Executive Tools
- Executive Summary
- Self Assessment Checklist
Expert Practices Articles
- The Sales Manager: Areas of Expertise
- Models of Sales Team Performance
- Coaching to Increase Sales
- Finding the Right Sales Compensation Plan
- The Sales Plan
- The CEO, Sales Force and Customer
- Coaching in the Field
Case Histories
- Use an Integration System When Hiring a Sales Representative
- Track the Selling Activities of Your Remote Sales Force
- Start New Salespeople on a Commission Base
- Plan, Plan, Plan
- Focus on Commissions
- Teach Networking Skills to Sales Reps
- During a Downturn, Sell to the Customer's "Pain"
Tools & Analysis
- Coaching: It's Never Over
- A Leadership Action Agenda
- Sales Methodology Audit Survey
- Top Ten Rules of Sales and Marketing
- Checklist: Are They Intrapreneurial?
- Success Checks: Evaluating Your Sales System
- Success Checks: Support Your Sales Staff
Book List: Sales Force Motivation and Management
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CEO Best Practice: Sales Force Motivation
and Management
Executive Summary
- The Sales Manager: Areas of Expertise
- Models of Sales Team Performance
- Coaching to Increase Sales
- Finding the Right Sales Compensation Plan
- The Sales Plan
- The CEO, Sales Force and Customer
- Coaching in the Field
The Sales Manager: Areas of Expertise
The job of the sales manager is not to grow sales. Instead, say
Vistage sales management experts John Asher, Jack Daly and Paul
Goldner, the sales manager's job is growing salespeople. In fact,
Daly prefers the title "sales leader."
Gone are the days when threats and intimidation worked as sales
management tactics to wield at frightened troops. Today, says Goldner,
the ability to persuade is far more important.
"The sales manager sets the course for the most efficient
system of selling the company's goods," he says. "By her
statements and actions, the successful sales manager inspires the
sales team to act in ways that are in everyone's best interests."
An effective sales manager also possesses insight into the personalities
of her sales team, Daly says. "The sales manager is there to
cultivate and refine the talents of the salespeople, and should
make sure they're aware of this. As time passes, the salespeople
start to understand the purpose behind efforts to enhance their
skills. Gradually, this drive toward excellence comes to replace
money as the prime motivator in doing their jobs."
Recruiting is a process, not a single-time event. It should be
ongoing and continuous. Just as a salesperson has (or should have)
a database of qualified prospects, so the sales manager should have
"a basket of people" he'd like to have come work for him.
The Vistage experts advise these steps for keeping the "sales
force" pipeline filled:
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Models of Sales Team Performance
Goldner identifies key sales activities that should be continually
tracked:
- Dials. How many calls does it take to reach a key decision-maker?
- Appointments. How many customer appointments are generated from
completed calls?
- Recommendations. How many proposals does the salesperson create
as a result of his appointments or meetings?
- Sales. What is the number of winning proposals?
- Sales dollars. How much revenue is produced by sales?
Goldner recommends recording the sum of these activities weekly.
"The goal is reaching a point where you know what every call
is worth, what every appointment is worth, what every presentation
is worth and, finally, what every sale is worth. Now you not only
have made your sales predictable, but you can clearly articulate
to future sales candidates what's needed to succeed."
"How well can a salesperson perform without understanding
what's expected of her?" Asher asks. "Expectations spell
out what's required to succeed, and it's best to articulate these
during the training period."
For more seasoned salespeople, job expectations can be defined
by:
- Number of customers
- Dollars of sales per period
- Gross profit margins
Daly suggests actively involving sales reps in the goal-setting
process. "If you want the sales staff to become more accountable,
ask them to set their own goals," he says. "Review their
performance against these goals on a regular basis. Make it very
clear what's expected of them."
Of course, any sales lead is only as good as the customer's final
decision to buy. The sales manager should closely scrutinize the
company's marketing and sales process areas, with respect to ROI
generated by the sales team's leads.
- How do leads come in? What is the quality of these leads?
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Coaching to Increase Sales
To help turn around a poor performer, the Vistage speakers advise
these steps:
- Document the situation. Gather facts. Identify problems in the
salesperson's performance.
Advise and counsel. Meet with the sales rep, making it very clear
that your goal as sales manager is to help him become better at
his job. Avoid placing blame or delivering ultimatums. Instead,
demonstrate your confidence that, with coaching, the problems
can be overcome.
- Look for problem behaviors. Ask the sales rep what he thinks
should be done to overcome gaps in performance. Does it mean adjusting
selling behavior? Making more new business calls? Find out what
difficulties, if any, he anticipates in changing his behavior.
Address these difficulties before they occur.
- Design a recovery plan. The plan, developed jointly by sales
manager and salesperson, should be comprehensive and results-oriented.
Set targets based on (1) improvements in sales with each account;
(2) new business penetration; and (3) increased number of calls.
- Have a follow-up plan. Following agreement on a recovery plan,
the sales rep must understand that the sales manager will closely
scrutinize sales efforts and results. The follow-up plan will
track results and progress, supplemented by weekly follow-up meetings.
"When salespeople don't hit the targets, hold their feet to
the fire," Daly says. "In some cases, you may want to
renegotiate the expectations. But if these were fair to begin with,
you're better off sending that person on the way to their next career
opportunity."
Recognizing top performers is another vital function. "How
many salespeople are overly recognized for their achievements?"
Daly asks. "Is there such a thing?" When he visits Vistage
companies, Daly asks members what recognition systems they have
in place for top performers. Surprisingly, not enough companies
have any such system.
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Finding the Right Sales Compensation Plan
Goldner advises linking your company's objectives and commission
structures, and placing salespeople "in the same boat"
as everyone else. "Is your focus on profitability?" he
asks. "Then compensate based on gross profits. Is the focus
on new accounts? Then compensate based on that. Choose two or three
objectives that are vital to your business and develop these in
your compensation plan."
"You have to incentivize the behavior you want," Asher
notes. "For example, if you're pushing a specific product,
raise the commission rate on it. You can further devise a formula
for basing the commission on sales and gross profits and the sales
team's overall performance. Many different options exist."
The Vistage experts and others favor this option: salary plus commission.
"This approach typically combines the best and worst of the
first two compensation structures," Asher says, adding that
while the equation differs among industries, most fall in the ranges
of 40-80 percent salary and 60-20 percent commission.
How does a company determine the best sales commission rate? The
Vistage experts point to these options:
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The Sales Plan
"Sales quotas should serve as a goal,"
says Goldner. "Generally, they originate from upper management
and percolate down to the sales staff, without much in the way of
negotiation. But an effective sales manager meets with the sales
team, discusses the quotas and other motivational issues, talking
about strengths, weaknesses and opportunities. The idea is moving
everyone in a positive direction."
Above all, Asher notes, the sales manager must have a clear understanding
of how the organization's overall revenue goals impact individual
or team sales quotas. "There are so many factors -- from company
objectives and the number and size of territories to each sales
rep's experience -- which influence goals and performance, that
the sales manager has to gauge a proper balance when planning sales
quotas."
Goldner is a forceful advocate for producing goals-oriented sales
reports. "Well-designed sales reports motivate salespeople
by making very clear what needs to be accomplished and what has
to be done to accomplish it," he says. "These reports
also help the manager measure specific behaviors salespeople must
produce in order to get the job done."
All the talk about quotas and reports leads back to one sales management
priority: helping salespeople grow.
"One way they grow is by being goal-oriented," Daly says.
"The more focused the sales force is on specific, achievable
goals, the greater their chances of achieving them. Of course these
goals have to be aligned with the company as a whole. The sales
manager's job is making sure these goals are coordinated and attainable."
These goals may include:
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The CEO, Sales Force and Customer
Creating a "sales-friendly" corporate environment is
-- or should be -- a CEO priority. The Vistage experts suggest the
following actions to keep your sales force on the cutting edge:
- The right tools. To succeed, your salespeople should be equipped
with the best support -- pagers, cell phones, laptop computers
-- available. This enables them to do their job better, and demonstrates
their importance in the mind of the prospect/customer
- Support on the inside. Make sure other departments are working
with, not against the sales force. "All too often,"
Asher notes, "internal departmental turf battles defeat the
company's overall goals."
- Recognize achievement. Salespeople respond to a variety of
motivating factors, but in nearly all cases, recognition for a
job well done ranks high. As CEO, you can make sure that top performers
(and those working toward that goal) are honored throughout the
organization.
- Be seen and heard. "The CEO's occasional presence at staff
meetings is a prime motivator in itself," Goldner says. "Keep
the sales force updated on changes in your products and services.
Listen to what they have to say about life in the field."
- Focus on training. Continuous training makes for better salespeople.
Make sure that training is one of your company's top priorities.
- Help wherever you can. Set a regular schedule (at least once
every quarter or every six months) to meet with the sales manager
and his team and ask them directly, "What can I do to help
you make more sales?" Create a "no-blame" atmosphere
where salespeople feel comfortable in objectively assessing current
situations and needs. Then do what's needed to make them better
at what they do.
In the past, say the Vistage experts, that might have been enough
knowledge for any individual salesperson to have. Today, the sales
rep should know the customer's business, too. "One helpful
approach in this area is inviting the customer to come in and talk
about her business with your sales force," Asher advises. "Also,
at regular intervals, dedicate an entire sales meeting to educating
the sales force on the ins and outs of the customer's business."
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Coaching in the Field
Asher's advice: Map out your joint strategy before making the sales
call. "The sales manager and her rep should review and refine
the approach the rep will use in the field. How can the manager
support him? Can they leverage a situation to gain access to key
decision-makers in the customer's organization?"
Coach in the field, not in the locker room, Daly says. "Too
many sales managers are busy shuffling papers, filling out reports,
sitting behind their desks. They should be out making calls with
their salespeople, helping to train them in ever more productive
sales techniques. If you're not training, you're not gaining."
Daly recommends three kinds of "coaching calls" -- on-site
visits (to customers or prospects) with the sales rep, in order
to provide coaching and feedback for improvement:
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