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Smart Selling Tools, an analyst and consulting firm specializing in sales productivity and performance technology, has just released their 2019 Top Sales Tools Guide and recognized SPOTIO as the leading Field Sales Engagement Tool.
“SPOTIO recognized that outside sales reps suffer from a lack of tools compared to their colleagues in inside sales. So, they created a platform designed to address the specific needs of field salespeople like, customer mapping, route planning and lead management”, said Nancy Nardin, Founder & CEO, Smart Selling Tools.
“By recognizing and solving this pressing need, SPOTIO was a shoe-in for this years accolades.”
Smart Selling Tools evaluated a multitude of sales software and solutions across seven technology categories to produce this years guide. SPOTIO received recognition in the Field Sales Engagement category.
“Our goal is to provide outside sales teams with tools and resources designed specifically for selling in the field, and we’re thrilled to have our efforts recognized.”
“SPOTIO is focused on making outside sales teams more efficient, productive and successful. The development of our one of a kind software provides outside reps the technology they need to be successful.”
– Ryan Dunagan, VP of Marketing, SPOTIO
About Smart Selling Tools
Smart Selling Tools, Inc., is an analyst and consulting firm that specializes in sales productivity and sales performance improvement through the use of smart sales tools. Businesses of all sizes can find suggestions and reviews for sales and marketing software along with great resources to learn about revenue generating tools.
Smart Selling Tools doesn’t sell sales software. They just provide great information to help you find the right sales tools for your organization.
Questions or comments? Contact SPOTIO at email@example.com or comment below.
SPOTIO is the #1 field sales acceleration and performance management software that will increase revenue, maximize profitability, and boost sales productivity.
Want to see a product demonstration? Click here to see how SPOTIO can take your sales game to the next level.
In this eBook, we arm you with the tools and techniques you need in order to make the right decisions that will improve sales performance.
An annual study conducted by The Bridge Group in 2017 asked respondents to identify their top challenges in managing sales reps. The responses revealed that improving sales productivity and performance has remained the #1 challenge. Not only has it remained the number one challenge for the last six years and counting, the number of respondents reporting it as their greatest obstacle has increased 5%.
In 2012, 44% of organizations claimed that increasing sales productivity was the toughest hurdle they faced. As of 2017, that number now sits at 49%. Proving what an overwhelming challenge getting the most out of your sales team truly is.
When you consider the nature of field sales, this shouldn’t come as much of a shock. The average outside sales rep typically only spends 22% of their time actively selling. The challenge of increasing salesman productivity is a taller task than ever before with the amount of additional tasks and distractions getting in the way of actual selling.
Another study conducted by Pace Productivity brought to light an interesting response they received from managers. When asked, managers said they expected salespeople to spend at least 50% of their time selling. There’s clearly a disconnect between the expectations that are being set and the time commitment required.
Sales reps are already working an average of 49.6 hours per week, just slightly less than their managers who work an average of 50.1 hours per week. Improving sales productivity starts with understanding that it’s not for a lack of effort. They’re working, just not only on selling – 23% more of a salesperson’s time is spent on administrative tasks than selling.
There are a million different strategies you could use to increase sales productivity, but reducing administrative tasks should probably be the first place you start.
Sales productivity can be summarized as maximizing sales results while reducing the resources expended. Resources can include anything from cost to effort to time.
Sales productivity can be measured by the rate at which a salesperson increases revenue for the company. In short, improving efficiency comes down to finding ways to become more efficient with your time. Adding structure and focus to their day allows them keep the end goal in mind.
Field sales professionals face an overwhelming number of obstacles preventing them from operating at peak efficiency. Before understanding how to coach and structure your sales team to achieve optimal levels of productivity, it’s important to recognize and understand the most significant factors standing in the way of reaching greatness.
– Excessive performance pressure to exceed targets
– Inconsistent sales strategies and processes
– Random, poorly planned sales coaching and training sessions
– Poor route planning and scheduling
– Lack of communication from top to bottom
– Failing to establish sales activity priorities
– Resistance adapting to new and innovative sales tools and technologies
– Large amounts of turnover and constant change
– Lack of alignment and communication between sales, marketing and operations
– Evolving dynamics in the sales funnel
– Poorly established ideal customer profiles (ICP)
– Continuous distractions from outside and irrelevant sources
– Sales cultures that breed negativity
This list could go on forever. The factors that prohibit salespeople from taking advantage of their entire work day can be big or small. Regardless of severity only one thing is for sure, every member on your sales team will encounter several of these challenges. In a landscape that’s more competitive than ever, the margin for error is slim to none.
1. Embrace Sales Tools
2. Track & Measure Sales Activities
3. Establish A Schedule & Routine
4. Create Daily Goals
5. Create An Effective Onboarding & Training Plan
6. Treat Salespeople Like Prospects
7. Over Communicate With Your Team
8. Stay Motivated with an Accountability Network
9. Establish Lead Qualification / Scoring Framework
10. Batch Admin Work
11. Research the Prospect / Account
12.Celebrate the Wins
13. Keep Coaching and Developing Your Reps
With such a large number of hurdles standing in the way of an efficient sales team, there are a few key pillars that serve as the foundational building blocks to help increase sales productivity. Some may be staring you right in the face while others aren’t necessarily on the surface.
A firm organizational sales structure is an essential component of consistency. There may be wrinkles unique to each salesperson, but the same sales process should always be followed. How a sales rep’s day is scheduled and structured goes a long way as well. Use what works and share those strategies with the entire team.
The number of distractions pulling us away from our daily goals seem to only ever increase. It doesn’t help that today’s generation has an extremely short attention span on top of that. Eliminate the things that take you away from your present focus or build a specific time for these tasks in your daily schedule.
The majority of field sales managers will tell you that things are “really good” and “going well” when asked, purely out of natural instinct. These answers are the epitome of mediocrity. While it may be more than lip-service, are their sales tools and processes as effective and efficient as they could be, or as their competitors?
Holding onto what’s working isn’t necessarily “bad,” but it prevents progress. The field sales industry changes at such a rapid rate, and refusing to innovate significantly hinders salesman productivity.
Need some inspiration? Nobody embraced innovation better than the driving force behind the infamous 1980 Miracle On Ice, head coach Herb Brooks. He was doing “pretty good” prior to the Olympics, leading the University of Minnesota to 3 NCAA D-I Championships in 1974, 1976 and 1979. Brooks is notorious for his approach, forcing 20 hated rival college kids to learn a new, untested style of play. Brooks’ hybrid combined the Soviet Union’s fluid, weaving attack with the physical defensive style seen in the NHL.
The competitive nature of the field sales landscape leads sales reps and their managers to feel the added pressure to perform and attain their quotas. Even the best sales professionals are bound to have an off-month. Low performance exacerbates the rush achieve their targets.
Salespeople taking the initiative to perform at a higher rate is a positive takeaway, but it’s this type of pressure than can actually have a negative effect on productivity levels. Additionally, re-evaluate your sales quotas to ensure they’re challenging, yet attainable. Quotas that salespeople perceive as being impossible to reach are likely to prevent your staff from trying because they believe they’re going to fail regardless.
With so much time being spent on the administrative side, there’s a glaring need in the industry for tools that can help automate some of these unproductive, repetitive tasks. Improving sales productivity becomes much easier when you can essentially put things on “auto-pilot.”
A 2017 report by CITE Research surveyed over 400 sales executives with a director-level title or above, and found that the majority of respondents rely on an average of 11 sales tools.
This is due to the fact that a CRM significantly reduces the amount of time spent on redundant tasks like data entry, freeing them up to focus generating revenue. One way to utilize automation tools to increase sales productivity is through triggered events; which are exceptionally beneficial when it comes to things like follow-up emails.
The trigger allows reps to respond faster while doing less work. Companies following a defined workflow are 33% more likely to be high performers.
In order to start improving sales productivity, you have to know where you currently stand. Dashboards are incredible for this purpose. They help you visualize trends to gain valuable insights into each salesperson’s activity-based metrics.
The 5 must know metrics for field sales managers will show you exactly where your team is spending the majority of their time. The key to measuring activity-based metrics is consistency. If you allow your team to slack at logging their sales activities, you won’t be able to establish a benchmark to measure your productivity gains against.
If Joe averages 5 minutes between each logged activity and Sam averages 15 minutes, you have the data to determine the root of the problem. Collecting and analyzing the proper data can quickly uncover opportunities for improvement.
The Most Important Field Sales KPI’s
Determining a sales rep’s productivity level extends well beyond dollars and cents. Measuring productivity can be done in multiple ways, most of which can be combined for a more accurate benchmark. The methods below may be more beneficial for you compared to simply measuring revenue per sale, depending on your sales team’s daily tasks and activities.
The number of attempts and contacts a sales rep makes is great to measure activity levels, but there are better KPI’s to help increase sales productivity. Your conversion rate is the percentage of prospective customers who complete a specific action, most commonly making a purchase.
The target range will vary for each company depending on the type of sale. Conversion rates provide insight into how well a sales rep is performing. Closing 10 sales per month in some companies is phenomenal. For companies that are transaction-based, 10 deals might not be so hot.
The number of deals pushed through is also dependent on how many sales activities were completed. A sales rep who burns through 50 leads to close 10 accounts is extremely inefficient compared to the rest of your team that is averaging 20 leads for the same number of sales.
However, keep in mind that these rates are not universal. In some businesses, closing a single deal out of a hundred is already considered a success, while in another, a 1% conversion is a proof that something isn’t working.
AVERAGE SALES (PER HOUR)
Knowing how efficient your team’s sales performance is on an hourly basis is an important aspect for many businesses. To increase salesman productivity, focus your attention only on the time spent completing sales activities.
Exclude anything that doesn’t actively work toward converting deals, like time spent preparing, company meetings, and administrative tasks. This is a great metric to help determine if your sales reps are making the most of the time they’re on the clock. If this number is below average, consider helping your team structure their day more effectively.
ACTUAL vs FORECASTED
Sales forecasting is a topic we’ll have to save for another day, so you’ll need to have a process for this already in place. Actual vs Forecasted is also commonly referred to as Mean Percentage Error (MPE), and is an extremely effective metric used to whether a sales rep is failing or exceeding their sales targets.
MPE provides an exact deviation from the target to help you determine whether you could increase sales productivity by reworking a quota that seems impossible to reach or looking for holes in your sales process.
Field sales reps typically have schedules that are slightly busier compared to their counterparts in inside sales. The key is to get things done. It doesn’t matter how you do it, as long as you do it. What works for one person may not necessarily work for another. That’s the beauty of field sales, there’s ample opportunity for flexibility and creativity.
Improving sales productivity will require salespeople to organize their daily schedule. Once they’ve laid out what needs to be done, it’s about prioritizing those items. They should be encouraged to say no to things that don’t help them meet their ultimate objective.
Sales productivity in the field demands a certain level of structure. All of their meetings need to start and end on time. This won’t always be possible due to the amount of travel, which puts them in a tough position trying to decide whether that meeting or event takes priority to start late and push everything else back, or reschedule it for another day to keep everything else on time.
To prioritize, place significant and long-term clients at the top of your list to ensure they are receiving optimal service. New leads should be prioritized after your existing clients, because it is better to nurture your existing relationships for long-term growth.
In my experience, productive scheduling manifests as something you develop on your own, then slowly evolve toward perfection. I think it’s easier, for example, to pack all my conference calls into a couple days and leave Fridays open for office work (unless I’m speaking at a sales conference).
Rather than schedule the ideal day, many salespeople prefer to schedule by the week with specific tasks assigned to specific days: cold calling on Mondays, warm prospecting on Tuesdays, demos on Wednesdays, networking on Thursdays, and meeting with or calling clients on Fridays. Keep experimenting with your rhythm until you find something that works.
All non-negotiables should go on your calendar. Whether you’re using Outlook, Salesforce, a paper planner, or an app on your device, you will need a calendar to keep you apprised of when you’re doing what — or you will eventually forget something important. Put all your commitments on your calendar, breaking your time down by 30-minute blocks.
If your cold calls take two hours daily, be self-disciplined about sticking to the schedule you’ve laid out for yourself. Yes, unexpected things always arise, so continue to adjust as necessary without letting your schedule completely implode. If you need to prepare for a demo tomorrow, schedule it. This applies for exercise and family time as well — always include enough life in your work-life balance to make your work worthwhile.
Several factors are essential to making sales: prospecting, preparation, and the actual pitch. Block time for all three during your day. For example, you may want to make cold calls early in the day (in-person and/or by phone) while you’re fresh. Then spend midday fulfilling requests from your calls, handling current customer needs, and preparing for tomorrow’s sales calls. Then spend the afternoon prospecting for the following day so you can get a jump on it in the morning.
While it’s exciting to chase new business, always schedule time for nurturing. You must check in with existing clients on a regular basis and maintain your relationships with them. The real profit doesn’t come from the first sale — it’s in all the sales that come afterward — from the clients who already know and respect you. Show them you care about them, and they’ll take care of you.
Respond to email and voicemail during your non-prospecting times. Empty your inboxes each time you check your email using my 6-D Information Management System™: discard, delegate, do, date, drawer, or deter.
For example, each time you click on an email, you’ll do one of the following:
Forward it or send as a “Task Request”
Reply if you can answer the question or provide the information in less than three minutes
If there’s an action in the email you can’t handle right now or isn’t due yet…
“Move to Task” command to convert the email into a task (or “Move to Calendar”)
Select “Start Date” based on when it needs to be completed by
Click “Save and Close” to automatically move emails from inbox for a future task
Use the “Save As” command to file the email on your hard drive
Unsubscribe from unwanted lists or add the sender to your Junk Senders list
“Accountability produces results – it’s an outside driving force that allows you to reach beyond your current disposition and realize your full potential.”
Setting goals is a simple and easy way to increase sales productivity because they serve as motivation. They give salespeople a sense of direction and a plan of action to hit their target.
There’s only one thing that a sales rep controls no matter what: the number of attempts he or she makes each day. Follow the SMART guidelines to help to create a plan of action. Remember, the focus is on improving sales productivity.
John wants to earn $500 per week
John needs 3 sales to earn $500 per week
John closes one sale for every 200 attempts made, then…
John needs to make 600 attempts each week (120/day) to achieve his target
By focusing on these two areas you are going to force yourself or your team to take the necessary steps to reach your sales goals.
The majority of companies have some degree of onboarding or training for new hires, but what they really seem to lack is any ongoing training. Aberdeen found that it takes more than 7 months totaling upwards of nearly $30,000 to fully onboard new hires. They also revealed almost 87% of that training is forgotten in just a few short weeks.
To effectively increase sales rep productivity, information should be tailored in a way that can easily be remembered. The more complex the product and process, the more important it becomes to present the information in a way new sales reps can relate to.
Ongoing training is just as important as onboarding. Yet less than 45% of companies have a formal sales training process in place post-ramp. Equipping your team with the right skills to increase sales productivity should be as great of a focus as providing them with the right tools.
Effective onboarding can reduce ramp-up time by 30 – 40%, and continuous training can lead to a 50% increase in net sales per rep.
Your company sends information to potential customers at every stage of the buying journey. Follow that lead and do the same for your sales reps. On average, salespeople spend about 30% of their day looking for – or creating – content. This eats up a ton of their time and does nothing to help them be more efficient.
Spend the time to learn about what their looking for and how you can help them if you want to make a considerable impact on their level of productivity. 95% of B2B deals are influenced by the content a company sends.
Using sales enablement tooling to recommend content and messaging based on the sales situation saves reps time and helps them to accelerate deals.
Communication is an essential skill for outside sales managers to possess. Schedules are much tougher to coordinate than they are for inside sales teams, leading to more interactions taking place over the phone and through text messages. To increase sales productivity, managers should check-in with each salesperson to get a pulse on how they’re feeling and performing.
It’s even more important to have a high number of interactions with new hires going through their ramp up period. Check-ins don’t necessarily always need to be scheduled. In addition to checking in, it’s always a good idea to schedule to conduct in person one on one’s.
The frequency may vary for each team, but the face to face setting should help promote a more in-depth interaction where training can be tailored specifically to that individual. One on one’s are the perfect opportunity to get feedback from your team to determine where there’s room for improvement. Chances are that if one person is struggling in an area, others are too.
Always be sure to ask what you can do to help them become more productive. The more specific they can be, the better.
An accountability network is one or more people who you hold yourself accountable to each week for getting things done, meeting your deadlines and achieving the goals you set yourself. Knowing you have to report to others is a natural deterrent to not getting things done. It’s easy to make excuses to yourself, but having to make excuses to peers as to why you didn’t accomplish what you were supposed to is much more difficult. So much more so that you will do everything in your power to avoid having to report less than optimal achievements.
This is important because you don’t want sales working poor quality (unqualified) leads. A scoring framework is a methodology used by sales and marketing departments to determine the worthiness of leads by assigning values based on their behavior relating to their interest in products or services. The “value” of each lead is independent for each organization, but is characterized as the interest shown in the company or their places in the buying cycle.
Batch work is a technique of grouping the same task together and not moving onto the next until everything in the current grouping is completed. For example, make 10 calls at once. Then do all of your data entry and follow-up work for those calls. This batching of activities is proven to be faster and more efficient than doing everything in a one off linear sequence.
Are your sales reps in charge of creating their own process and procedures when it comes to educating themselves on a prospect before they make the initial contact? If yes, you may want to rethink this approach. Try putting a standardized process in place. This will streamline the discovery phase and make sure they’re gathering the right information in a short amount of time. A 3 step information gathering process:
1. Learn about the company (size, products, employees, etc.)
2. Dive deep. Check out their site and learn about their mission. Research them on LinkedIn. Run a google search. Just make sure you have a holistic view of the organization: who they are AND what they do.
3. Find Their Pains. From what was learned in steps 1 and 2, you will be able to make an educated guess on their needs.
Nothing revolutionary here, but it’s important to celebrate wins and hard work. This builds morale, keeps reps motivated, and makes the days exciting.
Be in sales or life, continuous learning offers a myriad of benefits. But in specific regard to sales, continuous coaching and educating reps is a must.
Why? Two big reasons:
1. The world of sales is always evolving. Be it a new selling technique or emergence of a sales influencer, ensuring reps are up to date with the latest trends requires consistent coaching.
2. Staying informed on customer needs. Your product may be the same, but what your prospects are looking for out of it may differ. Studying reps’ notes from lost deals, you can extrapolate and learn new pain points. From there, teach reps new messaging that solves for the change in consumer behavior.
Field sales reps have the opportunity to learn – by way of prospects or current sales trends – everyday, and it’s up to management to make sure reps are always developing. By making it a priority to regularly teach and coach, your sales team will benefit.
Outreach helps you track, pace, analyze and automate your email and voice messages to your customers. By integrating Outreach into your CRM, you’ll never have to manually log your messaging activities and outcomes.
MailChimp is the world’s leading marketing platform for small business. They democratize cutting-edge marketing technology for small businesses, creating innovative products that empower customers to grow.
JobNimbus was developed with the cooperation of leading industry trainers and is the first CRM developed from the ground up to be an ultra simple, usable, yet powerful tool to help contractors take control of their jobs like never before.
SPOTIO is a sales tracking and territory management app used by mobile sales teams to get organized, find more opportunities and dominate their marketplace. SPOTIO is perfect for door to door and field sales teams that want a powerful way to track their sales efforts and territories on a map driven interface.
MarketSharp provides a way for remodelers to generate low cost leads, convert more leads into sales, and create lifetime customers who willingly give referrals and great online reviews. You’ll eliminate your daily struggles of running a business with the only remodeling software that is easy to set up, simple to understand, and time-saving.
It’s critical to make the most of each day because there’s only so many in a year. When trying to find a way to get the most from your team, consider that happy and engaged employees are 31% more productive and have 37% higher sales numbers.
Questions or comments? Contact SPOTIO at firstname.lastname@example.org or comment below.
SPOTIO is the #1 field sales acceleration and performance management software that will increase revenue, maximize profitability, and boost sales productivity.
Want to see a product demonstration? Click here to see how SPOTIO can take your sales game to the next level.
Of the top 5 forecasting methods, Opportunity Stages Forecasting is the most common. In this article we’ll discuss why this is the case and include specifics on how this sales forecast technique works, how to fix your sales forecast, and what you need in order to run one.
Sales forecasting allows companies to make more informed business decisions, particularly those decisions that have an impact on budget, operations, marketing, sales, and all related areas of decision making. Sales leaders habitually face issues implementing the most effective techniques for many reasons.
28.1% of businesses find that they need help with sales forecasting because they previously struggled with overestimating sales. This means that the company starts to spend money they can’t recoup, or they underestimate sales leaving the company ill-prepared for the influx that takes place.
Either way, sales departments need help forecasting.
Having the right tools makes it easier for sales leaders to use actionable sales intelligence. It’s imperative that your company uses sales forecasting methods not only early, but effectively. Choosing the right sales forecasting will help your company to identify problems in advance, evaluate potential sales opportunities, keep track of the progress each of your sales representatives make, and prepare the necessary support for sales.
Opportunity stages forecasting, as the name suggests, is a forecasting technique where sales staff break down the pipeline into different stages. This includes specific calculations pertaining to the chances of closing a deal at each stage in the pipeline.
This forecasting method is a quantitative method that helps you to predict when a deal is likely to close rather than what your overall success rate is. This happens through understanding how long the average sale cycle is and dividing the total number of closed deals by the total number of days it took to close those deals.
Forecast stages is a qualitative approach that helps companies to determine the expected value of the deals they close. It uses insight rather than intuition, relying heavily upon the assessments of sales reps.
The downside to this particular method is that it doesn’t rely upon hard science/math and is quite subjective. Companies that are not entirely certain their entire team of sales reps can make assessments about individual skills and potential clients might end up with a lot of disappointment using this method.
This technique is a qualitative approach designed for long-term planning. It’s a course dependent upon a subjective understanding of sales. It requires sales leaders to draft a different pictures that could potentially unfold based upon a variety of assumptions. This usually encompasses best case scenario and worst-case scenarios.
For this method to be properly applied, users would need a comprehensive understanding of business activity and psychology and they would be reliant upon a more subjective science rather than a strict science.
Regression analysis gives you a much more in-depth quantitative view of what things could impact sales and what changes you have to make as a result of your sales process. However this particular method requires a comprehensive understanding of statistics and involves a great deal of calculations pertaining to different variables that can impact sales.
As the name suggests, sales leaders would have to choose a regression model and run it after they have determined the reasons for forecasting, dependent variables, independent variables, length of time for review, etc.
Opportunity stages forecasting is the most common because it is one of the easiest to implement and to grasp for those with limited experience in forecasting. Moreover, it is one of the best forecasting methods to use for those who want an objective understanding of each stage of the sales pipeline.
Consider that as a sales leader, the most accurate understanding you get from every deal that was either closed or left open is the subjective opinion given by your sales reps. But with this type of forecasting, you can have a much clearer idea of what happened.
You can also use this to assess the performance of your sales team and figure out where they truly need improvement as they start working down the pipeline with a prospective client.
Most businesses will divide the pipeline into the prospect stage, the qualification stage, the quote, the closing, and whether the deal is completed with success. As a deal works its way through the stages it has a much higher chance of making it into the “win” category the closer it is down the line.
This is why understanding how performance is at each stage and where improvements are necessary is incredibly beneficial to the entire sales staff; it allows each sales rep to improve at various points along the pipeline which will naturally increase the chances of moving a prospect even farther down the line.
All of this improves the chance of that deal becoming a win.
5. Contract Sent
In order to implement this technique sales leaders have to analyze and understand past performance. Extrapolating on past sales performances to better understand success rates at every stage of the pipeline ensures that estimates are pertaining to future results.
If past performance indicates that half of the deals are successful, then during a given quarter your chance of closing a deal at the final stage of the pipeline is going to be 50%.
Basic calculations using this forecasting method allows you to estimate income in revenue streams which can help you assess the deals in your pipeline and performance for each sales rep. Companies with top-of-the-line sales leaders still struggle to use the right sales forecasting. The reasoning is simple. It is a quantitative topic, one with many moving parts and factors to take into consideration.
It takes a lot of practice to become proficient at sales forecasting but with the right techniques and the proper tools, it is possible. A CRM with great data and reporting capabilities is critical to fixing your sales forecast and properly implementing this technique. With a reliable CRM from a reputable company, your sales staff will have everything they need to improve all stages of the pipeline.
Take action now. Start implementing opportunity stages forecasting in tandem with reliable CRM with full data/reporting capabilities to improve your sales pipeline.
Questions or comments? Contact SPOTIO at email@example.com or comment below.
SPOTIO is the #1 field sales acceleration and performance management software that will increase revenue, maximize profitability, and boost sales productivity.
Want to see a product demonstration? Click here to see how SPOTIO can take your sales game to the next level.
Determining commission structures for sales reps is a critical piece to your sales plan. It sets the bar for the level of talent and skill set that you’ll attract to your sales team.
It seems simple, right? More money = better salespeople?
This isn’t always true. Higher earning potential through a commission time only comp plan won’t necessarily outweigh the risk a salesperson inherits by not having a guaranteed income source. Elite sales professionals expect to be paid a salary that they can rely on.
In short, a sales rep views their base pay as how they’ll be valued and treated by the company. Their salary is what they rely on to live.
Sales commission is most commonly known as the variable component of a total sales compensation package. While an on-target earning (OTE) is almost always established, the total commission earned is dependent on each salesperson’s individual goals and their performance.
Your commission structure ties a sales rep’s performance to the amount of money he or she will take home each paycheck. It’s no secret that accountability produces results, and a well-structured commission plan is an excellent way to incentivize top performance.
So, while the salary component of a salesperson’s comp package is fixed and pretty easy to understand, the variable portion has a large amount of room for flexibility and configuration depending on the type of sale and sales process a company has in place.
Because there’s no one size fits all, sales compensation plans come in many shapes and sizes, including: salary/hourly + commission, commission-only, tiered commission, residual commission, and variable-rate commission. Of these, the easiest and most commonly used approach is to pay a certain percentage based on the revenue generated from a single sale. Very simply, a sales rep who closes a deal for $500 with a commission rate of 5% earns $25 per sale.
Determining the right commission plan for your business can be an extremely complex task that often overwhelms even the most experienced owners. To help guide you, answer the following questions before reviewing the various commission structures:
1. What are the company’s sales goals and sales budget?
2. How much should you pay and how much should they sell?
3. How long is the average sales cycle for your product or service?
4. Are you offering benefits, bonuses, or incentives of any kind?
5. Is this a fair structure that will motivate each salesperson to work hard?
6. What is the average revenue per sale (ARPS) or average price point?
7. What is the salesperson’s role: lead generator / canvasser or full-cycle?
8. Does the salesperson provide support and training to the customer post-sale?
9. Is it a one-time sale or is there typically repeat business and upsells?
10. Does the sales rep handle customer service / account management, or do you have a team?
Answering these questions will help you determine SMART sales goals, performance measures, and payout formulas. Doing so will allow you to more accurately judge how much you should be paying your team, and how your commission plan should be structured.
By laying out detailed answers for the questions above, you’re ready to follow this simple 5-step approach that will guide you through the process of creating a fair – but effective – commission structure. A challenging, yet achievable, commission structure serves as motivation and inspiration for salespeople.
Remember that your commission structure extends well beyond just compensating your sales team for their work. Science has proven the best strategies to motivate sales reps. Compensation is an extrinsic motivation, and while it’s not enough on its own to keep salespeople hungry 24/7, a poorly structured commission structure can actually demotivate your foot soldiers.
Prior to laying out your structure, you need to establish detailed figures as it relates to what your company needs to experience a return on sales revenue. There are 4 components involved in this process:
Determine Gross Sales Profit (GSP)
Calculate your Cost of Goods Sold (COGS) Percentage of Sales Revenue (SR)
Calculate your Budgeted Sales Expense Percentage
Analyze your Sales Revenue Goal
Any combination of things can influence your compensation plan during the design phase. While there may be too many to efficiently address each and every one, list and plan for as many as possible. Some of which include:
Local market conditions & what’s being offered for similar positions
Job expectations specific to your roles
Who’s responsible for generating leads – the sales rep or canvasser / lead generator
Amount of post-sale support expected from sales rep
Level of industry knowledge & experience required to be successful
Average sales cycle length & the number of opportunities that can be worked at one time
Basic or complex sales process
Setting the standard for what your salespeople should be paid involves looking at more than just the work they put in. Start by establishing a benchmark for a sales rep who achieves their sales target in your market and industry. If you need help, reach out to people you know in this position or, if you’re part of an association within your industry, use them as a resource; they should be able to provide you with a considerable amount of relevant data.
After you’ve determined what your benchmark will be, then comes the fun part associated with creating a sales commission structure. Now is when you need to set individual goals. This is what each salesperson’s performance will be measured against.
You may be a rock-star, but don’t forget how difficult it is to find top performers. Set your standards based on above-average salespeople so that the target is challenging, but not on the level you expect of top performers.
Crunch the numbers to ensure you’re setting realistic quotas and not making it too easy or too hard. The graphic above shows that only 9% of the sales compensation expense was used out of the 15% allocated. The company now has 6% to use toward incentives, marketing, sales coaching or other resources to help the team reach their goals.
Choosing whether to pay your sales team salary only, making them 100% commission-based, commission-only but with a draw, or any other combination is a difficult decision. It often feels like a balancing act between trying to put a plan in place that properly incentivizes while making sure the company is making its margins.
Salary / Hourly Only
Salary + Commission
Commission Only With A Draw
Tiered Commission Structure
Salary + Bonuses
Commission + Bonuses
Salary + Commission + Bonuses
The phrase, “it’s the little things that often matter most” has never rang more true than it does as it relates to sales commission structure. Salespeople loving bragging about the perks they receive from their job. Whether it’s a cool office, providing breakfast every morning or covering expenses, these simple “extra” things go a long way.
You’ll be surprised by the positive comments you hear and boost in morale you see by offering certain perks in addition to your commission structure. A few items that go a long way in attracting and retaining top talent:
Car / Mileage Reimbursement
Cell Phone / Data Plan Reimbursement
Computer / Tablet & Data Service
Customer Entertainment Expense Account (can be controlled by requiring pre-approval)
Free Memberships (gym / social / recreational clubs)
Health Benefits & PTO
The top commission structures for the door to door and field sales industries aren’t necessarily revolutionary, but each model has several variations. Some companies combine and blend the methods outlined below to create a more specific plan that better matches their process.
Determining a standard or uniformed commission rate for outside sales reps is particularly challenging due to the vast number of unique sales processes and commission structures that have been established.
The low end usually bottoms out at 5%, with some companies paying as much as 40 – 50% commission per sale. These are typically businesses that have implemented a commission-only structure.
Despite such a large range, the industry average usually tends to land between 20 – 30% of gross margins. It’s also sometimes broken down by gross sales with the industry average ranging from 7 – 15%. This translates to an average annual salary of $66,805 for outside sales reps. Indeed lists the average tenure for this position as 1 – 3 years.
A commission only plan is the better of the two options if deciding between commission and salary or hourly only. A straight commission structure means a sales rep’s earnings will consist of entirely variable pay. It’s a rather risky option for some salespeople, especially those who are new. This is because there’s not a fixed salary component.
Paying hourly severely limits the company’s ability to get maximum productivity from their team. A commission only structure is typically used for 1099 sales reps (independent contractors). With this type of sales commission structure, the sales professional who thrive are those eager to hunt and close their own deals.
It can be pretty difficult for some individuals to determine what outside sales job will suit them best based on their experience, personality and selling ability. There’s not only risk for the sales rep in a commission only model, but for the company too.
A commission only plan is best suited for companies with shorter sales cycles and a considerable opportunity for sizable commission earnings.
Commission only plans are particularly popular because the sales rep doesn’t get paid if the company doesn’t’ get paid. Despite the challenges that could arise – like targeting the wrong prospects – straight commission is primarily used as a way to mitigate risk. But…
These plans do come with a rather large amount of risk for the rep. If they aren’t generating revenue for the company, they aren’t making money for themselves. This can lead to a large amount of turnover and unhappiness, casting a black cloud of negativity that destroys your company culture.
When implementing this model, recruit and hire the sales professionals who understand the difference between a sales job and sales career. They’ll have far more experience under this structure and understand what they’re walking into prior to joining your team.
Revenue commission models are one of the most well-known and basic structures available to field sales organizations. This type of sales commission structure works best with products and services that have a set price point.
Example: If your company sells a service for $500 that has a commission rate of 10%, a sales rep would earn $50 each time they sell that service.
They’re also favorable for companies attempting to gain market share or enter a new market because they’re less likely to be focused on profit, and more concerned with achieving a larger business goal.
It should be noted that revenue commission plans typically fail to align with the larger, broader goals of a field sales organization or the unique DNA makeup of a sales team.
Contrary to simply looking at the money coming in with each sale like in a revenue model, a gross margin commission structure includes the sale price and the costs associated with converting that sale. By taking both into consideration, the company arrives at the profit of each deal.
Example: If your company’s service costs $1,000 but accrues $500 in costs to complete that transaction, the sales rep would earn a percentage of the remaining $500 profit.
Those supporting a gross margin commission structure usually believe that all sales should benefit the company’s bottom line.
A draw against commission is excellent form of reassurance for your sales team. A draw is essentially a “guarantee” that a sales rep will make a predetermined amount of money each month for their efforts, regardless of their sales figures. Draws are best for new hires, ramp periods, long periods of change and uncertainty, and training.
Draws against commission are basically advanced payments to the sales rep. A rep who earns commission smaller than the draw amount keeps their commission, plus the difference between the total commission and the predetermined draw amount. There are a few variations to this structure, most notably, a “borrowed” draw that must be paid back according to the specified terms.
Example: A sales rep is eligible for a $2,000 draw in their first month and winds up taking home $1,000 in commission. The sales rep would then keep all of his or her commission in addition to $1,000 from the set draw allowance.
A tiered model is a sales commission structure that is particularly popular among sales reps, especially those who are highly motivated or top performers. Sales people earn higher commission rates after closing a certain number of deals, or, surpassing a total amount of revenue generated.
Example: A sales rep earns 5% on all products sold up to $10,000 in total revenue generated. Under the tiered model, the same sales rep would now earn 8% on all revenue generated after surpassing the $10,000 mark.
This sales commission structure significantly motivates and incentivizes the top performers to continue selling. A tiered model provides salespeople with the freedom and flexibility to explore additional areas they may not have considered previously, like upsells and new product offerings.
Base pay rate only is rarely used in today’s sales landscape for multiple reasons, one of which being its lack of incentives. Failing to properly incentivize results in an exceptionally low level of productivity due to a lack of motivation.
Example: Your company pays each sales rep an annual salary of $60,000. This translates to a weekly take home pay just over $1,150 (before taxes), regardless of performance level.
A base pay only structure is most often used by companies who operate almost exclusively on inbound leads. These businesses have a sales staff that is almost in more of a customer support role than they are a sales position.
The skill set required to succeed is fairly basic since the sales team works primarily on inbound leads. A base pay rate is most effective when your team is there to walk potential customers through the questions they have as opposed to overcoming objectives, for instance.
If you want to attract the best salesmen and saleswomen, you’re going to have to pay for it. Like most things in life, you get what you pay for. Offering an hourly rate in addition to commission places responsibility on both parties, the company and the sales team. Both sides are making a commitment.
The company is committing a greater financial reward to the salesperson by paying them for their time in addition to what they sell. The sales rep is committing their full skill set and effort to working to earn that hourly rate or annual salary.
In this setup you’ll pay less per hour / base salary than you would if you were just paying an hourly / base rate. The same is true for the commission your organization will offer, but in total, there is much more upside for the sales rep. Commission should always be uncapped to properly incentivize the reps on your team.
The best sales reps in the industry are looking for companies who will invest in their success. One of the best ways to show that you have their best interests in mind is to measure the exact times they make the most money.
The key is having the data to back it up. In order to determine these types of advanced analytics, you have to stop being lazy and track every attempt they make. Tracking the outcome of every door your sales team knocks on will give you the metrics needed to determine when they’re having the most success, and ultimately making the most commission.
To determine the best sales commission structure for your business, it’s paramount to understand the importance of an efficient and effective sales process in the field sales industry. Fine-tuning your sales process will help you develop a sales commission structure that is beneficial to all parties.
Questions or comments? Contact SPOTIO at firstname.lastname@example.org or comment below.
SPOTIO is the #1 sales enablement and territory management app to increase your revenue, maximize your profitability, and increase your team’s productivity in just 2 weeks.
In our expert series we discuss a variety of best practices to help sales reps, managers, and everyone involved in the sales process become better.
In this round, we sat down with Steve Kraner to get his insight on sales forecasting.
– Forecast Process and How to Go About It [1:50]
– Forecast Missteps [3:50]
– Steps of a Sales Process [6:00]
– How to Set an Accurate Forecast [8:20]
– Mutual Agreed Action Plan [9:30]
– The Key to Discovery Questions [14:05]
– Important Forecast Metrics to Track [20:03]
– How To Measure the Quality of an Outbound Call [23:00]
– Proactive vs. Reactive Sales Management [26:05]
– Keys to Crusher [34:20]
Steve has built successful high tech divisions within two major U.S. corporations. He has spent 25 years as one of the most in-demand Sandler sales trainers.
Through continuous experimenting, Steve and his clients continue to advance our understanding of the optimum approach to selling and how it increases sales.
To learn more about Steve, visit: www.softwaresalesgurus.com
Trey Gibson: Hello, this is Trey Gibson from Spotio coming at you live from dreary Dallas, Texas today. We have some hail storms in the forecast. So, that ought to be interesting. But here with our sales experts series. For these series we explore best practices for sales reps, managers and everyone in between to become a better sales professional today.
Today I’m here with Steve Kraner. The focus of our discussion is going to be why sales forecasts are still off in 2019. I am sure we’ll dovetail off into a ton of other relevant topics from there, but hey, before we jump in. Steve, tell us a little bit about yourself, how’d you get started in sales, as a consultant, and how do you help companies maximize their sales efforts?
Steve Kraner: Glad to Trey. Thanks for having me. So, Steve Kraner. I’m a sales coach. What I do is I treat selling as if it were a sport. If you think of it that way, behind great performance is great process. A lot of science, not a lot of art. So, that is my focus.
I’m an engineer. I got into sales kind of against my will. I take an engineering approach to sales. I am kind of a geek who studies it and tries to optimize it and tries to break everything down into a system. My company is Upward Sales Guru’s. That’s probably enough about me to kick it off.
Trey Gibson: Nice. I am very passionate about sales process and want to talk about that more as well. But let’s kick it off with forecasts. So, I’m sure you’ve seen it all from high performing, high functioning sales teams, to the ones that are completely broken and you have to come in and rebuild. I think today’s topic will be an interesting one and something every executive wants to solve.
When you first start working with a sales organization how many of them have a forecast in place and what does it typically look like?
Steve Kraner: I work with companies up and down the board from small ones to big ones. Although very focused in kind of software and sass space. So, the vast majority of my larger customers and medium sized customers already have a forecast in place, it’s kind of rare, maybe a start-up, maybe won’t have a forecast in place. But most people have a forecast and they have some process for forecasting.
That typically isn’t the problem, it is the way we go about forecasting. I thought of this analogy, just yesterday as I walking the dog. If you took a sales person and you sat them and you took a pistol and you put right up against their temple and said, tell the diameter of the sun! Do we think that would produce accurate math?
Trey Gibson: No.
Steve Kraner: What we do is we put a lot of pressure on our sales people, and sales VP say to me, I asked my people back in December what they were going to do in Q1, they didn’t produce the numbers and they were their numbers. Well, price doesn’t create accurate forecasts. What it creates is – as sales people know as an instrument of their own demise. Out of self-preservation, the bad ones are going to make up stuff, and that’s why it’s on the forecast so long. Because it was never real.
And by the way on the other end, the good reps, and you’ve probably seen this too they’re sandbagging a little bit. So, all you do through pressure you produce an inaccurate forecast. That’s what I typically start out with.
Trey Gibson: So, then when you go in – most of them of have forecasts. Do you spend time combing through it and seeing okay, that’s way old, get that old? What are kind of the main missteps you see when analyzing that situation?
Steve Kraner: We start any engagement by putting in place a sales process. I don’t begin with the sales forecast. Let that stay in place for a while. What we do is teach the folks how to approach sales conversation and the sales cycle in a very rigorous manner. By rigorous, this probably goes beyond what’ve you seen, what most sales training does, what most people even have a palette for. But when I say rigorous, here’s a discovery call, you’re going to spend an hour with somebody. I have a rubric, a checklist. Here’s the five elements of what we call mutual agenda to start the meeting. Here’s how we do a needs analysis into the forecast. At some point when we graduate through doing all of those initial steps well, and you do have kind do it in sequence.
Kisen, one step at a time. That’s why I don’t start with the forecast. There’s a point where towards the end of that discovery call, is what I’m doing is co-billing with a customer a mutual action plan. If I co-bill a mutual action plan with a customer that is truly mutual and they are truly engaged, then that is what makes the forecast accurate.
If you think of it like this; you’re at a wedding, the preacher says to the bride, will you take this man to be your lawfully wedded husband? The groom is not standing there saying, geez I wonder what she’s going to say.
Trey Gibson: Right. Hopefully not.
Steve Kraner: You’re forecast should be the same way. If it is truly mutual. Yeah, you’re going to get cold feet. Brides and grooms do too. But if you are truly mutually engaged and that is verified with the customer with a degree of rigor, then your forecast is customer validated and tends to be more accurate.
Trey Gibson: So, if I hear you correctly. The forecast is a result of a lot of things that come before that. So, it’s almost like if you’ve done the steps right, the sales process right up until then, then you have an accurate forecast.
Steve Kraner: Absolutely, well said.
Trey Gibson: Okay. And so, help me understand the steps of your sales process. Can you break it – is it a replicable one, is it something that you go in and say, here’s kind of the steps of it. You mentioned a mutual action plan and discovery, but what are some of the other steps along that process?
Steve Kraner: If you think of it in terms of a buyer’s journey, there are phases that buyers are going to go through where there are sales people involved. And sales people are there just to kind where they ca add value assist in a shift from one phase to the next.
So, when I think of sales process I think about a series of sales conversations which are really bridges from one customer buying state to the next. So, you go from latent need to being aware of a need. That is the first step in the buyer’s journey. Is the first step in becoming conscious and aware and any change in human beings. So, that first sales step is what I call the trigger conversation, and there’s a very specific way that you approach a trigger conversation.
If you’re making a cold call for instance, they’re sitting there, they don’t know who you are, they don’t know anything about you and your stuff. You take them from latent need to be cognizant of a need and there’s a great deal of specific science that needs to be applied to that very delicate operation. To shift them from latent need to active need. Then the rest of the conversation are just bridges between the various steps, all the way up to including the point where they become a promoter for you services.
Trey Gibson: Okay. Nice. So, there’s steps all along the way. And so, when you’re doing a forecast that’s – do you recommend your sales managers that you work with do reviews or how does that work? How does the manager interact with their team when it comes to forecast? Because at the end of the day it’s their job, they have to report those numbers up or to down, and they really need to have some clarity on am I going to hit this number? If I’m not, I can imagine the amount of internal tension if I have numbers to hit and I have no damn clue if I’m going to hit these, because I don’t know where we’re at. So, what’s your thoughts on that?
Steve Kraner: Yes. If you think of that series of steps we just talked about, and if you think about stations in a manufacturing environment. And you think about lean manufacturing, which means I want to get any poor quality stuff taken care of as early in the process, any defect out of the process as early as possible, lean selling could be viewed as doing the same thing. You’re trying to get the defects out of the process as early as possible. As opposed to trying to shoehorn people into the pipeline.
What we’re doing is taking a basic stance of qualifying people out of your pipeline. That stance will make a big difference and then in terms of your direct question about reviewing there are two levels. Different companies have different needs in terms of selling systems. On one end there’s very high velocity transactional sales, on the end there’s very high intimacy sales where it’s a considered sales cycle. And a lot of decision makers involved. We all operate somewhere along that spectrum.
On the low end of the spectrum it’s a tactical thing. I have a conversation I co-bill that mutual action plan, there’s built-in customer validation. Once I have checked all of those boxes on the rubric that say, here’s my mutual agenda, here’s a good need diagnostic. We built a good business case. We co-created the solution. We’ve had that difficult conversation about money. And we’ve co-created a series of steps to which we’re both truly committed to get us all the way to the ultimate yes or no.
Then I write that up. Share that with the customer. I don’t put it in a CRM system, I can attach it to my opportunity, but I start with the customer which is key. Because now the customer’s looking at it and they are needing to validate this, they need to verify it. If you require that customer verified written mutual action plan as well as all of the steps that led up to it, to be necessary to have something on the forecast or on the forecast at let’s say 80 percent. Then that in and of itself builds in – it’s almost like an image stabilizer on a big set binoculars. It just makes that image very stable instantly, because of the customer. You’re not measuring sales activity. You’re measure customer activity. And that makes it very accurate.
Now if you want to go a step further and talk about people on the other end of the spectrum where they are doing big complex sales. There’s an additional step of review there. Where I do something called an opportunity x-ray. And I teach managers to do an opportunity x-ray. So, there’s a more of a strategic look and understanding of are we talking to the right people at the right time so that we cover all of the basis in those big complex opportunities.
Trey Gibson: Okay. Opportunity x-ray. So, that’s where you’re going through and sitting down and looking at it as a team and identifying where we’re at in the process.
On your mutual agreed action plan, because I took a look at that. By the way I recommend everyone to go to Steve’s website, SoftwareSalesGurus.com. He’s got a great free resource section, downloadable’s galore. So, check that out.
I did check it out. One thing we talked about this morning with my sales team was the close date. How do we determine the close date? Is that when I as the sales rep think we’re going to get [inaudible 00:11:46] or what is that? Is it a magical number?
Steve Kraner: Nothing magic about it. And there’s no such thing as mindreading. What it’s not is when I need the deal. What it is, is based on the customer’s sense of urgency and never my own. So, when we talk about this rubric that I’m talking about, there’s a point where we’re starting to co-billing this mutual action plan. The first question is as we enter into that phase is when is the latest you want to your solution live up and running? So, we established their drop dead date. Their sense of urgency.
And by the way real projects have real timelines and real budgets, so it’s not real unless they have a pretty firm idea about which they would like see the solution up and running. And then if you use that kind of like date on Normandy Beach on this day, this is D-Day. Now we can do a black wards planning sequence so that everything else to include the due diligence process they want to go through. When I’m going to get my purchase order, all of that kind of stuff is driven not by my sense of urgency. But by their sense of urgency. And in deals you cannot hasten the ripening the fruit. When you do it does not taste as good. You cannot hasten deals in the process of doing that. All you tend to do is end up degrading yourself, degrading your solution, discounting all of that stuff that we don’t want to do. So, it’s their sense of urgency which you identify which drives the velocity of the deal.
Trey Gibson: How do I know as a rep when to have that conversation? In my sales background is I never had that, that wasn’t taught to me. And I like it, that’s how we do it at Spotio. But I have a feeling a lot of people aren’t asking that hard question about when do you need to go live by? When’s the latest you want to have this done? At what point in the process do you bring that up? Especially, imagine a cold call where I go out and I visit somebody’s business, they didn’t know who the hell I was a week ago. And now I’m asking them when do you want to go live by? I don’t know. When do we broach that subject?
Steve Kraner: It’s really clearly spelled out in that rubric. And the call we’re talking about now is not that trigger call, we’re past that point now. We’re doing what people would classically call a discovery or a diagnostic call. So, we are moving now from somebody who has an active need to somebody who is moving into analysis.
Typically, the value a sales person is adding in that second sales conversation is to maybe slow things down to speed things up. Which helps both the buyer and the seller do a deeper diagnostic than most buyers have the patience to do. They tend to jump to solutions too quick. We all do that. Slow down. Diagnosis really thoroughly, and once we’ve done that diagnosis and we’ve built the business case where that needs to be done. It’s key that we co-create the vision of the solution. So, it’s the buyer’s baby. So, at some point we may or may not want to talk about that. We have that money conversation. Then right there in that 15 minute mark about, and that discovery call. Which is the second of the sales conversations. Classically would be where we’d be asking, now is when the latest you would like to see this solution up and running. That’s the perfect place.
If you download the rubric that’s one of the downloads you can get to. It’s right there on the rubric and it makes it very clear when to ask it.
I’ll add one more thing. This idea of co-billing and mutual action plan, writing it and then sending it is a behavior trap. It forces you to sit down and write that up. Which means you’re sitting there writing it, and you say to yourself, oh, shucks I didn’t ask that question. Well, once you go through that the completing of the cybernetic loop two, three, four times, pretty soon you start asking all of the questions in that discovery meeting. It can be done. It’s just we don’t have an enforcement mechanism that makes us do it. And that is a behavior trap that kind of causes of to enforce or own discipline and to ask the right questions.
Trey Gibson: Yeah. I like check lists. I like processes because then its fool proof, you’re going to ask it. What are some of your favorite questions about – during that discovery process to understand their issues? Do you have some set questions that you find will kind of uncover some of their problems or pains better than others?
Steve Kraner: Yes. The way the rubrics are set up they are check lists. Like in the check list manifesto, like you will find in the cockpit of an airplane or in an operating room. Because we are doing the same thing. We’re managing the problem of extreme complexity, and so they’re very brief. A good checklist is not a script, it’s just a couple of words.
So, I also publish and help customers develop their own kind of stylized version of each of the questions and then the checklist is just a prompt to ask that stylized version of the question.
Maybe the hardest question in sales based on my listening game film, is to get a customer, especially a technical customer to quantify the impact of a problem financially. What is the cost of the status quo? So, there’s lots of important questions that need to be asked in a very intelligent way. That’s the hardest of all questions, so I’m going to pick that one to answer your question.
Trey Gibson: Absolutely, I couldn’t agree more.
Steve Kraner: So, you need to say, part A to the question is be vulnerable. Because you are asking another person to be vulnerable in front of you, very vulnerable. So, you have to say something like, help me out here, I don’t really understand your system economics, and then we haven’t talked about this idea of paradoxical intent. I don’t want to try to talk anybody into things. I try to talk them out of things and let them talk themselves into things. Which they will if it’s appropriate.
So, I’ll talk them out of the cost. I will say, help me, I don’t really understand your financials models here. You haven’t mentioned any cost, any dollars associated with this thing that we’re talking about. Is that because there is no cost associated with it?
Trey Gibson: That’s great.
Steve Kraner: You ask that question. And then you’re listening to game film and you hear people – it doesn’t always get the answer. Sometimes they’re a little taken aback, well, I’m sure there’s a cost. But I don’t know that we can quantify it. And that’s just kind of the start of the dialogue. That gets the cost of the status quo on the table.
Many sales teams I start where there’s nobody on the team and they’re good sales people to start out with it. There’s nobody getting an answer to that question. Within a couple of months we can get everybody on the team getting an answer to that question. Because it’s very doable.
Trey Gibson: Yeah. It’s funny, again we had a sales meeting this morning and we go through and listen to game film and every body can get a problem. You know you can get a problem out of anybody, any prospect. What’s the problem? Well, for us it’s our field sales team aren’t hitting their numbers or I don’t know what they’re doing out there. And the one this morning it was like they had 60 sales reps and didn’t believe that they were going and revisiting their existing customers to get new business. The reps stopped at that. And we talked through, you’ve got to get to the impact.
And you’re right, it’s awkward, saying, well Steve, what’s that costing you? You know? So, I really like the way you approach that on kind of the going like I don’t know what’s going on. That’s really good, I’m going to have to steal that and talk to my team about that.
I think the reason that we’ve stopped that at problems, because yeah, it gets awkward to start talking about money. What does this cost you? Because if I just meet someone and they just say, well Trey what’s that cost you? Come on, we’re not there yet. But I really like the way that you approach that subject. That’s really good.
Ex-engineer, numbers guy for sure. Are there any metrics that you like to look at around the forecast, the forecasting aspect? Are there certain metrics or numbers that you feel are important for sales orgs to track?
Steve Kraner: Yeah. When it comes to metrics we tend to measure what’s easy to measure. It tends to be easy to measure the quantity of things. And back to the original opening of dialogue about forecast accuracy and how pressure creates spurty and inaccurate forecasts.
If we press people they get more proposals on the street if they have any fear of this at all, they will probably get a lot more proposals on the street. We’ll increase the quantity. We probably will not impact the quality of those proposals, and we may even degrade them. Because you started out by talking about 20 leads one, and 70 leads to four, that math doesn’t work. It doesn’t, it probably degrades the quality of the effort. Because they are now rushing or pushing or forcing things that shouldn’t be forced.
So, my key focus when it comes to metrics is to think of it like calculus, there is a Y axis and X axis and we’re not just trying to get something as high as possible on the Y axis, because the area under that curb is zero no matter how high the Y number is. It’s the area under the curb that matters. And we’ve got both the quantity and the quality.
So, the effort for most sales managers is how I measure the quality of the thing I’m measuring. So, any metric I pick. Number of calls I’m making. Number of proposals on the street. And quiz me on any of those should you want to, we have to both a quantity and a quality measuring. The quality measure is the key to success because the area under the curb is what counts.
Trey Gibson: So, give me an example of quality measure. Because I – and I’ll tell you a quick antidote that’s a lot our customers go through and I’ve seen them go through is they will say; well, if I can get one new customer out of visiting 20 businesses or knocking 20 doors, well then like I said, let’s go do 80 and I’ll get four. A matter of fact I even had one customer that was paying their reps, started giving bonuses based on visiting businesses. Like, hey, we’ll give X number of dollars and guess what the hell happened? Just like you said. Boy, the visits went through the roof. I’ll tell you what, they got more visits than you had ever seen in you life. People were probably running from – they weren’t talking to anybody, so there was zero quality there. And I’ve experienced in my background of running inside sales team. They’ll say, guys, I want to 100 calls a day. Guess what they were doing. They were calling and hanging up. Call and hang up. Call, hang up. Call, hang up. It’ll get you 100 dials, by God, I’ll get you that, just like you said.
Man, I really like that the quality. So, how do I know what’s a metric or how can I measure the quality of these certain interactions?
Steve Kraner: So, let’s take those outbound calls you were just talking about. And it’s hard. The way you measure the quality of an outbound call, the top way, the best way, is to have your reps record the calls. Have a rubric. Here’s a seven step outbound call. Here is not just what to say, but also how to say it. Style is making you or breaking you on the phone. And your voice as an instrument of persuasion is critical. So, that’s one of the quality measures we’ve got to be listening to.
Do you sound playful when you’re doing the playful part or do you sound a little freaked out? That is going to make you or break you. So, listening to the call recordings is a great quality measure.
Now, the problem becomes, oh my gosh, Steve, how the heck can I do that, because it would take so much time. And the fact is, answer number one is, yes, it takes a lot of time and it’s tedious. Answer number two is if you’ll put that investment in your folks as you implement a sales process, implement a mastery phase and go through this phase where you’re forcing them to record their calls. Get the calls critiqued. Put the time in upfront. Once they develop the facility and they see the success that comes from that it will become self-sustaining.
So, you don’t have to have that focus forever. But you do have to put a lot of time and energy into it upfront. Also, there are new tools today. I was just reviewing Sales Loft today, I was not familiar with the details of their solution. It’s kind of a neat solution. I don’t know if you’re at all familiar with what they are doing. But they have, Gong, has stuff like this. There’s several mechanisms out there that allow you to use artificial intelligence to replace a guy like me or a manager to actually get some sense of the quality of the calls. So, there are mechanisms for measuring the quality of outbound calls in addition to the quantity.
Trey Gibson: Yeah. The tough part is if you’re doing field sales. I don’t know how the heck – the old school way is we just went to ride along, you do a ride along. But that’s not scalable. So, the technology will come along some day. Maybe Spotio can work on that.
Steve Kraner: Well, it would be a great one for you guys to do and you actually can do it with a handheld recorder. You can do it simply by saying to folks, rather than taking notes or in addition to taking notes, I’m going to hit the record on my phone here with your permission. If you’re uncomfortable with that you won’t. I don’t hear people saying no to that. And it’s certainly going to impact conversation, I think a lot of people are hesitant to do it, but it’s been my observation that it actually impacts the quality of the conversation in a good way.
I would encourage people to do it.
Trey Gibson: That’s good. I was reading some of your content and one of the posts I really liked was Proactive Versus Reactive Sales Management. And for our customers in field sales, I feel like – we talked about forecast, we talked about process, I feel like it’s really hard to be a proactive sales manager when you have very little data to work with. And that’s what we focus on at Spotio is giving them insight into activity and earlier in their sales process. But let’s just say, how do I identify, I’m a sales manager, how do I identify am I a proactive or a reactive manager and why should I care? Let’s dive in there a little bit.
Steve Kraner: Okay. Good. The classic reactive sales manager of course is responding to pressure perhaps from Wall Street. I was hoping that maybe when private equity firms started buying up and becoming private it would reduce the pressure. It hasn’t. It’s made the pressure even more extreme which has been my experience.
And I love those VC and those private equity firms, but they’re even tougher than Wall Street was. So, you’ve got Wall Street, you’ve got the private equity firms hammering the board of directors or hammering the CEO who are hammering the sales VP who then turns around and hammers the sales people. And if you think about it, the bigger the company is the taller the mountain, the more of this is flowing downhill and it’s gaining velocity as dropping. At the bottom of that people is not your sales people, it’s your customers.
And so, then we end up applying pressure to our sales folks. Because we are trying to accelerate artificially what’s already in the pipeline. Instead I would tend to apply pressure early in the quarter, early in the month to get some prospecting done. To get some more quality stuff in the pipeline. Because at the end of the quarter while there’s all of this natural tendency to be the hero to go out and make things happen. That’s not what we do. What we do is we take ten good deals that are in the pipeline and we instill panic in our troops, they go out and offer discounts. They degrade what’s already out there, themselves, the offering. If we’ve got ten deals in the pipeline and we go out and offering all 20 percent. Just do the basic math on this, maybe two or three of those deals realistically are going to be coming in now sooner. I am going to argue that they may have come in at that time anyway.
Seven or eight still come in, in the next quarter but what happens to the 20 percent discount? You say, well you pull it back. We don’t pull it back. Now that we put it on the table we can’t pull it back. And if you do the math on those numbers, that’s what I call eating your young.
It’s like a guppy, we’re cannibalizing our pipeline, that’s why the numbers are worse and not better. So, we need to stop doing that and put the pressure at the beginning of the quarter to get more in the pipeline, as opposed to at the end of the quarter trying to pressure and get deals done.
What I would instruct my sales people to do instead of saying, hey, end of the quarter, can you get that purchase order. I would instruct them to say, hey, it’s the end of the quarter everybody’s calling, everybody’s asking for the purchase orders, I just want to let you know. No pressure from me. We’re growing, I’ve already made my number. Don’t need it. I am responsible for forecast accuracy, so if this thing is going to come in next quarter or never going to come in, feel free to tell me that. Because truth is more important than sin. Just take that away.
Trey Gibson: Like it. So, being proactive starts today, not at the end of the quarter. It all kind of ties together from having a sales process, you understand be proactive to work towards that sales process and if you’re consistently doing that. You can be proactive instead of reactive. I like that, makes sense.
Steve Kraner: Yes. And when I take on a new sales team, I am going to be proactive from the beginning. I’m going to assess. I’m going to look at whether they have a documented selling system in place. And if they don’t have a really well-defined sales methodology I’m going to put that in place. I’m going to be proactive.
I’ve heard sales managers say, I don’t want to tell people, I don’t want to be prescriptive, I don’t want to tell how to make that outbound call. I don’t want to tell them how to conduct a discovery call. Well, why don’t you want to do that.
If you had a golf coach, and the golf coach said, Trey, you know the problem with your game. The ball does not go in the hole early enough and often enough. That’s not helpful. You need to be prescriptive. You need to be the person who knows what’s going on. You need to overcome your fear of that. And if you don’t know you probably shouldn’t be the sales VP and you should learn. You should call me up and hire me. And I’ll show you, teach you how to do it, and then you’ll know how to do it.
Trey Gibson: Exactly. So, I’ll put you on the spot. I love stories, any stories come to mind of one your past clients? Anything that, success stories, you went in and this was what happened and this was the result, I think people really, just really resonate with stories. I will put you on the spot to see if anything comes to mind, if not, no big deal we can move on.
Steve Kraner: There’s loads and loads of course.
Trey Gibson: Yeah, you’ve been doing this a long time, so it’s probably hard to pick just one.
Steve Kraner: Yes, the good, bad and the ugly. For the purpose of our conversation, I hear these stories all of the time. I’ll tell you one and several others that have occurred since.
In training sales force one of the young ladies I decided to try this idea of an agreed mutual action plan. She sent it out, and a couple of days later I got an email from her. She was passing on to me an email that her customer had sent to her. So, the sales rep has written up this mutual action plan, sent it to the customer, and the customer is now responding. And the customer is saying, I deeply appreciate your professionalism and the way you approach the sales process. She had a number of details of why she thought this approach was clear, concise, crisp, and respectful. But the point of the story is if you take – it’s just like a man leading the dance, if you can lead arm and arm dancing well, if you’ll take charge and do a good job – a woman looks better as a dancer, enjoys that and is glad to let you take the lead. If you as sales person take the lead and do a good job, buyers will be saying to you, wow you’re good at what you’re doing.
I pick that example because it had to with the mutual action plan. You can hear on the game film. If you do it a good cold call, buyers are saying, hey – I just heard this, this morning. I was reviewing game film before I got on with you. The buyer said, wow you’re really good at this. You will get buyers saying to you, you’re good at selling.
Trey Gibson: Yeah, that’s fantastic. That’s the biggest compliment I’ve received during my time at Spotio is we were cold calling to someone, VP of sales or something, he said, stop. He goes, I’m going to go call in my team real quick, I want them to hear how this is supposed to go. At that point you’re high fiving.
Getting props for being a professional, there’s nothing better than that.
Steve Kraner: You know what, I think that’s an unusual thing. So, I’m glad to hear you’ve had that experience. And anybody who’s listening to this, maybe they would think you and I are bragging about ourselves a little bit here. And I don’t want it to come across that way. If you’re not getting that kind of feedback as a sales person about every fifth all, 20 percent of the time, and I’ve measured that. I am that geeky. I measure stuff like that. Then you’re game isn’t where it could and should be. Because they will absolutely say, you are good at selling and I appreciate it. I don’t take calls ever from anybody, but I will take your call.
Trey Gibson: Yeah. That’s awesome. Alright, so wrapping up here. I like to do our what we call closing out our T’s to crusher, and we call it that because at Spotio if you’re at 150 percent or greater to quota we call it a crusher.
So, just four quick rapid fire questions and then just first thing that comes to mind. So, number one, favorite business or sales book and why?
Steve Kraner: You know given the context of our conversation today I love the Checklist Manifesto, it sounds boring. A guy who referred me to that book had to refer me three times, and I so respect him. Have you read that book?
Trey Gibson: I have not. No.
Steve Kraner: Read the Checklist Manifesto, it sounds horribly boring but it so ties into what you and I are talking about and once you do, you’ll say, whoa, it’s a little more interesting and I see why Steve recommended it in the context of this conversation.
Trey Gibson: I remember when I started my first company it was building processes was so important, as a matter of fact I hired a consultant to help me build the process. And a lot of it is checklist. It’s something so simple, but often very well overlooked, and I know a lot our customers at Spotio are trying to scale their business. So, that’s really good input. I read something about how the checklist that NASA has, like how detailed and maybe that comes from this book, I don’t know. I read a blurb on a blog somewhere about the checklists that NASA has and how detailed they are and how that allows them to avoid any mistakes that are going to cost people’s lives.
Surely in sales we could benefit from a good checklist.
Mindset, how important is it in sales and what do you do or what do you recommend to get in the right one?
Steve Kraner: That maybe my favorite topic. If you believe, and this is not some eastern metaphysical statement I making, this is just literally true. And if you haven’t got in touch with this truth then meditate on it and understand it is true.
Your actions today are suddenly a manifestation of your current beliefs. And therefore, your beliefs, you mindset, your mental map is determining the level of success and everything you are doing today. We believe 100 percent of our beliefs if we just stop and reflect for a moment – is it possible that 100 percent of our current beliefs today about selling, and customers and everything in life are absolutely correct? By definition it’s impossible unless we’re God himself. That’s not true. So, while we believe 100 percent of our beliefs, one of the most fundamental things we can do is check our basic belief system and redo things and update that mental map. Once the mental map is updated, our behavior will naturally, and instantly, and permanently change. One of the beauties of listening to game film is that you’ll ask people to do something that is so incredibly uncomfortable and which they think it’s the world is flat and we are going to sail off the edge, there’s no way in the world that’s going to work. And now, here one of their peers do it, and what’s changing isn’t their technique, it’s their belief. Because they just now heard somebody else do it and they believe it works and they can do it.
Trey Gibson: Nice. So, best sales advice you received, maybe not best sales advice you’ve received, what’s like the most common sales advice you give or receive. That’s broad topic.
Steve Kraner: If you want something that flips both ways, certainly, it is the advice I give and the advice I also give myself and others give me, is to inspect yourself as a third party. To seek ways to see yourself as a third party. At the end of a sales call, a buddy uses call recordings for field sales people. One of the things they’re suppose to do is review their calls and then give a summary of how the call went at the end. I think I’m the only one that’s actually listening to the call recordings. And the thing I pick up on is when you listen to the actual call and then you listen to the rep’s summary at the end, it’s two different calls.
Trey Gibson: Oh really.
Steve Kraner: Yeah.
Trey Gibson: Is that because they’re actually not listening to it or that they just had a completely different impression of what happened?
Steve Kraner: You do. You have a completely different impression of what happened until you sit back and listen as a third party. Because when you’re in the moment you’re emotionally involved. And you are not an accurate observer of what’s going. If you then sit back and listen to the recording, and they are not listening and they are not taking the time, because it’s tedious and it’s also painful and we hate to hear ourselves performing, because frankly it’s not that pretty for most.
Trey Gibson: Yeah.
Steve Kraner: It’s adopting that third party perspective. My mentor into the sales business, the sales systems business, the sales training business was a guy named David Sandler. And what he said was – I said David where do you come up with some of this stuff? He said, well I pretend like I’m a martian and that I was dropped on this Earth by my fellow martians, and my job is to study the earthlings. Take notes and they are going to pick me up in about a year and I’ve got to tell them about the earthlings.
Trey Gibson: Nice. So, last question, one thing every sales professional should start doing today?
Steve Kraner: So, given the context of this conversation, I would say, just take a baby step. Kisen, just do one little thing different. Just one step out of your comfort zone. Next time you talk to a customer about an active transaction try to reach an agreement that’s appropriate for that conversation. And then, write that agreement up, write up a courteous recap and send it to the customer and start developing that habit of documenting your agreements in writing. Confirming them with the customers. That won’t be a full blown mutual action plan the first time you do it, but if you’ll just start one baby step at a time there’s a point at which it will become a full blown mutual action plan. And if you want to take it a step further and get to that full blown mutual action plan, as you said go to my website, download the template. Adjust it if you don’t like my thing the way I have it, but try to achieve that level of mastery and that level of completeness.
Trey Gibson: So, with that said, where can the listeners find you. I was on your website earlier and I’m a content junkie and there’s a ton of good stuff. So, where can they go find you if they want to get some of your content and continue to learn?
Steve Kraner: So, the url is SoftwareSalesGurus.com. And to download content you can give me your email so I can start sending you tips if you’d like. If you don’t want me to send you tips the password to download all of the content is goodselling. You can download all of the things that we’ve been talking about, the checklist, the mutual action plan template and other stuff that we haven’t even talked about.
Trey Gibson: That’s fantastic. I had a great time Steve, learned as well, and really enjoyed our conversation. Thank you so much and we’ll talk to you later.
Steve Kraner: Likewise Trey, good selling.
We’ve gone over many of the most prominent forms of forecasting, and now it is time to review the use of Regression Analysis. Using this quantitative analytical method can improve business operations, sales, and marketing.
Regression Analysis forecasting is the most mathematically minded method is usually why people shy away from it. This technique is meant for those companies that need in-depth, granular, or quantitative knowledge of what might be impacting sales and how it can be changed in one direction or the other, as necessary.
Applying this method successfully requires comprehensive understanding of statistics and the influences that exert their power on your company’s sales performance. There are many calculations required to examine relationships between sales and variables that impact sales.
To use this you would start to figuring out the reasons you are forecasting, essentially what it is you want to learn and why that would be valuable. From there you figure out the factor that is being affected which in this case is the dependent variable, your sales.
Add to this the factors that impact the dependent variable, anything that influences sales. Then, select the period of time you want to review and collect the data for the variables in question.
From there, you choose your regression model and run it after which you find any correlation between those variables.
Your business wants to forecast your sales for the upcoming summer program in order to plan for your budget and figure out if you need to conduct a second round of hiring for temporary sales reps. In this scenario, the sales team is the dependent variable and your goal is to understand what influences it.
So, you compare the sales to an independent variable, like the number of sales calls. Then you collect data for both the total seasonal sales and the total seasonal sales calls for the last five years.
The goal here, again, is to compare what influences the number of calls had on the number of sales.
Once you set everything up and have the data, you can get even more granular with that information and review the number of sales calls as it impacts the number of sales each year, and then again for each month during the sales season so that you can determine not only how many new sales reps to hire the following year, but for precisely what months you need to ramp up seasonal sales reps. Then, you filter them out as the sales calls and subsequently the sales themselves, start to thin out.
The regression model equation might be as simple as Y = a + bX in which case the Y is your Sales, the ‘a’ is the intercept and the ‘b’ is the slope. You would need regression software to run an effective analysis. You are trying to find the best fit in order to uncover the relationship between these variables.
With this model you might see how something correlated to your sales that could be causing your sales to get better or worse. However, just because there is a correlated variable does not mean the variable itself is the cause.
This is where things get a bit complicated.
You need to take into consideration other factors that make the example too complicated for this short article. Additionally, this particular example is a rudimentary, linear one and in most real time cases your business will have a multiple linear regression. This contains multiple independent variable like the numbers of training sessions help, the number of incoming calls, the number of emails sent, etc.
The upside is that this helps you determine the precise variables that impact sales at any given time. In other words, this is one of the most accurate forms of forecasting out there. If you want the real-time data, and only the data, this is how you get it.
The downside is that this is accurate, but is incredibly advanced. Be fair warned that the reason most companies don’t use it or shy away from it, is because not just anyone can do it. It’s certainly not the easiest method to use.
For many companies, the variables that have to be taken into account in order to generate proper forecasts requires someone with a PhD in mathematics to figure out. This is especially true for larger companies. To that end, the larger amounts of accurate data is effectively a requirement in order to achieve meaningful results, and the large amounts can be tricky.
Regression Analysis is a highly data driven method which is why it takes skill and regular practice to do it well. Not only will you need to refine your ability to execute it, but to understand the results generated therein.
However, if you are able to properly run your regressions, soon your company will be able to uncover valuable information about the company that can be used to drive growth in the future.
Much like the other methods of sales forecasting, regression analysis may not necessarily be the optimum solution for your business. To that end, it is imperative to know how each method works and when it works best in order to determine if/when it is most suitable for your company.
Moreover, this does not have to function as a standalone tool; your business might very well benefit from integrating more than one method particularly if one is a quantitative method designed to counterbalance and complement a qualitative method.
By using sales forecasting techniques correctly you will be able to identify potential problems early on, evaluate your sales opportunities, track the progress of individual reps, and prepare post-sales support systems as needed such as infrastructure and materials.
Questions or comments? Contact SPOTIO at email@example.com or comment below.
Without sales, you don’t have a company. This makes the role of sales manager a crucial position with profound impact on the organization. Effective sales managers are not just knowledgeable about sales; they possess management skills and abilities that enable a sales team to continuously stretch beyond their current performance and achieve the next level of success.
“A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.” — Lao Tzu
Effective salespeople must have two basic qualities: customer empathy and a drive to compete. On top of these important qualities, effective sales managers must also be skilled in attaining superior results through the performance of others by leading and setting up the individuals on the sales team for success.
A Sales Manager with an excellent sales record – but who does not lead and bring out the best in others – can break a dream team. It may seem like enough to assemble a group of talented sales performers that fit well within the organization, but even the best salespeople will leave the organization or fail without the strong presence and vision of an effective sales manager.
“Where there is no vision, the people perish.” — Proverbs
Effective sales management begins with leadership. The best sales managers not only manage but lead with the following 12 core strengths of highly effective sales managers.
Effective sales managers drive their teams to meet their sales goals with intense focus and urgency. These goals, coupled with clear deadlines, rewards and consequences establish expectations for the sales team. They must be set early and communicated clearly.
To be most effective, goals should follow SMART criteria:
Effective Sales Managers must be excellent coaches that look out for the performance of the team as a unit and the attainment of each individual salesperson’s full potential. Great sales managers consistently strive to build individual sales skills and team confidence by holding group and 1:1 coaching on an established cadence and as needed.
They should adapt their coaching to the occasion, recognizing that different people respond to different coaching styles. The best sales managers take time to make one-on-one time valuable, personal, and focused on the individual salesperson’s needs.
A committed coach also serves as a mentor. Personalized mentorship accelerates professional development; effective sales managers act as a mentor to support the current and future development of individual team members while supporting the strategic direction of the sales organization.
Not only do effective sales managers teach the ropes, they also provide the necessary tools to succeed. Sales managers must be experts on the company’s products, sales processes, and sales enablement tools.
The best sales managers feel comfortable with transferring this knowledge base and enable the team to go from good to great by making them confident problem solvers and decision makers.
Most importantly, the best sales managers provide frequent and relevant real-time feedback on their team members’ performance.
Being coach and being player are two very different roles, and effective sales managers must be prepared to transition from individual contributor to manager with all the responsibilities that leading a team entails.
Managers who suffer from the Star-Athlete Syndrome – who cannot adapt to the manager mentality – have a challenging time leading their sales teams even when they demonstrate genuine aspirations to do something greater for the team.
Effective sales management focuses on the underlying behaviors that drive sales results like account development, lead generation, qualifying opportunities, managing the pipeline and closing sales. Effective sales managers consistently measure the team’s performance by tracking metrics and paying attention to key indicators that serve as markers throughout the sales cycle. Keeping a watchful eye on sales performance alerts sales managers of any risks in meeting targets and allows time for remediation.
Effective Sales Managers consistently measure performance against metrics and enforce the sales process to hold salespeople accountable for meeting targets. They avoid the micromanaging trap by cultivating a high-performance environment where peer pressure motivates salespeople to be better.
When salespeople exceed goals, they are intrinsically rewarded with praise and recognition. Those who don’t meet their goals celebrate on the sidelines eager to prove their value and redeem themselves. Accountability flows from the top down and the best sales managers hold themselves accountable for the success and failures of the team. After all, the success of the team defines the success of the manager.
Communication is a key function of a manager. Sales managers are tasked with communicating expectations, rewards and consequences along with all the other rules of the game. Effective managers take time to ensure every salesperson understands the metrics they are accountable for, along with the process and the tools they will use to attain them. They will foster an environment where feedback and ideas are expressed openly by the team in a dynamic flow.
The best sales managers communicate to inspire getting behind the team’s goals. Instead of using authority, they use motivation to command action.
Effective sales management begins with creating a positive work environment where salespeople know they are valued employees and their role is important to the organization. Sales managers set the tone and the code of conduct for the team and enable a healthy culture where everyone is happy to come to work.
The best sales managers invest in team unity to boost morale with team-building activities outside the office and other informal social events to prompt the team to get to know each other outside the pressures of the job. The more managers know about how each salesperson wants to be treated, the better they can cater to their unique development needs.
Team unity is also a product of success and failure. Success is memorable, and everyone likes to celebrate success. Effective sales managers reward success and celebrate immediately to create a continuous loop of motivation that reinforces the value of the sales team.
Managers also leverage disappointments to help the team grow and learn from mistakes and to find strength within the group to march on.
Effective sales managers stick to a standardized sales process that the sales team can count on for consistency and predictability. They define sales processes that are simple and flexible and can be used to monitor progress and enforce accountability. The best managers seek to streamline existing processes when opportunities for improvements are evident. They are receptive to automating tasks and redefining processes to eliminate activities that do not contribute to sales performance.
Effective sales managers lead their teams. They are superior confidence builders and exercise their influence to lift salespeople to a high level of sales performance. Studies demonstrate that effective sales managers directly affect each salesperson’s ability to reach high performance status and exceed their quotas.
Effective Sales leaders go beyond motivating and inspiring the team. They use accountability for targets, streamlined sales structures to nurture a high-performance sales culture, and provide the right tools to enable the sales process. Effective sales managers also focus the team on targets and eliminate conflicts of interest and other distractions that deter the selling function.
Effective Sales Management embraces technology to streamline the sales process and monitor accountability. Great sales managers take the time to learn the tools in detail. They also have a keen eye to spot opportunities for automation and process improvement to help eliminate inefficient tasks that prevent a salesperson from being in front of the customer. They seek out digital solutions that help the team handle sales tasks more efficiently.
They maintain a flexible process structure and are agile to incorporate sensible technical solutions. For instance, good sales managers leverage cloud computing and mobile technology to allow secure remote access to CRM tools, relevant business intelligence and data that empower sales teams on the road and enable their sales organization to stay nimble and competitive.
Effective sales managers lead their sales teams to keep their commitments and targets. In addition to overseeing the personal development of each team member, they also seek to improve their own performance as managers. The best sales managers take it upon themselves to always strive to be better sales leaders.
While organizations most often have formal development resources for managers, the impetus for self-development comes from within. Effective sales managers are willing to put in the extra work for self development to stay ahead of the curve.
Transparency is a concept that good sales managers tackle in their journey for self-development. It takes courage and confidence to display your team’s performance against goals for anyone in the organization to see. A transparent approach allows the team to be responsive, connected, competitive, and agile.
Effective sales managers set the stage for transparency and demand corresponding behaviors from their sales teams.
Effective sales managers take the responsibility for growing their sales teams. They dedicate substantial time to recruiting, hiring and onboarding new salespeople. They are constantly scouting for new talent and prefer to take their time hiring to ensure they have found the best person for the job.
When assessing talent, sales managers look for skills critical to the sales process as well as personality attributes that align well with the organization. Staying abreast of the talent market and building a pipeline of applicants, the best sales managers can quickly replace under-performers and continuously build the future success of the team.
Effective sales managers have the sales expertise required to help their teams master products, processes and tools. As experts in sales, great sales managers are able and willing to roll up their sleeves and participate in the sales process with tactical advice and support during sales meetings. They bring a wealth of practical experience to customer meetings and model top-tier behavior.
Effective sales managers are experts in sales pipeline management. While salespeople are generally focused on the task at hand, sales managers cast a wider net to ensure focus on deals in the present as well as deals in the future pipeline.
“A key differentiator of great sales leaders is their ability to dispense tactical sales advice and add value during customer meetings.” – Harvard Business Review
“Before you are a leader, success is all about growing yourself. When you become a leader, success is all about growing others.” —Jack Welch
As a bonus, here is a list of 40 desired character traits possessed by highly effective sales managers. Use this as a guide when you’re looking to hire a new sales manager or to evaluate your current leadership team to find opportunities to grow.
“In almost every survey conducted, honesty has been selected [as the desired trait] more often than any other leadership characteristic.”— James Kouzes and Barry Posner
An outstanding leader excels in:
“It is possible to give away and become richer! It is possible to hold on too tightly and lose everything. Yes, the generous man shall be rich! By watering others, he waters himself.”
Like any skill one acquires in life, effective sales management begins with an interest in practicing what you’ve learned until you get it right. Whether you’re a sales manager who wants to make an initial impact or a sales manager with tenure who strives to excel and attain mastery, you can grow and develop quickly by identifying one or two areas to focus on and crafting a measurable plan for growth and improvement.
No leader is perfect, but the commitment to mastering these traits translates into a more productive, healthy, and profitable team culture.
Questions or comments? Contact SPOTIO at firstname.lastname@example.org or comment below.
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