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What Exactly Is Sales Performance Management (SPM) Software?

To generate more revenue for your business, it’s crucial that your sales reps sell as many products as possible. Their performance needs to align with the goals and objectives you want to achieve. In more formal terms, this means you’ll need to manage your sales performance processes effectively and efficiently. 

Now, a significant component of this is managing their compensation and developing commission plans that motivate them and drive them to perform better and sell more products. But it goes further than this, however. Apart from developing effective compensation plans, you’ll also need to map out territories, calculate and pay out commissions, set quotas, and optimize your resources. 

Understandably, this could become challenging, especially if you have many reps. This is where Sales Performance Management software comes in. It allows you to manage your sales performance management processes more efficiently. It also gives you valuable insights into these processes that help you to improve where necessary. This, in turn, results in better performance, more sales, and higher revenue.

But what exactly is Sales Performance Management software? In this post, we’ll look at this question in more detail, look at its core components, and consider other aspects relating to sales performance management. 

What Is Sales Performance Management Software?

Although people usually think about sales performance in numbers like the number of leads won, sales made, or revenue generated, it goes far beyond this. As such, sales performance encompasses all the interrelated processes necessary to build and manage effective sales teams, make more sales, and generate more revenue. 

Sales Performance Management (SPM) is the process of planning, implementing, and optimizing all these interrelated processes to get the most out of them. And here, Sales Performance Management software gives you the tools you need to do this more effectively and efficiently.   

SPM vs ICM: What’s The Difference?

Before looking at Sales Performance Management in more detail, it’s important to understand the difference between SPM and ICM or Incentive Compensation Management, since these terms or concepts are often used interchangeably. However, there is a significant difference. 

Within your business, you have an entire sales ecosystem. This ecosystem is made up of all the people, systems, processes, and technology you use to acquire new customers, make sales, and generate revenue for the business. As mentioned earlier, Sales Performance Management is the methods and strategies you use to make sure all these processes run efficiently.

In contrast, Incentive Compensation Management is the process you use to manage your sales reps’ incentives in order to motivate and drive them to perform better and make more sales. It’s thus one of the core components of the larger Sales Performance Management concept.  

The Components Of SPM

Now that we’ve recapped what Sales Performance Management is and how it differs from Incentive Compensation Management, the next step in understanding SPM is understanding its separate components. Keep in mind that this is a broad overview of these components, and their implementation might differ based on the unique circumstances and requirements of your business. 

Defining Performance Metrics

The first major component of SPM is the key performance indicators (KPIs) you’ll use to track your sales performance. Defining these KPIs serves several purposes. 

For one, it allows you to track your performance and progress towards your goals, which we’ll deal with in more detail below. In addition, your KPIs also allow you to set a baseline of performance which, in turn, shows you how any sales strategies you implement impact your sales performance. Finally, your KPIs impact your decision-making processes.  

Now, when it comes to KPIs, there are several you could use and define for your business as a whole, for your sales team, and for individual sales reps. No matter which sales key performance indicators you choose, it’s crucial that they be measurable and relevant to your specific business. If not, they won’t serve their purpose. 

Determining Goals And Objectives

Once you’ve defined the metrics you’ll use to measure and track your sales performance, you should determine your goals and objectives relating to these KPIs. In other words, you’ll need to decide what levels of these KPIs you want to achieve. 

For example, you might decide that you want to generate a certain amount of revenue or make a specific number of sales. You could also determine more specific goals like making a number of sales of a specific product or generating a specified amount of revenue in a specific territory. 

When determining the goals you want to achieve, there are some things you need to keep in mind. For one, your goals and objectives should be aligned with your overall business goals. Also, your goals should be realistic and achievable. If they’re not, you’ll likely not achieve them, which, in turn, decreases morale.  

Ultimately, when you set concrete, achievable, and measurable goals for your business, sales teams, and reps, you’ll be in a better position to meet them. 

Performance Monitoring And Tracking

Defining your performance metrics and setting your goals and objectives won’t amount to much if you don’t measure and track sales performance. When you do, you’ll be able to measure the effectiveness of your sales strategies, identify areas in your strategies that are lacking and implement a more effective sales strategy to improve. 

You’ll also be able to forecast revenue and sales more accurately, which makes planning easier, and performance monitoring allows you to develop compensation strategies that will be most effective at motivating your sales team. This makes performance monitoring and tracking a critical component of Sales Performance Management. 

Territory Planning

For the best sales performance, it’s crucial that all your sales territories have the same coverage. In this way, you’ll ensure that you generate maximum awareness for your brand or products. As such, territory management, planning, and optimization are important components of Sales Performance Management.  

Compensation And Payouts

One of the most important components of SPM is compensation and payouts. This is simply because the compensation you pay to your sales reps is what motivates them and drives them to make more sales for your business. It’s for this reason that, as mentioned earlier, Incentive Compensation Management is one of the core components of SPM.

So, if you fail to develop effective compensation plans, your sales, and by implication, your bottom line will suffer. It’s important to remember that, when developing compensation plans, you align these plans with what you want to achieve. In other words, these plans should motivate behaviors that will help your business achieve its goals. 

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The Benefits Of Using SPM Software

Now that we understand what Sales Performance Management is and we’ve seen its separate components, let’s look at the benefits of using SPM software in more detail. From these benefits, you’ll see that SPM software will elevate your sales performance management and help you manage your sales processes more effectively and efficiently. 


Managing your sales performance management processes, especially your sales compensation processes like commission calculations, can take a lot of time and effort. And, as the number of reps increases, this gets more complicated and takes even more time. In addition, as the complexity increases, so does the possibility of errors.  

However, when using Sales Performance Management platforms, this problem is largely eliminated, and you’ll be able to manage these processes far more effectively and efficiently. As a result, you’ll manage your compensation and sales-related processes in less time, and you’ll reduce frustrating errors.


When managing your sales performance, you’ll likely depend on several manual and repetitive tasks. These make the process inefficient and take a lot of time and effort that you could rather spend on managing your team and focusing on their core competencies.

Fortunately, with Sales Performance Management platforms, you can automate most of these manual and repetitive tasks. As such, you’ll eliminate these inefficiencies and often reduce the time it takes to manage your sales performance processes from weeks to hours. 

An added benefit of automation is that, because it allows you to automate manual processes, you’ll eliminate human errors in the process. 


Transparency is also another major benefit of Sales Performance Management software. As a result, you can provide your sales reps with dashboards that provide valuable information about their performance. So, they can see what they need to do to earn their commission, how much they’ll earn, and where their commission is coming from. 

This not only keeps them motivated, but also helps you reduce disputes or wasted time when reps need to spend hours to make sure their commission calculations are correct. Overall, this makes your sales team more efficient and productive. 

In addition, Sales Performance Management platforms also provide advanced reporting for you and management which, in turn, gives you a complete picture of your business’s sales performance, how reps are progressing towards their quotas, and what territories are performing the best.  


In a sense related to transparency mentioned above, analytics gives you valuable insights into your sales performance processes. In turn, these insights can shape the strategies you use to improve your sales reps’ performance. In other words, analytics gives you the ability to make data-driven decisions. 

Ultimately, this means you’ll be able to use your business’s sales data to help your reps acquire more customers, sell more products, generate more revenue, and improve all your other sales processes. 


A significant benefit of SPM software is that it makes planning a lot easier. Here, it can help you with:

  • Compensation planning. Compensation plays a significant role in your sales reps’ performance and motivation. With SPM software, you’ll be able to plan and implement effective compensation strategies that drive the behaviors you need to meet your goals. In addition, SPM software also gives you compensation and quota management features. 

  • Territory planning. SPM software allows you to plan and optimize your sales territories to take full advantage of the market in each and give all your reps equal opportunities in the market. When you optimize your territories in this way, you’ll ensure that your sales reps stay motivated and that you generate maximum revenue in each territory. 

  • Capacity planning. Sales Performance Management gives you the ability to plan your capacity based on the market, demand, and the available sales reps. This ensures optimal usage of your available resources, which, in turn, optimizes costs and increases profits. 

sales performance management solutions

When Should You Consider An SPM For Your Business?

The first question you need to answer to find out when to consider an SPM solution for your business is what solution you’re currently using. For instance, you could be using spreadsheets, or you might already be using some other solution to manage your sales performance. 

Most small businesses use spreadsheets to manage their sales processes and performance. As such, they use these spreadsheets to manage their sales reps’ compensation, territories, and so on. The thing is, while it can be relatively simple to do this if you have a small sales team or only a few territories, the complexity increases exponentially when the number of reps and territories increases. 

As a result, you’ll experience incorrect commission calculations, you’ll fail to get commission statements out on time, and you’ll face other commission and sales-related issues.  

So, when you hire more salespeople and sell in more territories, spreadsheets will no longer be good enough, which is a good indication that you might need a Sales Performance Management solution. Ideally, you should implement the SPM solution before this becomes a significant issue. 

If you’re currently using another solution, there is a different set of considerations. Here, you need to determine whether it gives you all the features you need, whether it makes your sales performance management processes as efficient as possible, and whether it can grow as your business grows and its requirements evolve. If not, it might be time to consider a more well-rounded, all-in-one solution for your sales performance management. 

sales force automation

Features To Consider When Looking For Sales Performance Management Software

We’ve now seen the benefits of Sales Performance Management software and when you should consider implementing an SPM solution in your business. With these aspects in mind, let’s look at some of the core features you should consider when looking for Sales Performance Management software. 

Centralized Data

It’s crucial that the SPM solution gathers all your sales data in one centralized location. When it does, it offers several benefits. For one, it makes your Sales Performance Management processes more efficient. As such, it gives you better and faster access to all your sales data and saves you a lot of time and effort. 

In contrast, if you manage your SPM processes with several solutions that store data in different places, it becomes difficult to find the data you need to manage your sales processes. In turn, it becomes cumbersome and challenging to manage. 

In addition, when you gather all your sales data in a centralized location, you’ll make this data available to everyone across your entire business. In other words, when using a solution that gives you this capability, you’ll remove data silos. This in itself increases operational efficiency and allows you to track and measure your sales metrics more accurately, which leads to better analytics and decision-making capabilities. 

Real-Time Data

Apart from gathering your sales data in a central location, the right Sales Performance Management solution should also give you access to real-time data. When you have access to real-time sales data, you’ll be able to measure your sales performance and the effectiveness of your sales strategies more accurately.

In this way, you’ll be able to gauge your business’s and teams’ performance compared to analyzing the data after the fact. In turn, this allows you to make improvements to your strategies quicker. In addition, when you analyze your sales data in real-time, you’ll identify trends and patterns in your data, which makes planning simpler and makes it easier for you to optimize your strategies. 


We’ve now seen that the SPM solution you choose should allow you to gather real-time data in a central location. However, your sales data won’t have much value if you don’t analyze and extract valuable insights from it. For this reason, it’s crucial that the solution you choose has analytics features.

These analytics features offer several benefits. For one, it allows you to analyze your sales performance which gives you insights into how your business and your sales teams perform. Based on these insights, you can then develop new strategies or improve existing ones to extract the best performance from your processes and teams. 

In addition, with these features, you’ll also have access to predictive analytics. This gives you the ability to identify trends before they happen and take advantage of these trends before your competition does. As a result, you’ll be able to stand out from the crowd and generate more revenue. 


It’s important to remember that your business will grow over time. Moreover, your business’s circumstances, needs, and requirements will evolve as your business grows. When they do, you’ll have more sales teams, more reps, more processes, and other technologies and platforms you’ll use to manage your sales processes. 

For this reason, it’s crucial that the Sales Performance Management software you use be scalable and able to adapt to your business’s evolving needs. This means it should be able to handle more users, teams, and territories in the future. It should also allow you to make the necessary changes to handle the increased load effortlessly. 

In contrast, if it doesn’t have this capability, you’ll sooner rather than later need to replace the software, which not only costs more money but also takes a lot of time and effort to implement. 


To have effective and efficient sales processes, you’ll more than likely use several pieces of software or platforms. For example, you’ll typically use a Customer Relationship Management (CRM) platform to manage your customer data and product management software to manage your products.

To be as efficient as possible, it’s important that the SPM solution you choose offers seamless integration with the other tools you’re already using. This allows you to share sales data across platforms and your entire business. In addition, integrations give you more access to data for analysis and automation, which, ultimately, makes your sales processes more efficient. 

Quota Planning And Quota Management

Although the amount of commission you pay has a significant effect on the performance of your sales reps, quotas are just as important. If they’re not planned correctly or are set too high or too low, they could have a negative impact on performance, motivation, and productivity. This is exactly the opposite of what you want to achieve. 

For example, if you offer a competitive commission but your quotas are so high that no rep can earn the commission, your reps’ morale will suffer, resulting in lower performance and decreased revenue. Likewise, if you set your quotas too low, your reps’ productivity will decrease as soon as they reach their quota. This too then impacts your revenue. 

Considering the above, the Sales Performance Management software you choose should have extensive quota management planning features including different plan and optimization options.

Territory Design And Management

Just like quotas and compensation can have an impact on sales reps’ productivity, efficiency, and performance, territory can too. When you map out territories, you have to ensure that they’re equitable and that all your reps have the same opportunities to attain their quotas and earn their commission. 

However, if you, through the process of designing territories, create the impression that your territories are unfairly designed, it will lead to a decrease in morale and performance. 

For this reason, your SPM should have extensive territory planning and management options. It should also be flexible enough for you to customize these options based on your specific needs and requirements. Moreover, because equitable territory design is connected with your quota management processes, your SPM should integrate its territory and quota planning features.   

Ultimately, this allows you to create and optimize your territories for the best results. 

Sales Planning

Considering the importance of effective Sales Performance Management, the SPM you choose should, in addition, to the crucial features mentioned above, have all the features to be a complete, all-in-one solution to sales performance management. 

What these features are, depends on your business’s specific circumstances and requirements and will vary from business to business. No matter what these requirements are, the SPM should have all the features you need to make your Sales Performance Management processes more efficient and effective.

sales management

Getting Started With SPM Software

At this stage, you’re probably convinced that you need an SPM solution for your business. The immediate question is: How do you get started with SPM software? Let’s look at the steps you’ll need to follow to get started. 

Setting Goals And Objectives

The first step in the process of choosing the right SPM for your business is setting concrete goals and objectives you want to achieve. Here, you’ll, for example, need to decide what analytics capabilities you want, what information should be available across your business and for sales reps, and how much of the process you want to be automated. 

Another important consideration when setting goals and objectives is to remember that, as mentioned earlier, your business will grow over time. As such, you’ll need to factor in the possibility of scaling, as it will future-proof the solution you choose. If you don't, you'll likely end up with a Sales Performance Management solution that you’ll need to replace after a few years. 

These decisions mentioned above will, ultimately, dictate what solution will be right for your business and your specific needs and requirements.

For example, you might want in-depth data analytics and reporting combined with extensive compensation planning features that can help you plan, manage, and optimize your sales processes. Or, you might only need compensation planning and management features without the need for extensive analytics. 

If you opt for the wrong solution in either of these cases, you’ll either end up with a solution that doesn't have the features you want or pay for more features than you actually need. 

Researching Vendors

Once you've determined your goals and objectives, the next step in the process is researching vendors to find one that aligns with these goals. 

To do this, you need to create a list of vendors that offer everything you need to achieve your goals. Fortunately, this is relatively simple as there is a lot of information available online that gives you an idea of what features every vendor offers, what customers it's most suited to, and how much the solution will cost you.

Once you've created a list of vendors, you’ll need to complete an evaluation process with each of them. This typically involves an initial conversation with the vendor and then a product demo. With the initial conversation, you'll discuss your goals and objectives with the vendor, and, in turn, the vendor will decide if they’re the right fit for your business. 

After the initial consultation, a demo of the solution will follow. This demo will give you an idea of how the product looks and works and what features it offers. The most important part of the demo process is that you get a custom demo. In other words, the vendor should use your data and compensation plans to demonstrate how the product will work in your specific circumstances. 

Ultimately, the product demo shows you whether the solution will be able to meet your needs and be a fit for your business. 

Choosing A Solution

The final step of the process is choosing the right solution for your business. Here, there are three key considerations when deciding:

  • Features. As mentioned earlier, the SPM you choose should have all the features you need to make your sales performance management as effective and efficient as possible. So, with that in mind, these features will largely dictate the SPM solution you choose and use in your business. In contrast,  not selecting the solution based on the features you need, might lead to more hassle later on and the need to replace the system.  

  • Usability. Features are only one part of the equation, however. Furthermore, It's crucial that the SPM solution is easy and intuitive to use. It could have all the features you need, but without usability, they won’t amount to much and there will still be inefficiencies in your processes. And remember, the solution should be easy to use for those team members who are actually going to use it. 

  • Implementation. Any SPM solution, no matter its features or complexity, will have an implementation process. The difference is that some will take longer than others to fully implement. And it’s not necessarily the best choice to go with the solution with the shortest implementation time. What is important, though, is that, during the implementation process, the solution be tailored to your specific needs and requirements. 

sales rep

The Bottom Line

To increase your sales and generate more revenue in a competitive market, you must track and manage your sales team performance effectively and efficiently. When you do, your sales team will be more motivated, and productive and will perform better.

However, this process can be complex, especially when your sales strategy involves many reps and sales teams. This is where Sales Performance Management software comes in. It helps you streamline the process of performance management so that you can increase your operational efficiency.

To learn more about Sales Performance Management software and how Performio’s platform can help you, get in touch for more details. We can help you make your Sales Performance Management and Incentive Compensation Management more efficient and effective. 

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