A lot can change for salespeople when the economy takes a turn for the worse — both personally and professionally.
In many — if not most — cases, uncertain financial times lead to what might appear to be significant dips in a sales rep's overall performance. Maybe, they don't hit quota. Maybe, they lose out on accounts.
Maybe, they don't deliver the kind of results you, as a sales manager, have come to expect from them. But in a difficult financial landscape, it might be unfair to maintain the same standards and expectations you've always held for your reps.
When economic conditions are particularly volatile, the conventional metrics you've used to gauge your reps' overall performance won't be as reliable or reflective of the effort, energy, and sales acumen they're bringing to their day-to-day. So when you conduct performance reviews during troubling financial times, you'll need to adjust your strategies and frame of mind.
Here, we'll get some tips on how to conduct a sales performance review in an uncertain economic landscape, see some of the key aspects of a rep's performance you should stress, and get a feel for some areas where you should prioritize empathy.
How to Do a Sales Performance Review in an Uncertain Economy
Comprehensively prepare for the review.
Start with some positive feedback to ease the mood.
Frame negative feedback as aspects to improve as opposed to hard criticism.
Establish reasonable goals and offer guidance on how to achieve them.
1. Comprehensively prepare for the review.
This point is relevant when conducting any sales performance review — and reviews carried out under unfortunate economic circumstances are no exception. If anything, it's more important to have a comprehensive overview of a rep's performance before going over it when financial conditions are uncertain.
During rougher economic stretches, gauging a rep's performance can be less straightforward. A poor economy often means less consistent or more erratic interest from prospects and existing customers. That can make certain KPIs less reflective of a rep's individual skills and effort.
When conducting a performance review during a difficult financial time, you might have to dig a little deeper to really understand how a rep is faring. For instance, let's say you're reviewing an account executive's performance during an economic downturn. The clients they serve might be hit particularly hard by the shifting financial landscape — relative to their colleagues' accounts.
Factors like revenue or quota attainment might lean too heavily on the state of the economy to be a reliable means of understanding how they're actually performing. In that case, you'd need to take the time to understand the state of their accounts, the nature and extent of their sales activity, and whether they're actively contributing to your team culture in the face of economic uncertainty.
2. Start with some positive feedback to ease the mood.
As you can assume, a bad economy isn't exactly the most soothing backdrop for sales performance review — very few salespeople look at a financial crisis and say, "Neat! I love economic uncertainty and disrepair! I can't wait to take on this challenge! In fact, I hope things get even worse!"
No, those kinds of conditions tend to make things pretty tense for most sales reps, and even normal sales performance reviews are stressful in their own right. You bring those two together and you have a recipe for some extreme anxiety.
That's why it helps to put your reps at ease with some positive feedback to start the review. Don't lead with harsh criticism or contentiousness. Instead, let them know what they've been doing right. From there, you can start to reference any areas they might have for improvement.
3. Frame negative feedback as areas for improvement as opposed to hard criticism.
Again, tensions are bound to be high under less-than-ideal economic conditions, and you can't be sure how the state of the economy is impacting your reps' lives beyond the office. That's why you need to offer a bit more cushion to your criticism than you might have under the usual circumstances.
Though this point should be applied to any sales performance review — no matter the state of the economy — it's particularly pertinent in the thick of difficult financial times. Try to frame potential shortcomings as learning opportunities.
Don't scold your reps. Let them know you believe in their ability to address and remedy the weaker parts of their sales efforts. If possible, provide some actionable feedback and advice on how they should proceed post-review. Ultimately, they need to understand that you have certain expectations for them, but that it's well within their power to live up to those standards.
4. Establish reasonable goals and offer guidance on how to achieve them.
Managing your expectations is a key component of conducting an effective sales performance review under rough economic circumstances. Still, you can't suspend all your future plans or undermine the insight you offer by not setting any benchmarks or standards.
Instead, you have to take an objective look at the situation, understand what you can reasonably hope for out of your reps, and try to come up with actionable steps for them to reach those goals.
This point has some overlap with the one above it. You need to make sure you're proactive with your criticism, and setting reasonable goals is a big part of that.
Make sure your targets are viable under tougher economic circumstances, and let your reps know what they need to improve to help them reach those benchmarks.
What to Review
Work Ethic and Drive
Relevant Sales Activity Metrics
1. Abstract, Assessment-Based Qualities
In uncertain economic times, your reps can't be expected to deliver on the harder standards you'd generally set for your performance reviews. If your company is providing limited services or seeing a sales slump across the boards, it's unfair to come down on them for falling short of quotas you set before the economy took a turn.
Instead, you need to lean on more abstract, assessment-based qualities to shape your performance reviews. Try to see if your reps are demonstrating initiative, work ethic, and leadership skills against a less-than-ideal economic backdrop.
Stress the importance of these aspects of their sales repertoires in the face of difficult economic conditions. The broader circumstances around your reps' sales efforts are well beyond their control, so it's important to review their performance based on the factors they can personally manage.
2. Relevant Sales Activity Metrics
This point is a natural extension of the one above. Sales activity metrics are used to gauge a sales rep's behavior and effort as opposed to their hard results. They include metrics like number of calls made, number of emails sent, or number of follow-ups.
Again, like the abstract qualities mentioned above, these kinds of metrics don't rest as heavily on external circumstances as much as conventional KPIs. Instead, they demonstrate a rep's willingness to remain persistent in the face of adversity. In the context of economic trouble and uncertainty, that kind of determination among the most important qualities you can hope for.
3. Cultural Contribution
In the face of an economic downturn, your sales reps need to be on the same page. You want your team to work as a cohesive unit to help see your company through difficult times. Making sure they meaningfully contribute to and work per your team culture is central to that.
Make sure your reps are actively empowering and cooperating with their fellow team members. Again, this aspect of your operations doesn't lean on the state of the economy — it rests on a rep's personal inclinations and attitude. Those are key components to keep tabs on and potentially adjust during uglier financial times.
Where to Show Empathy
When Trying to Understand Performance Dips
Comparing Reps' Performance to Goals Set Before an Economic Downturn
When Reps Are Adapting to New Working Conditions
1. When a Rep's Performance Dips
You might get used to a certain level of production from your team, including some specific reps who consistently exceed expectations. But when the economy is in a rut, your team — and those star reps — might start to underperform.
It's important to empathize with reps who are seeing performance dips that coincide with the emergence of economic troubles. There's no telling how uncertain or unfortunate financial circumstances might be impacting their lives beyond their jobs.
Be willing to cut them some slack. That doesn't mean you need to totally suspend all your standards and abandon any accountability, it means that you need to take a second to consider their perspective — particularly if the rep in question has been a high performer up to this point.
Give them a little leeway initially, but if their performance falls off a cliff — more than their fellow team members — it's worth taking some extra time and attention to identify the obstacles they're running into.
2. Comparing Reps' Performance to Goals Set Before an Economic Downturn
This point ties into the one above, but if you set a quarterly quota — only to have the economy go into a tailspin shortly thereafter — you need to adjust your expectations. You shouldn't hold your reps to standards that are significantly less realistic now than they were at the start of the reporting period, given a radical shift in circumstances.
Instead, try to see how your team is performing as a whole, and see if there are reps who are lagging relative to their colleagues. Even then, don't be too quick to judge or harshly criticize them. There's no telling how global financial troubles are coming down on them personally. Remain empathetic, and that often means adjusting your expectations for your team.
3. When Reps Are Adapting to New Working Conditions
A change in economic circumstances can often lead to a shift in working conditions. Difficult financial situations could lead to fewer hours, a newfound emphasis on remote work, or some other substantial adjustment to how or where your reps do their jobs.
If that's the case, be willing to give a little room for them to adapt to the new normal when conducting your performance reviews. If they raise concerns and grievances about how their new working conditions are adversely impacting their performance, hear them out and look for ways to work with them as they get used to their new surroundings.
If they run into early trouble that doesn't let up, take some time in your review to identify any potential blockers that stem from their shifting circumstances. Remain empathetic, and present actionable advice on how they can better adapt to their new situation. Try not to chastise them for hitting a rough patch after changing working conditions throw them off.
The key to conducting an effective sales performance review during an uncertain economy is thinking of the big picture — being mindful of how external factors are impacting your reps both personally and professionally.
Give a reasonable amount of leeway and focus more on the effort, team contributions, and sales acumen they're bringing to your organization than results they're seeing.
An economic downturn has ramifications that impact your reps' lives both within and beyond the office, keep that top of mind when conducting your performance reviews.
Originally published Oct 5, 2020 8:00:00 AM, updated June 15 2021