To grow your business you have two options: grow in number or have your people grow in capability. In today's hyperspeed, hypercompetitive market, you will soon be at a competitive disadvantage if the only way you can increase sales is to increase head count. Indirect channels, including inside sales, partners and the Internet, all reflect this reality. However, there is still plenty of potential to be realized by growing the people in your organization. Specifically, you must teach your direct sales reps to manage sales cycles, sales teams, customer relationships and company resources more effectively.
Providing effective instruction and improving these elements, however, requires (a) that you know the rep's current level of performance (measurement standards and benchmarking); and (b) that you provide performance feedback against these metrics (coaching). Companies do not grow by management edict; they grow by management coaching. In this column, I will examine how coaching affects the entire sales process. I will also take a look at the contribution CRM makes to coaching efforts and some important ways it's failing them.
Process in C Minor
In today's complex business-to-business sales, sales managers and reps are less often seen as lone wolves than as conductors of sales teams. Can CRM technology improve managers' and reps' effectiveness so they hit more high notes? Maybe.
Allow me one more musical analogy. I remember an old song that describes how a tuba player blows in through the mouthpiece and the music "goes around and around and comes out here." These lyrics remind us that you don't go straight from air to sounds, or from sounds to music. To make music, you need the process that happens in between. In sales, process is what converts leads to closed deals. The Alexander Group labels the pieces of the sales process as identify, qualify, propose and close. However, as simple and universal as the understanding of this model is, something is missing: how a sales rep masters these pieces.
George Leonard, a writer who did groundbreaking work on the subject of mastery, pointed out that the number one key to mastery is coaching. In sales, effective coaching involves focusing on results and the processes that produced them. Results are essential to effective coaching because they are a reflection of things sales reps do over and over (make calls, do demos, propose solutions) and how well they do them. Providing reps with accurate, timely feedback on their performances, and consequently their processes' execution, is essential to improvement.
Feedback on a sales rep's performance is what coaching is all about. But unfortunately, with most coaching, managers are often holding up the equivalent of a fun-house mirror, full of distortion and offering a humorous though not very enlightening view. If managers were able to provide timely, fact-based coaching of relevant measures, the individual could begin to upgrade his skills. In particular, with a technology assist, the manager would be able to offer a few insights and suggest which, if improved, would have the greatest payback for the rep.
In theory, SFA systems should provide that technology assist. However, theory and reality are two different things. For feedback to be meaningful it must meet five tests. It must be: (1) timely, (2) accurate, (3) objective, (4) individualized and (5) relevant. Today's SFA systems fail three to five of these tests. They either are late or infrequent (quarterly analyses), inaccurately based on assumptions rather than actual performance (sales cycle = six months), and/or are inexplicably inconsistent (snapshot metrics can vary wildly from week to week). In addition, the feedback may measure elements beyond a manager's control or be computed upon generic figures or group averages.
Inconsistent and/or infrequent commentary does not result in improvement or growth.
We just adopted a dog from the pound and were required to attend training with him. The instructor was insistent: To correct or change behavior you must give feedback immediately. This doesn't just apply to pups, and it does reinforce the notion of timeliness. If the delay in reporting is so great that gauging your or your reps' sales performance extends beyond your threshold of patience, you might simply abandon the effort of entering data and running reports. This is the problem of weak or complex CRM reporting schemes. When you look at CRM applications, ask references not how they get data in but, rather, how they get intelligence out.
Just The Facts
The need for feedback accuracy is pretty much self-evident, but how do you spot inaccuracy? This is actually getting trickier. CRM programs can now use Excel or Crystal Reports to diagram all kinds of data in different formats (pie charts, bar graphs, 3-D with shading) at the touch of a button-even if it's totally wrong. The reason is the data upon which the reports are based may, and probably do, lack consistency. If the software doesn't enforce process rules, then the charts generated are filled with flaws.
For example, a frequently mentioned sales metric is sales cycle length. First we need to agree on when the cycle starts and ends. However, several well-known CRM packages do not enforce these definitions, so a rep can close an order and then reopen it. So when is the cycle ended? When you close or when you really close? Similar problems occur with close rates and other important measures. These faulty numbers could be somewhat helpful so long as they're consistent. However, since most managers don't know the basis of the figures reported, the likelihood of sound coaching deriving from these reports seems awfully low.
What's more, many of the reports simply have no meaning in the real world. How many calls I made or what percentage of my To Dos were completed may be accurate and individualized but have no meaning to me as a rep.
Finally, the ability to measure individual performance is virtually never available in CRM systems. The usual approach is to apply generic close rates and estimated cycle times or close dates to generate forecasts and estimate pipeline health, such as percent full. However, to be useful, such figures should be based on actual performance, not simply a guesstimate.
start At The Top
Despite these shortcomings, SFA systems can be a source of useful feedback information for coaching. The right system can provide accurate, timely and relevant data-but only when management recognizes this need and understands how to utilize the application to its fullest potential.
David Hannaman, executive vice president of C3i, presents a course called "Coaching with Technology." This isn't just a catchy title. It suggests several areas in sales in which technology can add value. However, for managers to realize that value requires a shift of focus. Says Hannaman: "What was needed for managers to take advantage of technology and how powerful it can be was management training. What metrics are available, how can they be used (and misused), how to interpret what the metrics are telling them." He adds, "There's very little emphasis on `push this button' technology training."
In other words, for managers to provide effective coaching, they must first be coached themselves and provided with meaningful metrics. Improved technology/coaching skills lead to improved feedback, which ultimately leads to improved results. The music that comes out of this process approach is sweet indeed.