Logo
BodyBGTop
Managers Have Needs Too, Ya Know
Sales managers must know who is doing what, when and how. Now, technology can provide this information-and make it more meaningful.
For the rest of the August 1999 issue of CRM magazine please click here
Page 1



In last month"s column, I introduced six issues that sales managers face every day. Among these were an increased span of control, managing reps from afar and the need for forecast accuracy.

This month, in part two of this three-part series, I will take a closer look at these issues and certain questions that naturally follow, such as: (1) Does this apply to you and/or your sales managers? and (2) Can automation systems provide answers to any of these pressing issues? I hope to help you find an answer to the first question. As for the second, the quick answer is yes, systems and tools can now provide unprecedented levels of sales manager support. Here"s how.

Span of Control
Managing people provides new opportunities for sharing and learning. Unfortunately, these opportunities are often lost because everybody is "doing their own thing." Many SFA systems try to overcome this by enforcing lock-step regimentation-first this step, then that step and so on. Since this does not reflect most sales situations or sales reps" experiences, the approach is quickly rejected.

In our process work the past eight years, we have presented the value of process (the ability to share information and increase learning cycles), while recognizing that the process itself isn"t correct and perfect. The process provides a standard by which we can all measure and keep track. With no common standard, everyone is measuring in his own separate units, so we can"t compare information.

However, if we all use the same yardstick and we all come up short, even though that yardstick may not be actually 36 inches long, we can still learn something. What a process does is provide sales reps something to measure with and something to measure against. Enter SFA and process management. The system should not only accommodate your selling-and your customers" buying-processes, it should also enable sales reps to easily and quickly record those actions they've completed and the location of opportunities in the pipeline. With the system tracking these opportunities, management can begin to see where things are even in a wide geography. In addition, by analyzing and comparing the deal movements, managers begin to see what is or isn"t happening in the form of patterns, trends or gaps.

Managing Reps From Afar
Operating intelligence is central to most of the issues outlined earlier. Central to this intelligence are leading rather than lagging indicators. When the only consistent and objective measures a sales manager has are sales and quota attainment, it is difficult to more than congratulate ("Way to go!") or chastise reps ("I told you you didn"t have enough deals that were going to close.").

Geography, time zones, differing priorities and agendas and lack of infrastructure all contribute to a manager"s "not knowing." And human nature is inclined to fill in the blanks with our worst fears. Hence, managers often feel they"re in the dark about deal specifics, and reps can feel micromanaged.

In the following scenario, a sales manager must deal with Bob, a remote rep, whose sales are way behind everyone else"s. The manager could utilize SFA technology to gauge Bob"s performance by looking at a "snapshot" table of sales numbers comparing Bob to other sales reps in his region, but that doesn"t provide the big picture analysis the manager needs. There is a more in-depth way of looking at the same data, specifically comparing Bob"s numbers with the regional average. (See Graph 1.)

Compared with the snapshot approach, this graph is a veritable movie. We see that Bob is running below the regional average for a number of deals. It may also be that Bob"s average deal size is three times the regional average and/or that he has twice as high a close rate. So while one graph does not tell the entire story, it does tell us a couple things. First, Bob is consistently running a lower number of opportunities. Second, the number of opportunities the region is pursuing is consistently increasing. If Bob"s deals are not considerably larger, he stands a good chance of falling further behind.

This notion of movies versus snapshots is an important distinction. Today, with everyone doing his or her own thing, the sales team is operating informally. The control chart depicted shows normal variance for the region (the space between the two dashed lines); if the performance metric falls within this range, the group is said to be operating "in control." The difference between informal and in control has everything to do with increasing predictability.

Increased Forecast Accuracy

Consider the following comparison of two companies" revenues versus plans. For the purposes of this discussion, assume Company A and Company B are in the same industry and, therefore, have the same seasonal variations, inventory requirements and so on. Also, assume the plans for both companies are three years in duration. (See Graph 2.)

What can we say about Company A versus Company B? Observations might include that Company B has a better handle on its sales process, is more profitable, experiences less turnover and is less stressful. In fact, Company B will be more profitable because it can better anticipate what business volumes are coming when. This ability translates into better resource utilization (less overtime, less rush shipping, smoother demand on resources). Company B is also seen as being more predictable. As a result, if this were a publicly held company, it could have three to four times the market cap on the exact same revenue due to its ability to forecast accurately. Even as a private company, demonstrating this ability would give Company B greater access to capital at more favorable rates, under better terms.

In addition, senior management has three top priorities: 1) increasing productivity; 2) increasing predictability; and 3) increasing shareholder value. The ability to forecast accurately plays directly into all of these.

Many users of SFA/CRM systems are taking too simplistic an approach to forecasting sales. Applying sales reps" probabilities, overriding these with managers" hunches and/or applying fixed percentages based on steps in the process are typical approaches. The net effect is that fancy packaging is used to hide the fact that the forecast is still being put together by managers on the back of an envelope or in an Excel spreadsheet somewhere.

Current technology enables the tracking of quality indicators, such as input and process quality, and allows comparisons between the variation in these and other criteria over time and forecast/actual results.

Page 1
To contact the editors, please email editor@destinationCRM.com
Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationCRM.com/subscribe/.
Search
Popular Articles
 

BodyBGRight
Home | Get CRM Magazine | CRM eWeekly | CRM Topic Centers | CRM Industry Solutions | CRM News | Viewpoints | Web Events | Events Calendar
DestinationCRM.com RSS Feeds RSS Feeds | About destinationCRM | Advertise | Getting Covered | Report Problems | Contact Us