Sales Performance Measurement and Incentives
Expert-defined terms from the Certified Professional in Sales Force Effectiveness course at London School of Business and Administration. Free to read, free to share, paired with a professional course.
Activity #
based Selling: A sales approach that focuses on specific sales activities, such as making calls, giving demos, and writing proposals, rather than just meeting sales targets. This approach helps salespeople stay organized and focused on the actions that will lead to success.
Balanced Scorecard #
A performance measurement framework that measures a company's performance using a balanced set of financial and non-financial measures. In the context of sales performance measurement, a balanced scorecard might include measures such as revenue, customer satisfaction, and sales productivity.
Commission #
A type of sales compensation that is based on the number or value of sales made by a salesperson. Commissions can be structured in various ways, such as a fixed percentage of the sale price or a tiered structure with higher commissions for higher sales volumes.
Key Performance Indicator (KPI) #
A metric that is used to measure the performance of a sales team or individual salesperson. KPIs are typically aligned with business objectives and are used to track progress towards those objectives. Examples of sales KPIs include revenue, number of new customers, and customer retention rate.
Lead Score #
A numerical value that is assigned to a sales lead based on various characteristics, such as demographics, behavior, and engagement. Lead scores help sales teams prioritize their outreach efforts and focus on the leads that are most likely to convert to paying customers.
Managed Sales Process #
A sales process that is designed and managed by a sales manager or sales operations team. This type of sales process typically includes defined stages, activities, and metrics, and is designed to improve sales efficiency and effectiveness.
Motivation #
The desire or willingness of a salesperson to perform at a high level. Motivation can be influenced by various factors, such as compensation, recognition, and the opportunity to learn and grow.
Quota #
A sales target that is assigned to a salesperson or sales team. Quotas are typically based on factors such as historical performance, market conditions, and business objectives.
Sales Effectiveness #
The ability of a sales team or individual salesperson to achieve their sales targets in an efficient and effective manner. Sales effectiveness can be improved through various means, such as training, process optimization, and the use of technology.
Sales Incentive Program #
A program that is designed to motivate and reward salespeople for achieving certain performance levels. Sales incentive programs can include various components, such as commissions, bonuses, and non-cash rewards.
Sales Performance Management #
The process of monitoring, measuring, and improving the performance of a sales team or individual salesperson. This process typically includes the use of various tools, such as performance metrics, sales analytics, and sales coaching.
Sales Productivity #
The efficiency and effectiveness with which a sales team or individual salesperson is able to generate revenue. Sales productivity can be improved through various means, such as streamlining sales processes, improving sales skills, and using technology to automate routine tasks.
Sales Quota Attainment #
The percentage of sales targets that are achieved by a sales team or individual salesperson. Sales quota attainment is an important measure of sales performance and can be influenced by various factors, such as market conditions, sales skills, and the effectiveness of sales processes.
Sales Territory Management #
The process of dividing a sales team's market into geographic or demographic territories and assigning salespeople to those territories. Sales territory management is an important aspect of sales planning and can help improve sales efficiency and effectiveness.
Sales Training #
The process of teaching salespeople the skills and knowledge they need to be successful in their roles. Sales training can include various components, such as product knowledge, sales techniques, and communication skills.
Salesforce Automation #
The use of technology to automate and streamline sales processes. Salesforce automation can include various tools, such as customer relationship management (CRM) systems, sales analytics, and sales forecasting.
Sales Forecasting #
The process of predicting future sales based on historical data and market conditions. Sales forecasting is an important aspect of sales planning and can help sales teams make informed decisions about resource allocation, production planning, and inventory management.
Sales Pipeline #
The series of stages that a sales opportunity goes through, from initial contact to closing the sale. The sales pipeline is an important tool for sales managers and salespeople, as it provides visibility into the progress of individual sales opportunities and the overall health of the sales pipeline.
Sales Process #
The series of steps that a sales team or individual salesperson follows to move a potential customer from initial contact to closing the sale. A well-defined sales process can help improve sales efficiency and effectiveness by providing a clear roadmap for sales activities and enabling salespeople to consistently execute sales strategies.
Sales Quota #
A sales target that is assigned to a salesperson or sales team. Quotas are typically based on factors such as historical performance, market conditions, and business objectives.
Sales Territory #
A geographic or demographic area that is assigned to a salesperson or sales team. Sales territories are typically based on factors such as market potential, customer concentration, and sales resources.
Sales Velocity #
The speed at which sales opportunities move through the sales pipeline. Sales velocity is an important measure of sales efficiency and can be influenced by various factors, such as the effectiveness of sales processes, the skills of salespeople, and market conditions.
Spiff #
A short-term sales incentive that is designed to motivate salespeople to take a specific action, such as selling a new product or entering data into a CRM system. Spiffs are typically paid out as a one-time bonus and are intended to drive short-term results.
Target Account Selling #
A sales approach that focuses on selling to a specific list of target accounts, rather than trying to sell to every potential customer. Target account selling is typically used in complex or high-value sales environments and can help sales teams focus their efforts on the most promising opportunities.
Upselling #
The practice of selling additional products or services to an existing customer. Upselling can be an effective way to increase revenue and customer lifetime value, but it requires a strong understanding of the customer's needs and a strategic approach to selling.
Variable Pay #
A type of sales compensation that is based on the achievement of certain performance levels. Variable pay can include various components, such as commissions, bonuses, and non-cash rewards.
Win Rate #
The percentage of sales opportunities that are won by a sales team or individual salesperson. Win rate is an important measure of sales performance and can be influenced by various factors, such as market conditions, sales skills, and the effectiveness of sales processes.