Tag Archives: effectiveness

Typical Sales Metrics…for sales managers who have never sold before.

6 Mar

Never been a sales person but now you find yourself managing a group of sales people?

Whether you’re the CEO of a midsized company or a senior manager who has been assigned the task, you’re going to get a lot of well-meaning suggestions on how to manage.  Press hard on results!  Inspect what you expect!  Always move out the bottom 20% of performers!  If you don’t show a willingness to move out non-perfomers then you’ll never gain their respect!  Expect a lot and you’ll get a lot.

Well I will offer up a suggestion also, based on decades of managing hundreds of sales people.  Here are a few thoughts for you to consider before I offer up some management metrics;

  1. Sales people are people.
  2. Sales people are one of the only employee groups that have to fill up their own in basket.
  3. Sales people are one of the few employee groups that have to fight through 5 failures to get one success.
  4. Sales people are one of the few employee groups where 30 to 100% of their compensation is entirely dependent upon their skill, will and tenacity to persevere on a daily basis.
  5. Sales people are the only people who actually go out every day with the sole focus of building your top line revenue.

If you’re going to be a successful sales leader then you should expect a lot.  But you won’t get a lot unless you give a lot…of yourself.

Okay so here’s the metrics I promised.  You should first identify the sales process (cycle) because all sales metrics spin-off the sales cycle;

  1. Suspects – a list of prospects who are likely to be qualified for your products or services.  Most companies buy lists of prospects.  Most people call them “leads”, but that’s a misnomer.  Leads are qualified prospects who have indicated an interest in knowing more about your product or service.  If your database of suspects have not responded to your marketing efforts then they are suspects. 
  2. Prospects – These are suspects who have been qualified.  Generally qualifying prospects has to do with financial ability, a potential fit as a target and is likely to have latent or blatant need for your product or service.
  3. First Presentation – A first meeting between your sales people and a prospect.  There is an exchange of information, your sales person is trying to qualify the prospect and uncover those latent or blatent needs.  The prospect is trying to decide if further discussions warrant any further investment of time.
  4. Needs Analysis – The sales person has found out enough about the prospect to see a good business fit and the prospect sees enough potential benefit to investigate the opportunity in more detail.  This stage of the sales cycle is all about investigation.  The results of that investigation will populate a proposal which is usually presented in the form of a proposal.
  5. Formal Presentation – Your sales person has worked through contacts, influencers, gatekeepers and key influencers to get decision makers into a formal discussion of the needs analysis findings.  The sales person uses this meeting to shape a discussion around the business fit of a business relationship.
  6. Decision Pending – This is where great sales people separate themselves from good sales people.  A good sales person has done an excellent job in the formal presentation and awaits the answer.  A great sales person has developed their contacts over the previous five stages to turn-key influencers into coaches.  They artfully work those relationships so they have enlisted several “internal sales people” who are selling the product/service even when the sales person is not there.
  7. Negotiation – Usually at this stage the prospect is trying to shape the offering to further fit their needs around price, performance and image.
  8. Program Approved (Implementation) – At this stage a good sales person will hand off implementation to an account manager or service group.  A great sales person will stay intimately involved until they are sure the new client gets precisely what they wanted, and that their employer gets all of the potential revenue & account penetration possible.

Okay…so where’s the metrics?

The metics that define the effectiveness of the sales person are the success ratio’s (conversion or close ratio) from First Presentation (step 3) to Implementation (step 8).  For business to business sales people the overall close ratio is usually around 16%.  In other words for every 6 new prospects that a sales person meets with will become a new client.  And here’s your AHA moment.  If you have a sales person who is falling dramatically below expectation you have a choice to make.  You can fire them and hire another sales person.  I will warn you that you only have a 1 in 3 chance that your new sales person will be better than the one you just fired.  Your other option is to peel this onion back another layer and find out why that sales person is failing.  If you’re willing to invest that time your odds of improving results are greater than 1 in 3!

Here are some pretty dependable step by step close ratios;

  • 80% of prospects who receive an effective first presentation ( Step 3 ) will want to understand the potential benefit ( Step 4 )
  • 65% of prospects who participate in a needs analysis ( Step 4 ) will be willing to coordinate a Formal Presentation ( Step 5 )
  • 85% of prospects who participate in a Formal Presentation ( Step 5 ) will make a decision ( Step 6 )
  • 60% of prospects that make a decision ( Step 6 ) will want to negotiate ( Step 7 )
  • 60% of prospects that negotiate ( Step 7 ) will eventually implement ( Step 8 )
  • 16% of prospects that will receive a First Presentation ( Step 3 ) will eventually become a client ( Step 8 )

If you’re willing to peel back one more layer you can set up a sales excellence template.  Let’s say you need for sales people to deliver 16 new average sized clients every year.  You can now take that goal and run it backwards through your sales cycle and create a template.  On an annual basis your sales people should have a sales pipeline that looks like this;

  • 100 First Presentations
  • 80 Needs Analysis
  • 52 Formal Presentations
  • 44 Decisions Pending
  • 26 Negotiations
  • 16 Implementations

 

So now you know all the metrics you need to know.  But what are you going to do with that underperforming sales person?

If you compare an individual’s sales pipeline to the sales excellence template you can easily identify exactly where that struggling contributor is failing.  For instance you may find that sales rep. A is failing miserably.  But on further examination you see that they are extraordinarily good in the latter stages and extraordinarily weak in the early stages of the cycle.  Conclusion?  Improving this sales person’s ability to set appointments and make compelling first presentations may turn them into a sales star!  In other words…why start from scratch and take on all the risks of a new hire until you know if you can help struggling performers catch up?

Next steps?  Meet with your sales team.  Get them to validate your sales excellence template and step by step close ratios.  Then run your meetings based on these metrics.  Strugglers will begin to see where their pain is and ask for help.  If you are willing to help them…they will always return the favor ten fold.

Sales Team Effectiveness Assessments

1 Oct

“I need your opinion of my sales organization overall with a development plan…oh yeah…I need it next week.”

I have heard this before…and it spells trouble.  Four out of five times it means trouble for me.  Can I assess a sales organization in a week?  Yes, but your satisfaction with the output will be in doubt…and that’s how I can get into trouble.

I always work from a copyrighted formula;

Sales Results = (Sales Skill + Sales Will) X (Execution + Leadership)

Each of these variables has 8 drivers.

Sales Skills (primarily B2B)

  1. Prospecting Skills
  2. Presenting Skills
  3. Probing Skills
  4. Listening Skills
  5. Closing Skills
  6. Pipeline Management Skills
  7. Product Knowledge
  8. Industry Awareness

Sales Will

  1. Recruitment Process
  2. High Performance Focus
  3. Target Compensation @ Plan
  4. Peer Recognition
  5. Family & Friend Recognition
  6. Tactical Sales Plans Aligned with Strategy
  7. Incentive Plan Clarity
  8. Effective Field Coaching

Execution

  1. Goal Clarity
  2. Tactical Prescription
  3. Performance Metrics
  4. Defined Performance Management Process
  5. Joint Call Activity Levels
  6. Readiness Assessment
  7. Coaching & Counseling
  8. Culture

Leadership

  1. Strategy Development
  2. Strategy Communication
  3. Tactical Definition & Measurement
  4. Readiness Planning
  5. Sales Participation
  6. Performance Management Process Execution
  7. Leadership Style
  8. Recognition & Communication

These are the 32 drivers of sales results.  Based on your industry and sales channels they will vary somewhat.

You start the assessment process with the understanding that there is a limit to the organizations resources and ability to execute change.  With this in mind, the key is to find the largest gaps and then to formulate a “do-able” organizational development plan that will begin to close those gaps.

I begin my assessments by examining the drivers at a high level, identifying the major gaps and then drilling down.  This saves me time and saves my clients significant money.  Once the four to six gaps are identified I review and discuss them with the assessment sponsors to find those gaps where the solutions can be bundled into a singular development initiative.  Again, this approach is designed to save money, time and ensure execution.

Why bother with an assessment?  It saves time, money and ensures sales growth.  Why spend money on negotiation training if your issues stem from a lack of field coaching?  Why waste time perfecting a lead generation program when your individual contributors are handicapped in their search for client pain?  Why would you continue to give up margins just because your sales pipeline is anemic?  Why continue to throw good money into an incentive plan when your recruiting process keeps bringing in candidates with low skill and low sales will?

Great organizations have a common approach to problem solving.  Assess, plan and execute. 

If you want to grow sales, you’re best approach is to start at the beginning.

When Sales Promotions Don’t Work Out

10 Sep

So often you hear of sales people failing to make the grade after being promoted.  Why is this?  Are sales people simply not cut out for more senior positions?  Are the skills that make a sales rep. shine no longer valid as the promotions come?

Over the years I have witnessed sales people struggle mightily after promotions.  Usually they don’t fail, but they are not able to make the same outstanding contributions as a manager as they did as a sole contributor.  To understand this you should first think through how the roles change from sales rep. to field sales manager, to regional Director/VP.

Sales Representatives – The core them of any sales position is making the sale.  While each industry commands different responsibilities and practices, the primary focus is common to all – to successfully complete the sales.  This includes;

  • Making initial contact with prospects, qualifying prospects.
  • Meeting with prospects to identify, understand and seek concurrence of prospect needs AND the implications of not addressing those needs.
  • Maintaining continuous communication with prospects throughout their buying process, while building a coaching network.
  • Continuing to pursue the sale in the face of rigorous resistance.
  • Identifying & communicating the benefits of addressing the prospect’s needs to decision makers and key influencers.
  • Closing the sale.

So along comes the first promotion…field sales manager.  So the refined skills that made the sales rep. a stand out are a good basis to work from but look how the job changes.

Field Sales Manager – The theme of this position is driving the team to sell.  The sales manager cannot personally ensure goal attainment, they must reach goals through the efforts of others.  The first level sales manager is a player coach.  The best usually invest about 30% of their time helping close the most valuable prospects, and then invest 70% of their efforts ensuring that the team results are maximized.  This job is very complex.  It is most natural for a newly promoted sales person to mismanage their time.  They may very well spend 70% of their time helping close business and only 30% of their time developing the team.  This will most often result in a sales plateau.  So in addition to the skills listed for sales rep the sales manager has additional skills required,

  • Concern for Order – Like Stephen Covey documents in his 7 Habits book it is very easy for the manager to run from task to task trying to meet all due dates while investing what little time is left helping close business.  An effective manager will arrange their calendar to ensure they are spending time with all team members.  Maybe not equally the team results will drive more success than the manager’s personal sales contribution.
  • Coaching and developing others – This is more difficult than it sounds.  Many of the skills that made them successful as a sales rep have moved from conscious efforts to subconscious habits.  It is a difficult transition to move from doing to helping others do.
  • Creating & maintaining effective work teams.  This includes internal team members as well as collaborating with other symbiotic departments.

Okay, let’s say our candidate is an incredibly entrepreneurial and is able to make the transition from rep to sales manager.  What’s next?  Regional Director/VP.

Regional Director/VP – The core theme changes from driving a team to sell, to managing a larger organization.  The job has taken a turn towards analytical thinking, matching resources to potential, creating efficient infrastructures of materials and organizational resources to support the regional sales efforts.  The RVP does not create the sales strategy, but uses their skills to ensure execution of the plan.  The RVP must communicate upwards to clearly and honestly keep senior management appraised on forecasts, product and customer input.  Additionally the entire region looks to this person as the Company’s idea of how they define leadership.

  • Analytical Thinking – The RVP must be able to rise above the level of any one particular customer or prospect.  They must look at the sales pipeline as an aggregate indication of the effectiveness of all teams.  They must be able to translate pipeline analytics into action plans including training, product/service redefinition and as a tool to coach & develop their sales managers.
  • Using Business Expertise – By now the successful incumbent has accumulated enough industry, product and customer experience to understand not only what the sales pipeline looks like…but is able to anticipate what it should look like and is able to formulate tactical plans to guide the regional to sales plan attainment.
  • Enabling the team – The incumbent is accountable to communicate to senior management exactly what is needed in order to make plan.  When sales teams face obstacles they rely on the RVP to identify & acquire resources to help them overcome these roadblocks.
  • Training and developing people – The RVP must make themselves accountable not just to their direct report’s development, but for every member of the regional sales team.  Keeping up routine inspection of individual, team and regional pipelines can help the RVP see trends.

So why do people struggle as they move along this track?  Well, I’ve worked within some very large sales organizations and made it to top sales officer.  From my perspective the failure of people falls on the shoulders of their employer.  Field sales is one of the only departments where you sit miles away from your boss.  You do not get the daily coaching sessions.  The accidental conversations that take place in the hallways simply never occur in field sales.  To make matters worse I have not seen leadership training offered to newly promoted sales managers.  There are not training courses on how to interpret the sales pipeline.  How to create developmental action plans around the analytics of the pipeline.  We do a disservice to the organizations most valuable commodity…people.  Not only do we leave the newly promoted manager swinging in the wind…but we withhold excellent leadership from the sales people who depend upon their manager to help them succeed.

I know this is ending up in a rant…but if you want different results perhaps you need to do things differently.

Are You a Hard Helper or a Hard Closer?

24 Jun

I think most of us have the same visual image of a hard closer.  A slick dresser, everything’s perfect including the shiny shoes.  They know more closing techniques than anyone else on the team.  You say your prospect has put off the decision for a week or two and they chime in “you should have used the take away close”, before you can finish your sentence.  There are some things to be admired about hard closers and they will get a few deals that only they could have gotten.  But does that mean that they are the master sales people?

Then we have the hard helper.  They understand & honor the prospect’s buying process.  They work hard to collaborate with multiple contacts within the prospect’s organization…to build consensus & identify obstacles.  They are continuously active and prospects love them!  You know who else loves them even though they will never meet them?  Shareholders!  Clients that are sold by a hard helper stay sold for a very long time.  The net present value of these clients is markedly higher than the average client.

So which one is better?  It’s an interesting question.  The top 2% of your reps are actually both hard helpers and hard closers.  But they’re a little different from the person alluding to in the first paragraph.  They close very hard but asking tough questions about the impact of doing nothing!  They keep reminding the prospect of the agreed upon needs & benefits and emit urgency on taking action!  The next 18% of your top performers are hard helpers but not hard closers.  They do an excellent closing job but may back off when they perceive the risk of a no. 

The next 30% of your reps might just be going through the motions.  They are performing tasks.  Make a call.  Make a presentation.  Generate a proposal.  Follow up on the proposal.  Ask for an order.  It’s okay I guess because they bring in enough business to warrant a congratulations.  So let’s call this group the “as expected performers.”  So the question is how do you turn as expected into above expectation.

I don’t really know the answer to that question without knowing your company & products.  But I can tell you that most often I have found the issues to be;

  1. There has never been a core theme to sales training.  You can’t expect continuous improvement in sales effectivenss if you keep hiring the trainer de jour.
  2. First level sales managers are smart, but they need help.  Give them an ounce of leadership training and watch the numbers soar.

I’d like to know your thoughts on this topic.  Please leave a comment!

Sales Cultures, Is Yours Heart Healthy?

7 May

I know you’ve heard someone say, “We have a high performance culture here at Amalgamated.  We have high expectations of all our people!”  So, if you’ve been a member of a larger national sales organization how often did the term “high performance culture” turn out to have any benefit for you as a person in the trenches?  Did the leadership team have high expectations of themselves on creating a sales culture that was not only good for shareholders, but also good for clients and employees?

Sorry for a little culture slamming, and I won’t mention any companies, but here’s the facts m’am.

“We have a high performance culture” usually means we are going to expect a lot from you.  Okay, fine.  But what can I expect from you in return?  Can I expect a vibrant lead generation program?  Can I expect to have a manager in my corner who will routinely carve time out of their schedule to help me succeed?  Instead of telling me that I’m not doing enough can you tell me how to do more?  Can I expect to have up-to-date sales collateral so my presentations help prospects visualize the benefits of our programs?  When I bust my hump to over deliver can I enjoy even better rewards next year or will I bask in the sunlight with dramatically increased goals coupled with dramatically lower commissions?  In other words, will you invest as much in me as I am being asked to invest in you?

First I would like to propose a definition of what an organizational culture is;  The quality that arises in a person by virtue of belonging to a group.  That person’s behavior begins to reflect what they have learned through training and observing others in that group.  With time, the members form agreement with what the group prizes as excellence.  So with my definition of culture let me disclose something else.  I am a huge believer in building a culture that benefits clients, stakeholders and employees equally.  I believe strongly that satisfied employees will deliver a superior service, which customers will be willing to pay for…and stakeholders like that outcome.

So where do you begin to build a sales culture that will help develop a sustainable world class sales organization?  Essentially there are four drivers;

  • Sales Effectiveness – A bundle of skills that arm each sales person & account manager with the tools they need to effectively help prospects navigate through a buying process and end up with needs that are satisfied.  This isn’t just about holding people accountable to having & using these skills.  It’s really about hiring people with high potential and then provided them with the training they need.  This is much more than simply enrolling people in training.  This is field managers who are experts in all the skill areas, and providing them the training they need to be excellent coaches in the field.
  • Reward & Recognition – There is a lot more to reward & recognition than a compensation plan & an annual outing.  The compensation plan should produce a target income at sales goal attainment.  Your peak performers should earn two or three times what your average performers earn.  Why?  Because sales people are great understudies and peak performers are the people you want them to imitate.  Management reports should be shared throughout the organization and include not just the top performers but also the strugglers.  The only people that should not make the standing report should be untenured sales people.  Additionally there are all kinds of recognition vehicles formed around peer recognition, Sr. Management recognition and yes, family and friend recognition.  For those recognized this affirms their contributions.  For those that did not make the grade it affirms what the organization values.
  • Execution – Do all members of the team understand the sales strategy?  Good communication is the key and good communication is not solely reliant upon the message…good communication is driven by understanding.  Can people recite a summary of what the strategy is?  Do they understand the role they play in the execution of that strategy?  Has there been a set of metrics devised that will benchmark how well the organization is performing and how well each team member is doing?
  • Field Leadership – The Rosetta Stone of the quality of yoursales culture is the company’s investment in first level field sales managers.  If you’re expecting for your army of revenue generators to win battles you’re going to have to invest in field support.  Do your field generals understand their priorities?  How should they be investing their time & energy?  Is it 50% making sales calls, 30% admin., 15% forecasting and 15% coaching & developing people?  If this is the reality of how people are spending their time your organization may never get any better than it is today.  I have one question for CEOs and top Sales Officers.  How many leadership training courses have you delivered to your field generals in the last 5 years?  Don’t hold them accountable for moving from a peak performing sales person to an excellent management leader.  That’s your job.

Is a heart healthy culture worth the investment?  Only if you want the best sales people in your industry to aspire to work for your company. 

The sales culture that develops in your organization cannot be controlled, but you can influence it dramatically.  Your culture will be known for a theme, for it’s character, for it’s composure, for it’s courage and yes…for it’s care for people.  You must deliver results, but how you go about delivering those results will define your culture.

Managing Sales Reps with “Attitude Problems”

21 Apr

Sometimes they simply have an opposing point of view.  Sometimes they are disrespectful of other team members.  Other times they simply refuse to do tasks commonly associated with what it takes to optimize sales results.  What’s their problem?  What’s your problem with them?

As a field sales manager you are accountable for delivering the optimal results possible with the assets assigned to you.  You are going to have a set number of sales resources.  Forget about the discomfort that you may feel from a rep with an attitude.  Stay focused on your job…optimal results!  First things first.  Are they making the goals? 

If not then you must take direct action by coaching and counseling.  You have to look at the territory as a resource and if the sales rep is not delivering that you’re not operating at full capacity.  You can afford an under-performing territory if you’re confident the numbers will improve.  You cannot afford to support an under-performing rep forever.  The next step is the most difficult one a sales manager has to perform…an autopsy of the sales pipeline.  Put on your stethoscope and begin to assess where in the sales cycle the problem resides.  Once you see where prospects, or lack of prospects, are clogging the pipeline you can next figure out what sales skills are lacking.  Most likely culprits?  Prospecting, presenting, probing or proposing are the most common ailments.  In this case the poor attitude is a symptom of a SKILL problem.  This is the most commonly overlooked solution because when we see a attitude problem we automatically begin inspecting the symptom instead of the illness.

If the rep consistently meets the goals but gives you or your team attitude problems then the plan of action is much more complex, but if left unaddressed it’s going to get worse.  High sales will is driven first by high sales skill.  But some people regress.  So I would recommend that you divorce yourself from the notion of “motivation”.  Motivation is what happens when there is a belief, held in expectation that something personally important will happend when a task is performed.  You need to go a little deeper.  Will is defined as the combination of desire, incentive, security and confidence.  When someone that used to have high sales will regresses, then one of those four drivers has reversed.  You need to figure out which driver has reversed then address the problem:

Desire – this is the closest to motivation.  It’s possible for people to lose the desire to perform tasks.  They simply feel that they have outgrown the need to perform the task, or that the they have already captured what was important to them and are now unwilling to perform certain tasks.  The most common example is prospecting.  Say the rep has a goal to make $100k per year.  Once they get to that level they stop performing a task they hate, like making old fashioned calls to set appointments. 

Incentive – there is a very strong link to incentive and desire, though incentive is a little more subtle.  Incentive can be a self imposed limit, such as a low income goal.  Incentive, as a driver of will, can regress quickly.  You see this all the time.  Outbound telephone calls disappear when the pipeline is full.  Then when the pipeline of prospects thins out people forget what got them there.  It becomes your job to remind them that the task of outbound calls is how they filled up their pipeline.  In other words, make sure they see the linkage between the task and their success.

Security – This is a tricky driver of sales will.  If you grew up in sales like I did then you know that security is fleeting.  You can feel a loss of security because of your own perceptions, or because of things going on around you that are outside of your control.  The most obvious are mergers or downsizings.  The less obvious are management changes or a change in the sales process.

Confidence – A change in confidence can come from within or from the outside world.  You can imagine what more senior sales reps felt when their company went from emailed weekly sales reports to an online CRM.  Confident people will speak out and ask for help.  Those that lose confidence will be afraid to ask for help, they don’t want to be discovered.  People are subject to a regression in confidence more today than ever before because the span of control for sales managers continue to get wider and wider.  The less communication there is, the more likely that a reps perceptions will cause damage to their confidence.

So, in the end, I hope that your view of attitude problems has been altered.  Your job as sales manager is to dig a little deeper and find out how you can help.  However, if the rep is the “bad apple” sooner or later they will ruin the rest of the team.  You may have to take action quickly.  Your team depends upon you to show composure and care for people.  Be the best coach and leader that your team ever had.  You’ll enjoy your job and over time you’ll create a team of winning professionals.

The Single Biggest Impact On Sales This Year!

7 Mar

As a CEO or top sales officer you may be the cause of sub-optimal sales results.  How?

Field Sales Leaders generally have multiple accountabilities, each one competing for their time;

  • Revenue – overall production, margins, pipeline and making joint sales calls.
  • Predictability – forecast, CRM adoption and usage.
  • Cost of Sales – time utilization, resource application, pursuit costs.
  • Sales Development – quota attainment, turnover ratio, ramp up time, coaching, training and general development of team members.

Unfortunately the Time Management Matrix in Stephen Covey’s book, “The 7 Habits of Highly Effective People” comes back to haunt us again.  In case your misplaced your copy, the third habit is putting first things first.  My overall take was that we are always reponding to those items that have a due date (urgency, but little importance). and in doing so we steal time from more important tasks simply because there is no due date associated with them.  Guess which of the tasks above does not have a time frame urgency attached to it?  Give up? 

If you guessed coaching, training and general development of team members you would be right.  So if the top sales officer of any company want’s to know the one thing that will have the single biggest impact on sales THIS YEAR it would be to free up time, and demand that time to be invested in assessing, coaching and developing all team members.  Okay, so you’ll get around to it next quarter, right?

In the movie “12 O’Clock High” (1940) General Frank Savage (Gregory Peck) is assigned to a poorly performing bomber squadron.  The group was demotivated, and their current leader mired himself in administrative duties when he wasn’t busy commiserating with his group.  The first thing Savage did was to get out of the office and fly lead in the missions.  He didn’t do this to become a member of the team, or to show what a good pilot he was.  He did this to find out where the team’s gaps were and then lead them back into high performance.

General Frank Savage (in his first address to the squardron)  : “There will be a briefing for a practice mission at 1100 this morning. That’s right, practice. I’ve been sent here to take over what has come to be known as a hard luck group. Well, I don’t believe in hard luck. So we’re going to find out what the trouble is”.

So, Chief Sales Officers, if you want what ever the optimal results are for this year think about this option.  Clear out the in-baskets of your field managers and insist they invest no less than 50% of their time assessing, coaching and training their sales people.  It is more important this year than ever before.  Do it this week.  No!  Do it today!