Sales Laundry

Posts Tagged ‘Sales Management’

Q&A’s are excerpts of questions I have answered as part of Sales Laundry or other forums that I am apart of. If there is a relevant sales message for the masses I post it here to share, gather feedback and discuss.

Q: We have a strong sales guy, excellent with Small/Medium Enterprise accounts, but is obviously struggling to land large enterprise accounts and failing to sell them on our services.  He has not closed a single large enterprise opportunity.

I would appreciate any help in steering this guy in the right direction, any issues you feel they may have with these account types, and what plans/procedures/proposals may be put forward to resolve this issue. Thanks

A: The absolute best way to get to the bottom of the problem is to go with him on some SME account calls where he is excellent and some large account calls where he is struggling and see first hand where the challenges are getting the best of him.

The good news…

He is able to at least get an appointment with the Large Enterprise accounts, so he is able to convey value over the phone (I assume) to a viable company contact and get the meeting.

The fact that your sales professional is excellent with Small/Medium Enterprise accounts tells me he does have the ability to convey your products value to a prospective customer and secure a signed contract.

Areas to look for an answer…

The fact that he is struggling to land a Large Enterprise account does suggest some potential problem areas worth investigating.

1. SME accounts will almost always have fewer decision makers involved in making the ultimate decision to purchase your product while large accounts may have a handful of individuals scattered across the organization that need to be collectively convinced.

Look at who he is meeting with at the large accounts, is he uncovering all of the potential people involved in making the purchasing decision?  He might need help identifying who the key players are in large corporate environments and developing a successful strategy to get in front of all of them.

2. While he may be getting meetings at the large enterprises, I would evaluate his efforts at qualifying the person he is meeting with making sure they can make a purchasing decision vs. being an internal advocate that cannot influence vendor/product selection.

3. The problems of the SME customer may not be the same as the large enterprise customer.  If he is selling to the same pain points in a large enterprise as a SME account, he may be missing the mark by trying to solve problems the large enterprise does not have or are of too low a priority to garner immediate attention.

Ask him what pain points/problems he is trying to solve for the large enterprise and evaluate his answers with other sales professionals successfully landing large enterprise accounts.

4. Look at your historic sales cycles.  It is not uncommon for a sales cycle to be longer with a large enterprise account vs. a SME account because of the bureaucracy and volume of departments and decision makers that have to be won over to your offering.  Benchmark the sales cycle you went through to land your other Large Enterprise accounts and SME accounts and compare them to this sales professional’s benchmarks.

From my experience, the answer you are seeking is most likely somewhere within these four suggestions.  If, however, none of these seem to address the problem, pinpoint the specific areas (from first call to signed contract) where your sales process differs between your SME and Large Enterprise accounts.  Systematically work through each one of those identified areas with your sales professional as it is almost a certainty that one or more of them are the source of his struggles.

Remote sales offices are established typically with the single purpose of growing new markets and revenue sources for the company.  Anything that hinders that mission is by definition hindering company growth and impeding efforts to grow revenues.

With that in mind I have put together a list of common mistakes I have seen repeated many times so you can at least recognize and correct them or at best avoid them.

Mistake 1:  Not enough support resources.

This mistake is almost always preceded in a sales meeting by the phrase “You sell it and we will figure out how to deliver it/get you the resources to get it done.”

As an employee in this situation a giant flashing light and klaxon should go off in your head warning you of the impending danger.  Negotiate for specific technical resources with timeline commitments before you accept the position or ask and understand how your sales efforts will be supported.  If it does not pass the smell test in explanation, you should never expect it to pass the smell test in execution.

As a company, you risk damaging your reputation, losing customers, destroying your remote sales teams integrity in the market, and doing irreparable damage to the remote teams morale by failing to execute all post sales responsibilities.

If a company cannot truly support a remote sales team that is going to need company resources to deliver the products and services they are selling, the company is better off not opening/closing that field location and terminating/relocating that sales resource to a market the company can support with certainty.

You cannot fight a war to win revenues without establishing clear lines of support.

Mistake 2:  Treating every office the way you treat the home office sales team.

Remote offices are almost always setup to expand the corporate empire based on the success of the home office.  It is a massive mistake to manage a new office in a new remote city the same way you manage your home office sales team.

In your home city it is likely that your company has established a certain momentum aiding ongoing sales efforts.  This momentum is often a compilation of several factors including having an established local brand, a number of years in business, culture, established customer base, local references, local advertising and publicity, tradition, and typically, local ownership ties.

It is a fundamental mistake to set across the board sales targets and objectives for the sales teams facing radically different established momentum.  This is not a matter of simply waiting for a new market sales resource to ramp up, it requires a fundamental change in how you attack that market.  (See Mistake 3.)

Mistake 3:  Not understanding the unique requirements of new markets or of markets in different stages of development and managing them all the same.

In establishing a remote office, a company is typically:

Expanding into a new market where their services have not been offered before.

Opening a remote office around a key client.

Opening a remote office to manage some existing accounts with hopes for growth.

Making a tactical decision to rapidly expand, block a competitor, arrive in a market ahead of a competitor or grab a key location.

The strategy for every office needs to be unique to its individual market situation.  Even McDonalds, with world wide name recognition and a reputation for producing a consistent product makes adjustments to their menu and process based on the unique qualities of the market they are entering.  Want to see how McDonalds has adapted?

In a new territory where there is no name recognition, I focus on territory planning, earning core anchor accounts that can be used as references, and deploying heavy support resources to make sure the first few engagements are successful ones to make sure the first few steps in a new market are solid ones as we begin to build our name.  That is radically different than my market approach with the home office.

Match management focus to individual market needs to establish remote offices in new territories.

Mistake 4:  Expecting remote office staff to be able to generate the same volume of reports/ admin/paperwork as the home office.

Where there are sales professionals there is paperwork.  Expense reports, pipeline reports, call reports, travel logs, presentations, proposals, RFPs, etc.

While there may be a standard procedure for preparing and completing necessary paperwork don’t automatically assume that what works for the home office is even necessary or will work for smaller remote offices.  In many cases there are additional official or unofficial support resources that assist in keeping the sales machine running in the home office.  Burdening a remote office with excessive admin requirements can destroy morale and limit their time/ability to do what the office was established to do, sell.

Mistake 5:  Micro manage remote resources.

In retrospect, I probably should have put this one first because this has been the death of so many remote sales organizations and the HQ based managers that are tasked with managing them.  Micro management has no place in managing remote sales teams.

Yes, the remote sales team is going to be out of the daily purview of management but that does not mean there needs to be any extra controls put in place to make sure they are doing their job.

In fact, there should be far fewer controls on them than there are on the sales team at HQ.  If you want the specifics of why, send me an email and I will break it down for you.  Pick four or five metrics preferably built into existing sales reporting tools to use to manage your sales team.

It makes no sense to try and manage where the remote sales team is and what they are doing every minute of the day.  If your sales team is making their numbers legally and ethically, who cares where they are.

If some team members are not making their numbers, use activity metrics and their call ratios as a comparison to determine where/why they are struggling.

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I have managed remote offices, opened remote offices and carved up new territories and can tell you from personal experience that there seems to be a tendency to treat remote sales offices as somehow of lesser importance than HQ.  Perhaps that is because of the revenue disparity between the established home office and the developing remote office or the lack of daily interaction, I am not sure.

Remote offices are your growth strategy.  Remote teams should get at least the same amount of attention as the home office sales staff, but in truth I think that a remote office team needs more ongoing attention to run at its peak.

We nurture babies more than adults.  We tend to the needs of puppies more than the adult dogs they become.  We pay more attention to young plants than we do old established trees they grow to be.  That same methodology should be applied to growing and managing remote offices.

Bonus:  Mistake 6:  Putting inferior equipment in the remote office.

At home when you buy a new television for the living room, what happens?  The old living room television moves to the game room/ master bedroom, the old TV there moves to the kids room, the old TV there moves down to the garage and anything left over goes to a garage sale or charity.

While this works at home, this is not a successful strategy for equipping a remote office.  While giving your remote sales representatives the older laptops and cranky office equipment replaced at HQ might seem like a good strategy to reduce the cost of establishing a new office and extend the life of assets that have long since been fully depreciated, it is really a strategy that can limit your new revenues by far more than any initial savings.

When one of those cranky pieces of equipment breaks, the impact to the remote office can be significant because often the people/time/money resources are not there to bring the equipment back online again in a timely manner.

At the home office there is, in many cases, a non-sales resource that can manage the repair process.  You would never think of having your best sales resource spend the day at the office waiting for the copier repair guy, so why relegate remote sales resources to that fate?

There is so much more to say on this subject, but if I could only say one more thing, it would be this.  View your remote facilities through the lens of trying to unburden them of the functions, procedures and paperwork that get in the way of their ability to deliver on their intended mission and you will watch a struggling cost center become a flourishing source of profit.

Then, turn that same lens on every aspect of your sales organization.

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Reading the book The Servant: A Simple Story About the True Essence of Leadership, by James Hunter this past weekend, I ran across two simple company organization charts that brought me back to a previous post on customer service and posed an interesting question I want to get your thoughts on.

 

Who do we really serve in our businesses?

A current trend in sales organization design is to be customer centric.  The customer centric sales model puts the customer at the center of the sales process in an effort to align customers’ needs and buying preferences with the way we design our sales tools and create value.

Add this to our “quality customer service” initiatives, “the customer is always right” statements, and customer service surveys that were once rare, but now seem to have attached themselves via URL to the bottom of every major grocer, retailer and restaurant chain’s receipts in recent memory.

All of this makes sense to me, especially today when it has become clear the power of knowledge once wielded by sales teams has shifted decidedly in favor of the customer researching via the Internet.  Coupled with that, customers continue to benefit from splintered product categories offering more product choices, wider selections, and more competitors fighting for dollars.

 

On this information alone I would have declared the customer “King”, but then I saw this:

 

 

It looks to me like to a large extent our Employees are serving our Supervisors who are serving our Middle Managers who are serving our Vice Presidents, who are serving the CEO, who is presumably serving the Board and the shareholders/investors.  The remarkable part is, by design, either everyone has their back to the customer or the customer is actually supposed to serve the company!

If customers are truly our focus, or as a corollary, if we should focus on serving our employees so that they will serve our customers, shouldn’t the model look more like this?

 

 

With this model, the CEO serves his customers, the Vice Presidents, who are in turn serving the Middle Managers, serving Supervisors who are focused on the health and wellbeing of the Employees so they can give their undivided attention to serving the Customer.

 It was wisely said a long time ago that a man cannot serve two masters.  So who do you serve?

 Are we serving the management team that writes our checks or the people that give the management team the money to make sure our checks don’t bounce?

Who is managing your sales force, your Sales Manager or your compensation plan?

If you said your compensation plan, the good news is you are in the majority. The bad news is your sales could likely improve 15-20% with a solid Sales Manager steering the ship.  Neil Rackham , in his book Rethinking the Sales Force: Redefining Selling to Create and Capture Customer Value, would say 17%.

When I find a Sales Manager that is giving honest effort but is not effective, it is usually because of one of these reasons.

1. The Sales Manager was your best sales professional and is still your best sales professional. Management? What management?
2. Most companies have a training program in place for new sales professionals and executive management, but few utilize any formal training for their Sales Managers. As a result, Sales Managers have no tools to help them manage the revenue production arm of the company, and run solely on gut instinct.
3. Sales Managers have a responsibility to complete a myriad of reports every week, with consequences for not getting them done. There is usually no compelling reason to make time for training or coaching exercises, and as such they don’t get done.
4. The Right Now. Sales performance is often measured on 30 day – 90 day increments on products and services with sales cycles that are much longer. No one dares to take their eye off the sales ball long enough to build in team development time.
5. The Sales Manager compensation model is out of line with company and/or the sales teams defined objectives.

Here are the first five tools I drop in my tool box when I am headed out to fix Sales Management related problems.

1. Put a “sales Manager” instead of a “Sales manager” in charge of your sales organization. Having the wrong person or personality type in the Sales Manager role is more often than not a significant part of the problem.
2. Train your Sales Manager. If you don’t have the budget, think of what an additional 15%+ in sales could do for your business.
3. Build training metrics into your Sales Manager performance measurements and make sure his/her workload will allow time to get the job done.
4. Build a model of continuous improvement into your sales process, making sure you do not shortchange your sales team’s growth and long term revenue potential for short term sales targets.
5. Align the Sales Manager job and compensation model with company goals to make sure a Sales Manager is watching and responding to the objectives and issues that are important to the company. Tie your Sales Managers compensation to the sales team and/or the sales professionals he is responsible for.

I want my Sales Manager to take care of his customers (the sales professionals he is responsible for) and keep the road clear of obstacles that might prevent them from doing their job.

I want my Sales Manager to be my eyes on the front line, making sure we are allocating our sales resources in the most efficient way possible to engage prospects and that he has and will use his authority to make necessary changes on the fly.

I want my Sales Manager continually engaged in enhancing or reinforcing the skill set of the sales team and identifying new ideas and best practices discovered by one sales professional and incorporating them into the entire sales team.

Put your Sales Manager to work growing your business instead of growing the stack of paper in your in-box. There is typically not another person in your organization that can have as much immediate impact for the dollar on your front line sales team as a well trained Sales Manager.

Have any Sales Management best practices or unique signs of spotting trouble?  I would love to hear them.

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From my experience, most companies don’t know their sales department is dead until they begin to smell the corpse and see their sales numbers fall off a cliff into Lake Competitor.

 It has been my job from time to time over the years to identify sales issues, diagnose sales health and return these sales organizations to top form.  As a result, I have learned where to look for the signs of decay.  Here is a rough version of the roadmap I use to find the problems.

Sales Metrics

 How are the Sales Managers measuring their existing sales team’s performance?  More often than not, I find that the sales organization as a whole is only using one sales metric consistently, final sales numbers. 

You can’t steer a dog by its tail and if you try you will eventually end up stepping in it.  The same is true of the Sales department.

 The final sales numbers should not be a measurement tool because it is too late at that point to do anything about it.  Final sales numbers are only a gauge, measuring your sales success for one moment in time.  No different than a customer survey or comment card after a sale measures overall customer service on a single sales transaction.

 A good sign would be to see multiple sales metrics in place and seeing Sales Managers actually use them to manage their business.  (CRM packages setup and used properly are a great source of information assuming the stored information is current, complete and accurate.)

The Sales Managers

 If the metrics are out of whack or missing I look for the Sales Manager to understand how he is managing his team and how he reviews his sales pipeline.

 Typically I find that a struggling sales department has a Sales Manager that is spending too much time looking at the bottom of the sales funnel or has never been trained how to  measure his team’s performance.

The Forecast

 The next stop is the individual forecasts of the sales team, present and past if available.  I want to understand how leads are collected and the process determining how a lead is converted to an opportunity and how it moves its way through the system toward a close.  I want to know what specific information a sales representative used to rank every opportunity on his or her forecast.

Usually this will tell me there is no consistent process for converting leads in place and the present standard is a combination of guess work and wishful thinking.

 I also want to understand what they are selling and equally important, what they are not selling and why.  This helps me understand what other departments outside of sales I need to visit.

Sales Training Process

 A look at sales training is next on my list.  How are the sales representatives being trained?  What methodology are they using?  How do they get trained on new offerings?  How have they been trained to manage opportunities through the pipeline?

The Services, Support & Systems Engineers

 Next I want to meet with the services manager. I want to understand how he decides what he will train his staff on, how they maintain certifications, how skill sets are allotted to the various offerings the company sells, and if there is communication with Sales to keep them in lock step with what Sales is actually selling. 

The Marketing Department

 The marketing department, if there is one, is next.  I want to compare the message Sales is sending with the message Marketing is sending.  I also want to understand how they coordinate their efforts in the end goal of bringing in more business.

C-Level Executives

 I want to understand the overall company direction.  What are the company objectives?  What are the company commitments to vendors and distribution relationships?  What is the company sales message? Etc.

Summary

 Decay in a sales organization can come all the way from the top, manifested in bad policies or poor communication that puts various departments in isolated silos.  From my experience it is the well connected CEO, or oddly enough the lowly Sales Manager that is in the best place to diagnose these problems internally.

 In the early days I only looked at the Sales department but as I worked through the challenges I began to expand my scope because many of the problems manifesting themselves in Sales I found were created by seeming innocuous decisions made in other parts of the company.

 If your sales department is inconsistent, struggling or darn near dead, look at the quality and quantity of your leads, analyze your forecast, focus on managing the top of the sales funnel and take this list and use it to find the root cause of your problem, don’t get caught up treating symptoms.

Two minutes into a conversation with a good friend, who works for a major national insurance provider, our casual banter took a sharp turn into a series of rants about the technology industry, incompetent sales professionals, ignorant project managers and grossly inadequate deployment teams.

 I had some time to spare so I just listened until finally she took a deep breath, blinked, looked up at me and said “Sorry about that.”

 Two years ago her company decided to gut their technology infrastructure and start over with a major ERP software package.  The plan was to completely integrate their organization in one mass of technology and human efficiency.  Unfortunately, two years later it was still a work in progress, and missed milestones were being measured in quarters, not days or weeks.

 I am certain the account management team thought they had struck gold landing this marquis account, and were already looking for ways to leverage this win into their next opportunity.  In actuality, all they have really struck is one big fat nerve that has an entire organization throwing them under the bus at every opportunity. 

 So what turned a fantastic win for the sales team and the entire company into a life sucking vortex?

In a word, implementation.

 When the implementation team began mapping the existing processes in the organization to mirror in the software they made one fundamental mistake that derailed the entire project on day 1. 

 They built their process map primarily from the information collected from executive and departmental management not the actual people doing the work.  The only input from the front line users came by way of survey forms.

 If they would have interviewed the front line team members and mapped their work processes then confirmed with management and integrated new efficiencies, moving to pilot phase and final implementation would have been a much simpler affair.

 So what is the lesson?  Account Managers, stay engaged until deployment is complete because you have a vested interest in things going well as a hunter or farmer.  What should have been a great sales win leading to many more for this team is instead a disaster they cannot shovel dirt over fast enough.  The next big mistake would be to bury this, you should parade this “loss” and the lessons learned, but that is a different post.

 Sales Managers, the impact of this cluster will never show up directly on a forecast, but it can be an invisible force working against your team morale, your ability to leverage future sales, and your reputation.  Watch for the signs as you performance manage your sales team, evaluate their forecasts and committed numbers for the next few quarters.  I would advise pushing for bigger committed numbers over the next several quarters to counter any fallout or delays this black eye might introduce.

 For the implementation side?  Simple analogy.  Design the new wrench based on what the guy who actually uses the wrench says he needs, not what his manager, a guy that will never use the wrench, says he needs. 

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Discussion boards are rife with comments from business owners lamenting the problems they have experienced on their quest to find an exceptional sales professional.  Arguably, a person that is exceptional should, by definition, be hard to find.

 So how DO you find the right sales guy for your company?  Begin by defining your sales process and the role you need this new sales professional to fill.

 This is ONE aspect, mind you.  Future posts will define other aspects selecting and building a solid sales team for your business.

 I use the terms “hunter” and “farmer” in this post, I assume most are familiar with the terms, but just in case, here is a brief definition:

 Hunter – a sales person engaged in finding new opportunities with new clients.

Farmer – a sales person engaged in managing existing client relationships.

 

Sales Intern – Free to low paid position, the primary reward for this position being the resume worthy experience and references the position can provide.

 Hire for:  sales lead data entry, basic sales contact management, assist with proposal development, general support host for in office lunch meeting, answer the phones, take some messages, general sales gopher.

 

Telemarketer – Typical entry level position with higher than average turn over and typically the lowest rung on the sales job ladder.  Could be home based, office based or outsourced to a 3^rd party call center.

Role:  Sometimes Farmer; Rarely Hunter/Farmer; Typical Hunter

 Hire for:  Hire a telemarketer if you have plenty of leads, you just need someone to call them.  Hire this person to do simple product driven sales, call to set appointment, research, sales or service add-on’s, follow up or act in a supporting sales role or layer of marketing for a larger sales organization.

 

Inside Sales – Home based or office based sales professional of entry or mid-level career experience.

Role:  Typically Farmer; Sometimes Hunter/Farmer; Rarely Hunter

 Hire for:  Hire a person for this role as a training ground to develop future outside sales professionals.  Hire a person in this role to assist an outside sales team, cold call, develop leads, manage an existing client base, develop proposals, do sales follow up calls, or as your primary selling organization if you do not need to build strong client relations or an outside sales presence.  In many instances this role is blended with aspects of telemarketing.

 

Account Manager/Executive – Like the Inside Sales Representative, typically home based or office based sales professional of entry or mid-level career experience with minimal to no activities supporting other sales teams.

 Role:  Typically Farmer; Sometimes Hunter/Farmer; Sometimes Hunter

  Hire for:  Hire for this role if you need someone to manage all aspects of the sales process that can be accomplished bound to a desk.  A person in this role can work in support of an outside account manager(s), or be your primary sales weapon if you product or services can be sold without the need for an outside sales presence.

    

Account Manager/Executive – Outside Sales – Like the Account Manager, except working a defined territory, visiting a prospects place of business.  Typically mid to senior level experience.

 Role:  Sometimes Farmer; Sometimes Hunter/Farmer; Often Hunter

 Hire for:  Hire for this role if you need someone to engage with your client at their place of business, at networking events, seminars, trade shows or other external promotional events.  The person engaged in this role is typically a hunter.  In many cases these individuals are responsible for finding their own leads, sometimes this role is supported by an Inside Account Manager or Inside Sales person.  Sometimes leads for this individual are driven by Telemarketers as well.

 

 Business Development Executive – Can be another name for an Inside/Outside Account Manager but is a title typically reserved for those engaged in activities beyond selling a set product to a set market.  Typically mid career to senior level experience.

 Role:  Rarely Farmer; Sometimes Hunter/Farmer; Often Hunter 

Hire for:  Hire for this role if you need someone to create new lines of business, new markets for existing products, new applications for existing products or new partnership opportunities.  As with an Outside Account Manager, in many cases these individuals are responsible for finding their own leads and are sometimes supported by an inside sales staff. 

 

Sales Overlay/Subject Matter Expert – Role typically defined as a single product champion within a multi- product sales organization.  Typically mid to senior level experience.

 Role:  Specialist; Supporting Hunter/Farmer

 Hire for:  Hire for this role if you need to focus attention on one product line, if one product line is vastly more complex or difficult to sell than other offerings, or if there are too many products for your primary sales organization to promote consistently.

 

Sales Engineer/Subject Matter Technical Expert – Role

 Role:  Specialist; Supporting Hunter/Farmer 

Hire for:  Hire someone for this position if your sales cycle involves engaging with customer side technical teams to discuss technical aspects that are beyond the depth of what you expect your traditional sales team to address.

 

Sales Manager – Role responsible for managing single or multiple teams of the sales professionals comprised of one or multiple sales roles.

 Role:  Primarily Manager, Sometimes Farmer; Sometimes Hunter/Farmer; Rarely Hunter

 Hire for:  Hire someone for this role to manage an existing sales team, hire, train, develop, coach, motivate, teach, possibly set compensation models, manage forecasts and pipeline activity, possibly set strategy and marketing direction.

 

 Director of Sales – Role responsible for managing multiple sales managers within an organization.  Can set overall strategy and tactics 

Role:  Manager

 

 VP of Sales/Business Development – Title is in some cases interchangeable with Director of Sales.  Can manage multiple business units, sales directors, and sales management teams. 

 Role:  Manager

 Hire for:  Executive level position providing front line sales experiences with executive management team.  Sets overall sales strategy and company targets for the entire sales organization.

 

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The title or role of the sales professional is only one aspect you need to keep in mind when hiring the right sales professional for your organization.  Just make sure you understand the sales role you need to fill so you can identify the sales qualities you need to look for in your interview process.

 If you have a question, ask.  If you need a little more assistance, email me at val @ saleslaundry.com

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