A sales manager at the helm of a sales team has the responsibility not only to manage the definition and implementation of effective sales processes but must also provide the leadership and coaching his or her sales team requires to effectively utilize the sales processes to achieve and exceed their goals. This blend of strategic and tactical skills is not easy to achieve. Sales Managers often are more comfortable with one aspect of their sales process leaving them to neglect others. That is human nature.
Being aware of the five classic pitfalls nearly all sales managers experience at one time or another will help you avoid unnecessary setbacks and smooth your path to sales growth.
1. Protecting the Status Quo
As important as a sales process is, a slavish adherence to the status quo is the first step on the road to failure. Generally, as a sales team is developing, a great deal of attention is focused on creating the structure for sales activity and sales growth. Managers make the mistake of assuming that once their sales process is in place that they can solely focus their efforts on tactical sales management. The problem is that elements of your sales process may not be a perfect match for your target market or for the individuals you have on your sales team. As a sales manager you must pay constant attention to your sales process to ensure that it is always supporting and not impeding, your sales efforts and take immediate steps to revitalize it when it has become outdated or stale.
2. Losing the Urgency
A second pitfall sales managers have to confront is losing their sense of urgency. This is not to say they become complacent. Rather they don’t act and manage with the requisite responsiveness. Prospects and customers have questions and want answers in Zero-Time in order to make informed purchase decisions in the shortest time possible. Neglecting to reinforce this urgency within your sales process and your sales team will inevitably lead to a decrease in responsiveness and, ultimately, orders. In sales, everything is urgent or needs to be. As a sales manager, if you aren’t maintaining this attitude of immediacy in all that you do, you risk failure.
3. Failing to Measure
Neglecting to establish metrics for key processes and overlooking the necessity of regularly measuring how the processes are performing is a common oversight that negatively affects sales productivity. A sales process is not an abstract concept but a discrete set of required steps to achieve a certain goal within a certain period of time. As a sales manager you must continuously measure the outcomes of your core sales processes and take the necessary steps to refine them and make them even more productive.
4. Providing Incomplete Training
Sales managers often fall into the habit of providing limited training for their sales team. They focus on isolated skills and product training to the exclusion of integrated sales training that teaches how to deploy their skills and knowledge within their sales processes to win customer orders. Sales people have to be trained on their processes as deeply as on their sales skills and product knowledge. Ignoring this training is akin to putting 11 football players on the playing field and telling them to just improvise plays and do whatever they please.
5. Swimming with Minnows
Too many sales managers keep chronically underperforming sales people onboard well past their expiration date. You don’t want to keep swimming with minnows when you need to be cruising with orcas to make your numbers. If you have salespeople who aren’t suited to sell your product or service then every minute you keep them is a minute too long. It is a myth that good salespeople can sell anything. To ensure the growth of your company, salespeople must have experience and skills that will enable them to be completely responsive to the information requirements of their prospects in Zero-Time. If they don’t, they must go. Period.
It has never been easy to be a sales manager. However, if you can avoid these common missteps then you, your team, and your company will all benefit.
Before You Can “Fix” Your Sales, Master The Fundamentals
In the hierarchy of things that you can do to improve your sales performance, there are both simple and complex solutions. Depending on your company’s particular situation, both the simple and the complex solution could provide value to your organization. They are not mutually exclusive. The question is: what should you do first?
The difficulty with sales problems is that they can be hard to diagnose and solve. There are lots of interlocking pieces to the sales puzzle, and the temptation is to assume that hard problems require complex and expensive solutions. Therefore, depending on your company’s size and resources, this could mean that your most pressing sales problem doesn’t get addressed because there is no budget or that a large investment is made to implement a new selling process and train your entire sales force how to sell to that model.
My experience has shown that a company with ample resources will typically default to the complex solution because CEOs and sales managers make the often faulty assumption that the simple solutions are already in place. A company with more limited resources will also tend to overlook the simple solutions to their sales problems because they have been conditioned to believe that the only answer to a hard problem costs money. If they search online they will find a parade of reputable sales training and consulting firms promoting selling systems that promise to fix their sales problems. But those approaches often require a substantial investment of money over a substantial period of time.
However, irrespective of company size, if management were to investigate and do a little digging they will usually find that the fundamental disciplines every company needs to flawlessly execute their sales plan, and that they believed were in place, have either faded due to management inattention or never existed to begin with. They assumed that all sales leads were promptly being followed up. They assumed that all salespeople were being responsive to their prospects and customers in zero-time with the information and answers to the questions they need to move forward in the buying process. They assumed that customers were receiving the level of unconditional support required to turn them into loyal repeat customers. They assumed that their frontline salespeople knew their products inside and out, or at least better than their customers did. Well, we all know what happens when you assume.
As with any investment, the dollars invested in new selling systems and sales training involve a certain element of risk. You can’t precisely predict the outcome although the potential payoff of improved sales productivity, over an extended period of time, can be large as well. So, imagine a company’s surprise when, after they have invested in an expensive new selling system. modified their sales model and re-trained their entire sales team, they determine that they are experiencing the same sales problems as before.
The fault doesn’t lie with the new selling system. The problem is that the company is trying to build a new sales house on a shaky foundation. The biggest return on the dollars you invest in your sales team will come from ensuring that you are mastering the fundamental sales disciplines ( and incorporating those into your daily routines. Before you embark on an upgrade program do the simple things first. Then take the next step to renovate and upgrade your sales house.
What’s Your #1 Priority?
If you’re a sales manager and your number one priority each and every day is something other than coaching the individuals on your sales team to improve their sales productivity then what are you doing? Whatever it is, put it on hold and take care of your priorities.
The term coaching is in vogue these days. Much has been written about the importance of sales managers becoming coaches for their team. Studies have been cited that claim that it is the single most important thing you can do. A commonly cited statistic is that a 19% improvement in sales productivity is to be expected with effective coaching. To which my response is an old-fashioned “Duh.”
The fact is that coaching is nothing more than disciplined sales management. There is no distinction between the two. I attended a conference recently where consultants talked about how they were hired to coach front line sales reps in companies with sales managers in place. The claim was that sales managers had too many other responsibilities and no time to coach their direct reports. I don’t buy it.
If you’re a CEO, there should only be two reasons why a 3rd party consultant should be providing coaching to your frontline sales team:
1. Your sales managers are inexperienced and don’t know how to effectively coach. That is okay. New sales managers need to be trained. They don’t arrive in their first sales management assignment fully formed and ready to effectively function as a manager any more than newborn babies are born ready to memorize and recite Shakespeare. But, if this is the case, then train your sales managers. If can’t do it yourself, then hire that consultant to coach your manager, but never your sales team. Teach your managers how to be effective sales coaches. And, if they are unable to do that then…
2. Your sales managers are in the wrong job. You need to find someone new who is capable of performing the hard work that comes with being an effective sales manager.
What should a sales manager do to be an effective coach?
A. Make certain that each member of your team fully understands the playbook.
In this instance the playbook means the sales team is thoroughly trained to know the answers to the “what” and “how” questions. What are they selling and how are they selling it? Sales reps need training in the sales processes you use as much as in the products you sell.
B. Work with each member of your the team to develop an individualized sales plan.
The sales plan is simply composed of the objectives, strategies and tactics that the individual sales rep is going to employ to achieve their assigned goals. People gravitate towards sales as a career because it gives them a sense of being in control of their own destiny. But they aren’t going to find their destiny without a road map. The effective coach makes sure their reps understand what each day, week and month holds in store.
C. Set expectations not only by your words, but also by your actions.
This is not about achieving the number but about the process and what it takes to mold someone into a high-functioning, self-sufficient salesperson. Sales is a craft. Learning how to successfully do it is an apprenticeship. The most successful salespeople I know learned their trade by watching their managers at work and integrating the skills and techniques they observed into their own daily selling routines. An effective coach has to be able to demonstrate the skills they are teaching.
D. Get down into the nitty-gritty.
This means conducting regular detailed reviews of every deal your reps are working, supplying the strategic and tactical coaching to move deals along, as well as providing the wisdom, guidance and counsel a rep needs to motivate them to persevere when the going gets tough. It means understanding the details of your teams’ deal so you can provide day-to-day guidance to ensure that opportunities are continuing to move forward.
E. Develop a strong level of trust with your team members.
How does that trust get established? By being openly invested in each rep’s success to the same degree that they are. This is a tough standard for sales managers to meet. But the great sales managers are all able to make it happen. Read interviews with players from great sports teams that have won championships and the common attribute they cite for their success is the high-level of trust that the teammates had in each other. In short, they had each other’s back. Have your team’s back.
My first sales manager was Ray. Ray was the most no-nonsense manager I have ever encountered. (My hiring interview with Ray lasted 2 minutes and he said all of 12 words. But that is a story for another day.) It was primarily through his coaching that how I first learned how to sell (and be a sales manager.) Everyday we sat down and reviewed each of the deals I was working on. He taught me how important it was to not waste a minute, hour or a day if I was stuck on a deal and needed advice to see what I needed to do next. I remember coming into the office one morning when I was in the midst of a month-long sales slump and Ray was standing by his desk with his jacket on and car keys to his big red Oldsmobile jangling in his hand. “C’mon,” he said. Let’s go make some calls.” We’d spend the morning talking to prospects. Sometimes I’d take the lead and sometimes Ray would take the lead. But I would always come back from those calls smarter about selling and motivated to knock it out of the park.
Being an effective coach means nurturing the success of the people who work for you. At the end of the day, that is the highest success a sales manager can achieve. If you’re a sales manager, and you’re not coaching, what the heck are you doing?
Surplus is at the Root of Discounting.
It is easy to blame the salespeople for rampant discounting but it has always been my experience that the primary responsibility for over-zealous discounting and the resulting price and margin erosion rests with management.
When a manager has a surplus, whether of inventory or of salespeople not hitting their numbers (meaning that he or she isn’t hitting their number either), they look for a solution in the form of a discount. Approach the end of the month or quarter with too much inventory on the shelves or too many people not hitting their quota, and the first thing many managers do is authorize their salespeople to offer a discount to a customer to win an order and move some product.
All parties involved in a sales transaction, buyer and seller, are familiar with this cause and effect scenario. Salespeople wait for it. Customers wait for it. It is not an accident that the trajectory of orders during a quarter traces the familiar hockey stick shape. Everyone is familiar with the rules and is in on the game.
The problem with this end of period discounting is that these “one-time” discounts have a tendency to morph into the new default price point for your customer. If you’re handing out discounts at the end of a quarter to induce customers to close an order or accelerate a delivery, then your next order from that customer is going to be at the new price point you established with the discount. Balk at that and you’ll find that all your orders from customers will start to materialize around the end of your accounting periods.
Surplus is also a key factor in discounting conducted by salespeople. It occurs because salespeople oversell their product or service, in effect offering more features than what the prospect needs to meet their needs. This overselling occurs when salespeople are not adept at precisely qualifying their prospect’s exact requirements. A salesperson can’t sell value if they don’t understand the problem the customer is trying to solve. As a consequence, they tend to sell the entire feature set of their product or service in the hope of encompassing the prospect’s needs in the process.
When a salesperson’s offer exceeds the needs of the customer they are left with the choice of reducing either the scope of their offer or their price in an attempt to win the order. Offering surplus features that are without value to the customer almost always leads to a discount.
As a manager, to effectively address this discounting problem you need to develop a plan to reduce the surplus factors in your selling. First, the answer for salespeople who oversell is ongoing in-depth product training. Learning to sell value is next to impossible without a true understanding of your product or service. A rule of thumb is that a salesperson can’t effectively sell value if they don’t understand their product better than the prospect. Does your training accomplish that?
The second surplus factor to manage is the end-of-quarter discounting syndrome. This is a hard habit for management to break. Unfortunately going cold-turkey is the only effective method to curtail the practice. It could take one or two challenging quarters to flush the temptation out of your system and re-train your salespeople, prospects and customers. However, you will learn which customers are buying your product for the value versus the discount. These are the customers to focus on in the future.
There is a lot of talking and blogging going on about cold calling and whether it is a necessary or even desired part of the sales mix. I can’t resist putting in my two cents on this discussion.
I have recently seen a couple of studies and listened to some presentations about the changes taking place in how sellers and buyers are interacting that are worth considering as we leap into the fray. In general, the trends discussed are reflected in the 2010 DemandGen and Genius.com study titled “Inside the Mind of the B2B Buyer.”One of their key findings was that more than 80% of B2B customers/buyers said that on their transactions that they had initiated contact with the seller. Only 10% said that they were contacted cold by the seller.
Personally I’m not convinced that the 80%, is an accurate reflection of the sales situation today. But that is really beside the point. The key takeaway is that it is an indicator of how your customer’s perception of the role of sellers has changed and how the actual role of sales is continuing to evolve at a rapid pace. The Internet and social media have irrevocably transformed how conversations with some significant fraction of your prospects are initiated. And, even if you, as a seller, initiate contact with a prospect, chances are high they are going to possess some level of pre-education and pre-qualification on your product and service on that first call (or they are going to acquire it by browsing your website while on the phone with you.)
What does this mean for cold calling? In an ideal world, cold calling wouldn’t be necessary. In our fantasy, marketing departments would prove capable of generating well-targeted (or “sales worthy” to borrow a term from my friend Nancy Nardin) in-bound sales leads in such large quantities, week after week, month after month, that all available sales time would be consumed with responsive follow-up. Wouldn’t it be great if the world were handed to you on a silver platter like that?
Unfortunately, that dreamy ideal world doesn’t exist for most companies. Using the figure from above as an example, even if you meet 80% of your sales goal today from prospects that originated as sales worthy in-bound sales leads, where will you find the remaining 20%? You will find them from proactive prospecting (i.e., cold calling.)
If you’re in Sales your job boils down to this: doing the hard work required to meet your goals. Whenever there is a gap between in your pipeline between the number of qualified prospect your need to meet reliably meet your goal and the number of qualified prospects in your pipeline generated from in-bound sales lead conversions, and there will almost always be one, it has to be filled in by prospect activity generated by you. This means fulfilling your responsibility as a salesperson to do what you have to do in order to meet and exceed your assigned goal. If this means spending a portion of every day following a disciplined prospecting process (i.e., doing some research to pick targets, making connections online, getting on the phone or going out and making calls) then that is what has to be done.
In my first professional sales job out of college, in the pre-Internet dark ages, I was selling big computers. Everyday involved getting kicked out of the office at 8am and venturing out to make cold calls out in my territory. I have to admit it didn’t come naturally to me. So I developed another approach. I hit upon a system of hosting a seminar in our branch office every Wednesday afternoon at 4pm during which I would demonstrate our system. I used business directories to research names of potential prospects in my territory and mailed out 10 postcards with a hand-written invitation every Thursday. I’d follow up with everyone on the following Monday morning and again on the morning of the seminar. Usually I’d end up with one or two attendees each week. Within months I had a strong, constantly renewing pipeline and was killing my numbers. After a couple years, I was getting two thirds of my business from existing accounts and referrals. But every Thursday, I was still sending out 10 postcards and every Wednesday I was playing host to new prospects.
No matter how many leads you receive, cold calling, or proactive prospecting, remains a necessity for most salespeople and most sales teams. Clearly the amount of time a salesperson has to devote to cold calling could shrink as increasing numbers of prospects pre-educate themselves online and initiate connections with potential vendors. But the role sales prospecting plays in building a strong pipeline of qualified prospects to ensure that you make your numbers is will never go away completely.
Sometimes you just gotta do what you gotta do.
I read a blog posting recently about what a salesperson could do to increase sales. The title was something catchy like “A Billion and One Tips to Increase Sales.” It was hard to argue with the premise of the post. Everyone in sales can use good advice on increasing sales. It’s the reason I continue to read everything I can about sales. There is always something new to learn.
In this case, this author’s useful quick tips were all about creating more sales activity. He was asking the question ‘What should you do if you have prospects but they aren’t moving forward fast enough?’ and providing answers that were designed to create a flurry of sales activity around prospects to stimulate them to engage and move forward with the seller.
But is selling the same as sales activity? And, if a prospect is not yet fully committed to the buying process, is random sales activity the way to get them engaged?
Nothing is sometimes better than something
I had a salesperson, named Arte, working for me once who had confused activity with selling. He came into my office one day and told me that he had invented his own method of selling that he called SWARM. The acronym stood for Surround With Activity to Regain Momentum. His thought was to envelop his prospects in a constant swarm of sales activities such as of phone calls, visits, emails, voice messages, invitations to webinars and seminars, product demonstrations in the hope that eventually something would stick and the prospect would relent and engage.
How’d that work for Arte? Not so well. But he got high marks for creativity.
Unfortunately, similar to Arte, many salespeople fall into the trap of believing that doing something, anything, with a prospect is better than doing nothing. This happens all the time when the prospect has gone radio silent. There are lots of reasons why this occurs and it is the job of the salesperson to determine the answer and respond appropriately and with content that has value for the prospect. But rarely is the correct response to bombard the prospect with trivial, time-wasting requests and interactions.
Keep in mind the customer’s objective
In a sales situation, or buying situation, it is important to keep in mind that the goal of the customer is to gather the information or data they need to make an informed purchase decision with the least investment of their time possible. This is not to say that customers won’t spend the appropriate time to purchase a product or service. This just means that they won’t spend a minute more than they have to.
Create and deliver value each time you talk to your prospects and customers
If you are selling you should only be taking actions with a customer that have a defined purpose, deliver clear value and support the customer’s goal. To that end, instead of unthinkingly reaching out to the customer and demanding some of his or her time with a trivial request, consider the opposite approach: make sure that every interaction you have with a prospect or customer achieves Maximum Impact in the Least Time (MILT) possible. It requires planning and thought to make certain that each time you interact with the prospect or customer you are providing information that will bring them closer to their goal of making an informed decision. But the result is that you will bring value to the customer through your selling. If you want a customer to engage, create value for them by your actions. Wasting their limited time with “sales activities” does the opposite.
Selling has a purpose. It is not the goal of your prospects or customers to spend time with you. In fact, the opposite is true. They want to accomplish their job, which is to buy a product or service, while spending as little time with the salesperson as possible. The winning salesperson will usually be the one who knows how to make that happen.
Which is more important in selling: Process or selling skills?
This is one of the classic debates about sales and selling. It is very similar to the ‘nature vs. nurture’ debates that young adults without kids and too much time on their hands indulge in. (Anyone with kids quickly learns the answer to this…) The answer is that both process and skill are required to succeed in sales. However, process provides the platform for skills to flourish.
What Would Michael Do?
Take the case of an elite athlete like Michael Phelps, the world champion swimmer. Michael Phelps trains like a demon, spending hours face down in a pool every day, to showcase his skills on the world’s biggest stage, the Olympics. He won an unprecedented 8 gold medals in swimming at the Beijing Games in 2008. There is no doubting his obvious skills. Having conquered the world once, the question was would he return to the London games in 2012 and try again?
In preparation for the Beijing Olympics, Michael followed the training regimen put together by his coach, Bob Bowman. It was a process that focused on the quality of the daily work Michael did in preparation for competition. Every workout he swam and the details of how he performed in that workout, every weightlifting session, every cross-training session were meticulously recorded, tracked and analyzed. Bowman and Phelps knew that the most accurate predictor of how Michael would perform in the big competitions was the data collected about his daily training process over the previous months and years.
The Day-to-Day Process
This is similar to selling. How you execute your sales process on a day-to-day basis will be the most accurate predictor of whether you will win orders and meet your objectives. An effective and disciplined sales process can do for you what it does for Michael Phelps. If you work hard, it will put you in a position to compete for and win orders. It is how well you execute the basic sales activities that comprise the steps of your process, and how often, that will ultimately lead to the order.
As he began his preparations for the London Olympics Phelps strayed from the process that had led him to the podium eight times in Beijing. And, with all the skills in the world, his results in competition suffered. He was losing to swimmers that previously couldn’t compare to him. What did he do? He redoubled his commitment to the process laid out by his coach. He might have rebelled against the process but he returned to it because he knew that if he invested his hard work into it results would follow.
Listen to Michael Phelps being interviewed after a competition today and he defaults to talking about his process. The race result might now have been a first place finish but he will talk about how well his training is going instead. His focus is on how is he performing each day in each step of his training process. He knows that if he executes his process he’ll put himself in the position to achieve the results he expects.
In the same way sales process can provide a much clearer snapshot of potential sales than simply looking at your pipeline of prospects. Well-defined sales processes provide a method to continually assess and measure the underlying sales activities that will lead to orders. Using metrics to continually measure and fine-tune sales processes, just as Bob Bowman did with Phelps’ training regimen, leads to improved outcomes for salespeople of all skill levels.
Your Process Enhances Your Skills
I had a client where one of the more senior salespeople, a grizzled sales professional, Ollie, was determined to resist management’s efforts to implement some fundamental and essential sales processes to respond to a changing sales environment. Ollie had always managed his sales territory his own way and while he possessed great sales skills and experience he was floundering. He found himself at odds with evolving prospect and customer expectations for salespeople in terms of responsiveness, follow-up, content delivery and service.
The processes that Ollie’s management implemented saved his sales career by requiring Ollie to become more responsive, more proactive and timely in follow-up, more knowledgeable of the products he sold, more conscious of eliminating time-wasting sales calls and making every customer interaction achieve the maximum impact in the least time possible in order to compress buying cycles.
This does not mean that a salesperson should ignore the skill components of selling. We should always be working to improve our sales skills no matter how much experience we have. But sales skills need to be utilized in support of defined sales process to create the most value for the customer. And the salesperson.
Why are your sales so slow? I’m not referring to your order rate. I am talking about the activities and processes that have to be happening in Zero-Time in order for you to achieve your sales goals. One thing leads to another and if you are running in place in February, you’ll be running to catch up by March and hopelessly behind by June.
Here we are, still near the beginning of a new year, when hopes for the next twelve months should be running high. And your selling efforts feel like they are stuck in the thick mud. Just like they were last year. This is not the way to kick off what should be your most successful sales year ever.
Everyone has a reason or an excuse for slow selling. Believe me, we have all been in a situation where you question your sales manager about why it is taking so long to move a customer along in their buying cycle, and they don’t have an answer that makes sense. Or any answer at all.
I ask all my new clients to identify the reason, or reasons, why they are not growing, why their sales efforts are stuck in neutral. The responses I receive are typically all of a piece. As CEOs they can identify the symptoms but not the causes of the problem. But as CEOs and sales managers of SMBs you can’t be a doctor who can only diagnose the symptoms of the illness without prescribing a cure.
I group the symptoms of sales lethargy into the S-L-O-W acronym.
S is for Status Quo.
Too many companies are just coasting along. The CEOs are not really satisfied with their results but they are too worried about making any changes that could rock the boat and potentially jeopardize the sales they do manage to capture. Maintaining the status quo is not a way to thrive.
“Status Quo is ancient Greek for ‘slow death.'”
Folks, say hi to Milt again. (To learn more about Milt, check out my book, Zero-Time Selling, or this previous blog post. )
Actually, Milt, Status Quo is not Greek. It is Latin for “the current state of affairs.” But when an SMB’s sales are stuck, maintaining the status quo is the same as slowly dying.
“As I said.”
L is for Lack of Urgency.
In today’s economy you can’t expect the customer to operate on your schedule. The timeframe for every sales action has to be immediate. Customers do a lot of online research on your product before they ever call you and when they do they are single-mindedly looking for answers to their questions. The first seller with the complete answers wins.
O is for Outdated sales practices.
Unfortunately many SMBs still operate their sales teams like it is 1912 not 2012. Their only concessions to the 21st century are a website and email.
“What would you call my pager?”
Your customer and their buying behavior have been irrevocably altered by technology over the past 15-20 years. And if your sales practices and sales methods haven’t changed in concert with your customer then you can’t expect to effectively compete for their business against competitors who have evolved.
W is for Weak sales management.
I don’t like to point fingers.
“But you will.”
SLOW starts at the top.
Even a highly self-motivated sales person will find it hard to succeed in company where the status quo rules, where everyone’s motor revs at a slower idle and where the sales systems and processes were obsolete before the turn of the century. A successful sales culture begins and ends with management. The CEO and sales management have to commit to change and urgency.
Make a change today to get your sales going!
Now, as you move further from the old sales year and deeper into the new sales year, now is the time to evaluate what you can do to shake things up, to change the routines your sales team have followed year after year. Break some of your bad old habits and reach a level of sales success that you haven’t achieved before.
Here are THREE tips you can put to use today. These are not permanent fixes. Or suggestions for how to comprehensively revamp your sales efforts. There are just small ideas you can put to use TODAY that can begin to make a difference and break you out of the SLOW mold. It doesn’t matter which one you choose. Just choose one of the following steps and put it into play.
Make One Change Today.
Take a close look at your sales routines; your sales processes. Tell each of your salespeople to choose just one customer facing activity and change it. Now. Don’t just pay lip service to change. Do something about it. This is not a change that requires a committee to plan and implement. I’m advocating something much more simple than that. Just choose one aspect of your day-to-day sales activity and change it. Simple.
Create a Metric.
Every aspect of your sales process is measurable. Do you have metrics for each step of your selling process? Are you measuring how long it takes to respond to your sales leads? Or how long it takes you to write a quote and deliver it to a prospect or customer? Choose a single aspect of one sales process and assign a metric to it. Then measure it today and again tomorrow.
Tell someone about the change you made or the metric you’re tracking. Tell a colleague that you have undertaken to make a change in your sales routine. Tell your boss which part of your sales process you have begun to measure and what the goal is. When you tell someone else that you are making a change they will be interested to learn if it is helping you. As a result they will ask you how it is going. And you will need to have an answer for them. Being accountable for change is a big motivator.
Sales Territories: What are they good for?
Every time a client asks me about the best way to set up sales territories I instantly hear that old Edwin Starr song pop into my head. I substitute “territories” for the word “war,” which is a bit clumsy from a rhthym perspective, but I quickly get past that and start singing “Territories, huh, Good God, y’all, what are they good for? Absolutely nothing, Say it again.”
Do you still use sales territories? Do you still assign your salespeople territories based on a geography or a certain account type? Really?
Here a three good reasons to get rid of geographic and account-based territories. (And, yes, I’ll answer your question about what you should do instead below.)
Reason #1 is that assigned sales territories are holding you back. If you’re a small business, this will be a familiar scenario. Sales are not growing as you would like. You have 5 salespeople. One, maybe two, of the salespeople have been with your company for a long time. Perhaps since the beginning. Together they are your most productive salespeople in terms of the dollar volume of orders they bring in. Together they are managing the company’s biggest accounts and bring in the lion’s share of the business.
Your other 3 salespeople are in spots that tend to turn over every year or so. The people in those positions constantly complain that they are unable to generate enough new business to meet the quotas that are assigned. As the manager you dismiss their complaints and assume that they are just not the right people for the job. So, you tend to churn those sales positions in an effort to find more capable people to bring on board. You ask yourself: how can I grow the business if I only have two people who can bring in enough orders?
That leads us to reason #2: Assigned sales territories turn your best new account salespeople into fat account managers. I had a client where the number one salesperson accounted for nearly 50% of the company’s sales each year. He had been with the company almost from the beginning. Along with the founder of the company he had been responsible for landing almost all of their early customers, many of which were still ordering product from them. 10 years later he was still working those accounts and grabbing up every lead that came in from them. The other 3 salespeople struggled mightily each year to meet their goals. The CEO kept telling me, “I need 3 more people like Jim.” I said the real problem was Jim. “What?” You have taken your most accomplished new account sales person, the one who went out when you were just starting up and landed all these big accounts, and turned him into an account manager. Most of his job involves picking up the phone and taking an order. Your best salesperson isn’t doing anymore what he does better anyone else; developing new accounts.
The third reason to dump assigned sales territories is that they encourage lazy sales behavior and increase sales turnover. Think back to Jim. When he first started selling for his company, when it was brand new, his charter was to go out and find business, no matter where it was. He was opportunistic and entrpreneurial. But he isn’t anymore. And he has such a large percentage of the available accounts that he is working broadly with each account instead of deeply. He isn’t getting the most out of each account. But his presence prevents anyone else from getting in the door.
Here are 3 simple fixes to permanently change this situation. Not everyone will be happy at first, but in the long run it will improve your overall sales.
1. At the end of each year, each salesperson has to give up 30% of their accounts. At one client we set up a bidding process, almost like the expansion draft that the NFL holds when they have expansion teams joining the league. All the current teams have to designate 10 players out of their roster of 45 that are available to be drafted by the expansion teams. Each salesperson had to put 30% of their accounts into the pool. We put names in a hat and determined the order of people picking new accounts. The only rule was you couldn’t select one of your own accounts. They each got N picks. All accounts that were leftover went back to their original owner. An amazing thing happened. The veterans started to go out and develop new business. And they started working their accounts more effectively, going deeper and broader then they were able to before. The other salespeople didn’t pick up great accounts but they got accounts that had potential that hadn’t been well served by the other salespeople. They picked up some confidence and started doing a better job on new accounts.
2. If an existing account hasn’t ordered, or been contacted, within the prior six month, then they become an open territory. At one client I introduced a rule to break up account monopolies that strangled overall sales. I said that if you hadn’t sold into an account within the prior six months then any rep could call on them. You might think that chaos would ensue but actually it was the opposite. The salesreps with all the established accounts began to willingly shed those accounts that they couldn’t service. Of course, they weren’t giving away their prime accounts. But they saw that unless they freed up the time to really focus on their big accounts they were at risk of losing them. I added a second change to the mix. If a lead, a sales inquiry, comes in from an existing account that had not been contacted by the assigned rep within the prior six months, then any sales person could take the lead. Sparks flew. But orders started growing as accounts started getting more attention.
3. All new sales leads are available to any salesperson on a first come first served basis. Without fixed sales territories salespeople should be free to compete for leads. I believe that management should get out of the business of assigning sales leads. I have never worked with a client where the CEO wasn’t shepherding what he or she thought were the high value leads to his top salesperson. When this system is implemented a few interesting things happen. First, the salespeople who were hungry for leads had the opportunity to show that they could perform. They showed up earlier in the office in order to get their choice of leads. That was healthy. Without a CEO directing leads to his favorites, it makes for equal opportunity among all salespeople. Those people who had been complaining about the lack of new leads might have had some justification. Under this system, their excuses were removed and they had to put up or shut up. Second, salespeople had an incentive to stay on top of, and truly work, their existing accounts. They certainly didn’t want a stray lead to come in from another division of an account that they were managing and have another salesperson scoop it up. But mostly, the high performing salespeople largely got out of the business of servicing new leads.
I got the idea for this system from my Uncle Bill. I remember visiting Bill and his family in Iowa when I was very young. My Aunt Martha was justly famous for her dark chocolate layer cake and on this one visit after dessert was served there was one tempting slice of this delicious cake remaining. All the kids around the table were eagerly eying the cake and each other, gauging who was going to jump first. Finally I couldn’t take it and I broke the silence and asked, “Who get’s it? Who gets that last piece?” Uncle Bill slowly reached over and picked up the cake plate. While looking at each of us kids in turn around the table, waiting for his decision, he leaned over and licked the top of the cake with his big tongue from one end to the other. “Me.”
The idea behind all three of these solutions is to ensure that your entire salesforce is engaged on an equal footing in the business of selling. Everyone is given a fair shot to succeed. This works to the distinct benefit of the company as you create an opportunity for everyone in sales to succeed to a greater degree. As long as you create an uneven playing field you are dooming certain of your salespeople to failure. Why?