Performance reviews: What they should include and how sales managers can use them to improve results | CrankWheel

Performance reviews are an integral part of the work every manager does. Whether annually, or usually quarterly, it’s a great way for a manager to review everyone’s work and identify areas for improvement.

Of course, on a daily and weekly basis, managers can see who’s performing and who isn’t. One of the best indicators is how many deals are being won, and who’s winning them.

But sales performance isn’t purely about the win rate. Performance comes down to who’s being active, and more importantly, proactive in bringing new clients in.

Sales activity is a crucial indicator of who should be the most successful on the team. If you’ve got someone who consistently calls, emails, messages, sets up demos and meetings, then use their performance as a model, a template for those who aren’t as active.

Activity — even more so than the win/close rate — is the best indicator of success. As it’s the more active salespeople who are more likely to be consistently hitting monthly and quarterly targets. Everyone can have a bad week or month. But it’s the active, motivated members of the team who will be hauling in new clients month after month. Those are the sort of results you want, and performance reviews and training help you get the best out of every member of the team.

Let’s take a closer look at how sales managers can use performance reviews to increase and improve the performance and therefore outcomes of those on the sales team.

What should performance reviews include?

Not every performance review follows the same template, but there are certain things it’s particularly helpful to include and cover when talking with members of the sales team. Such as the following, alongside any company-specific KPIs:

  • An overview of recent outcomes (e.g. number of new clients won, the value of the deals landed, big wins, etc.)
  • Examples of other contributions to the team (e.g. coaching a new colleague, speaking at a networking event or webinar)
  • Performance outlined in numbers, based on CRM data
  • An assessment of why specific deals were landed, or lost (looking into lost deals and missed opportunities is a great way of understanding how performance could be improved, and what could be done differently)
  • Areas for improvement, a look at things a salesperson could be doing differently
  • An understanding of overall career goals, thoughts on progression
  • Understanding what salespeople need to achieve more, win more clients; this could include support and training, coaching and mentoring, or even new software that would help them close more deals.

Every performance review needs a clear outcome. A salesperson should always know where they stand, in terms of whether they are under or over-performing, or are they simply on-target: not hitting it out of the park, but definitely not failing either. Depending on how well or not someone is doing, a review should be followed by recommendations and therefore actions. For example, for those who aren’t performing great, training and coaching would be very useful.

Whereas, especially if this is an annual performance, those who are exceeding expectations might ask for (or as a manager, you could recommend) a higher salary or other increase in compensation, promotion, or something to demonstrate the confidence a company has in a salesperson. If you don’t look after your top performers, a competitor could offer them a more attractive opportunity.

Now let’s take a look at the various levels of outcomes a salesperson should expect in a performance review.

Performance review outcomes

#1: Does not meet (minimum) expectations

This is when, unfortunately, a salesperson is consistently failing to hit targets and achieve company KPIs. Now, this could be for a number of reasons, of course. A salesperson might need more training, needs to know the right sales process, or could be new in a role, or new to a sector, and therefore not have a very strong grasp of what’s needed yet.

Not understanding a company or product very well, and failing to research prospects before calls and demos are examples of how a salesperson could fall below minimum standards. Not inputting enough data in a CRM is another. Training and improvements would definitely be needed for a company to continue employing someone who consistently failed to meet expectations.

#2: Needs improvement

Needs improvement doesn’t mean they’re failing badly, but work is required to get up to the minimum expected. In whatever way they’re struggling, aim to coach and mentor them more to help ensure standards are met when the next performance review rolls around.

#3: Meeting expectations, hitting targets

This is what every sales manager wants from the team: those who consistently hit targets and achieve the required KPIs. Hitting sales targets every month is a good indicator of those who are performing well. As is filling in details of deals in the CRM, alongside achieving other KPIs.

#4: Sometimes exceeds expectations and targets

Even better is when a salesperson occasionally exceeds expectations. Often, this would mean going over the target, pulling in even more new revenue/clients than they normally would. It might not happen all of the time, but over-achieving, alongside ticking over KPI boxes is a positive sign that a salesperson is doing well.

#5: Consistently exceeds expectations and targets

When someone does this consistently, then you really do have a salesperson worth holding onto! Constantly going above and beyond is an excellent sign, and reflects well on a sales manager. It’s also worth ensuring these sales reps are either promoted, given a raise (or other financial rewards for exceptional work), or given other ways to advance their skills and career.

Sales performance reviews are a vital and valuable part of how managers get the best out of their teams. Conducting these quarterly, alongside annual reviews, is the most effective format. Although make sure your team knows that you are keeping an eye on performance on a more regular basis, and reward those who are doing well and support those who aren’t on-target as best as possible.

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Originally published on the CrankWheel blog.