The front line sales manager is one of the most important yet undeveloped positions in a company. Many of these individuals are promoted out of a sales role where they excelled. The belief is that since they were successful sales professionals they can turn others into successful sales professionals. Sadly, that rarely happens.
The first issue starts with the “why” of the manager’s success in sales. I find this falls into a few categories, including two large ones. First, as a sales professional the manager had a process without realizing it. In other words that process was intuitive and not explicit to the person executing on it. That sales professional intuitively knew to call on the right sized account—that was probably driven by a desire to earn a certain income and knowledge that selling a lot of low-end equipment wasn’t going to get him or her there. They might have understood that they needed to call at the correct level in the account—the level with the budget and business knowledge. Once they had their first placement in the account they intuitively knew it was easier to sell to somebody that already bought from you so they worked on gaining share of wallet in the account. You get the point.
The second category is the sales professional that “lucked” into a cherry territory. Without statistical territory analysis—the value of the company’s placements in the territory—it’s possible that a sales professional lands in a territory where they can exceed their quota simply by upgrading the base of devices. When we conduct this statistical analysis for clients we always—100 percent of the time—find this situation. This sales professional never had to do a lot of business development, as upgrading base is a totally different sale then developing new business, so they don’t have the skills to transfer. There are other categories, but these two should capture 85 percent of the sales professionals.
Now, we throw that person into a management position. I could have said promote, but we usually “throw” them into the job. After a few months of struggling the manager usually concludes that they have the wrong people on their team so they hire new sales professionals to replace those that they fired. But they’re inexperienced, probably had no interview training, and work off of “gut feel,” many times making the tragic mistake of hiring another copier company’s rejects because they think it will decrease their time to success. Those hires are almost never successful so it only increases the time to success.
Companies make this same mistake in hiring a manager, picking up somebody else’s failure. If your manager has worked for three different companies in the last five years odds are he won’t be your manager in a year. There’s always a “reason” for the change with both sales professionals and managers, but you have to be objective and logical. I had a bad stint, spending a year at a dealership where the owner was certifiable. He offered me a crazy high salary, a fancy title, and a Mercedes SL as a company car when I was 24 years old. Are you kidding me—sign me up and drop the convertible.
By my second day I knew I had made a mistake, but I hung on for a year as I didn’t want it to look bad on my résumé. I insulated my team from his capricious acts (He would literally call out a name in a sales meeting and start to pluck the guy’s name off the “board,” that had month and YTD sales on it, and say, “your services are no longer needed” in front of the entire sales team) and was recognized as the top manager in the company, but I couldn’t wait to leave. Here’s the point: I never made that mistake again and if I did you should question my intelligence. So if you have a manager that continues to put himself in a bad situation it is OK to question his intelligence and pass on him.
Now that the manager replaced the team with “his hires” he desperately tries to make them successful. The usual approach is “run faster.” They start monitoring phone calls, even scheduling “phone blocks,” cold calls, appointments, and other almost meaningless information. I say almost meaningless because it is like trying to lead the horse from the tail. It is possible that a sales professional needs help in organizing their day/week to ensure they are allocating business development time, but I certainly shouldn’t have to tell anybody every week that they need to develop business, right?
Revenue = prospects X close ratio X average transaction size. That’s my revenue formula. If you agree then the next step is to look at the three variables and decide which one you can affect the most. I’d argue for prospects; I can grow my prospects by 100 percent over a year and there is no way to increase your close ratio 100 percent and it would be a miracle to increase your average transaction size, even with service like MNS by 100 percent. But average transaction size is definitely second as we do have those other products and services to offer to our prospects and customers. Adding prospects is key to driving revenue.
There are many companies out there in any geography and those companies span the range from one-man shops to Fortune 500 companies. If I call on one-man shops I might sell some $600 MFPs but they’ll have them for a dozen years, so I better find a lot of them each and every month. That’s a plan for failure. If I call on Fortune 500 companies, unless I work for a national company, that’s going to have a really low close ratio, like close to if not zero. But there’s some subset of that range I want to focus on.
Then I want to call on the right person in that account. If the company is between $15M-$40M that’s the owner or CFO. If they are between $40M-$80M it’s the CFO or CIO. This information shouldn’t be too hard to figure out. Then I need a business case and it can’t be saving money or better service, but rather a real business case.
The key to management is being able to put in place a sales process that ensures success and that can be followed and supported by the manager. We teach this in our Strategic Sales Management Class.
Our next class is scheduled for June 16-17 in Charlotte. Click here for more information or to enroll. Our last two sessions sold out!
