What is Sales Performance and How to Prepare for 2022

It’s no secret that 2022 will be a make-or-break year for businesses across the United States.

Companies that suffered due to the COVID-19 pandemic are itching to regain lost ground. Meanwhile, companies that found their footing in the disruption are seeking to leverage their head-start into larger market shares and greater profitability. 

Regardless of the current standing of their company, sales leaders will need to foster consistently high sales performance to drive revenue and growth. But what is sales performance in 2022? What strategies can companies use to fine-tune sales performance and enjoy outsized returns? 

We’ll get into these crucial sales performance questions and more in this article.

What is Sales Performance?

Sales performance is a key performance indicator that encompasses individual and team sales effectiveness. 

You can track sales performance through various methods depending on sales goals, the length of a company’s sales cycle, and the sales environment. For example, sales revenue, customer retention rate, and the net number of new accounts are popular data sets for evaluating sales performance.

But sales performance isn’t just about sales reps. Sales management also plays a pivotal role in driving high sales performance. In 2022, sales leaders will need to invest in strategic sales enablement. Meeting and exceeding sales targets will depend on equipping their sales teams with training, tools, and tactics. 

What Sales Leaders Need to Think About in 2022

Business in 2022 will look far different than many of us expected a few short years ago. To adapt and thrive in the new environments that dominate the global marketplace, sales leaders and executives must embrace fresh perspectives and new sales strategies and methodologies. 

Prioritizing Sales Opportunities

Reviewing sales opportunity prioritization may provide new and profitable revenue streams currently underutilized. For example, recurring customers can be up to five times as valuable as new customers. So identifying opportunities to upsell and cross-sell products or services may prove more lucrative than new account acquisition in 2022. 

Credibility

Credibility will also play a significant role in sales in 2022. Consumers are increasingly interested in making informed purchases. During the average buyer’s journey between 2019 and 2021, information-gathering events increased from 17 to 27. 

Thus, expect sales reps to have deep product insight and expertise to help inform their decision. Sales leaders should ensure sales reps have access to all relevant marketing content, product information, customer feedback, and case studies. Develop specialized knowledge on your company's products or services to maintain credibility with more discerning customers.

Sales Enablement and Adaptability

Finally, sales leaders should review their sales enablement strategies and practices ahead of the upcoming year. Sales training, resources, and best practices constantly evolve, making effective sales enablement an ongoing process. 

Sales leaders that want to gain and keep a competitive edge need to stay up-to-date with industry developments. They should keep sales strategies and methodologies flexible to implement new tools and resources that serve changing market conditions. 

Why Evaluating Sales Performance Matters

Investing significant resources in analyzing and fine-tuning their sales strategies and methodologies boosts sales performance. Companies with world-class marketing, bulletproof reputations, and decades in business know this.

Due to heavy market saturation and fierce competition, even companies with exceptional products can’t rely on the strength of their offer to drive revenue and support healthy growth. 

Developing and regularly evaluating a sales performance strategy helps companies track sales progress and provides valuable data for in-depth analysis. Companies can make strategic and nimble adjustments to sales enablement policies and drive high sales performance from these analyses. 

Build a Strong Sales Plan First

Companies should study their sales plan to develop a fair and effective sales performance evaluation plan. Sit down with sales executives and other relevant parties to discuss and codify key aspects of your sales plan, such as:

• Lead Generation
  
  
• Customer Qualification Strategies
  
  
• Customer Retention Goals
  
  
• Closing Strategies
  
  
• Sales Opportunity Prioritization
  
  
• Ideal Sales Cycle

A clear sales plan guides leadership through sales performance guidelines and standards that align with fundamental goals and strategies. 

How to Evaluate Sales Performance

If evaluating sales performance were as easy as it is important, there’d be no need for this article. Unfortunately, evaluating sales performance can be tricky to master because there’s no one-size-fits-all evaluation strategy. 

For example, many companies consider tracking revenue a stand-in for sales performance evaluation. But there’s far more to revenue than sales. Revenue is an accumulation of marketing campaigns, production and market trends, and more factors. Therefore, revenue is an imprecise metric for evaluating sales performance.

Instead, companies should measure, track, and analyze several key performance indicators to evaluate sales performance productively. Key performance indicators (KPIs) measure different aspects of the sales process. KPIs give deeper insight into individual and team performance and productivity. 

The best key performance indicators vary according to industry, market, and overarching company goals. But there are still some fundamental metrics every company should consider when evaluating sales performance:

Win Rate

Win rate is the percentage of deals that close compared to total deals, whether open, lost, slipped, or in another pipeline phase. Comparing individual sales reps’ win rates to a team average is a quick method for evaluating sales performance.

Sales Activities 

On average, sales reps only spend one-third of their day engaged in activities directly related to sales. Track sales activities for a clearer understanding of sales productivity. 

Customer Lifetime Value and Retention Rates

Retaining customers can be an extremely lucrative revenue stream for companies that consistently provide exceptional customer experiences. Customer LTV and retention rates can quantify the success of individual and team customer service efforts.

Sales Linearity

Sales linearity is a valuable metric for plotting sales progress towards targeted quotas. 

Expect some deviation due to business differences. But sales linearity generally dictates that adequately performing sales reps should meet 20% of their quota 30 days after a new quarter starts. They should cross 50% of targeted sales by the end of month two to reach or exceed quotas by the end of the quarter.

Implementing sales linearity in your sales performance evaluation process provides a quick and easy identifier for individual sales bottlenecks and overall performance.

Quota Attainment

No list of key sales performance indicators would be complete without this basic. And quota attainment isn’t just helpful in evaluating sales reps’ performance. It also analyzes sales forecasts’ alignment with real-world performance to further optimize sales strategy. 

Why Hiring the Right Sales People is One of the Most Important Decisions

Of course, driving industry-leading sales performance starts far before the evaluation process. Like their athletic counterparts, sales teams need a roster stacked with talented, committed, and high-performing team members for long-term success. 

Hiring the right salespeople is a process fraught with unexpected pitfalls that can hinder your sales goals from the start. Companies need strategic hiring and onboarding plans that leverage modern talent acquisition strategies and technology. Otherwise, sales staff turnover and shortages lead to significant, continued losses and downtime.

Alternately, companies that leverage emerging tools and technology like predictive analytics will rapidly and repeatedly build top-performing sales teams. 

How Predictive Analytics Can Fail-Proof Hiring Decisions

Predictive analytics matches companies with candidates whose personal and professional skills, habits, and values align with the company and sales department. 

Predictive analysis empowers companies to make strategic hiring decisions that dramatically impact ROI. After all, top-performing sales reps can bring in as much as four times the revenue created by average sales reps. This success rift means companies can exponentially increase revenue and growth with each hire, pushing profitability to new heights. 

PerceptionPredict’s proprietary predictive analytics tools produce unique sales candidate profiles called Performance Fingerprints. These Performance Fingerprints use cutting-edge machine learning and computational modeling to forecast candidates’ future performance accurately.

This forecasting includes specific insight into metrics like predicted length of tenure, sales productivity, and annual sales. Using our Performance Fingerprints, companies can rest assured that every addition to their sales department will bring a new wave of pleased customers, closed sales, and fresh revenue. 

Level Up Your Sales Team with Us Today

Sales performance is the lifeblood of your company’s success. While a robust evaluation process and clear picture of your sales plan can boost performance dramatically, performance outcomes are limited to the quality of talent you recruit and retain. 

Learn more about how predictive analytics can help your company optimize your hiring process to boost sales performance- book a demo with one of our experts.