CRM and Sales Performance Management: Sales Success Through Separate Systems

Introduction

One of the questions that we frequently encounter is: "Shouldn't incentives and sales performance management just be another module in the CRM?" To this, my answer is an emphatic 'No'. While it may seem logical to integrate incentives into the CRM at first glance, a closer look at the roles and functions of these systems highlights why they should be kept distinct.

The Customer Relationship Management (CRM) System: A Customer-centric Approach

At its core, the CRM is all about the customer. Designed with salespeople as its primary users, the CRM serves as a tool for understanding, tracking, and acting on everything related to the customer. It offers a comprehensive view of customer interactions and behaviours, allowing salespeople to act with the customer's needs, preferences, and history in mind.

With the evolution of CRM systems, their functionalities have grown significantly. The number of channels to reach out to the customer has exploded, transforming CRM from a simple call tracking system to a central hub that manages customer interactions across multiple touchpoints. Moreover, the boundaries between sales and marketing are becoming increasingly blurred, making the CRM an even more vital tool for coordinating customer-facing efforts.

Many companies even leverage CRM workflows to provide service to the customer in the post-sales world. With customer retention being a top priority in today's competitive markets, this aspect of CRM systems is becoming more and more critical.

The Incentives & Sales Performance Management System: A Sales Rep-centric Approach

While CRM focuses on the customer, the Incentives & Sales Performance Management system is all about the sales rep or agent. This system tracks sales rep behaviours and outcomes, and encourages alignment with corporate goals.

CRM data is just one of many data sources feeding into the performance management system. While CRM provides critical metrics regarding sales activities, most companies also use sales outcomes as part of their incentives. These outcomes can take on various forms, ranging from achievement to target, growth metrics, or measures tied to expanding the company's sales footprint and distribution.

The Goals and Metrics of Incentives & Sales Performance Management Systems

The specific goals of an Incentives & Sales Performance Management system will vary depending on the corporate objectives. For instance, if a company is targeting rapid growth, it may use growth metrics as a key measure. If the goal is to expand the company's outlet sales footprint and distribution, the system will have measures aligned to this.

Sometimes, the goals may be related to customer satisfaction, such as improving the company's Net Promoter Scores. In such cases, each goal may require data from a variety of systems not available in the CRM, such as ERP data, or third-party data sources.

The Role of Incentives and Sales Performance Management Systems

Good incentive and sales performance management systems excel at blending data from various sources. They assimilate this information to provide incentives that align with corporate goals, then offer the communication and engagement channels necessary to motivate and align the reps or agents.

It's important to remember that this is more than just another 'report'. These systems provide a communication channel that guides, motivates, and nudges your go-to-market teams towards alignment. By offering sales compensation in line with performance metrics, these systems serve as a powerful motivator for your sales team.

Conclusion

In summary, CRMs do what they do best - cater to the customer, while Incentives and Sales Performance Management systems do what they do best - align the sales rep. These systems serve distinct, yet interconnected functions, each crucial to the success of a company's sales strategy. Solutions like Incentivate are built around this separation, ensuring incentive management operates with the depth and flexibility it requires without overloading CRM systems. Keeping them separate allows each system to fully specialize and excel in its specific role, ensuring a more effective and efficient sales process.