Managing the highly-successful sales team
How do you know a highly successful sales team when you see it? Is yours successful?
Most would start with using a tried & true benchmark: “Did most members of the sales force meet or exceed quota?” If the answer is yes it is a success story and surely the company will benefit. Who could disagree?
Now, some CEOs and sales executives might think twice about trying to tamper with such success and so they often leave hands off of a successful sales force and its sellers. We think this is a missed opportunity, and a big mistake.
How should such a successful sales force be managed? We believe that the best way to manage the successful sales force is just like managing any other sales force: seek out and implement continuous improvement in the areas of people and process. Let’s look at possible steps you can utilize to evaluate and continuously improve both, and build sustained success into the future.
People: It is unlikely that your sales force has become successful without some pretty high-quality sales representatives at the top. How can we leverage such assets? We would suggest a simple 3-step plan as a starting point:
- Rank your sales representatives from top to bottom in terms of demonstrated ability and talent (I expect you or your top-sales executive can do this on the back of an envelope in about 5 minutes).Then, look at the top 1/3 of the sellers. What makes them successful? Is it their demonstrated sales-skills, product expertise experience in the industry, personality, account base and/or other factors? Is there a pattern? Sit down and look for one. When found (and it is there), consider how this information can help with future sales-force training and selection—and modify your current programs accordingly. We have found that the selection and development of sales talent is one of those rare areas where a $1 of investment can return $100.
- Everyone (yes, everybody) gets a day of 3rd-party sales-skills training this year—including VP’s. Start with the assumption that your sales reps need to significantly improve their selling skills, and you will probably be pretty safe.
- Pair up your top sellers (top 1/3) with your average sellers (middle 1/3)(one-on-one) in an in-house mentoring program where skills and experiences can be transferred. Let sales leadership (the VPs) figure out the details and success measures, but make sure the paired sellers spend at least two weeks together during the coming year. If some of your top sellers start to push back (and some will), take a closer look—is it the time required, or are they being misclassified at the top?
Process: Process is the collection of steps, systems or factors that combine as the underpinning to facilitate sales force or company success—actually meeting quota or goal is an end result and one metric of success.
To examine the health of your overall sales processes, develop and use a broad sales-effectiveness “dashboard,” to diagnose the foundations of your sales success (or lack of success) and seek opportunities for improvement.
Consider this a bit like a stress test for your local bank (or heart). Here are 7metrics or diagnostics you may want to apply:
- Look deeper into quota performance. Examine total sales-force achievement versus quota or goal. If you find that some or many sales representatives achieve results of 125% (or more) of quota or goal consistently (year in and year out), there may be reason to suspect that your expectations do not reflect the true potential of the sales representative’s account base, the seller or both. It may be a good time to revisit goals and quotas.
- Look even deeper at the sales-results and quota spreadsheet. What is the distribution of performance achievement? If you find that some portion of your sellers are alternatively achieving quite low levels of performance (as a % of quota or goal), it could indicate that there may be great (and unhealthy) disparities in such factors as: fair assignment of accounts, fair construction of sales territories and account plans and or levels of sales-skill inventories amongst your sellers.
- Look at key account growth. Take the top accounts that comprise 90% of current sales volume (this is probably less than 100 of them) and then select the half of these that have the greatest potential to grow—you know who they are. How many have grown over last year by less than your annual price increases? If the answer is 50% or less, these accounts are likely not getting the attention they deserve—as a group. Someone ought to go out and talk to them promptly about their needs and expectations.
- Also, look for any customer/seller groups that clearly stand out as poor performers, and begin an inquiry to find out why this is true. It could potentially be anything, but as it now stands, their poor performance is robbing your bottom line.
- Remember the ranking of sales representatives in terms of general ability and talent that you did above? Pull out the back of that envelope again and ask this question: Do the top sellers also have the best results & performance? Logic says that should be directionally true. If not, there may be something standing in the way of their success, or they may need a prompt attitude or skill evaluation.
- Take the entire sales force and re-rank all sellers in terms of last-year’s annual sales bonus or commissions earned—top to bottom. Do the top 1/3 earn 100% more in bonus and commission than the second 1/3 (on average), and does the second 1/3 earn 100% more in bonus and commission than the bottom 1/3 (on average)? Again, that is a logical outcome to be expected. If not, it may indicate that your pay systems are not properly differentiating, driving, or rewarding higher levels of sales performance. An audit of the sales-pay system may be in order.
- Lastly, examine the sources of revenue and sales growth for the last 12 months—on an account-by-account basis. Does15% of your total sales volume come from new accounts—with which you did not do business last year? If not, your sales force is not likely developing enough new-account business, and will not adequately be able to replace lost accounts in the long (or short) run. History says that your company will lose a percentage of your accounts and sales volume to competitors each year. In some cases we have seen that that loss can exceed 10%. If you are not acting to replace these losses your company will surely begin to lose share of market.
Did your sales force pass its stress test? Hope so. If not, it is clear what must be done (and communicated) to improve results and secure continuing future success.
Start using these people development and process diagnostic tools with your sales force annually. Do not be afraid to ask for better results and to aggressively fix underlying sales processes, even when a successful sales force is involved. Challenge them (with facts) and they will respond. Try it!