Revenue Operations

Revenue Operations

How to Design a Sales Performance Improvement Plan that Drives Quota Attainment

Alex Zlotko

CEO at Forecastio

Jun 13, 2024

9 Min

How to Design a Sales Performance Improvement Plan that Drives Quota Attainment
How to Design a Sales Performance Improvement Plan that Drives Quota Attainment
How to Design a Sales Performance Improvement Plan that Drives Quota Attainment
How to Design a Sales Performance Improvement Plan that Drives Quota Attainment

A Sales Performance Improvement Plan (PIP) is a strategic tool designed to help sales teams achieve their quotas and enhance overall performance. Additionally, PIPs enable sales leaders to motivate team members who struggle to meet expectations. It's not just about identifying underperformers but about providing a clear, actionable path to success. Sometimes, PIPs are negatively perceived by sales reps, but when presented properly, they can become a powerful tool for improving performance.

This article will guide you through the process of creating an effective Sales Performance Improvement Plan, ensuring your sales team is equipped to meet and exceed their targets.

Understanding sales performance

Before moving forward to the discussion of a Sales Performance Improvement Plan and its core elements, it is important to understand what sales performance refers to.

Sales performance is a measurement of how effectively your sales team meets its goals and quotas. This includes several metrics that should be measured on a consistent basis:

  • Revenue generated

  • Number of deals closed

  • Average deal size

  • Average win rate

  • Average close rate

  • Average sales cycle length

  • Sales velocity, and more

You can read more about which key performance metrics should be tracked and how in this article.

Common reasons for low performance and not achieving sales quotas include:

Assessing current performance

Before designing a Sales Performance Improvement Plan, conduct a thorough performance audit. This involves analyzing sales data to identify trends and patterns.

To properly and objectively assess your sales performance, you need four key elements:

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

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

  3. A consistent process for cleaning data. Accurate data is key for any measurements.

  4. A tool that helps you track performance in real time.

While in most cases CRMs are sufficient to track sales performance indicators, it’s highly recommended to leverage specialized sales performance management software like Forecastio. This software allows you to not only track but also receive immediate insights into areas for improvement.

You can also gain these insights by gathering feedback from sales teams and stakeholders.

Understanding both quantitative data and qualitative feedback provides a comprehensive view of current performance.

Core elements of a PIP

Before designing a Sales Performance Improvement Plan, it is important to understand its core components.

The following core elements provide a structured framework for creating an effective Sales Performance Improvement Plan that drives quota attainment and fosters a culture of continuous improvement.

Clear objectives

Define specific, measurable, achievable, relevant, and time-bound (SMART) goals that align with overall business objectives.

Acceptable performance levels

This includes setting clear expectations for what is considered acceptable performance, ensuring that all involved parties understand what is required to meet these standards.

Detailed action steps

Outline the specific actions required to achieve the objectives. In simple terms, what steps should be taken to guarantee the needed outcomes are achieved?

Defined timelines 

Establish clear deadlines for each action step and milestone to ensure progress is tracked and measured.

Regular reviews 

Schedule frequent performance reviews to monitor progress, provide feedback, and make necessary adjustments to the plan.

Guidance and support 

Outline how management will assist employees, including which training programs are included to address identified skill gaps and provide ongoing development opportunities for the sales team.

Feedback mechanisms

Create a system for regular feedback from managers, peers, and customers to ensure the plan remains effective and relevant.

Adaptability

Be prepared to adjust the plan as needed based on ongoing performance data and feedback, ensuring it remains aligned with business goals and market conditions.

Recognition and rewards 

Establish a system for recognizing and rewarding progress and achievements, motivating the sales team to continue improving.

Designing a PIP

  1. Assess performance

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

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

Talk to colleagues and customers (if possible) to gather thorough feedback and get a qualitative estimation of the sales rep's performance.

The key goal of this step is to identify gaps in performance and areas for improvement, which will later be translated into sales performance improvement goals.

  1. Explain the need for a Sales PIP

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

The key here is the manager's ability to explain why this PIP is required by presenting the facts (metrics) and conveying the benefits for the sales representative.

  1. Set SMART Goals

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

For example, you see that the win rate of one of your sales representatives is 20%, while other employees have 30% or more.

By delving into productivity data, you find out that the sales rep has issues at the demo stage. You offer the employee an opportunity to improve their presentation skills and take advanced training on product features.

The goal in this case may be stated as: to increase the win rate to 25% by the end of June.

  1. Define actions and timelines

Create a list of steps that should be taken to achieve the goals mentioned above.

Describe how all actions will be performed, who will participate in the process, and what the deadlines are.

Also, do not forget to describe the criteria for step completeness.

For example, a sales rep should take part in the 'Mastering Presentation Skills' training, which will be held by the Director of Sales, John Smith, on May 17th. After the training, a sales rep should pass a quiz and conduct a product demonstration for the lecturer.

  1. Outline review and feedback mechanisms

Define how often the review of sales performance will take place and which format will be used. Will it be weekly meetings in person or via video conference?

Decide on a list of questions that will be discussed during the reviews, which performance indicators will be assessed, and what a sales rep should prepare for the review.

For example, review meetings will take place on Mondays at 10 a.m. During the review meetings, the following questions will be discussed:

  • Win rate since the PIP was activated to assess improvements.

  • Demo stage conversion rate during the last week compared to previous periods.

  • Deals that were lost at the demo stage.

  • Progress towards actions specified in the PIP.

  • Any other issues and challenges.

  1. Offer guidance

This is the last but not the least stage.

The success of a Sales Performance Improvement Plan depends on both the employee and their manager.

Add to the plan the types of support and guidance a sales representative can expect from you, whether it’s additional training, coaching sessions, or quick question-answer sessions at the end of the working day.

Sales performance improvement plan example

PIP: Win Rate improvement

General information

Employee: John Doe
Position: Account Executive

Performance gap and reason

The average win rate is 20%, which is 10% lower than the average win rate across the sales team. After a detailed analysis of closed-lost deals, it was found that most of them are lost at the pipeline stage ‘Demo’.

Goals and objectives

Improve the win rate by 5% by the end of August.

Action steps and timelines

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

  • Extended training on presentation skills and best practices. (2nd week of June)

  • Additional training on ICP and current value proposition. (3rd week of June)

  • Extended training on product features and benefits. (3rd week of June)

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

  • Training on 'Mastering Follow-ups'. (4th week of June)

  • Joint demos for customers with a Senior Account Executive. (Twice per week)

Review meetings

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

Agenda:

  • Win rate dynamics (Trend analysis in Forecastio)

  • Demo stage conversion rate (Pipeline Analysis in Forecastio)

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

  • Review of deals lost during the Demo stage (Deals in HubSpot)

  • Feedback and Q&A session

  • Key goals for the next week

Guidance

Daily stand-up meetings with the Sales Director at 5 p.m. Remotely.
Duration: 15 minutes
Format: Q&A session

Consequences

If the outlined objectives are not met within the specified timeline, further disciplinary actions may be taken, which could include additional training or potential termination.

Mistakes and pitfalls

Crafting and implementing a Sales Performance Improvement plan requires time and effort.

Unfortunately, some PIPs fails and here are the main reasons:

Lack of clarity and specificity

Failing to define clear, specific, and measurable goals can lead to confusion and make it difficult for the employee to understand what is expected of them.

Insufficient support and resources 

Not providing the necessary training, tools, and resources can hinder the employee's ability to improve their performance.

Unrealistic expectations 

Setting goals that are too ambitious or unattainable within the given timeframe can demotivate the employee and set them up for failure.

Inconsistent monitoring and feedback 

Failing to regularly monitor progress and provide constructive feedback can result in missed opportunities for improvement and adjustments.

Lack of communication 

Poor communication between the employee and management can lead to misunderstandings and a lack of alignment on goals and expectations.

Ignoring root causes 

Focusing only on the symptoms of poor performance rather than identifying and addressing the underlying causes can result in temporary improvements 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.

Failure to involve the employee: Not involving the employee in the creation of the PIP can lead to a lack of buy-in and ownership of the improvement process.

Neglecting follow-Up: Not conducting follow-up reviews and adjustments can result in the PIP losing effectiveness over time.

Conclusion

In conclusion, a well-crafted Sales Performance Improvement Plan is essential for driving quota attainment and fostering continuous improvement within your sales team. Forecastio - a specialized sales performance management platform that empowers you to make data-driven decisions, identify areas for improvement, and create targeted, actionable PIPs that deliver results.

Don't let underperformance hold your team back anymore. Book a demo with Forecastio today and discover how our powerful tool can revolutionize your sales process. This will set your team on the path to success.


Alex Zlotko

CEO at Forecastio

Linkedin

Alex is the CEO at Forecastio, bringing over 15 years of experience as a seasoned B2B sales expert and leader in the tech industry. His expertise lies in streamlining sales operations, developing robust go-to-market strategies, enhancing sales planning and forecasting, and refining sales processes.

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  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

© 2024 Forecastio, All rights reserved.

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

© 2024 Forecastio, All rights reserved.

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

  • Sales Planning

    Sales Forecasting

    Sales Performance Insights

© 2024 Forecastio, All rights reserved.