Sales and Sales Management Blog

June 26, 2014

Why Producing Sales Managers No Longer Make Sense (If They Ever Did)

Although many companies believe they are maximizing dollars by requiring their frontline sales managers maintain and grow their own book of business, are they really getting the value they expect or are they costing themselves sales and money in the long run by trying to save a few bucks on a manager’s salary?

Let’s examine the duties that are expected from a producing sales manager as gleaned from several producing sales manager ads on CareerBuilder:
•    Recruiting and hiring salespeople–and often clerical staff
•    Training, coaching and mentoring those people
•    Resolving customer issues
•    Coordinating and working with other departments such as shipping, manufacturing, underwriting, finance, etc.
•    Monitoring the local market and competition and keeping management informed of market changes and opportunities
•    Creating and implementing a local sales and marketing plan
•    P&L responsibility for the local office or branch
•    Conduct sales and training meetings
•    Complete reports for management on a weekly, monthly and annual basis
•    Creating annual office or branch budget
•    Creating monthly and annual sales projections
•    Operating as company’s ambassador to the community by attending community events and maintaining a high visibility in the community
•    Other duties as assigned

And then the kicker:
•    Maintaining a high level of personal sales activity and personal production

The first dozen responsibilities listed above are management activities that are—or should be—critical to the growth and profitability of the company.  Most of these activities require someone with strong management, problem solving, and analytical skills.  To properly perform these activities, the individual must have a frame of reference to resolve customer issues, to develop sales and marketing plans, to maximize the return on assets, to properly analyze the local market and competition, and especially, to recruit, train and mentor salespeople.

Only the last item is a purely in-the-trenches sales activity related item.  Yet, as anyone who has been in sales understands, to meet that requirement of ‘maintain a high level of personal sales,” selling must be a full-time job.

The Requirements For The Job
Go further into the job description and you find the ‘requirements’ section, describing the background and experience this individual must have to be considered for the job.  Most typically, that description includes these items:
•    3-5 years direct industry sales experience
•    Proven high level of production, meeting or exceeding quota
•    Strong product knowledge
•    Proven industry contacts and book of business

What’s missing in the requirements for this position?  Of course, not a single word about management skills, aptitude, training or ability.

And how is this individual typically paid?  Usually some combination of base salary, commissions and overrides, or worse, overrides and commissions.

Does It Make Sense?
The above list of responsibilities was gathered from a number of job postings from a number of industries including retail, banking, insurance, securities, medical, software, chemical, consulting, and others.  Most of these job postings listed a majority of the above requirements including the personal production requirement.

Although traditional in many industries, does this combination of duties make sense?  If it does:
•    why are so many offices in these industries poorly run?
•    Why the constant harping by senior management for the offices to keep costs down?
•    Why complaints by marketing that leads aren’t being followed up?
•    Why the complaints by manufacturing and shipping that didn’t know certain things about various orders?
•    Why are commission checks so often wrong?
•    Why is the training and coaching in these companies so poor?
•    Why are so many poor hiring decisions made by the company’s sales managers?

The list could go on.

The reason of course is obvious.  The company didn’t hire a manager, they hired a salesperson to try to keep the herd in line and hopefully end up with the sales numbers the company wanted—and that sales manager is expected to make sure they do through his or her personal production.

Sales management as so often practiced today is hardly deserving of the term.  And despite the onus being placed on the sales manager by the company, the problem doesn’t lie with the sales manager.  Typically, the company got exactly what they wanted—a top salesperson willing to assume responsibility they haven’t been prepared for in exchange for a title.

Can Companies Afford to Continue This Way?
For most companies, selling is becoming a bigger and bigger challenge.  Competition is fierce, their products are most often indistinguishable from their competitor’s, their markets are becoming more fragmented, their prospects are better educated and more demanding than ever before.

Management as a sideline, although traditional in a great number of industries, is costing companies billions of dollars every year in lost opportunities, bad hires, poor local market decisions, lack of resource utilization and lost sales.

In a complex world with razor sharp competition and astute prospects who often know more than the people trying to sell to them, companies can no longer afford to use management positions as rewards for past production.  Frontline managers are increasingly becoming the focal point of a company’s success or failure.

Many companies have already begun to change their management philosophy and have eliminated the selling manager position and have replaced them with full-time, qualified, and trained managers.  To this end, they have instituted manager training and coaching programs hiring outside companies and coaches to work with their new and existing management staff.

Take Action Now
If you are in a producing manager role, hire a sales management coach to help you prepare for the realities of the changing environment you are entering.  Those items within your job description that haven’t been emphasized in the past are becoming increasingly important.

If you’re a senior manager, consider whether a producing manager is really worth the lost revenue and lost opportunities.  Your company’s selling environment isn’t going to get easier.

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June 24, 2014

Guest Article: “TEAM SELLING–Lone Wolfs no longer reign supreme,” by Dr. Richard Ruff

Team selling – lone wolfs no longer reign supreme
by Richard Ruff

Team selling continues to be on the rise. We’ve heard this from clients and colleagues – and now from the research front. According to a recent Corporate Executive Board (CEB) study, the individual salesperson “no longer reigns supreme”.

As the CEB authors noted: “On the most effective sales teams, particularly B2B, the individual no longer reigns supreme. Strong sellers must not merely execute their day-to-day tasks well; they also must engage with their colleagues to marshal resources, wrangle involvement, and coordinate people’s capabilities.  They now rely on collective, even crowd-sourcing skills, in ways that weren’t possible just a few short years ago.”

Why is this team selling collaborative approach emerging to the forefront today? There are a number of reasons – let’s explore three.

  • Transformational Market Change.  First, several markets are undergoing a transformational change where the customer is demanding the salesperson brings a broader and deeper level of knowledge to the sales process.

A good case in point is the medical market where the Affordable Care Act plus other social and economic trends are transforming the health care landscape.  Hospitals now expect their suppliers to become partners to help them to deal with significant challenges driven by reduction in reimbursements and changes in their care delivery models.  This means to sell successfully the salesperson has to know more about knowledge areas such as: hospital economics, payment models, disease states and end-to-end supply chain costs.  This requires a team – a single sales person cannot do it alone.

  • Availability of Technology.  Today, salespeople have available easy-to-use and powerful CRM systems and software applications that allow them to share information and insights to a degree that was hard to image even 5 years ago.  Simply put, the technology enables salespeople to collaborate more effectively than ever before.  So, not only is there more of a need for team selling; there is also a way.
  • Sales Management Support.  The frontline sales manager has always been the pivotal job for achieving sales excellence.According to the CEB authors, today’s sales managers are operating differently.  Among market leaders sales managers expect and support their salespeople to leverage all the personnel resources that are available. They facilitate idea exchange across their sales teams, use collective brainstorming to figure out how to unstick stuck deals, and borrow effective approaches to talent management and sales rep development from peers in other areas of the business.  Sales managers are fostering relationships with personnel outside their divisions, such as: marketing, manufacturing, tech support, and customer service, as well as, with counterparts in other sales divisions when multiple divisions inside a company sell to the same customer.

Today customers expect sales people to know more and know it at a higher level of proficiency than in times past.  The higher up in the customer organization, the truer the proposition.  Senior level executives expect the seller to bring fresh perspectives to help them to frame their challenges and new insights to generative alternative solutions.  They want help to know more about what they don’t know – not product presentations.  If this trend continues, so will the shift to team selling.

Dr. Richard Ruff has spent the last thirty years designing and managing large-scale sales training projects for Fortune 1000 companies.  He is a co-founder of  Sales Horizons, a sales training company aimed at mid and small size companies. He has co-authored Managing Major Sales, a book about sales management, Parlez-Vous Business which helps sales people integrate the language of business into the sales process, and Getting Partnering Right – a research based work on the best practices for forming strategic selling alliances.  You can find more of his work at his blog.

June 23, 2014

You Need to Know Your Sales History if You Want to Grow Your Sales Business–and Income

Filed under: Uncategorized — Paul McCord @ 12:37 pm
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OK, so metrics are boring—but knowing your numbers is critical to your success.  Go ahead, read the article and then apply the math to your sales business.

Do you know what you have to do if you want to increase your income by 25%?  How about if you want to increase it 70%?

The obvious answer is to increase your production by 25 or 70%.

But is that the right answer?

Maybe–probably–not.

Rather than thinking in terms of increasing your production by 25 or 70%, ask yourself these questions:

What is your average annual commission per client?

Since most of us have different products and/or types of clients, break it down even further:

What is your average annual commission per client type A (say retail client)?
What is your average annual commission per client type B (wholesale)?

Or

What is your average annual commission per individual client?
What is your average annual commission per corporate client?

Or

What is your average annual commission per client buying service A?
What is your average annual commission per client buying service B?
What is your average annual commission per client buying service C?

Here’s a hypothetical example:

Mary sells widgets to both individuals and companies.  Over the past 3 years she has sold widgets to 300 individuals and 114 companies.

Her average commission for selling to an individual is $375.
Her average commission from a sale to a company is $1,050.

Last year her income was $107,050.

She wants to increase her income by 22% or $23,500 this year for a gross income of about $130,000.

Since she knows her production/commission numbers she knows exactly what she must do:

She needs to sell to an additional 28 individuals and 12 companies to reach her goal.

However, she could refocus her business by concentrating on business sales as each additional business sale would reduce the required additional individual sales by 2.8.

She could also take her numbers one step further and calculate what her averages have been over a shorter period of time such as 6 or 12 months.  When she does that she discovers that:

Over the past 12 months she has sold to 105 individuals with an average commission of $450 and 45 businesses with an average commission of $1300.

With these more accurate current numbers she knows in order to reach her goal she must sell to an additional 23 individuals and 10 new businesses.

So, that’s all she needs to do in order to reach the $130,000 income she wants for this year—simply make an additional 2 ¾ sales per month.

Again, she could refocus her business and concentrate more on corporate sales as each additional corporate sale would decrease the number of individual sales needed by almost 3 sales.

All the sudden that 20% increase doesn’t seem so difficult to accomplish because she knows exactly what it will take to get there.  The hocus pocus of pulling numbers out of thin air, the wondering of how in the world she can make an additional $30,000 is gone and replaced with knowledge—knowledge of what she has done in the past, what she is doing at the moment, and what it will really take to reach her goal.

Reaching your income and sales goals can be just as concrete and just as realistic as Mary’s goals were for her if you’ll take the time to do a little research and math.  These are crucial metrics of your business that you must know.

Don’t play a guessing game.  You can’t afford to operate in a vacuum.  Knowing your sales history is key to reaching your goals for our future business tends to replicate out past business unless we consciously break out of that pattern.  You need to know where you’ve been in order to get where you want to go.

June 13, 2014

Are You Failing Because You Fail to Persist?

Filed under: Uncategorized — Paul McCord @ 10:05 am
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Over the years I’ve spoken to thousands of sellers who want to change their behavior, their careers and their lives. There are certain traits that seem to be consistent with a great many sellers I speak with–they tend to be disorganized; the majority question their ability to perform up to the standards they have set for themselves; almost to a person they have no idea of how they intend to get where they want to go.  Almost all lack one of the most crucial traits of a mega-producer–persistence.

They try one technique or strategy a few times, and then move to the next.  They read a book, put into practice a little they have learned and when that doesn’t immediately produce results, they discard it and go on to something else.  They never allow themselves to learn, practice and develop a new skill because they aren’t immediately getting the results they want or expect.

Selling is both an art and a science.  Like anything else in life, it takes time to learn and develop new skills.  If we don’t allow ourselves the time and practice required to develop the skills required to become successful, we’ll never become successful.  The NFL, NBA, PGA, and other sporting associations are chock full of individuals who have spent their entire lives on the practice field preparing themselves for just a few minutes each week in the limelight.

Take an offensive lineman.  A guard has basically one job—keeps someone from the opposite team from having the opportunity to tackle the guy with the ball.  That’s it.  Just keep one man from tackling one other man.  Pretty simple, right?  If you have never played football or have never even seen it played and you walked onto a practice field for the first time it probably wouldn’t take more than five minutes to understand what the job of a guard is.  Heck, it wouldn’t take 30 seconds to understand the basic concept. Within an hour, you’d understand the most basic concepts of playing guard.  You’d know the stance, you’d know that you don’t move until the ball is snapped, you’d know that the guy on the other side of the ball that you are supposed to block is really, really big, and you’d know that your job on each play is only going to take 3 to 8 seconds to perform.  During the same time period you would have learned that there are different plays and that you do something a little different on each play.  Let’s assume your team has 10 basic plays.  Maybe it takes you another 2 hours to learn what it is you do on each of those 10 plays.

So, you’re ready for the game, right?  You’ve invested 3 hours.  You know your job is to keep that guy from tackling the guy on your team with who has the ball.  You know you have ten plays and you know whom to block on each of those 10 plays.  What else is there to learn?  You’re done.  Go take a shower and show up a couple of hours early on game day.

Maybe someone forgot to tell you that the other guy is going to do everything he can to keep you from blocking him.  Maybe they forgot to tell you that he won’t line up exactly where you want him on every play.  Maybe they forgot to tell you that he isn’t just going to stand there waiting for you to come block him.  Maybe they forgot to tell you that people don’t act the way you want them to act.  Maybe they forgot to tell you that what sounds easy isn’t necessarily easy.

If the average lineman in the NFL is 26 years old, and the average player has been playing football since age 7 or 8, then that guard has spent almost 20 years of his life learning to do one thing—keep one guy from tackling another guy.  That’s it.  And no matter how good he is, he still gets beat consistently.  He still misses blocking assignments.  He still has opposing players get around his blocks.  He still makes mental and physical mistakes.

Salespeople are in the same position as the guard above.  We have a simple job that requires a great deal of skill and practice.  The guard has spent his life learning not just the most basic parts of his job, but he has spent thousands of hours learning the techniques and strategies that will make him successful.  If all he needed was to learn the most basic concepts, he could pick up a book, read about what a guard does and then show up for the game.  There wouldn’t be any need to practice.  There wouldn’t be a need to hone his skills.  After all, what could be simpler than to have someone tell you to just keep that guy away from that that other guy?

But that is exactly what tens of thousands of salespeople do each and every day.  They read about a particular skill, go out and try it and it doesn’t work the way they want it to. They conclude it was all hype anyway and move on to something else.  Selling is a practiced skill, meaning persistence in practice, patience in application, and honing of abilities is necessary.

As we enter the second half of the year rededicate yourself to your personal training. Understand that what you learn must be practiced and perfected.  New skills take time to learn.  If you are perpetually moving from one sales concept to the next without having learned and practiced each, you’ll never improve your ability to perform your job.

Persistence is at the heart of perfecting any skill, sales skills are no exception.

June 10, 2014

How huge changes in Buying have impacted Selling – Webinar

Filed under: Uncategorized — Paul McCord @ 9:28 am
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As part of our continuing goal of bringing the best speakers and ideas to you to help you develop as a salesperson, manager, and business executive, we’re excited to invite you to a dynamic, new webinar on Wednesday, June 18 at 11AM Pacific, 1PM Central, 2PM Eastern.

According to Daniel Pink, bestselling author of To Sell is Human, selling and buying has changed more in the last 5 years than it did in the last 100 years! Unfortunately, most salespeople have NOT adapted to these changes. What worked well just a few short years ago can be a liability today.

Our guest speaker is John Schumann, partner at Whetstone Group, a sales process improvement and training company. He is the co-author of several books, including Common Sense Selling, Sales Mastery, and The Monday Morning Sales Coach. He has trained 1000s of salespeople in over 17 countries.

John brings a new perspective to the old game of selling, one that will help you understand how these changes are affecting your everyday selling activities and how salespeople are now being manipulated.

You’ll walk away with some fresh ideas on how to begin making the transition to selling more effectively and selectively in 2014 and beyond…and learn a tool that you can put into practice immediately.

The webinar is complimentary. You won’t want to miss this.

Click here for more information and to reserve your spot now.

June 4, 2014

Announcing #SocSales Jam 2014: The Ultimate Social Sales Playbook (Live)

Want to master the art of social selling, but are wondering how to go about it?  During this hour long, multimedia Tweetchat, dozens of the world’s most influential social sales experts, including Jeb Blount, Jeffrey Gitomer, Jill Rowley, Dave Stein, Cheryl Burgess, Andy Paul, and many others will share their favorite social sales plays for achieving maximum reach, results and revenue.

Moderated by KiteDesk CRO Sean Burke, our expert panel will take the guesswork out of the equation so you can focus on dramatically boosting your sales .  Register today at http://bit.ly/SocSalesJam and get a pre-lease copy of the ebook The Ultimate Social Sales Playbook.

Some of the topics we’ll address are:

 How much time should be devoted to social media?

Has social media made traditional forms of prospecting such as cold calling obsolete?

What are some of the most effective social media prospecting strategies?

How can you effectively use the massive amount of social data available? 

Are there holes in the social selling toolbox?

Join us for an informative and practical hour.

 

 

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