How to Create a Sales Performance Improvement Plan that Hits Quota

A Sales Performance Improvement Plan (PIP) is a strategic tool to help sales teams improve sales performance and hit quota and overall performance. It also aims to motivate team members who struggle to meet expectations and overcome sales challenges. It’s not just about identifying underperformers but a clear path to success. Sometimes PIPs are seen as negative by sales reps but when done right they can be a powerful tool for improvement.

This article will walk you through how to create a Sales Performance Improvement Plan so your sales team can hit and exceed their numbers.

Table of contents:

1. What is sales performance

2. Current performance assessment

3. PIP components

4. Creating a PIP for sales reps

5. Sales performance improvement plans example

6. Common mistakes and pitfalls

7. Summary

What is sales performance

Before we get into the Sales Performance Improvement Plan and its components, let’s define what sales performance means.

Sales performance is how well your sales team is meeting their goals and quotas, which includes:

• Revenue

• Deals closed

• Average deal size

• Win rate

• Close rate

• Sales cycle length

• Sales velocity and more

You can read more about what key performance metrics to track and how in this article, which emphasizes the importance of using relevant metrics to assess and improve sales performance.

Common reasons for low performance and not hitting sales quota include:

• Unrealistic or unclear sales goals

• Poor lead quality

• No training

• Poor sales process

• No automation

• Not enough resources

Current performance assessment

Before creating a Sales Performance Improvement Plan, do a performance audit. The sales manager plays a big role in this process by doing a performance audit and analyzing sales data to identify trends and patterns to meet sales objectives.

To properly and objectively measure your sales performance you need four things:

1. A list of performance metrics to track aligned to your sales goal - the quota.

2. A deep understanding of how these metrics will be tracked, how often, and what data needs to go into your internal systems.

3. A process to clean the data. Good data is key to any measurement.

4. A tool to track performance in real-time.

While most of the time CRMs are enough to track sales performance metrics, it’s highly recommended to use sales performance management software like Forecastio. This software allows you to track and get immediate insights on what to improve.

You can also get these insights by asking sales teams and stakeholders.

Quantitative data and qualitative feedback give you a complete picture of current performance.

PIP components

Before creating a Sales Performance Improvement Plan you need to understand its components.

The following components will provide a framework to create a Sales Performance Improvement Plan that hits quota and a culture of continuous improvement.

Objectives

Define specific, measurable, achievable, relevant, and time-bound (SMART) goals aligned to overall business goals.

Performance levels

This includes setting clear expectations of what is acceptable performance so everyone involved knows what’s required to meet those standards.

Action steps

Define the specific actions to achieve the objectives. In simple terms, what needs to be done to get the desired outcomes?

Timelines

Set clear deadlines for each action step and milestone so progress can be tracked and measured.

Reviews

Schedule regular performance reviews to monitor progress, provide feedback, and adjust the plan as needed.

Sales rep support

Define how management will support employees, including which training programs will be used to address skill gaps and provide ongoing development to improve a sales rep's performance.

Feedback channels

Create a way for managers, peers, and customers to provide regular feedback so the plan stays relevant.

Flexibility

Be prepared to adjust the plan as needed based on performance data and feedback so it stays aligned to business goals and market conditions.

Recognition and rewards

Create a way to recognize and reward progress and achievements so the sales team will keep improving.

Creating a PIP for sales reps

1. Performance assessment

Start by assessing the performance of the underperforming sales rep you want to put on a Sales Performance Improvement Plan.

Measure key performance indicators, and define performance gaps and areas for improvement.

Talk to colleagues and customers (if possible) to get feedback and qualitative assessment of the sales rep’s performance.

This step is to define performance gaps and areas for improvement which will later be converted to sales performance improvement goals.

2. Why a Sales PIP

As mentioned above a Sales Performance Improvement Plan can be perceived negatively by a sales rep.

The key here is the manager’s ability to explain why this PIP is needed by presenting the facts (metrics) and benefits to the sales rep.

3. SMART Goals

Include measurable, achievable, and time-bound goals in a PIP.

For example, you see that one of your sales reps has a 20% win rate while others have 30% or more.

By looking at productivity data you find out the sales rep has issues at the demo stage. You offer the employee training on presentation skills and advanced product training.

The objective in this case might be: to get to a 25% win rate by the end of June.

4. Action and timelines

List the steps to achieve the objectives above.

Describe how each step will be done, who will be involved and what are the deadlines.

Also, don’t forget to define the criteria for each step.

For example, a sales rep needs to attend the ‘Mastering Presentation Skills’ training which will be conducted by John Smith, Director of Sales on May 17th. After the training, the sales rep needs to pass a quiz and present a product demo to the trainer.

5. Review and feedback process

Define how often the sales performance will be reviewed and what format will be used. In person or video conference?

List the questions to be discussed during the review, which performance indicators will be measured and what the sales rep needs to prepare for the review.

For example, review meetings will be on Mondays at 10 a.m. During the review meetings:

• Win rate since PIP was activated to see improvements.

• Demo stage conversion rate last week vs previous weeks.

• Deals lost at the demo stage.

• Progress on actions in the PIP.

• Any other issues.

6. Guidance

This is the last but not the least.

A Sales Performance Improvement Plan is dependent on both the employee and their manager.

Add to the plan the types of support and guidance the sales rep can expect from you, whether it’s extra training, coaching sessions, or quick Q&A at the end of the day.

Sales performance improvement plans example

PIP: Win Rate

Details

Employee: John Doe
Position: Account Executive

Performance gap and reason

The average win rate is 20%, which is 10% lower than the team average, indicating a failure to meet sales quotas. After reviewing closed lost deals, it was found that most of them are lost at the pipeline stage ‘Demo’.

Objectives

Get to 5% win rate by end of August to match overall sales goals.

Action steps and timelines

• Training on preparing for demo calls, including tips and best practices. (June 1st)

• Presentation skills training. (June 2nd)

• ICP and current value proposition training. (June 3rd)

• Product features and benefits training. (June 3rd)

• Coaching on working with customer objections. (June 4th)

• ‘Mastering Follow-ups’ training. (June 4th)

• Joint demos with Senior Account Executive. (2x a week)

Review meetings

Review meetings are on Mondays at 10 a.m.
Attendee: Sales Director, John Doe

Agenda:

• Win rate dynamics (Forecastio trend analysis)

• Demo stage conversion rate (Forecastio pipeline analysis)

• Review of closed lost deals last week (Deals in HubSpot)

• Review of deals lost at the demo stage (Deals in HubSpot)

• Feedback and Q&A

• Goals for next week

Guidance

Daily Q&A with Sales Director at 5 p.m. Remotely.
Duration: 15 minutes

Consequences

If the objectives are not met by the end of the timeline further disciplinary action may be taken which could include extra training or termination.

Common mistakes and pitfalls

Creating and implementing a Sales Performance Improvement plan takes time and effort. You need to address common sales challenges that can kill it and impact the overall performance of the sales organization.

Unfortunately, PIPs fail, and here are the main reasons:

Lack of clarity and specificity

Not defining clear, specific, and measurable objectives can confuse and make it hard for the employee to know what’s expected of them.

Not enough support and resources

Not providing the training, tools, and resources can prevent the employee from improving.

Unrealistic expectations

Setting goals that are too big or impossible to achieve by the deadline can demotivate the employee and set them up to fail.

Inconsistent monitoring and feedback

Not monitoring progress regularly and providing feedback can mean missed opportunities to improve and adjust.

No communication

Poor communication between employees and management can cause misunderstandings and misalignment of goals and expectations.

Not addressing the root cause

Only focusing on the symptoms of poor performance and not the underlying cause can mean temporary fixes but not long-term solutions.

Negative perception

Implementing the PIP in a way that feels punitive rather than supportive can create resistance and reduce the employee’s motivation to improve.

Not involving the employee: Not involving the employee in the creation of the PIP can mean no buy-in and ownership of the improvement process.

No follow-up: Not doing follow-up reviews and adjustments can mean the PIP loses effectiveness over time.

Summary

In summary, a well-designed Sales Performance Improvement Plan is key to quota attainment and continuous improvement for your sales representatives and overall sales team. Forecastio - a sales performance management platform that helps you make data-driven decisions, identify areas for improvement, and create targeted PIPs that deliver results.

Don’t let underperformance hold your team back any longer. Book a demo with Forecastio today and see how our tool can transform your sales process. This will get your team on track.