A group of talented salespeople without effective sales management is like a football team without a head coach: the players will be on the field but only creating chaos. Midsized businesses often struggle with implementing a solid sales management process, perhaps because they have finally grown big enough and complex enough to need one. Here are the important fundamentals to keep in mind when developing the sales management function in your business:
Hire the right sales leadership
One of the most common mistakes made by midsized companies is making their most talented salesperson the sales manager. However, the attributes that make a great sales producer are frequently diametrically opposed to those that make a great sales manager. An effective sales manager likes to help others succeed and share the spotlight, and is well-organized and methodical.
If you need time to find the right person to lead your sales organization, consider an interim VP of sales as you conduct your personnel search. By doing so, you can get your sales management function up and running quickly.
Define and prioritize customer types
Since salespeople are happy to sell anything to anybody, one of the first steps in crafting a sales management strategy is defining and prioritizing customer types. Doing so enables sales managers to channel the efforts of sales reps in the most productive way.
Customers and prospects are typically categorized by industry, size (measured by revenue potential, number of employees, etc.), or product and services used. Then, by prioritizing categories, prospecting efforts and performance evaluations can be structured around doing more business with higher value customers. Over time, sales reps will naturally focus on the type of business your company wants most.
Define and track the sales process
The journey from suspect to prospect to customer goes through definable stages. By defining and tracking them, a company can identify weaknesses in its sales process, more accurately predict its revenue generation, and determine which parts of the sales pipeline need to be filled.
Based on the scale and complexity of your business choosing the right CRM to track the appropriate KPIs is critical. Many midsized companies start by using spreadsheets or even informal review meetings to track these processes but this can result in emotional versus factual assumptions and decisions. Implement a CRM now if you haven’t already to capture essential communications and activities.
Implement the right compensation system
How sales reps are paid is critically important to boosting new account and revenue production. No matter how brilliant your sales management strategy looks on paper, in the end, to a very great extent, sales reps will do what you pay them to do.
Determining the right mix of salary, commission and bonus, and defining what performance metrics drive pay, are thorny issues. Plus, the compensation system must not only motivate sales reps, it must also be profitable for the company and manageable within the payroll system. For many companies, compensation is the biggest weakness in their sales efforts and it offers the best opportunity for dramatic turnaround — put this at the top of your review list.
Hold sales reps and managers accountable
Nothing drags down revenue and profits more than perpetually floundering sales reps and complacent sales managers. Establish sales and sales management performance metrics for reps and managers; and make sure there are positive consequences for exceeding them and negative consequences for missing them.
With accountability in sales, there is a fine line between inspiring motivation and generating dissatisfaction. This is why it is important not only to select the right performance criteria, but also to communicate success and failure in the right way.
This issue brings us back to the first point: hiring the right sales leadership. The ideal candidate knows the science and the art of sales — it takes both to achieve long-lasting, dial-moving growth.
Brian and Sales Empowerment Group (SEG) has helped the fastest growing, and most innovative businesses and Fortune 500 with sales consulting, sales recruiting, sales training, inside sales and a unique program called “The Interim VP of Sales Program.” Brian is also the author of three books available on Amazon.