For a bit more than the last decade, my career has focused on data and data visualization within sales, marketing and finance. From understanding data architecture and database design to deploying insightful and effective reports to teams across the organization, I have come to appreciate the profound role data plays in today’s highly competitive marketplace.
Understanding how to use data and integrating it into one’s daily routine is a challenge for many. As I reflect back on my career and the challenges for sales reps and analysts ahead, I chose to shift gears and focus on sharing my experiences with a greater audience.
With the purpose of sharing my skills, I created Saalun. Saalun is short for Sales Analytics University. The subscription based service is geared toward sales reps and analysts. While sales leadership can also benefit, the product is to help reps get the training they need without relying upon corporate leadership to provide it.
While we are just launching an early preview, we will open the doors in Q4’17 with content, newsletters, webinars and podcasts. Head over to our site and signup for notifications, early previews, and the latest news on this exciting project.
Sales Compensation is not easy. Throughout my career, I have seen plans which break the sales budget to plans which do are insulting to the rep as they pay too little for a lot of work. I refer to sales compensation programs as a form of art which requires a bit of science.
Science is pretty easy as it is understanding how your team should be selling your product and how it translates to the pipeline and corporate goals. This understanding translates to key performance indicators (KPIs) which one can use to monitor rep performance and team performance.
The art plays in as you develop the actual plan and which KPIs enter that plan. Average Deal Size, Number of Meetings, or Conference Attendees may not necessarily be the best indicators of sales. With a mix straight sales revenue compensation (say 2%) and additional kickers and bonuses, the art of using plan structure for influencing rep behavior can take trial and error to get right.
Finally, the best compensation programs leverage transparency, reporting, and recognition. This is plan implementation where making sure the rep understands their KPI progress and how it translates to their paycheck. Regular reporting and team leaderboard distribution are essential, motivating and drive revenue. A proactive analytics program can ease the calculation and payout of compensation at the end of the quarter.
As a specialist in the field, I encourage you to follow Spiral Analytics, my consulting firm dedicated to sales team optimization and small business promotion. Follow us on Facebook
Sales rep scorecards are that golden unicorn of any sales organization. The scorecard is a compilation of Key Performance Indicators (KPIs) which are measured against thresholds. In a rep scorecard, we see a visual interpretation of how a rep is doing for each of the KPIs. An example of which is below:
Sample Sales Rep Scorecard
Before I dive into best practices, a word on why not a lot of sales organizations have scorecards. The primary reason is due to organizations struggling with data which best represents the business which makes it difficult for them to setup a KPI, let alone establish effective targets. An understanding of the analytics continuum is also helpful for understanding the evolution of data practices which need to met prior to rolling out KPIs and Scorecards:
Top 5 Best Practices for Sales Rep Scorecards
- Sales reps, Mangers, VPs, and CROs must all have agreement on the KPI definition, targets, and thresholds. If one level of the KPI hierarchy is not on the same page as the others, there is very value in using the Scorecard to represent an ideal.
- Targets and thresholds must be reasonable. When rolling out KPIs, we often realize that actual performance is far from the corporate ideal. For instance, a Sales Cycle of 45 days is thought to be ideal, but the rep actual is north of 60 days. Don’t hold this against them, consider rolling out a target of 55 and stepping the target down to 45 days within three quarters of launch. Be kind to the reps and allow them to catch up.
- Scorecards must be part of a larger sales communication strategy. Rolling out a scorecard alone will have an impact on the organization, but the most impressive will happen if scorecards are a part of the larger communication strategy. For instance, a weekly email can call out wins by reps, it should call out performance, and it needs to call out what needs to be done to hit the goal. Scorecards are just one piece of the story in sales.
- Scorecards need to be updated as the business evolves. Scorecards can never be truly static, recurring reports. Part of the role of your analytical team is maintain reports as the business changes and evolves. Scorecards are no different. From a subtle change of keeping thresholds and targets up to date, to swapping out KPIs for new ones, scorecards are a living animal and requires food to stay alive.
- Scorecards are a coaching opportunity, not a punishment tool. While HR and managers will look at a scorecard and see a rep with all red for their KPIs, this doesn’t mean the rep needs to immediately be put on a performance improvement plan or, worse yet, fired. Scorecards are coaching tool and enable the manager to work with the sales rep and ask questions like “why do you think your sales cycle is double the average?” Work with the rep, train the rep, and allow the rep the chance to go for green.
As your team rolls out scorecards across the sales organization, keep these best practices in mind. Be kind to your reps, get agreement on definition, use scorecards as part of a larger strategy, keep them updated, and use them as a coaching tool.