Why Do I Need SPM? A Modern Answer.

Written by: Intangent

To many, sales performance management (SPM) is a glorified calculator. This majority views SPM as an automated way to reduce staff time spent on calculating commissions and related human errors, as well as a means to reduce sales’ shadow accounting. A smaller batch perceives SPM in a slightly more sophisticated light: a route to improve quota attainment with enhanced capabilities for motivating sales behavior.

Both groups miss the majority of the mark.

This blog outlines why SPM does more than motivate and pay sales teams, and actually is the glue for orchestrating all of revenue operations. Read to the end for three tactics that you can use to accelerate revenue—by using SPM as the strategic lever it is meant to be.

Sales Performance Management (SPM) Does More Than Motivate And Incentivize Sellers.

Intangent is fortunate to have a front seat view into how industry leaders do and don’t accelerate revenue.

Several years ago, we observed one key attribute separating companies that consistently excel from those that struggle: Their approach to revenue operations.

Since sales performance management (SPM) touches every revenue team—marketing, sales, and customer success—we began testing a thesis: that SPM could hold all of revenue operations together. We hypothesized that, with better orchestration, motivation and incentive tactics would drive revenue more efficiently across all revenue-influencing teams.

An Inflection Point In Revenue Operations

Today, we are at an inflection point in revenue operations. According to research, the majority of revenue teams have missed quota every year for the past 10. Despite tactics and tools installed to address the problem, revenue teams continue to suffer low conversion rates, insufficient pipeline, and unleveraged cross-sell and upsell opportunities.

These chronic symptoms have worsened as ever-larger buying committees conduct greater portions of their purchase journeys on digital channels, and spend less time with sellers.

From Chief Sales Officer (CSO) to Chief Revenue Officer (CRO)

In response, best-in-class organizations are installing a revenue function with a purview larger than just traditional sales. But standardization in CROs’ scope and success metrics are still needed. While revenue operations titles are the fastest growing on LinkedIn, CROs are 2.9X more likely to manage sales than marketing and 1.6X more likely to manage sales than customer success, according to SiriusDecisions.

Introducing The Revenue Capture Lifecycle

It’s a turbulent and exciting time. Fifteen years ago, we founded Intangent on the observation that revenue organizations were on the verge of a major transformation featuring increasingly specialized roles, supporting technology, and departmental silos. This transformation is now forcing enterprises to adapt their revenue operations in ways the corporate global landscape has never before seen:

Including all revenue departments in planning, programs, and operations
Orchestrating, motivating, and incenting marketing, sales, and customer success functions to accelerate revenue
Investing in technology solutions that lower total cost of ownership while driving higher quality revenue

The revenue capture lifecycle is the journey made by potential revenue as it travels from initial brand awareness through customer adoption, loyalty, renewal, and ultimately, evangelism.

Intangent collectively refers to these efforts as the tenets of the revenue capture lifecycle: the journey made by potential revenue, as it travels from initial brand awareness through customer adoption, loyalty, renewal, and ultimately, evangelism.

3 Best-In-Class SPM Tactics For Revenue Operations’ Success

We see teams optimize revenue operations and accelerate their revenue capture lifecycles with three tactics.

Align corporate and revenue objectives by effectively orchestrating, motivating, and incenting all revenue teams.
Organizations and revenue teams should win and lose together, so SPM planning must be built on a foundation involving all three functions: demand generation, sales, and customer success. An effective SPM strategy-build occurs in three phases:

Orchestrate. Orchestration involves clear roles and responsibilities, better territory and quota management, and predictable forecasts involving demand generation, sales, and customer success.
Motivate. By making performance expectations clear, revenue leaders communicate how and what teams are supposed to do—motivating employees to spend more time on revenue-producing activities.
Incent. Revenue executives drive company objectives by directly correlating behavior and payment. This phase aligns the prior two.

SPM aligns your company and employee objectives, improving efficiency (and by extension, profitability) across all revenue teams.

2. Give transparency into total rewards strategies.

Sales motivation problems often manifest via one common question: “How did you come up with this incentive compensation plan?” The question reveals two loopholes in a traditional approach to sales performance management.

Loophole #1: Ownership. Generally, the above question is directed at compensation administrators. This is problematic because comp admins generally don’t set quotas and territories, nor participate in incentive plan design.
Loophole #2: Technology. When using spreadsheets and homegrown systems, compensation administrators lack the same information as incentive designers. With SPM platforms, management can easily share information to answer the above question and more.

Revenue executives need SPM to give their teams necessary transparency into how to earn desired rewards.

3. Give prescriptive revenue guidance based on empirical data.

Revenue teams obtain access to sufficient empirical data to self-benchmark their company’s performance once SPM automation is complete. With it, they can offer prescriptive guidance to individual roles.

SPM Is The Glue For Revenue Operations

With a modern approach to SPM, our industry-leading customers better orchestrate revenue behavior and performance—producing higher conversion rates, more consistently attaining quota, and optimizing cross-sell and upsell opportunities. We hope this framework helps you produce similar success.

RESOURCES