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8 steps to conducting an annual sales review

Annual Sales Review
What is a sales performance review?
Why are sales performance reviews important?
8 sales performance review tips to improve next year
Final thoughts

The busier your sales work environment, the less time you have to stop and reflect. Taking stock of your team’s wins and losses with a comprehensive sales performance review is essential.

Similar to how software development teams conduct agile retrospectives to learn how to become more effective, sales retrospectives involve mining recent sales operations for insights.

In this article, we define what a sales performance review is and provide eight tips to help you translate its insights into an improvement plan for the coming sales year.

What is a sales performance review?

A sales performance review is usually an annual evaluation between individual sales reps and the leadership team. Occasionally, these can be quarterly reviews, too.

Sales management teams lead these one-to-one meetings to discuss each rep’s performance, personal goals and productivity. At the same time, it’s an opportunity to check in. Both sides can discuss career development opportunities, including promotion potential, financial incentives and action plans for the coming year.

Why are sales performance reviews important?

An in-depth sales performance review can often highlight areas of improvement, sharpen problem-solving and communication skills, offer constructive feedback and increase employee retention.

In your reviews, it’s critical that reps feel you’re assessing them accurately and fairly. In fact, staff rate reviews so highly that they’re likely to leave if the review doesn’t feel valuable (e.g., receiving non-actionable personality feedback).

Research by recruitment software platform Textio suggests employees who receive low-quality feedback are 63% more likely to quit their roles and 17% of those looking for other roles specifically cited insufficient feedback as the primary reason.

Impactful sales reviews are typically two-sided conversations rather than manager-led speeches. After offering feedback about a team member’s performance or professional development, give them time to share their thoughts on whether they feel supported enough or where leadership could better help them succeed.

Productive, informative performance reviews create a sales culture of open communication and a more positive working environment for everyone.

8 sales performance review tips to improve next year

Sales performance reviews don’t have to be nerve-wracking for your team; they can actually be highly motivating and a chance to make positive changes for the company.

Here are eight tips to help you conduct sales performance reviews that drive actionable insights year after year.

1. Frame the sales performance evaluation as a positive event

For a sales performance review to provide value, it should go beyond assessing your team’s performance against key sales metrics and targets.

Those involved in each employee evaluation must be willing to acknowledge mistakes, inadequacies and failures individually and company-wide.

However, doing so can sometimes lead to finger-pointing or ineffective bickering, so it’s good practice to reframe the performance evaluation as a positive event.

Some ground rules that can be helpful to introduce before and during the meeting include:

  • Focusing on learning instead of blaming (e.g., what does the rep need to know to avoid such mistakes in future)

  • Highlighting that the discussions are about past events and the future

  • Confirming the space is safe from negative repercussions so every team member can give an honest answer

  • Calling attention to the fact that retrospectives are also meant to improve teamwork

A retrospective organized in this way can cultivate a more trusting and supportive sales team. Doing so regularly can help spearhead continual improvement, boosting overall performance and breeding a higher quality of work.

2. Discuss what went well

Sharing, analyzing and archiving your sales successes can help establish a precedent for future actions.

It’s good practice to begin the sales performance review by discussing and documenting what went well during the last year.

Participants should be encouraged to think beyond generalities and pin down specifics. Rather than settle for statements like, “I made my sales quota”, “I had a lot of support from the sales manager” or “I closed a big deal”, try to push your team to dig deeper.

Some performance review example accomplishments could include:

  • “Around 60% of my clients made multiple purchases”

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

  • “I increased the number of conversations I initiated daily by 25%”

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

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

Being specific with your goals and statements can help them feel more achievable and meaningful. However, remember there are also successes outside the sales process itself.

Did your sales team cooperate with management and work as a cohesive unit? Did they master your new customer relationship management (CRM) software? Did someone start a mentoring program to improve employee performance?

Each of these is also an achievement you should highlight and celebrate in your review.

3. Don’t be afraid of what didn’t go well

It’s inevitable that things will go wrong sometimes. People will make less than ideal decisions and sales reps can fall short of their goals.

We’re all human. Learning from historical mistakes means we’re less likely to repeat them, so make sure you accurately note down mistakes and the planned steps to avoid them in future.

Again, specificity is key to ensure you take meaningful insights from any event. For example, “I didn’t close as many deals as I wanted to” is a good place to start. However, losing deals is a result, not an action.

To better understand your team’s setbacks, identify what actions led to the given result and ask reps to get specific.

You may consider asking questions like:

  • “Did you manage to win the buyer’s trust?”

  • “Did you identify the prospect’s true needs?”

  • “Did you balance your time between larger and smaller deals?”

  • “Did you identify the correct decision-maker at each company?”

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

Note: Missing quota or losing deals can be uncomfortable topics to discuss. As a manager, you can mitigate this by being supportive and figuring out where reps may need backup or education instead place of finger-pointing.

4. Ask more specific follow-up questions

Discussing what went well and what didn’t can generate plenty of valuable information. However, you can ask more prompting follow-up questions to mine your sales representatives for even more insights.

Examples of such questions include:

  • In what industry were your biggest wins?

  • In what industry were your most significant losses?

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

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

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

  • Which part of your time management process could you improve?

The answers will help you understand how well reps performed individually and if you need to optimize sales strategies to give your team a better chance of hitting milestones and company goals.

For example, you may find that your updated product is now more suited to a new niche than one you’ve previously succeeded with. Therefore, there may need to be a higher discussion between sales leaders and the product team about product positioning.

5. Consolidate the answers and create a team performance review

After discussing the successes and failures of the last year, it’s time to consolidate everyone’s answers and organize them hierarchically.

Doing so can highlight two things:

  1. The areas most in need of improvement

  2. The areas least in need of improvement

Perhaps 90% of the sales team felt they needed more support identifying the decision-maker at an organization. Maybe 70% had buyers make multiple purchases, while only 10% managed to shorten their average call time.

Thanks to the answers from your sales performance review meetings, you know which areas to invest the most time and energy into improving. Sharing the anonymous group results with the team shows reps what they can collectively work toward and celebrates what they’re doing well.

6. Turn the “What” into “Why” for honest self-assessments

After everyone’s successes and failures have been consolidated and organized, the learning can begin.

The first step toward improvement is to turn the “what” into a “why”. In other words, try to identify the root cause of any success or failure and connect the two.

These are some sales performance review examples of how to do just that.


Multiple customers rejected my work

I did not clearly articulate what we could deliver

I struggled to gain the buyer’s trust

I made false assumptions about the buyer’s needs

I gave away too many discounts

I was too nice to the buyer and avoided healthy conflict

I failed to connect with buyers in a particular industry

I did not tailor my messaging to that particular industry

Conducting honest self-assessments can help you determine your “why” for each success or setback.

Doing so means you and your team can dig deeper into your wins to increase their likelihood and avoid repeating losses in future.

7. Establish what everyone learned

By this point in the annual sales performance review, you and your team should be looking at a massive whiteboard filled with successes, failures and the root causes of both.

To fully establish what everyone learned, it can help to engage in a little linguistic rearranging.

Let’s say 65% of your sales professionals had trouble obtaining face-to-face meetings. One of the leading causes was that salespeople failed to develop a holistic understanding of the customer’s needs during the initial conversation.

In that case, your whole team learns that b 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.

If 55% of your salespeople were consistently able to meet their daily goals, largely because they focused on the activity rather than the result, your team learns that, by focusing on the activity rather than the result, they can increase the likelihood of consistently meeting their daily sales performance goals.

Use this method to positively reframe what your team can do in the future rather than what they haven’t previously.

8. Make an improvement plan for next year

All that’s left to do is identify the actions and initiatives your team can take to improve their shortcomings.

If your team learned they can increase the likelihood of obtaining a face-to-face meeting by deeply understanding the customer’s needs, one action they can take is to practice active listening.

Suppose your team learned they could consistently meet their daily sales numbers by prioritizing certain activities.

In that case, you can implement an organization-wide CRM to track those that have the most impact.

Pipedrive’s cloud-based CRM helps you pinpoint and measure every customer touchpoint with your team and company. Updating and assessing this software regularly gives you a clearer picture of the actions that encourage people to buy.

Sales activities in Pipedrive

You can also use these findings to double down on the strategies that worked.

For example, if public sampling increased leads in that area by 12%, you can try the strategy in other districts.

Final thoughts

By conducting comprehensive sales performance reviews, you and your team can use the past to improve the future.

Identifying, organizing and understanding the root causes of your team’s successes and failures can help you repeat what worked and avoid what didn’t.

Everyone should walk away from the performance review process feeling confident about the future and better understand the team’s goals and key performance indicators (KPIs) in the coming year.

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