Performance review examples sales

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Performance review examples sales

Sales performance goals are measures used to incentivize salespeople and determine achievement-based compensation. While there are many types of goals – from units sold to gross margin – it can be difficult to choose the right one for your business. Multiple goals may help focus salespeople. But be wary. Too many metrics may confuse the sales force and dilute the business strategy. Too few may create financial instability for your employees and business especially during tough economic times.

Sales Revenue

One of the most frequently used goals, sales revenue is the income received from the sale of products or services by a salesperson. It is usually straightforward to measure and easy for the sales force to understand. The difficulty is in setting the goal. Be it a percentage increase over last year’s sales or a total dollar value, unrealistically high targets can hinder motivation and low-ball goals can be costly

Profit

The bottom line is what drives business, so measuring and compensating salespeople on profitability may sound ideal. However, according to sales management experts Andris A. Zoltners, Prabhakant Sinha and Sally E. Lorimer in their book “Building a Winning Sales Force: Powerful Strategies for Driving High Performance,” profitability metrics can be difficult to implement well. Profit calculations are often too complex for the sales force to understand and salespeople may feel like they have less control over profitability than revenue.

New Business

Setting new business targets can be an effective way to focus the sales force on growth. This can be especially true for mature businesses that experience stalled or declining sales. These goals can be based on revenue from new customers or new revenue from existing customers. For example, the latter might include targets for selling new products, services or markets to existing customers.

Growth

Another way to focus the sales team on growing the business is to create a target based on growth over the previous year. This can be a percentage or a total dollar value. What matters most, as author Dan Kleinman points out in “All Star Sales Teams: 8 Steps to Spectacular Success Using Goals, Values, Vision, and Rewards,” is to create a goal that is challenging, realistic and achievable.

Team Performance

Many sales performance goals are relatively short term and individual based. However, according to Andris A. Zoltners, Prabhakant Sinha and Sally E. Lorimer in the “Harvard Business Review” article "Is Your Sales Force Addicted To Incentives," these metrics can discourage teamwork and reward sales people for short-term business practices. As such, the authors suggest minimizing self-serving incentives. Team-based performance goals may be a way to broaden the salesperson’s perspective. Instead, set department or team goals for revenue, units sold or customer service.

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