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8 steps to conducting an annual sales review

1Frame the retrospective as a positive event
2Discuss what went well
3Discuss what went poorly
4Cover all your bases
5Consolidate the answers
6Turn the What into Why
7Establish what was learned
8Make an improvement plan
Reflect, realize, revamp

The busier your sales work environment is, the less time you have to stop and reflect. However, it’s important, even essential, to take stock of your and your team’s successes and failures, which is why a comprehensive sales retrospective is a productive way to start the new year.

“The goal of a sales retrospective is to figure out where you can streamline areas of your process, find out what worked and what didn't, and where you can improve,” says Max Altschuler, CEO of Sales Hacker and author of Hacking Sales.

Similar to the way software development teams conduct agile retrospectives to learn how to become more effective, sales retrospectives involve mining the last 12 months of sales operations for insight, and translating that insight into an improvement plan for the coming sales year.

1. Frame the retrospective as a positive event

For a sales performance review to provide any value, it needs to go beyond assessing the team’s performance against the key metrics and sales targets. Those involved in the employee evaluation must be willing to acknowledge mistakes, inadequacies and failures, both at an individual and companywide level. This can quickly lead to finger-pointing and ineffective bickering, so it’s important that the performance evaluation be framed as a positive event.

Some ground rules:

  • This is about learning, not blaming.

  • This is about the past and the future.

  • This is a safe haven where every team member involved can speak their mind without negative repercussions.

  • Retrospectives are not only about self-evaluation but are also a team exercise meant to improve teamwork.

By properly framing the employee performance review, a sales retrospective doesn’t just spearhead continual improvement, it cultivates a more trusting and supportive sales team, which boosts overall performance and breeds a higher quality of work.

2. Discuss what went well

Sharing, analyzing, and archiving your sales successes can help you establish a precedent for future actions, so begin the sales performance evaluation by discussing and documenting what went well during the last year. “What did you win at?” says Aaron Ross, author of Predictable Revenue. “What did you accomplish? What did the team win at? The company?”

Participants should be encouraged to think beyond generalities and pin down specifics. Rather than settle for statements like “I made my sales quotas” , “I had a lot of support from the sales manager” or “I closed a big deal,” push yourself and your team to dig deeper. Some performance review example accomplishments could include:

  • “Many of my clients made multiple purchases.”

  • “I consistently hit all of my key sales activity goals.”

  • “I increased the number of conversations I initiated per day.”

  • “I shortened my average call time by two minutes.”

  • “I stopped prematurely discounting and still maintained my close ratio.”

Remember also that there are successes outside the sales process itself. Did your sales team cooperate with management? Did they work as a cohesive unit? Did they master your CRM? Did you enhance your leadership skills by taking a professional development course and hit a new career goal? Did you start a sales leaders mentoring program to improve employee performance?

3. Discuss what went poorly

No need to sugarcoat this part of the process. Things go wrong, people make bad decisions, and sales reps fall short of their goals. But those that don’t learn from history are doomed to repeat it, so make sure the history is accurately chronicled.

Again, specificity is key. “I didn’t close as many deals as I wanted to” is a good place to start, but losing deals is a result, not an action. To gain a better understanding of your team’s failures, identify what actions led to the given result.

For example, “I failed to close deals because I …”

  • “Struggled to gain my buyer’s trust.”

  • “Failed to identify the buyer’s true needs.”

  • “Spent too much time chasing big deals that were dead in the water, while neglecting smaller deals that were much more likely to close.”

  • “Was focused on my own agenda and sales results rather than the client’s objectives.”

  • “Took too long to reach a decision-maker.”

As they did with their successes, everyone involved in the performance appraisal should also keep a list of their failures for later reference.

4. Cover all your bases

Discussing what went well and what went poorly can generate plenty of valuable information, but to mine your sales representatives for even more insight, take this time to ask more prompting questions, such as:

  • In what industry were your biggest wins?

  • In what industry were your biggest losses?

  • How long did it take to separate the deals from the duds?

  • What percentage of your monthly prospects led to won deals?

  • What percentage went nowhere?

  • Was your follow-up process as efficient as it could have been?

The answers to these questions will help you understand not only how well sales reps performed individually, but also if you need to optimize sales strategies so your team has a better chance of hitting milestones and company goals.

5. Consolidate the answers

After discussing the successes and failures of the last year, it’s time to consolidate everyone’s answers and organize them hierarchically. Which areas are in most need of improvement? Which areas are in least need of improvement?

Perhaps a whopping 95% of the sales team spent too much time chasing big deals, while only 15% failed to identify their buyer’s true needs. Maybe 92% had buyers make multiple purchases, while only 10% managed to shorten their average call time.

Now you know which areas to invest the most time and energy into improving.

6. Turn the What into Why

After everyone’s successes and failures have been consolidated and organized, the learning can begin. The first step toward improvement is to identify the root cause of any given success or failure. This can be done by turning the what into a why.

Here are some sales performance review examples of how to do just that:

  • What: Multiple customers rejected my work.
    • Why: I did not clearly articulate what we could deliver.

  • What: I struggled to gain the buyer’s trust.
    • Why: I made false assumptions about the buyer’s needs.

  • What: I gave away too many discounts.
    • Why: I was too nice to the buyer and avoided healthy conflict.

  • What: I failed to connect with buyers in a particular industry.
    • Why: I did not tailor my messaging to that particular industry.

Conduct an honest self assessment to figure out your “why”.

7. Establish what was learned

By this point in the annual performance review, you and your team should be looking at a massive white board filled with successes, failures and the root causes of those successes and failures. To fully establish what was learned, engage in a little linguistic rearranging.

For example, if 85% of your sales professionals had trouble obtaining face-to-face meetings, and one of the causes was that those salespeople failed to develop a holistic understanding of the customer’s needs during the initial conversation, then you learned:

“By developing a more holistic understanding of the customer’s needs during the initial conversation, I can increase the likelihood of obtaining a face-to-face meeting.”

Or, if 55% of your salespeople were consistently able to meet their daily sales goals, and one of the causes was that those salespeople focused on the activity rather than the result, then you learned:

“By focusing on the activity rather than the result, I can increase the likelihood of consistently meeting my daily sales performance goals.”

8. Make an improvement plan

After establishing what was learned, all that’s left to do is identify the actions people can take to improve their shortcomings.

If your team learned that by developing a more holistic understanding of the customer’s needs during the initial conversation, they can increase the likelihood of obtaining a face-to-face meeting, one action they can take is to practice active listening.

If your team learned that by focusing on the activity rather than the result, they can increase the likelihood of consistently meeting their daily sales goals, one action they can take is to use a sales pipeline calculator to establish which activities are necessary to the sales process.

Reflect, realize, revamp

If you conduct a comprehensive sales retrospective, you and your sales team can use the past to improve the future. Use the tips in the sales performance review examples mentioned throughout this guide to dive beneath the surface. Identifying, organizing and understanding the root causes of your team’s successes and failures will help determine what worked and what didn’t, and how to improve.

A properly conducted sales performance review will highlight areas of improvement, sharpen problem solving and communication skills, offer constructive feedback and serve as a performance review template for future sales retrospectives.

Everyone should walk away from the performance review process feeling confident about the future, and with a better understanding of the team goals and KPIs in the coming year.

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