There are seven main mistakes employers make when it comes to managing sales.
I HAVE been part of many business turnarounds in my career, and in all situations I have noted the errors consistently made by sales management, all of which negatively affect team morale and sales. Here are seven of the deadly sins of sales management.
1. Conflicts with marketing
We have all heard of the traditional conflict between sales and marketing.
The sales team says the product is priced too high or not what the customer wants, or that the marketing programs are ineffective. Marketing may say the sales force is not well trained, too small, ineffective, or have myriad other complaints.
Sometimes these are valid complaints, and good management will identify and address them; but if they aren’t valid, or if they are merely excuses for poor performance, it is imperative that management recognise this situation.
I was once employed to effect a business turnaround in an organisation that had conflicted sales and marketing departments. To overcome this situation, we employed a consultant skilled in strategic planning processes and team-building.
We conducted a two-day offsite meeting designed to bring the sales and marketing groups together and show them they must function as a team for success.
As a result, the relationship evolved so that if marketing was late introducing a new product, sales management would pick up the slack with promotions on existing products.
Conversely, if sales anticipated a tough quarter, marketing would work to release a new product ahead of schedule. Teamwork between sales and marketing isn’t a ‘sometimes’ thing; it is critical to the success of a high-velocity organisation.
2. Poor people management
Powerful investment groups don’t invest in companies, they invest in people. People are the most important ingredient in any organisation.
At the heart of high-performance organisations is management that obtains the willing cooperation of others to achieve its goals.
To gain the willing cooperation of others, employees must see that management genuinely cares about them, that they can trust management’s word, and that management focuses on distinction in all aspects of the business.
Another common mistake is not acting on low performers fast enough. In every failed business I have worked with, I have found a number of salespeople who should have been moved to another position. You do no favours by keeping a failing employee around, unless you are confident a correction can be effected.
One word of caution, though; most failing businesses do not have metrics that effectively judge individual sales performance, so care should be taken when identifying low and high performers.
Another error – the reverse of too few terminations – is aggressive termination. To avoid both extremes, remember that it isn’t who you fire that counts but who you hire. The proper hire will not need to be terminated.
Holding people accountable for their performance is a cornerstone of powerful organisations, but you would be surprised at the number of companies that don’t consistently do this.
This is especially true during trying times, when management is inclined to lighten up on performance standards. During a downturn, it is better to reduce quota requirements than look the other way on non-performance.
When we don’t consistently hold people accountable for their performance shortfalls, it sends a message that management is weak and not confident in the goals it sets. This will erode morale as well as confidence in management.
4. Poor award programs
Award programs need to be seen as achievable and fair. Reps need to see that the playing field is level and that everyone has a shot at winning recognition.
It is amazing how many companies have award programs that are slanted in favour of a few preferred individuals.
5. Changes to the process
The sales process includes all the steps and procedures a company puts in place on its way to having the product delivered and invoiced.
When the sales process is changed or modified, expect the sales force to need time to adjust.
For example, the sales team might be required to fill out new reports or obtain price quotes from the corporate office, even if they previously had the freedom to do this themselves.
During a period of adjustment to a new process, expect sales to be affected. When the sales process is changed, all of management should expect sales as well as sales forecasting to be affected and in direct proportion to the degree and type of change, at least for the short term.
Additionally, sales reps generally dislike change. If you are faced with needing to modify the sale process, quantify the amount of time the average rep will need to spend on the new non-sales activity, calibrate this lost selling time to lost sales, and advise senior management on the anticipated impact.
6. Poor metrics
Metrics are the numbers that tell us where we have been and where we are headed. They should act as the radar that lets us know well in advance of impending problems.
A large number of sales management teams get into trouble due to ineffective metrics – or in extreme cases I’ve seen, no metrics at all.
Usually, when we find poor metrics, it is because sales management doesn’t appreciate their value or does not know the business well enough to develop them.
Good metrics should allow sales management to confidently predict the quarter’s sales, identify high- and low-performing reps, and develop solutions to problems.
7. Lack of understanding
Failing to know the business at a deep level is one of the surest paths to failure. This has been a prime issue in every struggling business I have worked with.
Management that does not know the business at the customer, product, or service level will have difficulty identifying solutions to problems and will lack confidence in the directions they take.
When sales are going well, the lack of deep business understanding usually does not appear as a problem, but when business is challenged by sagging sales, it is.
These are the times when a thorough understanding of the company’s customers, products and services, and sales process is critical. Without it, sales reps cannot be confident in the course taken by management.
Changes in the sales process, poor metrics and award programs, ineffective management, conflicts with marketing, and a lack of business understanding are all deadly to the performance of business.
In today’s tough business climate, wise management will review these topics frequently to ensure excellence in their organisations.
• John R Treace has more than 30 years’ experience in the sales management industry. Based in the US, he is the author of the new book, Nuts & Bolts of Sales Management: How to Build a High-Velocity Sales Organization.