Focus on fundamentals when facing shortfalls.
Posted Oct 12, 2007
What type of metrics and evaluations are you employing to track and evaluate your sales efforts? Or, to put it more bluntly, how do you know whether your sales staff is doing all that it can to deliver on the CEO's objective to enhance revenue?
Our annual global productivity research, based on 10,000 hours of observations, underscores the facts that major corporations that come up extremely short of their sales goals do so because their sales management processes, systems, and operations are generally flawed and, consequently, their efforts misdirected -- and many of them don't realize it. The findings are ominous and consistent year to year.
For example, is it acceptable for sales executives to devote just 10 percent of their time to actively selling, and the balance executing various administrative and non-value-added tasks? As startling as that sounds, a lack of commitment to actively selling and to other fundamental aspects of sales is preventing many organizations from flourishing.
One basic question gets to the heart of whether your sales force is selling smart: What are your sales executives doing right now? Presumably, most of their time is spent selling, but unless you are proactively managing in the field or on the sales floor, the truth is you really don't know whether they are, in fact, selling, let alone whether they are selling effectively.
At the regional office of a national copy-machine company, I once noticed a majority of the salespeople sitting in their office at about 2 p.m. When asked why, the sales vice president noted that his people were professionals whose activities didn't need to be measured -- even though the company was losing $15 million annually.
The sales chief agreed to start monitoring activities -- but six weeks later still hadn't "gained consensus on what form to use." (He was later fired.)
Too many organizations still promote their leading salespeople to management roles regardless of whether they've had even basic management training. And what hurts them even more is that executives charged with heading sales organizations often lack the key skills to motivate and lead. So it's little wonder that the practice of proactive management is, at best, rudimentary and, at worst, absent in an overwhelming number of cases.
All companies measure revenue generation as an indicator of sales performance, but surprisingly few measure the underlying activities. How many sales calls are we capable of making in a day? Are they executed competently and professionally? Are they targeted to the "right" accounts? Are we focused too strongly on finding new customers at the expense of selling more to existing ones? Are prospects being identified, actively pursued, and converted into revenue-generating business?
The key is to set appropriate guidelines and expectations and establish disciplines needed to execute against those targets. Remove any barriers that waste time, such as time with nonproductive or low-potential prospects. This will ensure that your sales team is spending optimal time in front of the right potential buyers.
Managers should review the next week's and the prior week's calls to ensure appropriate accounts are being covered and call objectives met. This will remove any tendencies to provide special attention to clients, such as an oil company salesman we documented making sales calls every Friday and Monday to an account two miles from home. Also, determine that sales calls are made competently and professionally to the right accounts, which requires the sales manager to periodically join the calls.
Ensure that your salespeople strike the right balance between finding new customers and selling to existing ones. Furthermore, sales targets should be based on what can be delivered realistically, rather than simply on historical performance. And make certain that your reporting system is providing you the timely and accurate information you need to proactively manage -- and win -- each opportunity in the pipeline.
By identifying and managing these key performance indicators (KPIs) in a systematic way, managers are taking an important step towards practicing proactive management.
However, equally as important as KPI identification and an activity-based management system that is monitored daily or weekly, is the other prerequisite for proactive management -- recognizing the key role the manager must play as mentor and coach. My experience across many industries suggests that it's effective to set a proper standard for coaching and mentoring that allows managers to spend time in rotation with every customer-facing sales person.
Actively participating will allow you to anticipate and resolve budding issues before they escalate out of control, to focus on reinforcing critical skills and to ensure higher quality meetings that result in sales.
This proactive approach ultimately will create a culture change for the sales team: It will allow you to instill a greater sense of discipline and urgency, to challenge the team's comfort level, and to motivate and maintain optimal sales performance.
With this dynamic, overall team performance should continue to improve, benefiting everyone (and the organization as a whole). You will able to see much more clearly on a weekly or daily basis how you are using the one commodity that cannot be replaced -- time. The reactive manager sees this only in retrospect through month-ending performance reports.
About the Author
As director of the marketing and sales effectiveness practice for the global consulting firm Proudfoot Consulting, Don Hammalian works with sales executives in many industries to maximize their selling effectiveness. As a Xerox marketing executive, Hammalian wrote the revolutionary, best-selling primer on selling, Professional Selling Skills, which was embraced by 400 of the Fortune 500 companies.
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