Sales Force Management
The Sales Manager: Areas of Expertise
The job of the sales manager is not to grow sales. Instead, the sales manager's job is growing salespeople. In fact, I prefer the title "sales leader."
Gone are the days when threats and intimidation worked as sales management tactics to wield at frightened troops. Today, the ability to persuade is far more important.
The sales manager sets the course for the most efficient system of selling the company's goods and services. The successful sales manager inspires the sales team to act in ways that are in everyone's best interests.
An effective sales manager also possesses insight into the personalities of her sales team. The sales manager is there to cultivate and refine the talents of the salespeople, and should make sure they're aware of this. As time passes, the salespeople start to understand the purpose behind efforts to enhance their skills. Gradually, this drive toward excellence comes to replace money as the prime motivator in doing their jobs.
Recruiting is a process, not a single-time event. It should be ongoing and continuous. Just as a salesperson has (or should have) a database of qualified prospects, so the sales manager should have "a basket of people" he/she would like to have come work for him/her.
These are the steps for keeping the "sales force" pipeline filled:
* Interview a number of individuals each month.
* Place an ad in the classified section every few months (whether you're hiring or not). This ensures a continual supply of resumes for review.
* Enlist the help of the men and women in the trenches. Good salespeople usually know other good salespeople.
The next step is training, for newcomers and veterans on the sales force alike. But is training really worth the organisation's investment of time and money? Absolutely, and here's why:
Enhanced performance. Training prepares the salesperson to maximise every customer encounter. A methodical selling process incorporates specific selling techniques that are custom-tailored for each buyer they interact with.
Increased customer satisfaction. Through proper training, salespeople better understand their customers' wants and needs. They're also better equipped to cope with potential difficulties with the company's products or services.
More effective sales activities. Well-trained salespeople recognise genuine selling opportunities more readily than their untrained counterparts.
Reduced turnover. An effective training programme brings new staff up to speed more quickly than when sales persons are forced to learn on their own. As a result, frustrations go down and people are less inclined to opt for "something better" elsewhere
Passion. To be successful and achieve total satisfaction with your efforts.
Models of Sales Team Performance
I identify key sales activities that should be continually tracked:
Dials. How many calls does it take to reach a key decision-maker?
Appointments. How many customer appointments are generated from completed calls?
Recommendations. How many proposals does the salesperson create as a result of his appointments or meetings?
Sales. What is the number of winning proposals?
Sales in money. How much revenue is produced by sales?
I recommend recording the sum of these activities weekly. The goal is reaching a point where you know what every call is worth, what every appointment is worth, what every presentation is worth and, finally, what every sale is worth. Now you not only have made your sales predictable, but you can clearly articulate to future sales candidates what's needed to succeed.
How well can a salesperson perform without understanding what's expected of her/him?" Expectations spell out what's required to succeed, and it's best to articulate these during the training period.
For more seasoned salespeople, job expectations can be defined by:
* Number of customers
* Revenue of sales per period
* Gross profit margins.
I suggest actively involving sales persons in the goal-setting process. If you want the sales staff to become more accountable, ask them to set their own goals. Review their performance against these goals on a regular basis. Make it very clear what's expected of them.
Of course, any sales lead is only as good as the customer's final decision to buy. The sales manager should closely scrutinise the company's marketing and sales process areas, with respect to Return on Investment (ROI) generated by the sales team's leads.
How do leads come in? What is the quality of these leads?
Who gets these leads and who hands them out? Do we have a support system in place to help with these critical tasks?
Once a lead is generated, how long does it take for a salesperson to follow up? Are they being attended to with call-backs and follow-through, or are they just left to wither on the vine?
How many sales opportunities do we close?
Are we tracking any deficiencies or obstacles blocking our path to success?
Without a system in place to track all of this data, you have no way to analyse sales trends or assess overall team performance. Set your key indicators and track them on at least a weekly basis. That way, everyone gets involved and understands where things are going well and where they're not.
Coaching to Increase Sales
To help turn around a poor performer, I advise these steps:
Document the situation. Gather facts. Identify problems in the salesperson's performance.
Advice and counsel. Meet with the sales person, making it very clear that your goal as sales manager is to help him become better at his/her job. Avoid placing blame or delivering ultimatums. Instead, demonstrate your confidence that, with coaching, the issues can be overcome.
Look for problem behaviours. Ask the sales person what he/she thinks should be done to overcome gaps in performance. Does it mean adjusting selling behaviour? Making more new business calls? Find out what difficulties, if any, he/she anticipates in changing his/her behaviour. Address these difficulties before they occur.
Design a recovery plan. The plan, developed jointly by sales manager and salesperson, should be comprehensive and results-oriented. Set targets based on (1) improvements in sales with each account; (2) new business penetration; and (3) increased number of calls.
Have a follow-up plan. Following agreement on a recovery plan, the sales person must understand that the sales manager will closely scrutinise sales efforts and results. The follow-up plan will track results and progress, supplemented by weekly follow-up meetings.
When salespeople do not hit the targets, hold their feet to the fire. In some cases, you may want to renegotiate the expectations. But if these were fair to begin with, you're better off sending that person on the way to their next career opportunity.
Recognising top performers is another vital function. How many salespeople are overly recognised for their achievements? Is there such a thing? When I visit companies, I ask the CEO what recognition systems they have in place for top performers. Surprisingly, not enough companies have any such system.
We tend to recognise people when the spirit moves us, but that results in inadequate motivation. Recognition doesn't have to be expensive, but it should be ongoing. It can range from a handwritten note saluting a person's performance to a luncheon or a birthday card personally signed by the CEO. These things are all easily done, and well worth the effort.
Do not just say, 'Job well done' to your Sales person. Praise them in public meetings. Describe the specific results of their sales achievements. This demonstrates your confidence in the sales team, as well as your high expectations of them. When you expect people to win, they usually do.
Finding the Right Sales Compensation Plan
Salespeople are motivated by ambition, the need for recognition and, of course, compensation. To prompt the sales team to higher levels of performance, it's necessary to design an effective sales compensation structure.
How this structure is developed depends a lot on the nature of your business and industry. It should be tied to the corporate culture you want to instil and what's going to work best in terms of generating profitable sales.
I advise linking your company's objectives and commission structures, and placing salespeople "in the same boat" as everyone else. Is your focus on profitability?" Then compensate based on gross profits. Is the focus on new accounts? Then compensate based on that. Choose two or three objectives that are vital to your business and develop these in your compensation plan.
You have to incentivise the behaviour you want. For example, if you're pushing a specific product/service, raise the commission rate on it. You can further devise a formula for basing the commission on sales and gross profits and the sales team's overall performance. Many different options exist.
Others may favour this option: salary plus commission. This approach typically combines the best and worst of the first two compensation structures. Adding that while the equation differs among industries, most fall in the ranges of 40-80 percent salary and 60-20 percent commission.
How does a company determine the best sales commission rate? I point to these options:
A flat rate on all sales
Different rates on different products (i.e., larger commission on sales to new customers, somewhat less for existing customers)
A percentage above a pre-determined goal
A percentage of gross profit
A combination incentive plan is often favoured by both companies and salespeople alike. Individuals are motivated to generate more sales and are compensated according to the results. But whatever compensation plan is chosen, it should be kept as clear and straightforward as possible.
Keep the commission formula simple! When a salesperson makes a sale, she/he needs to be able to figure out the commission in her/his head. Otherwise, you lose the impact of incentive. The closer you keep the commission to the event, the greater the impact.
The Sales Plan
Sales quotas should serve as a goal. Generally, they originate from upper management and percolate down to the sales staff, without much in the way of negotiation. But an effective sales manager meets with the sales team, discusses the quotas and other motivational issues, talking about strengths, weaknesses and opportunities. The idea is moving everyone in a positive direction.
Above all, the Sales Manager must have a clear understanding of how the organisation's overall revenue goals impact individual or team sales quotas. There are so many factors - from company objectives and the number and size of territories to each sales persons experience - which influence goals and performance, that the Sales Manager has to gauge a proper balance when planning sales quotas.
I am a forceful advocate for producing goals-oriented sales reports. Well-designed sales reports motivate salespeople by making very clear what needs to be accomplished and what has to be done to accomplish it. These reports also help the manager measure specific behaviours salespeople must produce in order to get the job done.
All the talk about quotas and reports lead back to one sales management priority: helping salespeople grow.
One way they grow is by being goal-oriented. The more focused the sales force is on specific, achievable goals, the greater their chances of achieving them. Of course these goals have to be aligned with the company as a whole. The Sales Manager's job is making sure these goals are coordinated and attainable.
These goals may include:
Sales and gross profit for a year
Penetrating current accounts more deeply
Addressing new prospects on a continual basis
High performance starts with clear, unambiguous goals. The Sales Manager can encourage salespeople to set their own goals. They can break these goals down into smaller parts to make them more accessible. Whatever the course of action, they must define what success means to the organisation and how it can be achieved.
The CEO, Sales Force and Customer
Creating a "sales-friendly" corporate environment is, or should be, a CEO priority. I suggest the following actions to keep your sales force on the `cutting edge`:
The right tools. To succeed, your salespeople should be equipped with the best support, pagers, mobile phones, laptop computers available. This enables them to do their job better, and demonstrates their importance in the mind of the prospect/customer.
Support on the inside. Make sure other departments are working with, not against the sales force. All too often internal departmental turf battles defeat the company's overall goals.
Recognise achievement. Salespeople respond to a variety of motivating factors, but in nearly all cases, recognition for a job well done ranks high. As CEO, you can make sure that top performers (and those working toward that goal) are honoured throughout the organisation.
Be seen and heard. The CEO's occasional presence at staff meetings is a prime motivator in itself. Keep the sales force updated on changes in your products and services. Listen to what they have to say about life in the field.
Focus on training. Continuous training makes for better salespeople. Make sure that training is one of your company's top priorities.
Help wherever you can. Set a regular schedule (at least once every quarter or every six months) to meet with the Sales Manager and his team and ask them directly. What can I do to help you make more sales? Create a "no-blame" atmosphere where salespeople feel comfortable in objectively assessing current situations and needs. Then do what's needed to make them better at what they do.
In the past, that might have been enough knowledge for any individual salesperson to have. Today, the sales person should know the customer's business, too. One helpful approach in this area is inviting the customer to come in and talk about her/his business with your sales force. Also, at regular intervals, dedicate an entire sales meeting to educating the sales force on the ins and outs of the customer's business.
Coaching in the Field
An effective Sales Manager juggles many balls in fulfilling his responsibility to the company, but perhaps nothing is more important than her/his willingness to get out "in the field" with the sales team itself. Sales Managers can exert great influence and provide vital guidance during field calls with their salespeople.
Map out your joint strategy before making the sales call. The Sales Manager and her/his sales person should review and refine the approach the sales person will use in the field. How can the manager support him/her? Can they leverage a situation to gain access to key decision-makers in the customer's organisation?
Coach in the field, not in the locker room. Too many Sales Managers are busy shuffling papers, filling out reports, sitting behind their desks. They should be out making calls with their salespeople, helping to train them in ever more productive sales techniques. If you're not training, you're not gaining.
I recommend three kinds of "coaching calls" - on-site visits (to customers or prospects) with the sales person, in order to provide coaching and feedback for improvement:
Joint call. Working as a team, the Sales Manager and sales person participate equally in the call. These double-up calls not only increase sales, they make wonderful learning experiences. Following the call, ask the sales person three questions:
What worked on the call?
What didn't work?
If you had to do it over, what would you do differently? Why?
Training call. The Sales Manager runs the sales call while the salesperson silently observes. At the end of the call, debrief the salesperson by asking:
What did I do that worked well?
What could I have done to improve the presentation?
If you were making the call, what would you do differently? Why?
Coaching call. Set up a series of calls with the same salesperson on the same day. The salesperson runs each call and the Sales Manager silently observes. Do not debrief at the end of each call. As the two of you drive from one call to the next, ask the salesperson these questions:
What is our purpose on the next call?
What is the value of the account?
Who is the key decision maker?
What is his or her highest value need?
What is the customer's market share?
Who are the customer's competitors?
Are we positioned to take over the account? If so, how?
What is standing in our way?
Who are our top three competitors?
What type, piece or share of business do we have?
What are the three biggest obstacles to getting more business?
How can I help you back at the corporate office?
Wait until the end of the day and then collectively debrief all the calls. More important do not step in and rescue a sale when the salesperson makes a mistake. If you take over the call, it ruins the purpose. You must be willing to lose a few in order to develop your people. The goal is to observe patterns of behaviour throughout the day and then provide quality feedback and coaching.
Typically, salespeople do not enjoy "coaching days, but they need them in order to learn and grow. As the sales leader, your job is to raise the bar and help your salespeople grow by coaching in the field.
The passion to be successful wins the customer that generates the `right` profit.
After sharing the above article with you, I believe training is a necessary need for `all` involved in sales and `all` processes in organisations for `all` to be successful. I hope you agree?
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Sales Force Management!