Will Sales Metrics Technology Ever Become a Need Based Sale?

Will salespeople and managers ever demand their company acquire a sales metrics system or will the sale always be a ‘need’ created by the technology companies themselves? Currently, there is little or no demand by the sales force for the company to acquire the technology. The sale of sales metrics technology is driven not by demand from the field, but rather by the push of the technology companies to create the need in senior management.

If you examine the literature and discussions on the subject, you find that virtually everything written—from the articles to the blogs to the commentary on the blogs is written by those with a vested interest in the sale of the product—developers and tech consultants. Seldom do you run across anything, including interviews, by the product’s users or those who would be users.

The question, then, is this an indication that the technology is so new that its existence hasn’t been recognized by the end user—or is it an indication that the product isn’t viewed by the end user as having any real value for them?

The answer to that question will ultimately determine the success or failure of the technology. CRM has been a top down decision with senior management determining it to be of value and then finding resistance at the user level because the user hasn’t found personal value in the technology.

Is sales metrics technology headed in the same direction? Unless the industry can create awareness and demand at the salesperson and front-line manager level it may well be that the technology will end up with the same reputation with salespeople as CRM—accepted and welcomed by a few, resented and misunderstood by the majority.

Investing time and energy to get independent voices—from salespeople to managers to trainers and coaches acquainted with the technology and ‘on-board’ with its value is going to be necessary if the industry wants to turn the product from a created ‘need’ to a demand from the sales team for the company to invest in the product.

The alternative is to slowly build the industry through a top down sale, hoping eventually enough product will be on the market and enough salespeople will find value in the product that other salespeople will begin demanding the technology be implemented in their company. With dozens upon dozens of companies in the marketplace and more entering all the time, do product developers have the time to take a long-term approach?

If technology developers in fact have products that will help salespeople identify their specific skill and behavioral needs so they can address them and increase their sales, they need to be aggressively seeking to bring salespeople and managers on-board as enthusiastic supporters of their products. In addition, they should be seeking to develop the interest, support and enthusiasm of the sales trainers and coaches who work with and influence salespeople and front-line sales mangers. Convince the sales team of the product’s value and the company will follow; sell the executives without selling the user and the process will be a long tough pull.

 

What Are Your Front-line Sales Managers Costing You?

What does a new sales manager cost?  Unfortunately, there has been little written and less studied on the subject.  The cost of hiring a salesperson is fairly well documented—somewhere in the neighborhood of at least three to four times their salary, so if your average salesperson is making $50,000, your minimum cost to hire and train a new salesperson will be $150,000 to $200,000.  That’s a significant investment.

A small, very unscientific, informal survey by McCord Training indicates the hard and soft costs of hiring an outside sales manager or promoting a salesperson into management is significantly more expensive than hiring a salesperson.  The survey indicated the minimum costs associated with a new manager are in the area of five to seven times salary.  So if your manager’s salary is $50,000, your first year expenses for that new manager are in the area of $250,000 to $350,000—minimum.

Where are the dollars spent?  Whereas a new salesperson’s investment tends to be in formal and informal product and service training, lost sales opportunities, management’s time invested in the new hire, and the costs associated with hiring the salesperson, the new manager’s costs are almost all related to lost opportunities and wasted resources.

Lost opportunities and wasted resources come in a great many shapes—insufficient coaching and mentoring of the sales team, overlooking new market opportunities, not recognizing and reacting to new initiatives and expansions by competitors, not acting to correct or eliminate destructive behavior by team members, misallocating discretionary training and marketing dollars, as well as a number of other areas.

False Expectations
Few companies hire a new manager or promote a salesperson into management with the intention of simply letting them sink or swim.  Most often the company’s management sincerely expects to give the new manager the resources they need to succeed through an informal structure where the new manager’s manager–and possibly others in the company–is available to help the new manager as he or she has questions or as situations arise.

Seldom does this informal structure work.  Soon after coming on board or being promoted, the new manager discovers that his or her manager isn’t available when needed; others in the company are too busy to help, as are the other front-line managers the new manager tries to connect with.  They quickly discover that despite the best of intentions, they’re left on their own.

Within short order a pattern develops.  The new manager determines they can’t wait for help and either makes decisions on their own without sufficient background to make the appropriate decision or they simply ignore the issue hoping it will resolve itself.  Mistakes are made.  At first, the new manager is given a gentle slap on the hand and some guidance.  As more and more mistakes are made, the gentle slaps become harder; the new manager’s manager becomes less patient.   Within a few months, both the new manager and their manager are both frustrated.  Within 12 to 18 months, there is a better than 50% chance the new manager will no longer be with the company—either leaving on their own or having been let go.

Informal Training Programs Don’t Work
Although well intended informal training programs don’t work.  An informal program is by definition a catch as catch can program.  The new manager is encouraged to seek help as needed, wherever that need arises.  Consequently, not knowing when or why they’ll need help, help is usually sought only when it is needed immediately.  That immediate need often occurs when the individual who can help address the need is unavailable, requiring the new manager to either wait until someone who can help is available or to address the issue without counsel.

The expectation in an informal program is that the new manager will have the ability and foresight to seek guidance before it is needed or that those who can help address the issue will be available when needed.  Both of these are unrealistic expectations as the new manager doesn’t have the experience or background to anticipate many of the situations they will encounter, and those that can give guidance and support cannot neglect their primary duties to be ‘on call’ at a moment’s notice.

Addressing the Issue
Of course, it doesn’t have to be this way.  There are alternatives to the well intended but ineffective informal training the company intended to do:

Training Program: A formal training program that each new manager undergoes is an excellent choice for larger companies.  Whether constructed and presented by the company’s training department or by an outside vendor such as McCord Training, a formal program should enlist support from a number of departments to address each area of the new manager’s responsibilities.  Consequently, the program may bring in individuals from finance, accounting, shipping, manufacturing, human resources, and a number of other departments.

Although most often presented in a structured, multi-day classroom setting, additional one-on-one coaching for an extended period must be an integral part of the program to insure success.

Coaching Program: A one-on-one coaching program for each individual manager is perfect for small to mid-size companies and has certainly been very successfully employed by large companies as well.  Typically an outside management coaching company such as McCord Training or any of the other quality coaching companies is hired by the company on a 6 month to year contract to formally coach the new manager.  Often the coach will pull in individuals within other parts of the company as needed to address particular areas of responsibility.

Management Based Mentoring Program: An alternative used very successfully by McCord Training has been to set up a formal mentoring program within the company’s management where a senior manager from each department that touches on the new manager’s areas of responsibility engages the new manager for a set period of time to mentor them on how to manage their responsibilities within that area.  A senior manager from accounting would work the new manager on budgeting and cost control, a manager from human resources would work with them on human resource issues, and other managers from other departments would take their turn.

The difference between this and the informal program established by most companies is the formal mentoring program is just that–formal.  Both the new manager and the department executive know the mentoring process is important and a set time is scheduled for meetings.  It is the department manager’s responsibility to prepare the new manager for the issues they will face, not just to react to the particular questions the new manager may have.  Each department manager has a formal agenda to address that is designed to prepare the new manager to fully execute their duties.

Manager Hired Coach: The least desirable but often used method of addressing the issue is for the new manager to hire their own coach.  Once they understand that they are in a sink or swim situation, many will take the initiative and hire a coach to help them learn and perfect their management skills.  Although their coach will help them become quality managers, a byproduct is often resentment on the part of the new manager that the company ‘left them out in the cold.’

Manager Training is Becoming More Critical
With the introduction of sales metrics, training front-line managers will become increasingly more important.  Those costs of five to seven times the manager’s salary will increase as the opportunities to increase sales performance increases due to better understanding the coaching and training needs of individual salespeople, more market opportunities will be exposed through an analysis of better and more accurate sales and market data, and as competitors enlist the sales metrics technology to sharpen their sales teams.

Whether a company chooses an outside vendor, an in-house training department, or a management based mentoring program, investing in the success of front-line managers doesn’t cost, it saves, it increases sales, and it increases profitability.

 

Understanding Sales Performance Management for its own right

Sales performance management (SPM) has taken the turn into mainstream business. Like ERP in the late 1980s/mid 90’s and CRM in the late 1990’s/early 00’s, SPM’s day has come. Contributor: Patrick Stakenas, President and CEO, ForceLogix Like ERP in the late 1980’s and CRM in the late 1990’s, sales performance management’s (SPM) day has come. Just hiring more salespeople or trying to acquire one’s way to growth is not the way, understanding SPM and treating it with the same respect that you give ERP and CRM will provide significantly better results. For years, managing back end financial and operational processes was done with one-off tools or spreadsheets. In the late 80’s and early 90’s it was recognized by businesses of all sizes that they needed specific applications to manage these processes, as the function was too critical to leave alone. The same thing happened with sales and marketing in the late 1990’s - businesses of all sizes again recognized that they must better track their customers, leads, prospects, marketing campaigns etc., and the birth of main stream sales force automation (SFA) and customer relationship management (CRM) applications occurred. SFA and CRM brought considerable efficiency to the sales process in managing and tracking customer-related activities and contact management. Still, to date, little attention has been given to truly understand the strengths and weaknesses of every sales player every day and to focus on the leading indicators that can make a salesperson more effective. Companies in all industries have realized that they must keep focus on what they have. They must give more attention to who is driving revenue and model those behaviors to top-line and bottom-line growth. Using technology to enable SPM is the key to managing this process. Just like ERP and CRM, businesses can no longer just get by as the function or process of managing selling is too important and training alone has not been the answer. Just like having effective tools to manage customers, marketing and finance, it is equally important to have a process and supporting technology to manage the sales person, to manage sales effectiveness, and here is where you will have the biggest impact on revenue: sales effectiveness that drives organic growth. SPM has become the next critical process that needs overhauling. Business has begun to recognize this but are way behind with their focus on process and tools that actually manage the sales rep. For years companies have thought that just training the sales person, or applying a better compensation plan would drive the necessary revenue; it has not happened. Managing a sales person and understanding what drives that person, understanding their strengths, where there is opportunity for selling improvement, figuring out what the true leading indicators are to revenue and focusing on coaching to better the person’s skill, method and attitude are the revelations companies are now having. Some companies are trying to get at this through repurposing reporting systems, dash-boarding tools, business intelligence tools or building super Excel reports to try to better leverage data from tools such as CRM, ERP or HR systems. Other companies are investing in compensation systems or annual review systems, all of which provide a service to make the process of sales management more efficient, but they do not make the sales person more effective. Gartner, Ventana, Sirius, The Conference Board of Sales Executives and many other analysts and research firms have been talking about this now for several years and companies that have come to this same conclusion are those that will be seeing a greater impact on results, even during times of a confusing economy. Companies that have a consistent, measurable process around sales management and understand and see the future in managing sales management know that they must provide information, process and tools that are usable at the field manager’s level, with a method to coach on the material, are far out ahead of their contemporaries. Managing sales rep. information, and coaching on the true leading indicators to revenue will drive more revenue and the sales manager will know what to coach on to get more results. It is time to wake up and stop relying solely on the sales person or manager to figure it out on their own. It is time to take SPM as serious as you have taken ERP and CRM!

Patrick Stakenas is president and CEO of ForceLogix. He can be e-mailed at pstakenas@forcelogix.com.

 

Measuring What?

Whether you’re a salesperson, manager or executive, the most basic question that must be answered when dealing with sales metrics is, ‘What should be measured?’ You really can’t get to the how to measure until you know what should be measured and why.

That question will to a large extent determine the success or failure of the system you employ. But the very question itself creates conflicting answers. Senior management’s desires may be very different from those of the sales team members. The information most useful to management is not going to be the same information most useful to individual salespeople.

There is a natural dichotomy between what concerns management and what concerns salespeople. Management wants to know the big picture and improve gross performance; salespeople want to know how to improve their performance.

Jessica Royer Ocken discusses how to select the most critical Key Performance Indicators for your organization in Synygy Magazine. Although the article concentrates on the metrics most important to management, she does give some guidance in how to construct a system that will also help meet the needs of individual salespeople.

 

The Critical Missing Data on Sales Technology Effectiveness

From a simple Google search of sales technology keywords such as CRM, Sales Force Automation and Sales Performance Management, one would think that sales technology is taking over the world.  There are dozens upon dozens of companies competing for the technology sale.  From internet based programs designed for individual salespeople and small sales teams to mega systems designed for the largest organizations in the world, anyone considering the purchase of a system is faced with a maze of choices.

Naturally, any field that has the volume of activity as sales technology is going to attract attention from academics–and sales technology has certainly attracted its share.  Another Google search of keywords relating to research on sales technology generates a gross number of about 350,000 hits.  Although a large number of these hits are ancillary to sales technology research, a fair number are directly related to the topic.

Unfortunately, few address the most critical question—does sales technology improve the sales or sales management process?

To date, the study of sales technology has been primarily relegated to how well the technology has been accepted within the sales force.  There have been studies at Penn State, a study published in the Journal of Business Research, and others.

However, little has been done in studying what impact the technology has on sales performance.  A paper in the Journal of Personal Selling and Sales Management and reprinted at Allbusiness.com seeks to analyze the impact CRM technology has had on sales performance, but as the authors admit, a great deal of further study is needed.

Yet, within this single paper are indications of both the potential value and the potential pitfalls of sales technology.  The study found that there is a point of diminishing returns to the use of CRM technology.  Salespeople who ‘underused’ and those who ‘overused’ the technology experienced reduced sales while those who were ‘optimum’ users experienced an increase in sales performance and sales.  Unfortunately, there wasn’t a uniform standard for the optimum usage.  Each company must determine the optimum usage point for themselves—meaning investing a great deal of time and energy into monitoring and training.

Additional studies are underway to examine the real world impact of CRM and SPM systems.  Currently, companies must rely on anecdotal tales or their own biased experience to determine the value—or lack thereof—of the technology.  It will be very interesting to see the additional data as it become available.

Yet, even without the additional studies, I believe the study referenced above is a strong indication that sales technology if implemented properly will have a very positive impact on salespeople, managers, and companies.  The key is the proper implementation, meaning not just training salespeople and managers on the ‘how’ to use the system, but more importantly, what to do with the information the system produces—and that seems to be the single biggest hurdle to determining whether an investment was wise or whether the company simply has an expensive new toy

 

Sales Call Reports–Are They Worth the Hassle?

Do you require your salespeople to compile a daily or weekly call report?  If you’re like the vast majority of managers, you do.

What do you use them for?

How useful are they?

I’ve spoken with hundreds of managers about call reports and almost to a person they agree call reports are one of the most useless traditions management clings to.  The reports are filled with fictitious information, and the information that is truthful is itself useless.

The typical call report will identify who the salesperson met with, if and when the company plans to make a purchase, an estimate of the size of the purchase, and any information the buyer wants from the salesperson.  The report may even give an approximation of the likelihood of securing the contract.  It probably looks something like this:

Met with John Smith, head of procurement for XYZ Corp.  He said they’d be
purchasing by the end of the quarter and wants me to re-bid based on a quantity
of 5,000 instead of 10,000 units.  I told him I’ve had the new numbers to him by
Tuesday of next week.

What does this report tell the manager?  Does it:
•    indicate why the change in the number of units to be purchased?
•    discuss why the purchase decision will be made by the end of the quarter instead of now?  No.
•    indicate the likelihood of closing the sale?  No.
•    indicate what actions the salesperson plans on taking other than giving revised numbers?  No.
•    indicate who the salesperson is competing against?  No.
•    indicate if there are other decision makers in the process?  No.

We could go on.

The Problem
Call reports are useless for three major reasons:
1.    Salespeople haven’t been taught how to construct a useful call report.
2.    Salespeople see no use in the reports.  Although they’re told the reports will be used to help them sell more, they believe its real purpose is to keep an eye on them.
3.    They believe management is only interested in how many appointments they have, so they pad them with fictitious appointments to keep management off their back.

Salespeople see call reports as a weapon—or potential weapon–in the hands of management instead of a training and coaching tool.  And most often, that’s what it’s used for.

The typical call report doesn’t give the manager enough information to be able to help identify the areas in which a salesperson needs training and coaching.  Consequently, the most often result of submitting a call report is a response of “You aren’t seeing enough people.  You need to make more calls.”

That response is worthless.  It doesn’t help the salesperson in the least.  There is no guidance in how to ‘see more people.’  There’s no identification of what the real root problems and issues are.

Call Reports as Real Tools
Call reports, however, can be real tools managers can use for coaching, training, market and competitor analysis, and managing department assets.

The problem with call reports isn’t with the concept, it’s with the execution.  Salespeople must be taught how to construct a meaningful call report and managers must be trained how to analyze the report for coaching, training, and market analysis purposes.

A Meaningful Call Report
Call reports don’t have to be massive documents, but each call should be broken into three sections:

Synopsis of the call: a brief summary of the sales call.  Who, what, when, bullet points of key information from the call, including the length of the call.

An analysis of the call: a longer discussion that analyzes the call and the sale, indicating:
•    who the decision makers are and where the sale stands with each
•    what issues must be dealt with before the sale can be closed
•    who the competition is
•    the salesperson’s best estimate of the probability of closing the sale
•    the salesperson should rate each potential prospect as to the long-term value of the account

Moving forward: What specific steps the salesperson intends to take—and when—to move the sale forward.

A call report that follows the format above can be used to help salespeople close more sales.  It lays out for the salesperson and the manager what happened, where the sale stands, what is expected to happen, and what the salesperson is going to do to make it happen.

Using the Report
Call reports that summarize, analyze and outline how the salesperson will move the sale forward offer both the salesperson and their manager real information that can be used:

•    To spot skill and behavioral issues where the manager can step in to coach and train
•    Opportunities where the manager can offer specific help in identifying and addressing prospect needs
•    Spot accounts where the salesperson is investing too much—or not enough—time and energy
•    Spot buyer, competitor, and product trends within the local market

Some sales performance management technology products and CRM programs make the call report generation process easier and more accurate.  They can help turn generating call reports into highly useful tools for helping your sales team members become better sellers, spotting and analyzing changes in your local market, and maximizing both the department’s human and non-human resources.

Whether you are using hand written reports or using a system, you must turn the reports from wasted effort to keep management off the salesperson’s back into a real tool that can improve sales and your salespeople.

 

The Waste of Sales Training

How many thousands, tens of thousands or even millions of dollars a year does your company waste on useless sales training?  No, I’m not suggesting that sales training is useless.  I’m suggesting that the way most companies approach sales training is wasteful in terms of time, money, and energy for both the company and the sales team members.

Sales training is typically a herd activity.  Someone—VP of Sales, head of training, or a regional, district or branch manager decides that X training is needed.  They either have the training department develop a training program or hire an outside training company to address the issue and then schedule a training session.  On the day or days of the scheduled training, everyone comes out of the field to attend—mandatory, you know.  So, for one, two, maybe even three days no one is out selling.  Lost sales opportunities and revenue for those days, and of course, there are the expenses for travel, meals, possibly hotel rooms.  The expenses alone can mount into the tens of thousands.

A small one-day training session for a region of say 18 reps can cost anywhere from $10,000 to $25,000 or more depending upon the training company fee and the travel expenses for trainer and attendees.  That’s anywhere from $550 to $1,400 or more per salesperson.

That, however, is the least of the problems.  A far more serious problem is that all of the salespeople are being treated as though they all had the same training needs.  They don’t.  Those individuals who don’t need the particular training are taken out of the field and required to attend, just as those who do need the training.  Now, the company not only has lost production and the expense of training individuals who don’t need the training, they also have salespeople who resent being forced to take time out of selling to attend a session they shouldn’t be attending.

But the most serious problem of all is that those salespeople who shouldn’t be attending are not getting the training they do need.  Most companies hold mass training sessions only a few times a year—often only once or twice.  If the training offered fits the needs of an individual salesperson, great.  If not, well, maybe next year we’ll have something for you.

Why is training a herd activity instead of geared toward the needs of specific individuals?  Primarily because companies have not been able to determine who needs the training and who doesn’t.  They haven’t had the ability to pinpoint the needs of individual salespeople and develop programs to address them on an individual basis.

Secondly, sales training has traditionally been sold as a herd activity.  Many of the most popular training companies are designed to do mass training, not to work with individuals on a one-to-one or small group basis.  Many training companies are guilty of encouraging training waste by selling their services based on the assumption that the company wants to maximize the use of training dollars so they encourage the company to have everyone participate whether they need it or not.

And thirdly, as mentioned above, the company seeks to ‘maximize’ their training dollars, so the whole herd is to attend to squeeze every dime’s worth of training out of the training company’s fee.

As the use of sales technology that gathers a great deal of data on the activities and behavior of individual salespeople increases, the way sales training is delivered and consumed by companies will change.  Managers will be able to pinpoint the real needs of individual salespeople and to develop programs either through the training department or with outside training and coaching companies, to work with their salespeople one-on-one or in very small groups to address their specific needs and issues.

The company may still spend the same $10,000 or more, but instead of a single day mass training session on a single issue presented by a single company, those dollars will be used to address multiple issues and very possibly through multiple vendors.

Some companies are using this model today and experiencing far greater benefits than they experienced through the mass cattle call training of the past.  Their salespeople are performing at a higher level, managers no longer have entire sales forces out of the field at the same time, and companies are finally squeezing every dime’s worth of training out of their training dollars.

Yet, to be able to create highly targeted training, managers and companies must understand the needs of their sales team members far better than most do today.  They must have real information that reveals the real underlying issues of individual team members.   Sales metrics technology if used correctly can keep salespeople in the field selling, give salespeople the real help they need, while saving the company thousands of dollars due to lost sales and wasted training.

 

Why are Sales Metrics not understood?

The writers on the site and many enlightened practitioners see the gold in sales activity/outcome data and sales metrics, yet there use isn’t widely adopted in the field. I wonder if part of the problem is a lack of overall sales management models to provide a framework? If we contrast the situation with our friends in marketing, they have plenty of frameworks and models: The 4P’s, 6P’s, SWOT, Product Lifecycle, and PEST to name a few; and these frameworks often act as the basis for the development of performance metrics.

When I became interested in sales management, I started by reading a number of books with Sales Management in their titles, and became aware that they had plenty of content on the softer issues; recruitment, training, sales meetings, but I have not come across any references to sales management models or the quantative side of sales management. The problem goes as far as an agreed standard definition for sales management. If you visit the sites of the various vendors for CRM and SFA, they all claim to offer ‘Sales Management’ and freely list what they include; yet in my opinion, very few or any of the things listed are part of sales management. We should also consider the use of other widely used words in sales management such as quantity and quality, often used to describe mutual independent events, which in one context they can be but in others they are linked.  Why would sales be the only profession where more practice (quantity) would not lead to better outcomes (quality), unless of course you are selling something that addresses only one?

Why are the model/frameworks important? Without the development of such models and frameworks, I believe we will struggle with both technology for sales and metrics. As the old adage says, if you do not know where you are going any road, or should I say any new tool or idea, will get you there!!!

I am not sure what comes first -  the model or the data? Do we need to start as with our friends in marketing with models and then collect the data to prove the models and from there a set of meaningful metrics? I suggest that it does not make a difference, rather the important thing is to start.

 

Can Your Company Afford to Maintain Its Current Management Philosophy?

Flip through some random job descriptions for frontline sales managers on CareerBuilder or Monster.  Take a look at the job descriptions for frontline sales managers from a number of industries.  Look closely at the responsibilities and duties the manager is expected to handle.  What do you find?

The Job Duties
If you’ll take the time to look at least a dozen—preferably more—you’ll find a whole slew of duties that frontline managers are expected to perform such as:
•    Recruiting and hiring salespeople–and often clerical staff
•    Training, coaching and mentoring those people
•    Resolving customer issues
•    Coordinating and working with other departments such as shipping, manufacturing, underwriting, finance, etc.
•    Monitoring the local market and competition and keeping management informed of market changes and opportunities
•    Creating and implementing a local sales and marketing plan
•    P&L responsibility for the local office or branch
•    Conduct sales and training meetings
•    Complete reports for management on a weekly, monthly and annual basis
•    Create annual office or branch budget
•    Create monthly and annual sales projections
•    Operate as company’s ambassador to the community by attending community events and maintaining a high visibility in the community
•    Other duties as assigned

And then the kicker:
•    Maintain a high level of personal sales activity and personal production

The first dozen responsibilities listed above are management activities that are—or should be—critical to the growth and profitability of the company.  Most of these activities require someone with strong management, problem solving, and analytical skills.  To properly perform these activities, the individual must have a frame of reference to resolve customer issues, to develop sales and marketing plans, to maximize the return on assets, to properly analyze the local market and competition, and especially, to recruit, train and mentor salespeople.

Only the last item is a purely in-the-trenches sales activity related item.  Yet, as anyone who has been in sales understands, to meet that requirement of ‘maintain a high level of personal sales,” selling must be a full-time job.

The Requirements For The Job
Go further into the job description and you find the ‘requirements’ section, describing the background and experience this individual must have to be considered for the job.  Most typically, that description includes these items:
•    3-5 years direct industry sales experience
•    Proven high level of production, meeting or exceeding quota
•    Strong product knowledge
•    Proven industry contacts and book of business

What’s missing in the requirements for this position?  Of course, not a single word about management skills, aptitude, training or ability.

And how is this individual typically paid?  Usually some combination of base salary, commissions and overrides, or worse, overrides and commissions.

Does It Make Sense?
The above list of responsibilities was gathered from a number of job postings from a number of industries including retail, banking, insurance, securities, medical, software, chemical, consulting, and others.  Most of these job postings listed a majority of the above requirements including the personal production requirement.

Although traditional in many industries, does this combination of duties make sense?  If it does:
•    why are so many offices in these industries poorly run?
•    Why the constant harping by senior management for the offices to keep costs down?
•    Why complaints by marketing that leads aren’t being followed up?
•    Why the complaints by manufacturing and shipping that didn’t know certain things about various orders?
•    Why are commission checks so often wrong?
•    Why is the training and coaching in these companies so poor?
•    Why are so many poor hiring decisions made by the company’s sales managers?

The list could go on.

The reason of course is obvious.  The company didn’t hire a manager, they hired a salesperson to try to keep the herd in line and hopefully end up with the sales numbers the company wanted—and that sales manager is expected to make sure they do through his or her personal sales.

Sales management as so often practiced today is hardly deserving of the term.  And despite the onus being placed on the sales manager by the company, the problem doesn’t lie with the sales manager.  Typically, the company got exactly what they wanted—a top salesperson willing to assume responsibility they haven’t been prepared for in exchange for a title.

Can Companies Afford to Continue This Way?
For most companies, selling is becoming a bigger and bigger challenge.  Competition is fierce, their products are most often indistinguishable from their competitor’s, their markets are becoming more fragmented, their prospects are better educated and more demanding than ever before.

Management as a sideline, although traditional in a great number of industries, is costing companies billions of dollars every year in lost opportunities, bad hires, poor local market decisions, lack of resource utilization and lost sales.

In a complex world with razor sharp competition and astute prospects who often know more than the people trying to sell to them, companies can no longer afford to use management positions as rewards for past production.  Frontline managers are increasingly becoming the focal point of a company’s success or failure.

Many companies have already begun to change their management philosophy and have eliminated the selling manager position and have replaced them with full-time, qualified, and trained managers.  To this end, they have instituted manager training and coaching programs hiring outside companies and coaches to work with their new and existing management staff.

Take Action Now
If you are in a producing manager role, hire a sales management coach to help you prepare for the realities of the changing environment you are entering.  Those items within your job description that haven’t been emphasized in the past are becoming increasingly important.

If you’re a senior manager, consider whether a producing manager is really worth the lost revenue and lost opportunities.  Your company’s selling environment isn’t going to get easier.

 

Can Sales Share Technology with Other Departments?

Alan Timothy of i-Snapshot posted a comment to “Is CRM a Failure” that addresses one of the key issues that must be addressed by any company thinking about instituting any technology: can it meet the needs of all of the departments and users who will be using it or they would like to use it?

Will a single system work for customer service, marketing, sales, and maybe even payroll, accounting, shipping and scheduling? It would have to be a system that integrated the specific needs of all of these departments and could track customers, marketing metrics, sales metrics, commissions and payroll, manufacturing and shipping needs and schedules, and more.

As Alan points out in his commentary on the post, asking a system to perform all of those activities isn’t realistic. Yet, in many instances, companies are asking their systems to perform a good many of these activities. Usually, the result is dissatisfaction with the system because it can’t do what it wasn’t designed to do.

The concept of a sales department specific system is still relatively new. The how, why and what of the system is still a question that most companies have either not addressed or have not fully answered. Moreover, product developers have addressed the question in many different ways with different focuses and objectives. And, naturally, there are still a good number of companies trying to shoehorn every department and every need into a single system, hoping to save money by doing so.

Over the coming days, weeks and months, hopefully we can address the issue not only from a perspective of whether or not a single system can handle the needs of the sales department, but is the investment in sales tracking and metrics worth it? What real value can companies realize from instituting a sales specific system? What impact—good, bad, indifferent—would the system have on the salespeople, the management staff, and the company?

These are not easy questions to answer, and certainly, there isn’t a single answer. But the answers are vital not just to the company but to the salespeople and managers whose lives and careers will be fundamentally affected by how their company answers these questions.

For us in sales and sales management, these aren’t academic questions. Sales technology is going to have a tremendous impact on what we do, how we do it, and even whether or not we are successful at doing it. For many at this point, the issues may seem distant or even non-existent. For others, it evokes images of George Orwell and Big Brother. Others may see it as much ado about nothing, lots of noise about something that is more a toy than something that will have serious implications for them personally.

There isn’t a single universal system that will answer all of the needs of every department. Trying to force systems to perform functions outside its intended scope is ultimately self-defeating for the company. Now, what does the sales department do about it and how will their decisions impact you?