Tag Archives: Sales Management

manage sales

Manage sales activities, not just outcomes

What do you think is going to happen if you think the way to manage your sales function,  is  simply double last year’s sales to create this year’s targets?

  1. Your sales will double?
    or
  2. Your sales staff will start looking for new jobs?

I’d vote for B every time. As you can’t just double sales without a plan, and only checking in on a sales teams performances at the end of a year is a disaster.

See there is a couple of things wrong with just setting bigger targets.

  1. Targets require resources to get you there.sales activities
  2. Targets are designed to tell story at moment in time, not help you with the journey to get there.

Manage Sales Activities

Most people are aware that sales require activities to generate them, and that series of activities is normally called a pipeline or funnel. Perhaps 10 leads give you one prospect, and 10 prospects generate you one sale. In that example, 100 leads generate 1 sale. So to double your sales, at the simplest level, you need to double the number of leads you generate. If your average sale is $50K and your business turns over $1M a year, you need another 20 sales to get you to your two million, or another 2,000 leads require generation per year.

(Note you can also focus on multiple funnels, changing the ratio’s and the size of the sale!, but Im not talking about this today).

So to specifically address point 1, to double your sales you need to invest in doubling all the activities in your pipeline. I.e. how are you going to generate another 2,000 leads? Spend more money on SEO?, Spend money on PR?, Spend money on a content strategy? Spend money on advertising?

Hopefully I make my point. A sales target without a supporting plan and resources allocated to achieving it will fail. Sales staff know this and will start looking for a new job before they get blamed for managements lack of planning and execution.

The second thing wrong with just setting a bigger target is its focussed on measuring performance at the end, not along the journey. Making it much tougher to manage sales staff.

Set Activity Targets

I’m a big fan of two types of targets – sales outcomes and the end of a big period (monthly, quarterly yearly) and activity targets for your regular meetings (daily, weekly, fortnightly).

By your performance, you will be able to generate indicative ratio’s of how your sales funnel works. For example (for normal week):

• 10 leads from the website.
• 20 leads from advertisements in industry magazines.
• 10 leads from attending two events.

We may also discover that roughly 10 leads generate us 1 prospect, and 10 meetings with prospects generate us 1 sale. Therefore, our baseline operational cadence per week is:
• 30 leads generated from Marketing Activities
• 2 events attended
• 10 leads generated from events, and
• 10 prospect meetings conducted by sales people
However the average week has no sales, as our $50K sales occurs every 2.5 weeks!

Therefore a weekly sales meeting focused on sales outcomes only would be less than useful as even though we are supposed to generate sales averaging $20K per week, sales occur only once ever 2.5 weeks and are that the $50K per sale level. Hard to tweak your activities, when you are guessing on outcomes.

But a sales meeting focused on our activities and whether we have the required operational cadence is vastly more useful.
For example if out week generated (with suggested decisions in brackets)
• 30 Leads – from the website (Big Week!, is this a trend that means our ratio’s need revision?)
• 0 Leads – from advertisements (better investigate what’s happening)
• One Event – attended by sales staff (need to lift our game and identify some events to attend)
• 20 Leads : from the one event (can we discuss what made this event such a high performer so we can replicate it?)
• 5 Meetings – Attended with prospects (That’s too low, what’ss preventing us from getting out the door?)

You see focusing on your sales activity or your sales cadence allows you to make small changes to improve performance as they suggest themselves. Focusing on outcomes only makes staff either happy or sad.  Manage sales activities!

So, do you know a good Sales Manager?

Over the last 9 years of running the Churchill Club I noticed that every time we have an event with a sales and marketing focus, someone asks me that question afterwards. They sidle up beside me and pretty much use these exact words every time “So, do you know any good sales managers?”

Sales ManagerThe person asking the question is normally the founder / CEO of a small but growing innovative business. They wanted to grow faster by professionalising their sales and marketing activity or address at plateauing of sales. First stop is that they employ a Sales Manager who is very impressive. Around 6 months later they fire them for having no impact. They then repeat this cycle a couple of times hiring and firing, until they eventually ask me the questions “So…..”

So why does this pattern repeat itself? Lets set the scene……

  1. The CEO has traditionally generated business out of his/her own networks. Normally they have a strong background on the tools (whether it be tech, science, serving ice cream whatever)…They are well respected for being good at their job and consequently get plenty of business referred.
  2. Its easy for them to sell, because they are “the man” the person who can make a decision immediately, answer any question and fix a price or discount on the spot.
  3. They don’t particularly need professionalism of their sales and marketing activity, because new business effortlessly and regularly  arrives.
  4. Their business booms for a while (normally for around two years) before they start to run out of opportunity in their own network, which is when they decide to employ a Sales Manager.

Here’s what happens next…

  1. The Sales Manager gets the job because he or she is good at selling (themeslves to you). They have probably worked in the industry before and somehow connect with the CEO. They have previously held roles as a “Sales Manager” which you don’t yet realize is meaningless, because pretty much every salesman in existence has held the title “Sales Manager” but not done the job.  The difference between selling and managing sales is vast, but its confused by the fact that Sales Managers are usually a senior salesperson as well.
  2. Turns out that they are also poor pick for the job – because of you.  You don’t know what should be in their job description other than “sell stuff”, so you can’t recruit effectively.  Secondly if they are currently working for a competitor or similar business, you probably don’t uncover the real reason they want to join your business (which won’t be a payrise for them).   Hint – they are probably about to get fired!
  3. The new Sales Manager is not completely incompetent though – but then they find there is pretty much no sales and marketing infrastructure in place and your “hundreds of customers” is usually just a debtors ledger listing of 50 businesses that may or may not exist anymore.  Lots of hard work ahead for them.
  4. The Sales Manager is out of their depth because they just know how to sell but the job requires more.  There is no guidance from you, because it’s the blind leading the blind. They then spend a lot of their time out of the office “building a pipeline”. You don’t have formal sales meeting because you don’t know what to do and what to measure. You just occasionally ask “What’s going on?”
  5. You gradually become more and more nervous that you have picked badly. You barely see the Sales Manager because they are always out and your suspicion is that they may be going to Job interviews.
  6. You start undermining them by handling incoming requests yourself, as you no longer trust them to build your business.
  7. They then quit just before you sack them and blame you, bad mouthing your company as being “about to fail”.
  8. The cycle then repeats a couple of times because you think the problem was caused by you recruiting badly.

You then whisper in my ear “So……………”.

The real question you should ask though “is how do I get out of this cycle?”

Firstly you need to accept you don’t need to recruit a Sales Manager yet because you are it and will be it for a while  (don’t abdicate this role).  You do however  need a system, then a salesman you can manage, then replace yourself as sales manager when you validate your arrangements work. The system for selling could include:

A simple Strategic Marketing Plan – i.e. What you selling, who do you sell to, and why do they buy it? You will also know the way to find, sell and deliver (channels) to these people and what the market looks like you operate in. This however can start as a single paragraph that you improve and expand every time you revisit it.  It is your compass.

A simple Tactical Marketing plan. – ie. How you will generate leads, generate prospects, close customers, fulfill orders and account manage each of your solutions listed in the Strategic Marketing plan. This will hopefully have some nice measurable metrics and a budget attached (even if the budget is simply an apportioning of someone’s time ).  Its the framework for managing salesperson activity to deliver sales (the core of sales management).

Some Sales & Marketing Infrastructure should be put in place– Sales Collateral, contracts, website, reports, perhaps even a CRM system that actually has customer information.  The tools your sales people use to do their job.

A simple Job Description for a Salesperson  detailing what you want the Salesperson  to do. You should combine this with the metrics you will measure and judge them on. Eg. Perhaps they need to do 10 new business meetings a week.

You are then ready to recruit your first salesperson. Once you have a sales person, setup a weekly meeting with them because you are “The Sales Manager”. Don’t abdicate this role. You need to manage your sales person by gaining regular insight their performance (against the metrics), problem solve and innovate to ensure their success. When the sales person is successful, split the work and employ another.

Write up what you are doing as the Sales Manager as a Job Description.  You will need it for when you are ready to employ your replacement Sales Manager. The one that will be a highly effective and valued member of the team because; they know what to do, they are the right person for the job, and have the right resources.

Not that hard I think, but not much fun to learn the hard way.  If you can’t do it, help from someone who can.