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"With SAP CRM, you transform your direct and indirect
sales force into a team of knowledgeable and trusted advisors – fostering efficient
collaboration between sales, marketing, and service teams to align efforts on fulfilling customer needs. "
Source : SAP
Sales Performance Management
Performance Management is also known as :
Performance Management,
Effective Performance Management,
Innovation Management,
Learn Performance,
New Performance Managment,
Performance Management Virtualised,
Quality Performance Reviews,
Performance Management Refers,
Performance Management Basic,
Performance Management Overview,
Performance Management Technical,
Performance Management Process,
Enterprise Performance Management,
Performance Management System,
Performance Management Business,
Provider of Performance Management,
Performance Management Software,
Performance Management Forms,
Performance Management Definition,
Performance Managementtools,
Performance Measurement,
Performance Appraisal,
Performance Management Articles,
Overall Performance,
Performance Management Guidance,
Managing Employee Performance,
Workforce Performance Management,
Performance Management Initiatives,
Performance Management Applications,
Business Performance Management,
Performance Management Guide,
Used Performance Management,
Learn Performance Management,
Performance Management Resource,
Performance Management Software,
Info on Performance Management.
EXECUTIVE SUMMARY
SALES PRODUCTIVITY DRIVES REVENUE AND PROFITABILITY
The key to a productive sales force is ensuring that
salespeople concentrate on acquiring, growing,
and retaining profitable relationships within their
account bases. This requires a clear and detailed
view of prospects, customers, and the market - and
the ability to turn that insight into action. Companies
with highly productive sales forces do just that.
Changes in customer buying behavior,
increased global competition, continued
tight financial markets, and higher
customer expectations: these are just
some of the challenges forcing many
sales organizations to redesign and, in
some cases, reinvent how they sell.
Such efforts are particularly prevalent
in highly competitive environments,
saturated markets, and industry sectors
in which products are not true
differentiators.
Many companies establish formal sales
processes to boost productivity in their
sales organizations. The positive
effects of more productive sales forces
extend beyond simple cost reduction;
they help increase revenue and the likelihood
of higher profit margins as well.
To improve the performance of their
sales operations, successful organizations
employ best practices to help
them:
- Define and measure key performance
indicators (KPIs)
- Rate the value of each account and
sales opportunity
- Align salespeople and accounts
- Focus on productive activities
The key to a productive sales force is
ensuring that salespeople concentrate
on acquiring, growing, and retaining
profitable relationships within their
account bases. This requires a clear
and detailed view of prospects, customers,
and the market - and the ability
to turn that insight into action. Companies
with highly productive sales forces
do just that.
To achieve this superior level of sales
efficiency, you need a sales force
automation (SFA) system that supports
the management of pipeline performance
and territory alignment. It must
also help you attain insights by analyzing
customer relationship management
(CRM) and other enterprise application
data.
OPTIMIZE SALES OPPORTUNITIES
EFFECTIVE SALES PROCESSES AND SYSTEM SUPPORT ARE KEY TO SUCCESS
After years of deploying systems and
processes merely to control costs,
companies are now deploying systems
that will help drive profitable growth. To
maximize their profits, many companies
seek to increase revenue and margins
and improve the productivity of their
sales forces. Enhanced productivity
that involves your sales organization
concentrating on your most valuable
customers and prospects can reduce
costs while boosting revenue and
margins.
Your sales force must operate at the
highest level of productivity to acquire,
grow, and retain profitable customer
relationships. To meet this challenge,
many companies establish formal sales
processes and provide all required
customer information to their sales
professionals in usable and useful ways
so they can turn insight into action.
Implementing an effective sales process
is an enterprise-wide endeavor
that requires comprehensive knowledge
of your business and sales
cycles. An integral part of that knowledge
is recognizing that sales processes,
which entail sales-cycle management
and execution, involve both early
planning and ongoing performance
measurements.
Developing a successful sales process
or enhancing an existing one involves
several challenges. You need to match
the appropriate sales professionals
with the right accounts so that your
best salespeople work with your most
valuable customers. You need an efficient
way to measure your sales performance
and success. You must ensure
that your sales professionals focus on
productive activities such as determining
their most important accounts and
planning appropriate activities for them.
You must also ensure that your salespeople
apply the right strategies to
the right opportunities and continually
make their quotas.
To efficiently address these challenges
and become more process oriented,
you need adequate system support.
Because success requires the integration
of huge amounts of data from
CRM and other enterprise application
systems, you must employ automation
rather than manual efforts to measure
the performance of predefined KPIs.
Many companies without the necessary
system support eventually halt
their efforts to measure sales performance
after only a few months.
They do so because of the enormous
amount of labor needed to gather
all the data required to achieve beneficial
results.
System support is equally important
for your sales managers and representatives.
They need the essential functionality
of an SFA system to help
manage pipeline performance, align
territories, and analyze data. Inadequate
system support will hinder their
abilities to perform timely and accurate
value-rating activities, assign resources,
evaluate opportunities, and plan
productive sales activities. It is, therefore,
critical to deploy the appropriate
SFA system before you attempt to
address your sales processes and
anticipated objectives.
DETERMINE KEY PERFORMANCE INDICATORS
THE RIGHT PERFORMANCE MEASUREMENTS CAN MAXIMIZE SALES OPPORTUNITIES
Sales analytics, which you can use to
assess KPIs, offer enormous opportunities
to improve the ways you measure
your sales organization. Industry
analysts, for example, believe an average
organization loses a great deal of
sales if it has limited visibility into sales
activities.
Deploying sales-analytical functionality
can help you dramatically reduce lost
opportunities and improve the performance
of your sales organization. It
can help you improve productivity from
existing sales resources, realize faster
productivity gains from new salespeople,
increase penetration into existing
accounts, and expand your customer
base.
These critical objectives form the basis
for implementing a sales-performance
measurement plan. KPIs and the right
performance-measurement tools are
critical to the creation of a successful
sales process, which includes measurement,
control, and correction
efforts.
Continuous measurements of your
sales organization according to the
following KPIs are critical to success:
- Percentage of sales reps achieving
quotas
- Increase in success rates at each
major stage of the sales cycle
- Pipeline required to make quota
(based on the difference between
actual sales and quota)
- Close rates of forecasted deals
- Percentage of visits covering
predefined objectives or success
factors
- Quotes per order
- Coverage rates, including visits
and calls, of your most important
customers
- Sales-force turnover rate
Measuring performance based on
your top achievers also helps your
sales professionals learn what they
need to do to attain greater success.
The knowledge gained from such
measurements can help reduce the
gap between your leading salespeople
and the rest of your sales force.
Establish an Effective Sales Process
A proven way to establish a successful
sales process is to design a performance-
indication program to help your
salespeople recognize their objectives
and the way they measure success
based on predefined KPIs. These
elements will help define the scope
of the sales process and the key areas
that need improvement.
It is important to ensure that some
KPIs - such as quotes per order, percentage
of visits covering predefined
KPIs, and coverage rate - are available
in real time. A lag in access to such
data can detract from the usefulness of
the measurements and hinder the reaction
time to items that require attention.
With the rapid pace of today's sales
environment, any delay can have a negative
impact on the planning of required
activities. In addition, performance indicators
that help you understand pitfalls
and quickly capitalize on opportunities
are often of greatest importance at
critical stages of the sales and reporting
cycles.
Start with a Simple Report
Successful performance-management
efforts involve more than reporting;
they support informed sales decisions
and improved win rates. The first element,
however, is a simple report from
which you attain information about
effective activities that salespeople
can undertake to close deals. Salespeople,
for example, can use report
information to determine that their
pipelines are insufficient to reach future
sales targets, identify new opportunities,
increase the value of deals, or
close deals earlier. They can combine
such data with past experiences to
identify required actions.
By including the right performance
indicators, you can help salespeople
use the reports to determine the reasons
for certain occurrences, such
as whether pipeline shortfalls result
from a lack of prospecting quantity or
quality. Performance indicators can
help salespeople determine how many
additional prospects to contact daily or
what benefits they would achieve by
spending a certain amount of additional
time with each new prospect to build
greater rapport. Such KPIs include
raw metrics linked to benchmarks or
simulation processes to answer whatif
scenarios.
IDENTIFY YOUR MOST VALUABLE ACCOUNTS
SALES FORCE AUTOMATION OFFERS A ROBUST APPROACH TO VALUE-RANKING CUSTOMERS
Deploying sales-analytical functionality can help
you dramatically reduce lost opportunities and improve
the performance of your sales organization.
It can help you improve productivity from existing
sales resources, realize faster productivity gains
from new salespeople, increase penetration into
existing accounts, and expand your customer base.
In the past, customer opportunities
were more plentiful, and a shotgun
approach to account management
was often successful. But increased
competition, decreased customer loyalty,
and inflated quotas have changed
today's sales environment. As a result,
sales take longer to complete, opportunities
are more complex, and salespeople
must prioritize their actions
more efficiently to remain successful.
The key to making the right salesmanagement
decisions and allocating
the appropriate time and resources to
each account begins with a thorough
understanding of your account base.
Real-time visibility into the value of
accounts increases your ability to prioritize
customer opportunities and make
the right business choices.
To rate the value of your customers
correctly, you need to analyze them
from different perspectives. Many
sales organizations rank their customers
on "A-B-C" or "gold-silver-bronze"
scales. While such simplistic approaches
provide salespeople with quick
indications of the value of certain
accounts, it is unclear what they actually
mean. You may, for example, have
to downgrade historically steady
customers who experience financial
troubles, or upgrade customers who
usually buy products from competitors
but have recently become disenchanted
with those companies' services.
You may also have to determine which
customers require priority service.
Without a clear way to rate the value
of each account, individual salespeople
are likely to develop disparate ap -
proa ches to suit their specific needs.
An SFA system with robust valueranking
functionality ensures that your
sales professionals have real-time
access to information about the value
of their accounts. It also facilitates
data main tenance by updating each
account's revenue or margin contribution
in real time - eliminating the need
to update this data at fixed periods.
You have to consider quantitative factors
(such as revenue and profit) and
qualitative factors (such as the loyalty
of customers), along with account histories
and outlooks, to rate the value
of specific accounts successfully. Such
factors help you determine:
- The total volume of products or
services that a customer buys from
you and your competitors
- The outlook for the same customer's
potential to purchase products or
services from you and your
competitors
- How much the customer has bought
from you during a specified time
frame
- The outlook for the customer's
potential to buy products or services
from you instead of your competitors
After combining and structuring this
information in an automated valueranking
tool, you can make effective
prioritization decisions. You can also
use the tool to segment specific
groups, such as large inactive accounts
with strong future potential. You can
employ this grouping technique to plan
your strategy, forecast results, and
assign resources.
ALIGN YOUR MOST PRODUCTIVE RESOURCES
THE PROPER ALIGNMENT OF SALESPEOPLE AND ACCOUNTS CAN IMPROVE WIN RATES
The key to making the right sales-management decisions
and allocating the appropriate time and resources to
each account begins with a thorough understanding of
your account base. Real-time visibility into the value of
accounts increases your ability to prioritize customer
opportunities and make the right business choices.
The alignment of salespeople and
accounts can have positive impacts on
sales organizations. Proper alignment
can help sales managers achieve
enhanced productivity, lower employee
turnover, higher revenue per account
and salesperson, and a more profitable
sales operation.
To optimize the alignment of salespeople
and customers, however, you
must do more than simply choose an
approach. The alignment process is
complex and requires management
insight, the involvement of your salespeople,
and constant monitoring - all
of which you can achieve only with the
support of a powerful SFA system.
Companies employ different methods
of assigning accounts to their salespeople.
You may choose to designate
accounts based on geography and
hope to turn the savings in travel time
into extra sales. You may assign
accounts based on vertical-industry
segments, anticipating that salespeople
will make more sales by gaining greater
understanding of specific industries
and customer needs. You may align
older, experienced salespeople with
valuable current customers and assign
younger, more energetic salespeople
to the higher risk-and-reward challenges
of finding new customers.
You may also decide to use a com bination
of options or select a completely
different approach.
Whatever your choice, it is critical to
do more than protect loyal salespeople
by offering them the easy accounts.
You need to balance the inclination to
reward loyal and effective salespeople
with the need to assign strong employees
to the most challenging accounts
that offer the greatest potential.
Examples of successful territory re -
a lign ment abound. A technology manufacturer
achieved substantial revenue
and productivity increases after hiring
an external consulting firm to target
several geographically based territories.
The consultancy helped the company
recognize that it could attain the
same revenue by dividing many of its
top territories in half and sending salespeople
to visit new as well as existing
customers. In the fiscal year following
the changes, the territories that the
manufacturer partitioned produced as
much business as the original territory,
indicating that the company could
set and achieve the same revenue
goals with their salespeople covering
smaller areas.
Executives at another technology firm
realized that certain salespeople were
highly successful in some accounts and
not profitable in others. As a result, the
company would continually reassign
salespeople to accounts for which they
were best suited. For example, the
company would avoid assigning salespeople
with strong business-value selling
skills but weaker technology abilities
to accounts that required technical
aptitude. While managers who
reviewed account alignments weekly
recognized the costs associated with
instability in account coverage, they did
not hesitate to shift resources on
short notice. Though time-consuming,
this process had a dramatic and
positive impact on the company's
opportunity win-rate and customersatisfaction
levels.
FOCUS ON PRODUCTIVE USE OF TIME AND RESOURCES
SALES FORCE AUTOMATION CAN EMPOWER SALESPEOPLE TO PRIORITIZE ACTIVITIES
The proper alignment of salespeople and accounts
can help sales managers achieve enhanced productivity,
lower employee turnover, higher revenue per
account and salesperson, and a more profitable
sales operation.
It is no longer enough simply to forge
contacts with customers. To succeed
in an environment in which sellers and
buyers are extremely busy, you need
a strategy that will maximize their contacts
by planning activities at the right
times for the right reasons.
Productive activities are at the core
of successful sales organizations.
Although a salesperson's sales talent,
ability to identify customers' needs
quickly, and other soft skills remain
important, salespeople must rapidly
determine which activities and
accounts deserve their time. On a
basic level, salespeople must determine
which prospects on their lists
to call. To determine priorities quickly
and appropriately, they need information
about when someone last contacted
a prospective customer and
that prospect's value potential to the
company. This part of the sales process
can help salespeople find new
opportunities rather than spend time
on activities that are likely to yield fewer
sales.
The most common measurement of
sales productivity is how salespeople
use their time, but you must also consider
other activities as well. In fact,
thriving sales organizations empower
their salespeople to prioritize productive
activities that ensure they spend
time with customers representing the
best opportunities.
A leading high-tech manufacturer, for
example, released updates of its computer
product lines as technology
improved. This strategy worked well
with customers who adopted technology
early, but not with the buying cycles
of customers who followed set upgrade
paths and renewed their products
every few years. The manufacturer's
salespeople knew which customers
would likely purchase new products
immediately. They recognized the benefit
of not offering such customers large
discounts on outgoing product lines or
they would likely lose sales for the new
technology. Salespeople also knew
which customers were unlikely to purchase
new products immediately but
were potential buyers of outgoing product
lines at discount prices.
The right SFA system can help you
accomplish all such objectives. It can
also help you partially automate and
enhance activity planning. Another
technology manufacturer, for example,
used customer data to generate and
send activity proposals, with deadlines,
to each salesperson automatically via
its SFA system. The salespeople could
then decide whether or how to act on
the proposals. The automated process
required no administrative work from
the salespeople, who were able to
manage customer relationships more
efficiently and effectively.
UNDERSTAND AND EVALUATE YOUR OPPORTUNITIES
SUCCESSFUL SALES PROCESSES ENABLE YOU TO COMPARE AND OPTIMIZE OPPORTUNITIES
While salespeople typically want to pursue every
opportunity, smart sales teams realize that some
opportunities waste time and resources. The right
sales force automation system can help determine
priorities and create action plans to achieve the best
results.
Opportunities form the basis of sales
pipelines, and salespeople spend most
of their time working on them. As a
result, it is important to deploy a process
that helps you better understand
and compare opportunities so you can
eventually derive more revenue and
profitability from them.
Many sales organizations manage their
pipelines and sales processes by targeting
opportunities, which represent
qualified chances to make sales to
accounts. Most organizations try to
determine the validity of opportunities
by having sales managers informally
query salespeople about the details of
their opportunities. Sales managers
can use this process to control forecasts.
They can also suggest activities
and deliverables to guide salespeople
through the opportunity phases. The
process, however, does not enable
salespeople to fully understand each
opportunity.
Successful sales organizations provide
standardized structures and processes,
based on sales methodology implementations
or company best practices,
to evaluate opportunities. Such frameworks
use the following defined criteria
to help salespeople quickly assign
scores to every opportunity:
- A customer's financial ability or
budget
- The financial value of the purchasing
decision for a customer
- Competitors whom a customer is
considering
- Your ability to contact a customer's
decision makers directly
If every salesperson follows the same
process, the management team can
attain a clear understanding of the
strength of sales forecasts. For example,
an opportunity in which a customer
has no budget is of no value, and therefore
would not appear in forecasting
reports.
Standardized processes also afford
sales managers access to information
they can use to guide their sales staffs
without having to interview each salesperson
individually. Sales managers
could, for example, offer to lend assistance
after determining when their
salespeople should contact potential
customers' decision makers.
Of even greater importance is a salesperson's
ability to compare and prioritize
all available opportunities in the
pipeline. A proper SFA system can help
determine priorities and create action
plans to achieve the best results. While
salespeople typically want to pursue
every opportunity, smart sales teams
realize that some opportunities waste
time and resources.
Opportunities are also connected to
sales stages, which divide an opportunity's
progression into distinct segments.
Sales stages are useful in
establishing time-frame benchmarks
and closely observing opportunities
that deviate from the norm. A company
may determine, for example, that 10
days is the average length of time for
an opportunity to remain in the information-
gathering stage before it moves
to the proposal stage. If an opportunity
does not reach the proposal stage for
more than 20 days, the company may
flag it as a potential problem and
require a review of activities that have
occurred to date. If, on the other hand,
the company completes the information-
gathering stage in one day, a similar
alarm may trigger a review to ensure
that customers are not using your proposals
as decoys in discussions with
competitors. Pipeline performancemanagement
functionality can help you
easily identify such abnormalities.
REVIEW YOUR OPPORTUNITIES AND ACTIVITIES
AN SFA-ENABLED REVIEW PROCESS CREATES A COLLABORATIVE ENVIRONMENT
While it may seem unusual to attain
significant benefits from sales reviews,
the knowledge transfer between managers
and salespeople can be substantial.
Ensuring a healthy relationship
between sales managers and salespeople
requires more than people
skills; you need a solid understanding
of how to deliver value to a customer.
SFA-generated reports measuring
win rates can help you assess the
increased success of your salespeople.
Thriving sales organizations
boost their
productivity, revenue,
and profits by deploying
customer relationship
management
systems to support
sales processes that
drive consistent
results and improved
performance.
Your sales organization maintains
reporting relationships among sales
professionals, managers, and executives.
These relationships are designed
to support accountability, guidance,
and direction from top to bottom.
Successful salespeople, who typically
represent some 20% of a typical sales
force, tend to be self-sufficient, selfmotivated,
and independent employees.
The other 80% of your sales
force, however, requires coaching,
advice, motivation, and supervision.
The relationship that exists between
salesperson and sales manager is critical.
Many salespeople, for example,
dislike micromanagement. Without
clear processes and tools, they may
harbor resentment about their managers,
believing they waste their time
with unneeded questions and tasks, try
to steal their successes, and diminish
their capacity to perform.
Companies that determine their salespeople
hold such beliefs must move
quickly to install processes, such as
opportunity reviews, that support collaboration.
Such processes help sales
managers stay informed about activities
in accounts and opportunities.
They also provide deeper insights into
strategy and tactics. Indeed, the key to
mutually beneficial relationships is the
ability of sales managers to support the
success of their salespeople.
A global IT leader recently established
a specialized review process that benefited
managers and salespeople alike.
Salespeople employed the pipeline performance-
management functionality
within the firm's SFA system to help
them quickly prepare for weekly update
meetings. The system provided information
about the number of their open
and closed deals, as well as how such
deals compared with their quota goals.
The reviews included discussions about
expected timelines, milestones, and the
resources required to reach their goals.
The system also defined unique ways
to flag stalled accounts and opportunities
so that managers could quickly
identify and resolve problems.
OPTIMIZE SALES PERFORMANCE WITH SAP® CUSTOMER RELATIONSHIP MANAGEMENT
SAP SOFTWARE ENABLES SALES PROCESSES THAT INCREASE PRODUCTIVITY
With global competition intensifying
today's sales-performance challenges,
successful companies boost their productivity,
revenue, and profits by
deploying CRM systems to support
sales processes that drive consistent
results and improved performance.
Companies can streamline many of
their SFA processes by implementing
the SAP® Customer Relationship Management
(SAP CRM) application. The
ability to rate and analyze customers
according to their value helps you manage
accounts so that you set and meet
the right objectives. You can use
defined criteria tailored to business processes
to assess opportunities and
ensure you concentrate on the opportunities
that drive higher revenues and
profitability. You can save time and
resources by quickly determining which
less-valuable opportunities to abandon.
SAP CRM provides sales professionals
and managers with pipeline performance-
management functionality they
can use to track performance and simulate
expected results based on realworld
metrics such as churn rates, quotas,
and expected year-over-year
growth. They can also work more
closely together to evaluate opportunities
and identify potential issues such
as stalled opportunities. Tighter collaboration
helps them make fast decisions
and plan appropriate activities easily
and quickly.
Your dynamic sales environment
requires you to react quickly to changes
in opportunities by reassigning
salespeople to accounts. The territory
management component in SAP CRM
makes such reassignments quick and
easy. In addition, SAP CRM helps your
sales organization capture the most relevant
information in real time, so you
can make faster decisions. Your sales
professionals can also create their own
reports - functionality that helps
reduce support costs and increase
user acceptance.
Another important aspect of SAP CRM
is its seamless integration with other
SAP software such as the SAP ERP
application. This synchronization eliminates
the need to maintain separate
systems and ensures the rapid, accurate,
and automatic transfer of ordermanagement,
billing, financial, and other
critical data between SAP CRM and
SAP ERP. You can also easily and
quickly access and transfer productavailability,
credit-check, and other
order-related information between the
applications.
Sales-analytical functionality from the
SAP NetWeaver® Business Intelligence
component lets you create reports and
assess KPIs with data from SAP CRM,
SAP ERP, and other SAP and thirdparty
software. Such reports can help
you determine customers' buying habits
so you can target the right customers
with new products or discounted
discontinued products throughout their
buying cycles. SAP CRM also provides
preconfigured planning and reporting
content, such as customer-profitability
analyses, so you can immediately begin
to evaluate the value of your customers.
With SAP CRM, you know your
sales professionals are engaged with
your most valuable customers to
increase your sales and profits.
To learn more about how SAP CRM
can help you improve your organization's
sales performance, please
contact your local SAP sales representative
or visit us on the Web at
www.sap.com/crm.
CONTENT
- Executive Summary
- Optimize Sales Opportunities
- Determine Key Performance Indicators
- Establish an Effective Sales Process
- Start with a Simple Report
- Identify Your Most Valuable Accounts
- Align Your Most Productive Resources
- Focus on Productive Use of Time and Resources
- Understand and Evaluate Your Opportunities
- Review Your Opportunities and Activities
- Optimize Sales Performance with SAP Customer Relationship Management
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