When they were just a few salespeople, I was the first person to work with them. They decided to grow and expand their business in 2013 and 2014. I was notified by the last week.
Paul, please help us. We are struggling to maintain momentum. Our revenue is dropping, and our incoming calls have fallen. Can you help us make calls to our existing clients to increase our revenue and help our guys reach their targets?
“Of course I can. Let me come by later in the week, and we’ll discuss it.”
After an hour of talking, I realized that training salespeople to phone orphan clients in order to generate new business was not going to work. They would find the rejection of semi-cold calls too tricky and would stop being proactive as soon as they rang again.
“How do you measure them?” I asked. He replied, “They each have monthly revenue targets of PS7,000.” “Good, what are their Key Performance Indicators (KPIs)?” I continued. I continued.
They were clearly being targeted, and they were pushing for the final numbers, the monthly revenue. It was clearly visible on the wall, and it was easy to see who was doing well versus who was struggling.
I kept going with my questions. What do you discuss in sales meetings? We have them every Monday and talk about their targets and performance and what they can do to improve. We ask everyone in the room what they will do to reach their target for that week.
This is a classic mistake in sales management. The salesperson will not perform better if they are only focused on the numbers and targets. This only adds to the pressure. Sales managers often measure their salespeople in this way and then harass them to perform.
I continued. I continued. “It’s hard to do anything else because we don’t have the time. That’s why we want to give some training.”
It was then that I realized what had happened. My client had grown his business organically over the past few years and had hired some new salespeople. He now had around ten employees. My client, the CEO, sold to the high net-worth clients he had known for many years. He had very little time to pursue them, and he was not able to take on any other tasks.
This is what you see? Have you seen it before?
If your marketing machine generates lots of leads in a busy market, and the phone keeps ringing constantly, it’s possible to get away with it. If things don’t go your way, such as a slow period, poor marketing results, competition, or recession, you need to improve your sales performance. My client hadn’t taken the above-mentioned actions. Although they had a seasonal marketing engine, they were still able to create an effective one. Their market was booming with an increase of 3% in GDP every year. They were not competing with anyone. Their problem was expansion. They were looking to expand their business and had hired new salespeople and leased office space with new software and shiny equipment.
They were mature and had grown up. I realized they needed effective performance management. Let me tell you what they need to achieve their goals and keep the business going. Right now, they are bleeding money.
The Performance Cycle
Let’s look at each part of the cycle and then examine the role of the sales manager to complete the entire process. This is the first thing to note. A sales manager is essential for this growing company—someone who can guide and motivate the team to succeed. A full-time person could be overwhelmed managing 12 salespeople. They do require management. My client neglected to manage them because they were so busy.
Strategie and Objectives
Your purpose, values, and culture should be developed. Once you have a clear understanding of your market, what you stand for, and the value proposition you offer, you can start to create it.
Determine your market route, how to continue to bring in customers, sell to them, and how to maintain a relationship so that they return to you again when they need you.
This is how you engineer the process. This is the sales process. It’s essential to have one. You decide how detailed it should be. Don’t let your salespeople run the sales process. They must bring their personalities, skills, and verve to the sale. However, they must follow the process or pattern that you have established.
Next comes your KPIs. You will naturally have sales revenue targets. These are also known as outputs, indicators of lag, or simply numbers. These are important, but you should pay more attention to other KPIs that will improve performance. You should take a look at the sales process and determine what actions are necessary to reach your goals. Prospecting calls, first meetings, and written proposals are just some of the activities that you should be doing. These KPIs can be used to focus on the number of them, or better yet, how they can be measured in quality.
You could make appointments. If you want, you can set a KPI of 10 per week. Also, I want to measure the quality of service. For every three calls, one appointment has been made. This ratio is a KPI.
These are called activities and lead indicators. As the saying goes, what gets measured gets done. Focus less on revenue targets and the numbers that generate them and more on the many KPIs that lead to success. The numbers will not fall if the activities aren’t performed with the required skills.
This is a bold decision to make. But if you do it, you will be well on your path to success in the cycle.
Communicate your goals and plans
Clients often ask me to assist with reengineering sales processes or KPIs. I always begin with the idea of “ownership.” Your sales team is the best place to ask for help in re-engineering sales processes and KPIs. Ask them to design the sales process and determine the KPIs that will make the company successful. This concept and approach are straightforward and highly effective.
Communicate the objectives monthly, quarterly, or annually. Get buy-in to the goals and make it easy for them to achieve this by creating a motivating environment. Motivation comes from within. It’s about recognition, the opportunity to fulfill their potential, challenging work, and continuous development. It’s not about the reward. They will be stimulated by compensation, but they don’t expect it. However, more tips won’t necessarily create a motivating environment that allows them to excel.
Hygiene factors like working conditions, management style, and relationships with others are all part of the “hygiene” package. These are the most important factors to motivate your team.
Training is something I will mention here. If you are unable to achieve any of your performance goals due to a lack of skills or knowledge, inform the sellers that you have organized a training program throughout the year. This can be very motivating and will help you achieve success. The cost of training can be offset by the revenue you’ll get when you meet the targets and objectives.
Monitor and Measure
My client had a massive whiteboard that he posted on the wall. It showed sales results day-to-day and also gave a Z graph showing the annual total. This is a handy and satisfying tool for the manager. However, it can be pretty stressful for sellers who see this as a way of driving their performance.
Your CRM system is the foundation for any measurement. So, include your activities-based KPIs in this system and measure them. These KPIs should be monitored and shared with your sellers. If you wish, display them on a whiteboard or on your CRM’s “dashboard.” These indicators are not the complete story. I said that your sellers would reach their goals if they follow these KPIs and have the required skill level. You want to monitor the status of the skill needed. Coaching is where it all comes in.
Field visits allow you to observe, provide feedback, and coach. These can be compared against the sales process to create an observation aid that you can use for new recruit training.
To help you measure milestones and measure revenue, gather forecasts from salespeople.
Regular one-to-one meetings with salespeople are a great way to find out how they’re doing and to help them with any issues. You can give feedback on KPIs and other activities they are measuring.
The previous activity consisted primarily of monitoring and observing; we now want to evaluate performance. Although it is easy to state that they are not meeting their target, this ignores the fact that too much of the output is late. This is why we call it a “lag indicator.” This section will review the performance against activities and the KPIs that affect the quantity or quality of KPIs.
If performance is exceptional or good, I won’t correct it. But I would be happy to applaud it. Salespeople thrive on recognition, so be sure to give it. I will say something that is a bit different. This praise should be done privately and not publicly. It can be embarrassing for the salesperson, and it can also wind everyone up. Make it private.
You should also give feedback in private on negative performances. That’s why we hold performance review meetings at least once a month.
Let’s decide together what we can do to improve our performance. Here’s a reminder:
Training in all its forms – shadowing job rotations, workshops, reading, and videos, as well as podcasting.
If the cause of the performance decline is Inner Game, counseling
FISH to determine the reason for the performance drop
If they don’t understand it, tell them. Mainly if it is attitude and not skill.
You can bring something new to the motivational environment that you create.
Invite someone else to join you
The sales meeting is my final ingredient. It’s something I haven’t mentioned before, as most sales meetings are poorly run. Actual sales meetings should help the team reach its goals. Their core purpose is to help the team achieve its sales goals. The sales meeting should include activities such as coaching, role-playing, and idea generation. This is not the place to check sales results or ask them to make improvements.
This is counterproductive and demotivating.
This is my guideline for how a sales manager should be successful. All of these things will help my client improve his business results and make him more consistent. Because he understands the actual value of the sales manager, he can now safely scale up his business.