration is important not just for the initial annual targets, but also to enable any revenue projections and proposed adjustments to be incorporated into overall financial plans and HR reporting.
Forward visibility into future sales and revenue is important for all types of organizations, either for public reporting, investors, or executive management. Any adjustments to projections or costs need to be integrated into overall financial reports and projection.
And as the number of roles that are directly involved with revenue expands to include customer service and success, expansion teams, and marketing, the typical HR systems will not support the shift to variable pay based on revenue transactions and target attainment. This means an SPM platform should be used to compute the necessary payment information.
Stephen Hurrell
Director of Research, Office of Revenue
Stephen Hurrell leads the Office of Revenue software research and advisory expertise at ISG Software Research and guides leaders in the applications and technology for buying and selling products and services to maximize revenue. His topics of coverage include digital commerce, partner management, revenue management, sales engagement, revenue performance management and subscription management.