Cracking The Sales Management Code by Jason Jordan
Cracking The Sales Management Code by Jason Jordan
PART 1 Metrics, Metrics Everywhere
CHAPTER 1 — CRM, Reporting, and a False Sense of Control
THE WAR ROOM
So there we were. The war room. Our Fortune 100 client was showing us the sequestered conference room where the company’s senior leadership gathers weekly to review business performance and set strategic direction. On the walls hung a sea of performance reports showing everything from current financial projections to the number of customer-facing calls the sales force had conducted year-to-date. Literally hundreds of data points culled from the company’s customer relationship management (CRM) tool were reported in vividly colored charts for the leadership team’s real-time consideration.
There was data at an aggregate level. Data at the sales manager level. Data sliced by product line. Data sliced by region, by customer segment, and by the stages of the company’s sales cycle. Data sliced and diced in every way imaginable — truly a world-class demonstration of performance reporting. It was a scene that would make any IT director stare in amazement and any senior executive turn green with envy.
Looking at the walls, it was easy to envision a typical weekly war room meeting, which might resemble the classic scene from a World War II Hollywood movie in which analysts scurry about updating information on the walls, while leadership takes it all in and formulates a strategy to outflank the enemy. Except in this case, the generals are VPs of sales. The soldiers are sales-people. The battlefields are sales territories. The numbers on the wall are not enemy head count — they are product sales, pipeline size, sales rep activity, win/loss ratios, profit margins, and of course, revenue forecasts. Anything and everything that can be reported has a spot reserved on the war room walls.
The constantly updated numbers are key ingredients for the primary activity in the war room — to quickly identify trends (both good and bad) and dole out urgent directives to the field. Is the pipeline too small? Then have the salespeople do more prospecting. Profit margins down? Tell the sales managers to hold their ground. Forecasts inaccurate? Have the reps update the data more frequently. No doubt these weekly meetings are intense, focused, and perceived as high-impact. Ah, the war room. Who wouldn’t want one?
Most companies have their own scaled-down version of the war room — at least in spirit, if not in practice. They have a set of reports that they regularly examine to assess progress against their goals and to determine what actions must be taken in order to ensure the goals are met. The reports aren’t always large-format color prints with pie charts, bar graphs, and scatter diagrams, but it is exceedingly rare today to find a sales force of any size that hasn’t invested in some type of customer relationship management (CRM) or sales force automation (SFA) software for the primary purpose of increased reporting.1
GOT CONTROL?
So what has all this reporting gotten us? Well, having all this data at our fingertips has become like comfort food for leadership. A real-time view of sales force performance makes us feel in touch with the organization. And increased transparency to field-level activities gives us the satisfying sense that we are somehow in control of the sales force’s behaviors. However, visibility to an action does not equate to control over it. Let us give you an example of the life-threatening danger of this assumption.
When one of the my children was 18 months old, I left her with a babysitter while I made a quick trip to the store (I was no doubt as much in search of silence as I was in search of provisions). When I returned to my house and opened the door, I saw the terrifying sight of my precious child standing upright on a steep set of stairs, wobbling in her attempt to make it to the next step. Meanwhile the babysitter was sitting calmly across the room just watching the situation unfold. Witnessing the obvious terror on my face as I sprinted across the room toward the teetering child, the sitter attempted to calm me down by saying, “Don’t worry. I am right here. I can see everything she’s doing.” Trying only halfheartedly to contain my anger, I responded, “Watching my daughter fall to her death is not the same thing as preventing her from falling to her death.”
Similarly, watching the walls of the war room is not the same as directing the battle on the field. While seeing activity-level data such as Number of Calls Made or Percentage of Customers Contacted creates a sense of participation in the activities, in reality, it is more akin to watching salespeople climb treacherous stairs from across the room hoping they don’t fall to their deaths. You can see the disaster happen, but you can’t control the outcome.
Despite the billions of dollars that have been spent to enable deep and wide reporting of sales force activities and outcomes, we have seen few instances of increased reporting capabilities actually leading to greater control over sales force performance. Greater visibility provides you with exactly that — greater visibility. Not greater control.
THE SOURCE OF THE PROBLEM
In a nutshell, here is where we are.
Over the last 20 years, we have witnessed a technological revolution known as CRM. With few limits, we now have the ability to generate extremely detailed reports that allow us to see both the activities of our sales reps and the outcomes they create.
The amount of information that we have to help us manage is unprecedented in the history of sales management and is only getting bigger. Our challenge in the future is more likely to be an excess of data, not a scarcity of it. Even today, we observe “analysis paralysis” in companies for which information overload has crippled the very decision-making ability that reporting was meant to enable.
Enlightened about what’s happened — and even what is currently happening — but we have little more control over the future than we did in the past. What then are we missing?
What we are missing is quite fundamental:
We are missing the operating instructions for a sales force.
How do the numbers on the war room wall work? Of all the data points that we see on our reports, which are the inputs, and which are the outputs? Which are the causes, and which are the effects? If I want to move this number, should I push that one or pull another? What we don’t yet know is how to work the numbers.
If we did understand the relationships between all the numbers on the wall, then we could exert more control over them. Want more revenue? No problem — do this. Want more new customers? No worries — do that. This is the level of understanding that sales leaders do not have today. Instead, management concludes: Want more revenue? Do more. Want more customers? Do more. But sometimes the revenue and customers don’t come.
This is where CRM has left us. It has given us the power to see what the sales force is doing, but it didn’t come with instructions for what to do with that newfound visibility. We can get plenty of data from the magnificent reporting machine, but we haven’t been told how to use it. Basically, our ability to report data accelerated faster than our ability to understand it. For better or worse, we cracked the CRM programming code before we cracked the sales management code.
HOW SALES HAS TRAILED ITS PEERS
Sales is unlike its corporate peers finance, manufacturing, and marketing in many ways. And as patrons of the sales function, we think it is not only different but also better. We could argue that it’s more dynamic, more exciting, more challenging, more fun, and outright more important than its organizational siblings, but there is one place that sales has woefully trailed other business disciplines: discipline itself.
During the nineteenth and twentieth centuries, every other corporate function developed a body of knowledge that enabled it to measure and manage itself in a more consistent and predictable way. Consequently, corporate functions other than sales enjoy a fundamental understanding of their inner workings, and they are able to direct their day-to-day business with confidence toward their ultimate objectives.
Sales has somehow evaded the management rigor and professional discipline that has burgeoned in its peer groups. There is no sales equivalent of GAAP. There is no standard TQM framework for sales improvement. And there are currently fewer than 50 colleges and universities in the United States that offer a major or minor in sales. Compared to finance, manufacturing, or marketing, the discipline of sales is still in its infancy.
So when information technology eventually came to the sales force, there was relatively little to automate. Sales had no formal operating instructions for itself. In contrast to its organizational peers, sales’ information systems were just layered on top of unstructured processes and inconsistent execution. Basically, sales forces automated their own forms of chaos.
We strongly believe this is the reason that CRM has failed to create a more controlled sales environment. It’s not that CRM’s expectations were overblown, nor that its implementation was botched. Senior leadership watched as technology revolutionized finance, manufacturing, and even marketing, so it was completely reasonable to expect a similar revolution in sales.
But the revolution didn’t occur. It didn’t occur because unlike our organizational peers before us, sales did not have a fully cooked management discipline. We had all of the pieces to the puzzle, but the overall picture had not yet come into focus. We had not cracked the sales management code.
This book makes one big step toward establishing a rigorous sales management discipline. Based on our research into how leading companies use metrics to manage their sales forces, we have developed a management system that will predictably link the activities in the war room to the battle on the field. It will help sales managers floating in a sea of data to focus their attention on the few metrics that really matter. It will help sales executives to drive their sales forces with a clear set of operating instructions. It will provide a framework for improved sales performance reporting. It will finally crack the sales management code.
PART 2 The Sales Management Code … Cracked!
CHAPTER 2 — What Can We Really Manage?
Though we open this book with a narrative on CRM and performance metrics, the core issue here is neither technology nor reporting — the core issue is sales management. The advent of information systems and reporting capabilities merely exposed the underlying reality that sales management has not evolved into the discipline it needs to be. We believe this lack of development at the sales management level is in part the by-product of a myopic obsession with developing our frontline sellers. This intense focus on developing salespeople rather than sales managers has been enabled by at least two faulty assumptions.
GREAT SELLERS EVOLVE INTO GREAT MANAGERS … MAYBE?
Look at any sales organization, and there is most certainly a budget to train its salespeople. However, with almost equal certainty, there will be no budget to train its sales managers.
Salespeople aren’t typically taught management skills, and superstar sellers are legendary for avoiding structure and formality. Yet these are the same people who routinely get promoted into management. Managers do need structure. They do need analytic and critical thinking skills. They do need a management discipline to succeed in their management role. Put simply, preparing salespeople to be great sellers is not sufficient preparation for them to become great managers.
IT’S THE SALES MANAGER, STUPID
The second assumption that has hindered a focus on sales manager development is the perception that salespeople themselves are the primary agents of sales success. Prevailing wisdom says that given the choice between training salespeople and training sales managers, it is wiser to invest in the frontline sellers.
In fact, many of our clients now look back in despair at how little they’ve invested in this critical role. Sales managers are often the only contact remote or home-based salespeople have with their organization.
As with many companies, our client had made a sizable investment in developing the skills of its salespeople only to ignore the most critical change agent in any sales force, the frontline sales managers.
CAN YOU MANAGE A NUMBER?
If we agree that the sales manager plays a critical role in driving sales performance, then the next question we might ask is, What can we reasonably expect them to do?
As we discussed, today’s sales managers spend hours each week poring over reports that detail the activities and productivity of their salespeople.
Interestingly, there has developed an unstated expectation that sales managers can with enough effort change the numbers on the page. There is a tacit understanding that an integral part of a sales manager’s role is to make the numbers look right. In fact, we suspect that the phrase “make your number” has become as commonplace in the sales management lexicon as “good morning.” It’s all about making the number. But can a sales manager truly make the numbers? Or phrased differently, can someone with enough willpower and effort actually manage numbers?
Managers are now expected to manage those numbers, and probably hundreds of thousands are desperately trying to do so. In an effort to assess how this management-by-report exercise was being administered more broadly, we decided to explore how leading companies are currently attempting to manage their numbers.
OUR JOURNEY BEGINS
To understand how metrics are being used to manage sales forces, we first partnered with the Sales Education Foundation2 to survey its corporate constituents. Specifically, we asked sales leaders to provide us with the data points that they found the most meaningful in driving the performance of their sales forces. We then expanded the scope of the research to include our own client base, adding data from actual management reports that are being used at both the executive and field levels. In sum, we gathered 306 metrics that are considered by leadership to be the keys to effective sales management. As we began to study the metrics, some very interesting (as well as some very concerning) findings began to emerge.
One company reported 14 different categories of sales metrics, often with only two metrics per category. Another listed 16 different measures in no particular order whatsoever. One global vice president of sales claimed that he needed only three key numbers to effectively manage his entire sales force. And some responded with terms so vague, it was impossible to immediately discern what they were truly trying to measure (see Figure 2.1).
There are many potential explanations for why the various metrics were arranged (or not) in such a seemingly random fashion. Perhaps it was an artifact of the systems from which they were reported. Or perhaps the different types of measures came from different parts of the organization. And it’s equally as likely that the metrics were sorted for reporting to various stakeholders who had slightly different interests. Regardless of the reason we observed such a chaotic mix of sales force metrics, it was quite clear that a best-practice method for categorizing sales metrics had yet to evolve. If we were going to make sense of the relationship between sales management and sales metrics, we would have to do it ourselves.
THE QUESTION
So there we were. Our own war room.
Or at least that’s what it resembled with our 306 metrics hanging randomly about the walls. Except that unlike the real war room generals, we were not there to lead — we were there to follow. We were going to follow those seemingly random numbers wherever they would take us, as long as we ended up with a coherent framework of sales force metrics. But how then should we begin our sure-to-be-frustrating journey?
We chose as our tour guide a single question. The question that had led us to this point in time, and the question that would hopefully lead us to crack the sales management code:
Can we manage this number?
Our first task was to clearly define our use of the term manage. What did we mean to say that we could manage a number? Our criterion for managing became that a frontline sales manager could directly influence the metric by asking someone to do something differently. That is, he could direct or take some action that would consequently and undoubtedly cause the number to change. No one’s consent and no further decisions were required. A sales manager could control that number.
To choose an example of “management” from our everyday lives, we cannot directly manage our children’s grades in school. As much as we would like to instruct that B on the report card to become an A, the B is not listening. What we can manage, though, is the amount of time that our children spend studying. We can direct our children to study two, three, or even four hours a day in hopes that their grades will ultimately be influenced. The metric of Time Spent Studying is in our control.
And thus began the tedious process of interrogating the metrics on the wall. One by one, we posed to each of them The Question, “Can we manage you?”
So, Percentage of Time Spent Coaching Reps, we asked, “Can you be managed?” Sure. A manager can allocate more time to coaching.
Number of Sales Calls Made per Rep, “Can you be managed?” Sure. A manager can require more calls by his or her reps.
And so it went, 306 times. Over and over again.
We wish we could report that this process took only a few hours, but in fact, it took days, weeks, and even months before we had sorted, unsorted, categorized, recategorized, and otherwise tortured the numbers until they confessed to their true nature.
ACTIVITIES, RESULTS, AND THE STUFF IN-BETWEEN
In the end, we discovered that some sales numbers are in fact quite manageable. These are metrics that relate to field-level activities. At the other extreme, we determined that many numbers are completely unmanageable. These metrics track high-level corporate results. We then teased out a third category of numbers that lies somewhere in between — not really manageable, but vulnerable to influence. These middle-ground metrics refer to the sales force’s objectives that serve as a pathway from activities to results. To take you along our journey, we will examine each of the three categories in the order that they came into focus for us.
Sales Activities
Let us start with the easy one. We were pleased to discover that there are many metrics on war room walls that can truly be managed. In fact, 17% of the metrics in our study were deemed to be highly manageable. Of course, that means that more than 80% of the metrics on the walls of sales forces around the world can not be directly influenced by management, but we will reveal shortly that there is hope for those metrics yet.
Sample measures of what we are calling Sales Activities include metrics like these:
They are merely the outcomes of all our doings. Our research therefore informed us of an irrefutable fact:
Activities can be managed — outcomes can’t.
At a glance, this observation seems quite obvious. Of course you can only manage activities. Who needs to read a 200-page book to learn that? Well, it’s a little less obvious than you might think.
Apparently, a lot of smart, successful people have spent much of their careers attempting to manage things that in hindsight were obviously unmanageable.
Business Results
Now we will move from the lowest level of metrics to the highest level that we found in our study. Business Results are the culmination of all that an organization does. In fact, these metrics are at such a high level that they can be influenced by factors well beyond the sales organization — finance, manufacturing, marketing, or even external troublemakers like the competition or the economy can help these numbers budge. Comprising 24% of the metrics on our wall, examples of Business Result metrics include:
When we compare metrics like Number of Calls Made to metrics like Revenue, it is easy to judge the dramatic disparity in the amount of control we can exert over Sales Activities versus Business Results. If our lives suddenly depended on “making the number,” we would strongly prefer that the number be something actionable like Time Spent Coaching Reps, rather than Customer Satisfaction. At least our fate would be in our own highly motivated and in-control hands.
While some people will struggle to abandon the notion of “managing” Revenue, the truth is that we have virtually no direct control over Revenue or any other Business Result. Yes, there are things we can do to influence these outcomes — many things in fact. But we can no more command the numbers to change on our corporate report card than we can command the letters to change on the report cards of our children. All we can do is manage what is in our direct control and expect the desired outcomes to follow.
Sales Objectives
Sales Activities and Business Results were not the only metrics on our wall, though. Between the extremes of action and outcome is a category of metric that serves as an intermediate step to get from one to the other. These metrics can be considered guideposts for Sales Activities to ensure that they are pointed in the right direction for the Business Results to materialize. Consequently, we labeled them Sales Objectives. See Figure 2.2.
These metrics are really unique goals for the sales force. They are Sales Objectives that are either given to sales management from above or identified by the sales force itself. Within the 59% of our metrics that fell into this category, we observed measures such as these:
Every time we asked these metrics, “Hey, can I manage you?” the answer was always, “Sure, if I just do …” Figure 2.3 summarizes our findings.
These metrics are not highly manageable, but they can be directly influenced by pointing certain Sales Activities at them. Again and again, we had the same conversation with these metrics: “Hey, can we manage <insert Sales Objective>? Well, probably so, if we just <insert Sales Activity>.” While it was initially quite difficult to distinguish these two types of metrics from one another, we soon found that the nature of our struggle to separate Sales Activities and Sales Objectives was our first big stride toward cracking the sales management code.
THE CODE BEGINS TO CRACK
To have control over something, it is fundamental that we understand the cause-and-effect relationship between the action we take and the outcome we expect. If we press the accelerator on the floor of our car, we expect the car to go faster. If we turn the steering wheel to the left, we expect the car to follow. Sales management has long been standing on the accelerator, and it periodically needs to turn the wheel as well. However, our sales forces do not respond with the same predictability as an automobile because sales management has not had a thorough knowledge of the cause-and-effect relationships at work in its organizations.
It turns out that management is quite good at telling sales-people what it wants (the Sales Objectives). However, managers aren’t always as diligent in providing sales reps with explicit guidance on how they should do it (the Sales Activities).
The flying brick here is not that doing specific things will lead to certain outcomes. The insight is that if you want certain outcomes, you have to do specific things. If you want higher Share of Wallet, your salespeople have to do good account planning. If you want more new customers, your reps have to develop detailed plans for effective prospecting. Asking for specific Sales Objectives without ensuring that the proper Sales Activities are in place is not necessarily a recipe for inevitable disaster, but it is certainly a recipe for unpredictable and (more importantly) uncontrollable performance.
The sales management code starts to crack when leadership provides its sales force with a clear path from the bottom to the top. It cracks when everyone in the field understands what they must do at the Sales Activity level to achieve specific Sales Objectives and the consequent Business Results. If the expectation is set that Market Share must increase, then the explicit expectations should also be set that this will be accomplished through greater Share of Wallet driven by increased account planning activities by salespeople.
STATUS CHECK
We identified three discrete levels of sales force metrics.
Sales Activities, which are highly manageable and whose associated metrics can be moved at will
Sales Objectives, which can be directly influenced and whose associated metrics can be driven by managing certain Sales Activities
Business Results, which are wholly unmanageable but whose associated metrics are determined by the achievement of specific Sales Objectives.
Even more important, we established causal relationships among the three levels. Sales Activities drive Sales Objectives, which in turn drive Business Results. For example, if you do more account planning, you can achieve greater Share of Wallet, which should in turn lead to greater Market Share.
Understanding how the causal relationships work up the chain is not as important, though, as the ability to reverse-engineer the relationships. If a corporate goal for the year is to increase your Revenue, then you need to choose a specific Sales Objective that will most likely lead to the achievement of that Business Result. If you determine that increasing your Number of New Customers is the best available path, you know you must manage the Sales Activities that will strongly influence that metric — in this case, increased prospecting.
Of course, you should also associate relevant metrics with each of these levels in order to track compliance with the activities and to measure progress toward the Objective and Result. Say that your target increase in Revenue is 3%. You might determine through analysis that each rep needs to recruit four new customers per quarter to achieve this Business Result. You might then calculate that each rep needs to make 16 additional prospecting calls per quarter to predictably expect to win four new customers. As a sales manager, you can now set explicit expectations with your reps down to the level of Sales Activity. Your reps will know what to do. You will know what to manage. You will now be able to confidently exert control over your sales force’s performance. See Figure 2.5.
At this point in our journey, we had uncovered some very important insights into the challenges and limitations of sales management:
We discovered that not all sales metrics are on par with one another. Some of the numbers on war room walls can be managed with the degree of control that leadership expects, but more than 80% of those numbers can only be influenced indirectly.
We established a series of causal relationships that can be used to coerce those unmanageable numbers with a high degree of certainty. Managing Sales Activities leads to the achievement of Sales Objectives, which in turn leads to the attainment of Business Results.
We identified a means to reverse-engineer high-level corporate goals and connect them to sales force activities. Beginning with the end in mind allows us to architect a series of interrelated metrics that enable us to manage toward our desired outcomes.
Looking back at our point of departure, we felt like we had written the first few pages of the desperately needed operating instructions for a sales force. The numbers on the wall now had more meaning, and we’d learned a bit about how they can be used to exert control over sales force performance. However, we didn’t feel that we had cracked the code. We needed to learn more about how the numbers actually work.
CHAPTER 3 — Business Results — the Company’s Health
BACK TO THE WAR ROOM
The fiscal year just ended, and the war room is rockin’.
Excitement is in the air, as the entire leadership team awaits its first glimpse of the company’s year-end numbers. Conversations swirl about the year’s big victories over the competition. People are thankful for the last-minute deals that closed just in time to be booked in Q4. Twelve long months of hard work have led to this single moment in time. All eyes are on the walls as the numbers begin to post.
The numbers that will make or break the mood in this war room are all Business Results. Did the company hit its Revenue target for the year? Did it eke out enough Profit to satisfy investors? These are the numbers that everyone has gathered here to see. Not measures of Sales Activities or Sales Objectives — just Revenue and Profit. Is this intense focus on Business Results short-sighted by senior management? No, it is not. In fact, this is how it should be.
Make no mistake — Business Results are the most important numbers on the wall. They are the corporate endgame. This is because Business Results are the primary measures of a company’s overall health. These metrics include such key performance indicators as Revenue, Profit, Market Share, and Customer Satisfaction — things that eventually find their way into financial statements and annual reports. These few measurements afford even casual observers a crystal-clear snapshot of an organization’s well-being. Good numbers reveal a healthy company. Bad numbers? Well, let’s not even think about that.
DOING WELL
As you might imagine, we found several different ways to measure a company’s well-being. First, there are metrics used for self-examination that we called Financial. These are measures of health that the company defines for itself. How much Revenue does it want? How much Profitability would be considered a good Return on Investment? These Business Results are the objective financial parameters that leadership uses to judge its own progress toward its self-defined standards for “doing well.”
Second is a set of measurements that reflects the perceptions of others. They reveal how healthy the company appears to others whose opinions it values. We chose to label these measures Satisfaction, and they include the opinions of both an organization’s customers and its employees. Distinct from self-imposed Financial metrics, these numbers are highly subjective, and the criteria are largely defined by the customers’ and employees’ own personal experiences. See Figure 3.2.
Finally, we found a category of metrics that evaluates a company’s health relative to its peers. Measures of Market Share put success in the context of a competitive environment and assess which company has the healthier organization. In some industries, Market Share is the primary indicator of well-being, and a shrinking share of the market can spell certain death.
In sum, we identified categories of performance metrics that examine a company’s health from several perspectives:
All good questions. Now let’s take a deeper look at what the answers might be for each.
It’s All About the Financials
We now had only three buckets within Business Results — Financial, Satisfaction, and Market Share. Life was much simpler. See Figure 3.6.
Satisfied Yet?
So Satisfaction metrics can be useful as directional indicators of a company’s health. Figure 3.7 shows the many forms these metrics take. They also allow management to leapfrog organizational information filters and gather candid feedback from its customers and employees. However, measures of Satisfaction must be kept in perspective. Like other Business Results, they are driven by many other things in an organization, and you must take care to decipher their meaning before making any management decisions.
Dare to Share
Result metrics falling into this category, we can assure you that a higher percentage of companies are tracking Market Share data. In fact, marketing departments in most companies will have this number on the tips of their tongues, but our study only incorporated sales force metrics. At the highest level of many organizations, corporate health is all relative. See Figure 3.8.
THE PROBLEM WITH “MANAGING BY RESULTS”
Though Business Results clearly are not manageable by any direct means, this does not keep sales managers from trying. Week after week across the globe, sales managers meet with their sales forces to review their salespeople’s “numbers” and to provide the sellers with counsel on how to improve them.
What you have just witnessed is “managing by results.” Revenue and the size of a pipeline are both Business Results and cannot be directly managed. This conversation is the business equivalent of your doctor saying to you, “You’re not looking too healthy. You’d better go get more health, or else you’re not going to be healthy the next time I see you.”
This transition from management by results to management of activities is how sales managers take control of their sales force’s performance. Management stops begging for outcomes and starts directing the behaviors that will cause a chain reaction from Activities to Objectives to Results.
We therefore need to take our examination down a level, to explore how Sales Objectives can help us drive toward our desired Business Results.
STATUS CHECK
We had now begun to dig into the management code by examining the level of metrics that cannot be managed whatsoever, Business Results. Eventually, these metrics all fell into one of three categories:
Financial, which are primary accounting measures like Revenue and Profit (note that these can be reported as either forecasted or realized dollars)
Satisfaction, which are measures of customer and employee pleasure with certain aspects of a company, its products and services, or its relationships (aka the applause-o-meter)
Market Share, which are measures of a company’s captured portion of its total addressable market
These metrics on the war room wall are really measures of overall corporate health: how healthy the company considers itself, how healthy key stakeholders find it, and how healthy it looks in comparison to its peers. In sum, they determine how well a company is doing. If you have lots of happy, profitable customers, then you are doing well, for sure.
Our examination of Business Results led us to realize that the true nature of a metric is determined by its intended use. Using this conclusion, we eliminated our troublesome Sales Pipeline category entirely and redistributed those metrics to other spots on the wall. If the pipeline metrics were used to forecast financial performance, then into the Financial category of Business Results they went. If they were intended to measure a salesperson’s effectiveness in moving deals through the pipeline, then they were diverted to Sales Objectives.
Of course, as high-level corporate outcomes, Business Results cannot be directly managed. To exert any form of control over these numbers, leadership needs to select the right Sales Objectives and manage the right Sales Activities to drive its desired outcomes. See Figure 3.9. We therefore turned our attention to the next challenge in engineering a cohesive set of management metrics — understanding how to identify and measure relevant Sales Objectives.
CHAPTER 4 — Sales Objectives — the Sales Force’s Mandates
SMILE … FOR A WHILE
Business Results, Sales Objectives, Sales Activities, causal links, reverse-engineering — does sales management have to be so complex? No, not always. But as an organization grows and the demands on its sales force expand, sales management necessarily becomes a more sophisticated endeavor.
Despite the complexities, the Grin-Again product launch is critical to your company’s future, and it must go well. But several vital decisions beckon:
How much bigger must your sales force become?
Will it be capable of selling both product lines?
How will you ensure that the right customers are being targeted?
How will you get your sales force to sell the right products?
You didn’t face these decisions four years ago when you only managed a single salesperson with a single task. A slight grimace appears on your face, defying the harmless, nontoxic gas that bellows from your building’s Smile-a-While unit. Alas, you long for the good ol’ days when all you needed was a little revenue.
BEHOLD, THE SALES OBJECTIVE
So this is how sales management becomes complex. As companies grow and their go-to-market strategies become more sophisticated, it is no longer sufficient to simply hire any salesperson, call on any customer, and sell any product. Some customers are better than others, some products are better than others, and as we all know, some salespeople are better than others. Deliberate action is required.
Hiring the right salespeople, deploying them in the right way, targeting the right customers, and selling the right products is the only formula for long-term organizational health. The question that each organization has to answer for itself is, What does right mean for you?
That is a trial-and-error marathon that you may or may not win. Success is now found in making the right sales calls to achieve the right Sales Objectives to reach your quota — a quicker and more predictable path to the winner’s circle.
This is how powerful clearly stated Sales Objectives are in driving sales force behaviors that are aligned with corporate goals. Sales Objectives are often the missing link between what the leadership team wants and what the sales force does. Without cogent Sales Objectives, the sales force does the best it can. With cogent Sales Objectives, the sales force does what it should.
So one school of sales management says to just tell your sales — people the results you expect and then trust them to deliver . In other words , “ We need 25 % growth in revenues , please . Let us know if we can help . ” This management style is certainly easier than charting a predefined path for your sales force , and some managers and sellers may even prefer it , because it gives them the freedom to define their own strategy .
Our school of thought says to tell them the results you expect , tell them the objectives that will get them there , and then trust them to execute . In other words , “ We need 25 % growth in revenues , and here is what you need to do to accomplish that . ” If I were a VP of sales wanting more control over field — level activity , then I would prefer this approach . If I were a sales manager wanting a clear path to success , I would also prefer this approach . And if I were a salesperson wanting to avoid the pain of trial — and — error selling , I would strongly prefer this approach . It’s the equivalent of , “ There is the finish line , and here is the shortest route to get there . ” Behold the power of the Sales Objective .
STUFF FOR SALES MANAGEMENT TO WORRY ABOUT
Sales , of course , has its own set of management objectives . They are sales ’ contributions to the company’s overall Business Results and are the guideposts that the sales force should use to align its day — to — day selling activities . When we studied the metrics on our wall , we found that four distinct categories of Sales Objectives emerged ( see Figure 4.1 ) .
First , there is a group of metrics that we labeled Market Coverage . These metrics measure the objective of having enough salespeople in the right places to cover all of a company’s desired prospects and customers . A sales force must be the right size and shape in order to fully execute its go — to — market strategy .
The second set of metrics we found is meant to assess what we call Sales Force Capability . These metrics quantify the objective of having effective salespeople who can competently sell your products to your target customers . If there is sufficient Market Coverage and the sellers are highly capable , then the company has a very potent sales force indeed .
Third is a collection of metrics that measures Customer Focus . These metrics evaluate the objective of attracting , retaining , and growing the types of customers that the organization wants . Whether the company wants to focus on new customers , existing customers , or some other demographic profile , these measures provide the sales force with guidance on which customers to pursue .
Finally , we observed a category of metrics about Product Focus . These metrics measure the objective of selling the products and services that the company prefers to sell . Whether they are products with higher profit margins or they have some other strategic value , these metrics focus the sales force on selling the right things .
In sum , these four Sales Objectives and their associated metrics help answer the questions our young entrepreneur posed as he tried to position his company for growth :
Do I have enough salespeople in the right places ?
It is worth restating that Sales Objectives cannot be directly managed ; they must be influenced by directing Sales Activities .
THE SALES FORCE AS GROUND COVER
Companies have tried for decades to clearly define the relationship between their sales and marketing functions . One definition that we found interesting proposes that the role of marketing is to provide “ air cover ” for the sales force . If that’s the case , then I guess it’s fair to consider the role of the sales force to be “ ground cover ” for marketing . Whatever products marketing conjures up at a company’s corporate headquarters , its salespeople will find a way to sell in their far — flung sales territories . But it’s crucial that the sales force has the right troops , in the right numbers , in the right places to fight and win each battle . Otherwise , trouble will ensue .
There are many different ways to measure your level of selling effort . Company — wide , you could calculate it as the aggregate number of hours your sales force has to make sales calls , say 60,000 hours per year across all of your salespeople . You might also examine it at an individual level , like 6 hours of productive time each day per salesperson . You could even measure it from a customer’s perspectives , for instance , each of your customers is contacted 12 times a year . However you choose to analyze it , Market Coverage metrics attempt to gauge when you have enough sales force to do what you want to do . See Figure 4.3 .
THE “ CAPABLE ” SALES FORCE
We just stated that getting the right number of salespeople in front of the right customers is a foundation of sales success .
Finally , you always want all of these metrics to be improving . With a different Sales Objective like Product Focus , you may set an objective this year to obtain 30 % of your revenue from a new line of products , and then next year you may intentionally lower your target to 20 % as your product strategy shifts . However , you never want your Deal Win Rate to drop from 30 % to 20 % . Never . You always want more deals to advance and your skill level to increase . You always want your sales cycle to shorten . You always want your Sales Force Capability metrics to move in the same direction . This is a classic case of continuous improvement as the goal . So while there is no clear destination for any of these numbers , you always know which direction you want to be headed . See Figure 4.4 .
ACQUIRE , RETAIN , GROW , REPEAT
Management guru Peter Drucker famously wrote that there is only one valid purpose for any business : to create a customer . 2 This may be true , but anyone reading this book knows that there’s a little more to it than that . Customers cannot simply be created . They have to be identified , courted , and won . The level of effort required to perform these tasks necessitates focus on the part of a sales force .
We were relieved to see that there is an abundance of metrics in our research directed at customer retention and growth . We have worked with many sales forces that are so obsessed with bringing new business in the front door that they forget to lock the rear exits . One leadership team had set a target to grow its customer base by 15 % annually , but it was simultaneously suffering 20 % attrition with its existing customers . When we pointed out to its head of sales that his team would have to effectively grow sales by 35 % each year to grow its customer base by 15 % , we thought an ambulance would need to be called . To avoid such emergencies , numbers like Churn Rate and Customer Retention deserve a very prominent space on any war room wall . See Figure 4.5 for a list of the Customer Focus metrics we found in our study .
SELL SOMETHING … BUT NOT JUST ANYTHING
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Now you have a sales force that is perfectly sized , highly capable , and totally focused on your ideal customers . The final Sales Objective that you have to communicate is this : what do you want your sellers to sell ? Nearly every company has a variety of products and services it can offer to its customers . Some products are new , some are old . Some are high — margin , some are less profitable . Some are designed for specific customer uses , some are more universally applicable .
Using Product Focus as a primary Sales Objective can have an incredible impact on a company’s Business Results . Depending on your particular product strategy , providing your sales force with explicit guidance on which products and services to sell can set you on a course to high profitability and revenue growth . Failing to do so will essentially turn each individual salesperson into his own marketing department , setting product strategy for you as he sees fit in the field . See Figure 4.6 .
THE SALES FORCE : REVENUE MACHINE OR STRATEGIC WEAPON ?
Several years ago we were speaking with a large financial institution , and its global head of sales posed such a provocative question . His question was simply this :
How do I know if my sales force is good ?
Of course , sales forces have to be judged ultimately by their performance against Business Results , like making quota . But Revenue is too blunt a measure to reveal definitively whether or not a sales force is any good . That’s where Sales Objectives can help . Sales Objectives put a more sophisticated lens on a sales force’s performance and give us greater confidence that leadership has built a good sales force .
This last point begs another fundamental question :
What is the role of a sales force ?
This is why Sales Objectives are so vitally important . They give management a deeper level of control over the performance of its sales force : “ Don’t just bring us revenue — bring us the right revenue in the right way . And here is what we mean by right . ” When desired Business Results are supported with relevant Sales Objectives , the sales management code begins to crack a little more
STATUS CHECK
As we dug yet deeper into our unfolding management framework, we examined the Sales Objectives that lie in between the highly manageable Sales Activities and the totally unmanageable Business Results. We found that there are four distinct Sales Objectives that provide guidance and diagnoses that are specifically useful to sales management:
Market Coverage, which measures whether the sales force has enough selling capacity to pursue all of its desired opportunities in the marketplace
Sales Force Capability, which reveals whether the salespeople and managers are skilled and enabled to effectively execute their Sales Activities
Customer Focus, which indicates whether the sales force is successfully capturing the company’s desired types of customers
Product Focus, which informs whether the sales force is successfully selling the company’s preferred products and services.
If all of these objectives are met, then you will have an amply sized sales force that is willing and able to execute your company’s stated go-to-market strategy. In our opinion, you will have a great sales force. See Figure 4.7.
Beyond being “great,” your sales force will be more under your control than a sales force that is left to find its own path to your targeted Business Results. In the absence of clear Sales Objectives, sales managers and salespeople will do what they think is best. But their individual assumptions could leave you with an inefficient, ineffective sales force that sells the wrong products to the wrong customers.
If your organization is indifferent to how your Business Results are achieved (and many companies are), then it can also be indifferent to the setting of Sales Objectives. However, if it wants a sales force that is a genuine competitive advantage, then Sales Objectives are a critical management tool. They allow leadership to shift go-to-market strategies as business conditions dictate while knowing with confidence that its sales force will react accordingly. Crisp Sales Objectives are the difference between a chaotic selling effort and a precision selling effort. For any organization that offers an assortment of products to a diverse customer base, a laissez-faire management strategy is a high-risk and potentially wasteful approach.
So as we continued our quest for the operating instructions to the sales force, we were pleased to find these Sales Objectives conveniently nestled between Business Results and Sales Activities. They provide much-needed guideposts for sales management to steer field-level activity toward executive-level expectations. If the sales manager is the most critical link in the chain of command from the war room to the battle-field, then Sales Objectives are the marching orders. Without them, the fight might get ugly. With them, the execution of the battle plan can be flawless.
Marching orders in hand, we now turned our attention to deciphering the most tactical portion of the sales management code: Sales Activities.
CHAPTER 5 Sales Activities — the Drivers of Sales Performance
THE MISSING METRICS ON THE WALL
As the 306 metrics slowly found their rightful places on our own war room wall, we were eventually left with only the numbers that can truly be managed. Of course, these were measures of Sales Activities. Compared to Business Results or Sales Objectives, these metrics are extremely cooperative because they measure the things that a sales force actually does. Pursuing leads, planning for sales calls, visiting prospects, strategizing opportunities, and managing customer relationships are the day-to-day activities that are done in pursuit of Sales Objectives and Business Results. Perform these tasks efficiently and effectively, and achieving your quota is a breeze. Fumble around and misplace your effort, and any goal feels like a stretch. Plainly stated, these things are important.
Imagine our disappointment, then, to find that more than 80% of our 306 numbers were already pinned to other walls. That means that only 17% of the metrics in our study were intended to measure the Sales Activities that actually determine sales success or failure.
You’ve probably heard the old management adage that “what gets measured gets done.” Ironically, it appears that in most sales forces, what gets done doesn’t get measured. As you might expect, we’ve questioned many sales leaders over the years on why this is the case, and there are two primary reasons that they typically offer in response.
The first objection we encounter when we push clients to report more Sales Activity metrics is that activity-level data is difficult to collect, and this is somewhat true.
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The second objection that we often hear is that managers don’t even want activity-level data on their salespeople. Here, the argument goes that they don’t wish to give the appearance of micromanaging their sellers.
We would contend that collecting activity-level metrics is not old-school whatsoever — we think it is new school. And we would argue that tracking salespeople’s activities won’t lead to micro-management — it will lead to proactive management. Technology has enabled us to collect these metrics in less intrusive ways, and our new sales management framework will enable us to use the data in a more sophisticated manner. Going forward, we hope that all war room walls will have a fair representation of Sales Activity metrics, since managing those numbers is what aligns sales force behaviors with desired outcomes. Whether old or new, that’s the school for us.
SALES PROCESSES, YOU SAY?
Clearly we believe that measuring Sales Activities is a key ingredient to better sales management. However, reporting data on salespeople’s doings is not sufficient to exercise control over a sales force’s performance. To truly exert influence over Sales Objectives and Business Results, sales managers must not only receive relevant data, they must know what to do with it. They therefore need a way to organize a sales force’s activities into a coherent operating system with predictable inputs and outputs. They need a set of formal business processes.
Like many, this senior executive knew very little about what his sales force actually did from day to day.
Therefore, we felt that to truly crack the sales management code, we had to wrestle this issue to the ground. It was not enough to merely identify that Sales Activities are the most basic levers for controlling a sales force — we had to discover how those levers fit into manageable sales processes. We had to figure out how sales managers could organize and direct their sales-people’s activities to predictably influence all the other metrics on the wall. If we could do that, we would have done something meaningful. If not, the sales force would remain a collection of seemingly unrelated activities, and the chaos would persist.
THE BUILDING BLOCKS OF CONTROL
We braced ourselves for the expectedly arduous task of definitively identifying the fundamental processes at work in every sales force. Given the fact that it had never been done before, we assumed that we would struggle mightily to tease out distinct sales processes that would encompass all of the remaining metrics on our wall. Surprisingly, the task proved to be quite easy.
Therefore, to identify the nature of each specific sales process, we simply had to determine the desired outcome of each activity. Within minutes, we had shuffled the remaining numbers on our wall into five separate processes — four for the sales rep’s activities and one for sales management’s (see Figure 5.1). We had extracted from the metrics the fundamental building blocks for gaining control over a sales force. The code had finally cracked, and we were on the cusp of mapping once and for all the sales force’s DNA.
First, we found measures of activity that were directed toward effective Call Management. These metrics, such as Percentage of Reps Doing Call Planning and Call Plan Usage, are intended to ensure that sales calls or meetings are conducted effectively. In our study, navigating an individual sales call was the most elemental form of sales process.
If you string together several sales calls in pursuit of a single deal, then you will need to employ the second type of sales process we observed, Opportunity Management. Metrics that measure Opportunity Management, such as Opportunity Plan Usage or Adherence to Opportunity Planning Process, make certain that salespeople are thoughtfully pursuing individual deals.
If you find that you are pursuing multiple deals over time with a single customer, then you might choose to engage in our third sales process, Account Management Account Management metrics such as Percentage of Account Plans Complete or Number of Interactions per Account measure the sales rep’s effort in retaining and growing existing customer relationships.
And finally for the salesperson, if you target many customers and have to allocate your time efficiently across them, then you are engaging in Territory Management. Measures such as Number of Calls Made or Number of Meetings per Customer Type track sellers’ efforts to call on the right customers in the right quantity.
We also found several types of metrics that were used to gauge how well sales management is preparing its sales force to succeed. We called them collectively the Sales Force Enablement process, and they include numbers such as Percentage of Time Spent Coaching and Training Investment per FTE. 2 These varied measures help to focus sales management on developing and supporting the capabilities of its sellers. Sales Force Enablement metrics were by far the most common Sales Activity measure found in our study (see Figure 5.2).
Call Management?
No doubt, making sales calls is the most essential task of the salesperson. Whether face-to-face, over the telephone, or even through some electronic means, direct interactions between a seller and a buyer are at the core of every salesperson’s role. For that matter, they are the very reason that a company needs a sales force. If an organization made no sales calls, it would need no salespeople. So if a company has a sales force, you can bet it’s making calls.
The Activities. Call Management is a vital process for many salespeople. Of course, managing a sales call really comes down to careful planning, execution, and reflection on the part of the seller, and sales managers can play a very valuable role in helping their salespeople navigate these elemental sales activities. Unfortunately, managers cannot manage the outcomes of a call — successful call outcomes are Sales Objectives, since they require agreement from the buyer. But a sales manager can heavily influence the outcomes of sales calls by guiding the salesperson through the process.
This is why thorough call preparation is so very important. You’ve got to know what you’re doing. See Figure 5.3.
The Metrics. Most of the Call Management metrics we observed were focused on pre-call planning activities. Commonly, these are measures that track whether salespeople are adhering to a call planning methodology or using their call planning tools. In our study, we observed a handful of these measures, like Adherence to Call Planning Process and Call Plan Usage (see Figure 5.4). These metrics can be collected in a variety of ways, including sales force surveys, sales manager observations, and reports that are generated from the planning tools themselves.
The Tools. The primary tool to support Call Management is, of course, the call plan. Call plans take salespeople through a structured and thorough approach to preparing for an upcoming sales call (see Figure 5.5). Call plans help reps conduct an effective customer interaction by forcing them to consider questions like these:
What are the call objectives? What are the customer’s likely needs?What information does the seller want to learn? What questions should the seller ask? Which products or services should the seller and the customer discuss? What objections might arise?
Common Issues. The most common question we get when working with clients to implement call planning processes, tools, and metrics is, When should a salesperson take the time to plan a sales call?
Formal call planning should be done only when it is needed.
Call planning should involve both the salesperson and his manager.
In summary, Call Management is one of the most elemental ways that sales managers can exert control over the performance of their salespeople. By influencing the quality and the content of their sales force’s calls, managers can achieve specific Sales Objectives by guiding the behaviors of their reps in the field. In the absence of deliberate Call Management, sales reps will make critical decisions in the midst of battle. With a formal Call Management process, the battle plans will be drawn with a little more care.
Opportunity Management
Most sales are not completed in a single customer interaction and require many sales calls before the sale is finally closed. Sales that involve multiple calls across different stages of a customer’s buying process might require an additional layer of sales process to navigate the opportunity successfully. In addition to managing the individual sales calls, it’s wise for salespeople to think deliberately about how they approach the end-to-end selling effort. This process is called Opportunity Management.
The Activities. Opportunity Management is a group of activities that helps a seller examine, qualify, strategize, and execute a single multistage sales pursuit. Like Call Management, there are both conceptual and tactical elements to Opportunity Management. But unlike managing individual calls, managing opportunities requires wider and longer-range vision, since there are more moving parts to consider in a complex sales cycle.
First the salesperson must gather information that is needed to fully assess the opportunity in the context of the customer, the seller’s organization, the competition, and other environmental factors. This information can come from online services, conversations with the customer, annual reports, records of previous customer interactions, industry publications, marketplace gossip, and just about any other source of information that one can imagine. Until full information is known about the opportunity and its surrounding circumstances, good planning cannot take place.
Once sufficient information has been gathered, the seller must qualify the opportunity to ensure that it’s worth pursuit. This should be done by judging the opportunity against clearly defined criteria that will steer your sales force toward deals that align with your company’s go-to-market strategy. If formal criteria are in place, your sales force will become expert collectors of highly desirable leads. If formal criteria are not in place, your salespeople will spin their wheels pursuing unwinnable or undesirable deals. Many sellers struggle to disqualify bad opportunities, and it shows in the bleak percentage of deals that actually win.
Next the salesperson must form a strategy to shepherd the opportunity successfully from beginning to end. This involves deciding how to align her company’s selling activities with the different stages and different participants in the customer’s buying process. Additionally, the seller has to determine how to best position her company’s products or services against those of the competition. With a coherent strategy in place, the salesperson can close a deal efficiently and effectively. Without a coherent plan, the seller can resemble a pinball being bounced around by every unanticipated discovery. No one wants to be a pinball.
Of course, your organization must then execute the strategy according to the plan. We say that your entire organization must execute because resources from anywhere inside a company can be engaged in an opportunity pursuit. In addition to the salesperson, there might be resources from engineering, marketing, finance, or other departments carrying out tasks in an opportunity plan. Even external resources such as other customers or industry luminaries are frequently involved in winning a complex opportunity. As with all winning strategies, accurate execution is crucial.
Unlike a Call Management process that has a discrete beginning and end, Opportunity Management is a circular process (see Figure 5.6). Once an organization begins to execute its plan, more information will come to light that could require a course correction in the strategy or even disqualify the opportunity altogether. Opportunity Management is iterative and should be expected to evolve as the sale progresses. Round and round the process goes, until someone makes a sale.
The Metrics. As with Call Management, the Opportunity Management metrics on our wall were mostly intended to measure compliance with the process.
Disappointingly, very few companies in our study collected metrics on the activities associated with Opportunity Management (see Figure 5.7). However, the variety of metrics that could be reported is only limited by the nature of your sales process.
The Tools. The primary tool to support the Opportunity Management process is the opportunity plan. The format and contents of an opportunity plan should be customized to fit the way your sales force sells, but it is commonly designed to help salespeople thoughtfully answer opportunity-related questions like these:?
What is the nature of the opportunity? Is the opportunity qualified? Who are the participants in the buying process? What is important to them? Who is the competition? What are our competitive strengths and weaknesses? What will we offer the customers and why? What must we do to win? What are the steps in the sale? Who should be involved in the sales process? Where are their responsibilities?
Like any planning tool, opportunity plans encourage structured thinking and make certain that all angles have been considered (see Figure 5.8).
Common Issues. For a moment we’ll overlook the glaringly obvious issue that Opportunity Management, like Call Management, is being measured by so few companies.
Opportunity and Call Management are the processes used to manage a sales pipeline.
The goal is not to document all possible information about an opportunity.
Account Management
If Peter Drucker was correct that the most basic purpose of a business is to create a customer, then there is a higher purpose that he forgot to mention: to create a repeat customer. Customers who purchase from you repeatedly over time not only provide an ongoing stream of revenue, but the cost of sale to existing customers is often substantially lower than that of faceless prospects. Any way you look at it, repeat customers fall squarely into the category of Things a Company Wants to Have.
If your company receives a high proportion of its revenues from a concentrated number of loyal customers, then you need to be very deliberate about how you handle those critical relationships. There is a particular set of activities that can prove very useful in helping your organization retain and grow those existing relationships. Collectively, they’re known as an Account Management process (see Figure 5.9).
The Activities. The ultimate goal of Account Management is to maximize the long-term value of a select group of customers. Whether these customers are the biggest, most profitable, or otherwise strategically important, they warrant additional attention from the seller’s company in order to increase loyalty and profits. Account Management activities essentially tailor a company’s go-to-market strategy to each chosen customer through careful analysis, planning, and execution at the individual account level.
The first activity in a good Account Management process is to assess your customer’s business needs. By understanding your customer’s long-range strategy and short-term objectives, you can not only align your products and services with its top-of-mind issues, you can also look for innovative ways to help your customer further its own business objectives. Research shows that customers highly value suppliers that have an innovative eye and proactively bring new ideas to their customers. 3 This can only happen if you invest the time to assess your customer’s business deeply.
Once the customer’s needs are known, you must develop an account strategy that will align your company’s needs with the needs of your customer. Clearly your company will have its own agenda for the account — increasing Share of Wallet, introducing a new product line, expanding into other parts of its organization, or some other Sales Objective that will yield better Business Results. However, your agenda can only be accomplished if it in some way supports the customer’s agenda. A winning account strategy will consider both sides of the relationship and find strategic alignment between your organizations’ goals.
Of course, that winning strategy can only be brought to life if you develop a plan outlining the required tasks. The planning effort should be led by the salesperson, but it could include people from across the seller’s organization. In addition to the salesperson’s manager, account planning often engages other sellers who assist with cross-selling, operational staff who improve customer service levels, external partners who provide related services, executives who engage the customer at higher levels, or any other people who must play a role in achieving your goals for the account.
Finally, there’s the pesky chore of flawlessly executing the plan. Account Management is very much a team sport, and in this case, the salesperson is the coach. Not only must your seller diagram the plays in the account plan, she must ensure that her teammates are performing as expected. It can be challenging for a salesperson to coordinate resources that are not accountable to her, but the seller must find a way to rally the necessary troops. It’s the salesperson who is ultimately accountable to her customer … and to her manager … and to her quota. So she is the one who has to make it happen.
The Metrics. The Account Management metrics we saw on our wall fell into one of two categories. Like Call Management and Opportunity Management, there were numbers that were intended to drive compliance with the planning process. In the case of Account Management, all of these metrics assured that planning was taking place by assuring that the plans were in place. Measures like Percentage of Account Plans in Place or Number of Business Plans Completed were reported, as you might expect.
The second group of numbers was focused on tracking interactions between the company and its customers (see Figure 5.10). Metrics like Number of Activities per Account and Number of Joint Meetings with Accounts reveal not only the intensity of customer relationships but also the nature of their interactions. Depending on your go-to-market strategy or the contents of your account plans, you could track a metric for nearly any customer-facing activity.
The Tools. As you can see from the first group of metrics, an account plan is the key tool for Account Management activities. Account plans can range in size from a page to a small book, depending on the level of detail that an account plan captures.
What are the customer’s strategic initiatives? How can we help the customer accomplish them? What do we want to get from this account? What will we have to give them to get it? Who are the key stakeholders at the account? Do they consider us friend or foe? What do we need to do in the next month, quarter, year, or longer? Who from our organization must be involved? What must they specifically do and when?
The list of potential questions could literally go on forever. Account plans can include information such as customer financial data, past purchasing history, incumbent competitors, issues between the two organizations, industry dynamics, and anything else that the seller’s company thinks is important or somehow interesting (see Figure 5.11).
Common Issues. Companies that are heavily engaged in Account Management will tell you how important the process is to retaining and growing key accounts. And if the majority of your profits come from a small number of customers, it is nothing short of a necessity. But even in organizations that view Account Management as a mission-critical process, we still find two widespread behaviors that diminish the value of their sales forces’ efforts.
Territory Management
With rare exception, salespeople are responsible for selling to more than a single customer. In fact, sales reps will frequently have a database with hundreds of prospects and customers that they contact on a routine basis. Whether organized by geography, industry, size, or some other corporate characteristic, most salespeople are assigned a defined group of target customers. This group of targets is commonly referred to as a sales territory.
Anyone who has ever owned a sales territory can attest that there is never enough time to fully serve all of these prospects and customers. And even if there were, certain customers deserve more attention than others. Therefore, one of the most important decisions a seller has to make on a daily basis is this: How do I allocate my time across all of the customers in my territory? This process of identifying, prioritizing, and calling on target customers is called Territory Management.
The Activities. While the first three sales processes we explored are designed to increase the effectiveness of a sales-person’s effort, Territory Management is all about efficiency. Stated in more tactical terms, Call, Opportunity, and Account Management processes help your salespeople improve what they do when they are face-to-face with a customer. Territory Management helps sellers get face-to-face with as many qualified customers as possible given their time and resource constraints. If you only have so many hours each day to call on customers, you’d better use them wisely.
The first activity in managing a territory is to prioritize your customers. Without a clear customer hierarchy, all customers look alike to a sales force. Customer prioritization should be determined by your company’s current Customer Focus objectives. Whether the Sales Objective is to win customers in a particular industry, acquire customers that buy certain products, or grow revenue from existing customers, your Customer Focus should determine how you identify high-priority customers. And if your Customer Focus objectives happen to change over time, then so should your Territory Management priorities. You need to know your target before you can hit it.
The second Territory Management activity is to define the territory. Despite the fact the word territory in everyday language refers to a geographic patch of land, in the world of sales, a territory can be virtual. That is, a salesperson could be assigned a territory that is a handful of accounts spread all across the globe. Customers in a territory do not have to be in close proximity to one another; they simply have to be assigned to a rep.
Some companies choose to redefine their sales territories on a periodic basis — say annually. Others do so only as circumstances change — when they hire new salespeople, shift their Customer Focus, or perceive changes in the marketplace. Regardless of how frequently you reconfigure your territories, making sure that the territories are configured properly for each sales rep is a vital step toward good territory management.
The third activity is to design customer call patterns. These are the tactical plans that communicate the frequency with which certain types of customers are to be called. For instance, if your Customer Focus objective for the year is to acquire new customers, then you might choose to direct more of your sales calls toward prospects than toward existing customers. If your objective happens to change to increasing Share of Wallet with current customers, then your priorities would shift, and you would reallocate those sales calls back toward existing accounts. With this example, you can begin to see how managing Sales Activities so powerfully affects the attainment of specific Sales Objectives.
Finally, your sales force must execute its designated call patterns according to plan. When call patterns are closely followed, the sales force becomes that nimble strategic weapon that can be confidently redirected as circumstances change. But when call patterns break down, the sales force becomes an unguided brute, hitting its target only by luck or providence. An undisciplined sales force not only makes inefficient use of your sales force’s effort, it can also threaten the achievement of your company’s stated Sales Objectives.
It is worth reiterating that Territory Management is subject to constant refinement. As market dynamics or Sales Objectives change, you should reengineer your territories and redesign your call patterns (see Figure 5.12). Particularly if your company has constantly evolving product and customer priorities, we cannot overstate the importance of keeping Territory Management activities aligned with your Sales Objectives. Otherwise, your sales force may be dutifully executing last year’s strategy.
Also, we should mention that the first three Territory Management activities are often performed by the organization for the salesperson. Defining territories, prioritizing customers, and even designing call patterns involve a level of analytics and organizational alignment that are perhaps best done by sales management or a sales operations support group. However, the accurate execution of the call pattern is unquestionably the responsibility of the salespeople, and they must be held accountable in order for your market-facing objectives to be met.
The Metrics. In our research, we noted three distinct types of Territory Management metrics (see Figure 5.13). The first measures activities toward the front of the process — assigning customers and prospects to the sales force. Metrics such as Number of Customers per Rep and Number of Key Accounts Assigned are intended to ensure that customers and prospects are assigned to sales reps in the correct quantity and ratio. Too many customers, too few customers, or unassigned customers can lead to an inefficient selling effort.
The second type of metric focuses on the volume of effort that salespeople are applying to their territories.
The third and final flavor of Territory Management metrics are the type that we find most useful because they reflect the sales force’s allocation of effort across a company’s desired targets.
The Tools. Unlike Call, Opportunity, and Account Management activities that are performed continuously in the field, most Territory Management activities are completed on a periodic basis and often by a centralized group.
The most common tool to use to prioritize customers and design call patterns is the electronic spreadsheet (see Figure 5.14). Since the goal of these activities is to determine which customers are most desirable and how many sales calls can be allocated to each, spreadsheets are useful for the many iterative calculations required to reach agreement on the actual targets and the distribution of salesperson effort. As always, which tool you use is not as important as the deliberate thought that goes into making these critical decisions.
Common Issues. When companies choose to engage in Territory Management, the issues are rarely with the analytics. Sales leadership is more than capable of designing adequate territories and call patterns. The problems arise in the execution of the call patterns, and there are two issues that are particularly meddlesome.
Sales Force Enablement
We’ve made the case that management rigor is a key driver of sales force performance. With focused attention on how calls, opportunities, accounts, and territories are managed, sales leadership can steer its teams most directly toward its company’s desired Sales Objectives and Business Results. In other words, sales success is built on sound execution of the right Sales Activities.
However, all of these activities are executed by individuals, and the capability of those individuals plays a tremendous role in the soundness of their execution. Although we still encounter unenlightened companies that treat their salespeople as disposable commodities, the vast majority of sales leaders today recognize that highly capable sellers are worth their weight in Business Results. Consequently, they invest heavily in their sales forces to build their capabilities and improve execution in the field. This process of investing in improved sales execution is called Sales Force Enablement.
The Activities. As we mentioned in Chapter 4, Sales Force Capability is more than just the skill of the sales force — it also encompasses the greater system in which salespeople operate. This includes the strategies the salespeople employ, the processes they follow, the tools that support their activities, the expectations that are communicated to them, and many other elements that go well beyond the scope of only training to develop skills. Capability basically incorporates every aspect of how a salesperson does her job. Accordingly, Sales Force Enablement includes a variety of tactics that an organization can use to increase its sales force’s ability to execute (see Figure 5.15).
First, management should structure the organization in a way that provides its salespeople with access to the resources they need to perform their jobs efficiently and effectively. If the sales manager plays a pivotal role in your seller’s day-to-day activities, then where you locate your managers and how many reps you assign to each will have a great impact on salesperson performance. Or if your typical sale involves roles such as technical engineers or other specialists, then easy access to those individuals is a must-have for your salespeople. The coordination of internal resources is often required in complex sales, and organization structure can influence it tremendously.
Second, you must recruit and hire salespeople to staff your organization appropriately. If your sales force is chock-full of talented sellers, then the burden on every other Sales Enablement activity is reduced. But if your sales force is ladened with mediocrity, you will have to invest heavily to elevate sales performance. We should note that recruiting and hiring not only has a direct impact on the objective of Sales Force Capability but also on Market Coverage. Having the right number of skilled salespeople onboard makes a manager’s world a much happier place.
Clearly, you need to train your sales force to develop the skills and knowledge necessary to capably execute its Sales Activities. Training is the most widely used means of Sales Force Enablement, and it is a very efficient way to fill capability gaps that are common across a sales force. Training is so deeply embedded in the sales culture that it really requires little explanation.
Another way to develop your salespeople’s skills and knowledge is to coach them individually. Whereas training is designed to instill common knowledge across a sales force, coaching is used to build a salesperson’s abilities based on her unique development needs. As Sales Force Enablement activities go, this is the most value-added of them all. Unfortunately, it’s also the most time-intensive for a manager, so it must be done in a deliberate and thoughtful way.
You also must equip your salespeople with tools or job aids that support their selling activities. From sales presentations, to proposal templates, to communication devices, and a vast assortment of other documents and gadgets, salespeople have more tools in their hands today than ever before. Organizations have discovered that equipping their sales forces with relevant tools is a high-leverage investment that promotes consistent execution across an organization.
The final Sales Force Enablement activity found in our research is to assess the sales force. Sales force assessment can be done in many different ways using many different tools and methodologies. We prefer to use a combination of assessments to get several perspectives on potential issues — both at the individual and organizational levels. However you go about it, assessing the capability of your sales force has broad implications for how you approach the other enablement activities.
As you might have concluded, the Sales Force Enablement “process” is really a collection of ongoing activities. Some activities such as coaching should be done on a never-ending basis, though few companies coach enough. Others, such as restructuring the sales organization, can be done episodically, though we know companies that scramble their org charts almost daily. These activities are also highly interrelated; for instance, you could train someone on how to use a new sales tool and then reinforce that skill with coaching. The greater point is that there is a selection of Sales Activities in which sales management can make deliberate investments to achieve specific Sales Objectives.
The Metrics. Of all the Sales Activities numbers on our wall, Sales Force Enablement metrics were the most prevalent by far — representing more than 50% of the activity-level measures. Since the metrics themselves revealed the activities we just described, we of course observed metrics that aligned with each activity (see Figure 5.16).
With regard to organization structure, we found metrics such as Manager Span of Control and Ratio of Salespeople to Sales Support. These measures show whether staffing levels are in balance among various resources for the salesperson. By providing sellers with adequate oversight and support, leadership helps its reps function at full capacity.
We witnessed only one hiring metric study, which was Recruiting Spend per FTE. However, we have known companies that track things like Number of Recruiting Events Held, Number of Candidates Interviewed, and other measures of recruiting activity to make sure their pipeline of potential employees remains full.
Roughly half of the Sales Force Enablement numbers on the wall were intended to measure some aspect of sales training. Metrics like Training Hours per FTE show the volume of training taking place, while numbers like Days of Training by Type put a finer lens on the precise types of skills that are being emphasized. A final type of training metric like Percentage of Certified Salespeople demonstrates that the sellers had completed a formal training program. It is clear from our research that leadership is very focused on monitoring its training investment.
We were pleased to find several coaching metrics in the mix, such as Percentage of Time Spent Coaching and Frequency of Coaching. As we mentioned previously, companies are increasingly expecting their sales managers to engage in active coaching. Measures such as these not only indicate that coaching is taking place, but they also force an organization to deliberately define what, why, when, where, and how it wants coaching to take place.
We were also encouraged to discover metrics on sales tools. Numbers such as IT Spend per FTE measure the level of investment a company is making in its supporting infrastructure, and metrics such as Percentage of Users Logging into SFA reveal whether or not the investment is being leveraged by the sales force. As we provide greater insight into the effective use of metrics, we hope that numbers like these gain in prominence.
The final type of Sales Force Enablement metric we encountered was pointed toward assessing the sales force. Measures like Percentage of Salespeople Assessed and Percentage of Performance Appraisals Complete can give management confidence that the sales force is at least aware of its own capability. Performance assessments are also essential to any ongoing continuous improvement efforts.
The Issues. The Sales Enablement activities that a company could potentially undertake are so diverse that we could write a separate book on the issues associated with this process. But let us highlight one that is particularly widespread and leads many companies to waste massive amounts of time and money. It is the ready-fire-aim approach that companies frequently take when deploying new Sales Enablement initiatives.
FACT: BETTER PROCESSES = BETTER SALES PERFORMANCE
A funny thing happens when we start talking to people about formalizing their sales processes. All of their energy and enthusiasm immediately disappears. It’s as if the term process possesses the curious ability to suck all of the joy out of a room full of otherwise happy salespeople. In fact, should you ever want to destroy the cheerful atmosphere at your annual holiday party, just stand in front of the room and list all of the new sales processes you’ll be implementing in the coming year. Joy vacuum, activated.
Fortunately, our friends at the sales performance bench-marking firm CSO Insights have some information that might help reinflate the room’s spirits. Their research reveals that those very processes could help you sell 23% more stuff next year. That’s right, sales process really is a good thing.
Among its areas of inquiry, CSO Insights asks its respondents to rate their company’s degree of sales process implementation among four levels of sophistication:
Ad hoc process: The company lacks a single standard process, and each rep sells as he thinks best.
Informal process: The company gives its salespeople a sales process and expects them to follow it, but usage is neither monitored nor measured.
Formal process: The company enforces the use of a defined sales process and periodically reviews the process to ensure its effectiveness.
Dynamic process: The company monitors and provides continuous feedback on sales reps’ usage of the process and proactively modifies the process when market conditions change.
As you might expect, a minority of companies have deployed rigorous sales processes, with almost 60% of the respondents claiming that their processes are either ad hoc or informal (see Figure 5.17).
STATUS CHECK
And then there were none.
All 306 of the metrics in our study had now found a home somewhere on our war room wall. The final pieces of the sales management code had been revealed in the Sales Activities layer of our sales management framework, with all of the activities falling neatly into one of five sales processes:
Call Management, which improves the effectiveness of individual customer interactions
Opportunity Management, which helps sellers navigate complex, multi-call sales cycles
Account Management, which maximizes the long-term value of a single customer
Territory Management, which allocates selling effort efficiently across numerous types of customers
Sales Force Enablement, which improves a sales force’s ability to execute
These five processes and their related activities are the fundamental building blocks of control over sales performance because these are the things that you can actually manage. Unlike Sales Objectives and Business Results, Sales Activities can be directed by a sales manager. These numbers can be changed at will, and cleverly doing so will drive predictable improvement in overall sales performance (see Figure 5.19). As we’ve commented, this is where the action is.
Unfortunately, our research showed that these highly manageable metrics are in relatively low demand, with fewer than 20% of the numbers on our wall pointed at Sales Activities. Whether these numbers are difficult to obtain or whether leadership is just hesitant to collect them, they are missing from most companies’ management toolbox. However, these numbers are the leading indicators of sales success, and they should be on everyone’s war room wall.
With them, you can begin to proactively Manage Your Sales Force. Without them, control will continue to elude you. With the chaos on our wall now completely in order, we felt that we had finally cracked the sales management code. In our own sort of sales genome project, we had effectively mapped the sales force’s DNA by forcing hundreds of seemingly random data points into a tidy framework of cause and effect (see Figure 5.20). We now knew which elements managers can control in a sales force and which they can’t. We could see the inner workings of sales performance — the levers and pulleys that are used to drive a sales force down the path of management’s choosing.
However, it wasn’t yet a full set of operating instructions. To make the code practically useful, we would need to understand how the framework should be applied to the task of managing any particular sales force. We had the “superset” of things leadership could measure and manage, but we needed clear guidelines to help cull from it the handful of activities and metrics that would enable leadership to focus on its own organizational goals. We needed to know how to apply these insights in a targeted and tactical way. Fortunately, we were on the verge of doing just that.
PART 3 Using the Code to Manage Your Sales Force
CHAPTER 6 Building the Foundation for Control
THE BUILDING BLOCKS
We’ve made the point that sales processes are the building blocks of control over sales force performance. Since you can only truly manage your salespeople’s activities, you must achieve your Sales Objectives and Business Results by implementing formal processes that you can tactically direct and measure. With process rigor, you can manage the territories, accounts, opportunities, and calls that lead to successful sales outcomes. Without process rigor, you are asking for the outcomes but leaving the critical tactics to chance.
This is the kind of back-to-basics exercise that must be conducted before you can progress to the more advanced task of architecting a system of metrics that will allow you to attain your desired Business Results. To fully avail yourself of the newly cracked sales management code, you must first put in place the formal processes that will enable you to proficiently measure and manage your Sales Activities. Even if you already have a formal process in place, we encourage you to review your current state of affairs to make certain you’re working from a solid foundation. Until the levers and pulleys are in place for you to control the selling effort, you will necessarily remain in a management-by-results quandary (see Figure 6.1).
WHICH SALES PROCESS IS BEST FOR OUR COMPANY?
It seems to be a reasonable question. If we know all of the facts about our company, how hard can it be to choose a process that will best fit our sales force? Unfortunately, it’s not only hard to answer this common question, it is impossible. And the reason the question is impossible to answer is because it’s the wrong question to ask.
Unless the company has only one sales role and all of its sellers do exactly the same things, no common sales process will do the job. The right question to ask when you are selecting a sales process is, Which process is right for this specific role in my sales force? Not what is right for your entire company — just for a single role. This is an extremely critical point to understand as you begin to implement or redesign your formal sales processes:?
The specific sales processes you need in your sales force are determined by the nature of each individual selling role.
This sales manager inherently understood that different selling roles follow different sales processes, and consequently they require different performance metrics to manage them effectively. Meanwhile, the leadership team unintentionally demonstrated that attempting to measure and manage salespeople with a set of irrelevant metrics creates noise on the war room wall and discontent in the field.
So when someone asks, “Which sales process is best for our company?” he is asking the wrong question. The first question to ask when you begin to build or rebuild the foundation of your sales force is:?
Which distinct selling roles are at work in our sales force??
Answering this question will allow you to identify the nature of each selling role and to pinpoint the activities that drive success in each. With the roles and activities clearly defined, you can then turn to the more tactical question:?
What is the best sales process to measure and manage each of my selling roles??
Answering this question will allow you to select the right sales processes to take control of your sales force’s performance. Failing to answer this question will lead to two predictable situations — neither of which you will want to endure (see Figure 6.2).
The first thing that predictably happens when a mismatched process is forced onto a selling role is exactly what happened in the previous example — it will be ignored. So often when we hear executives grumble about low process adoption by their sellers, we discover that an irrelevant process has been dropped on top of a helpless sales role. Even if a territory manager wanted to use an Account Management process, he’d struggle to make it work.
The second predictable consequence of an errant process implementation is that management will begin to exert effort trying to force compliance by the sellers.
We once witnessed a tragic instance when both of these consequences were suffered by a well-intentioned management team. The company began its tragedy by implementing a Call Management process that it was convinced was needed by its territory sales reps. Unfortunately, the reps found no value in the process and immediately disregarded it. Realizing that the process implementation was a failure, the management team regrouped to assess what had gone wrong.
In short, don’t make the classic mistake of foisting formal processes on your sales force without vetting the individual selling roles and their critical Sales Activities.
Identifying Your Sales Roles
Your first step on the path to control is therefore to clearly delineate the various selling roles that reside within your organization. This is usually a relatively simple task, since distinct roles frequently have different titles and reporting relationships from one another.
But here are some typical reasons that sales roles are separated:
Different Customer Focus
Different Product Focus
Different Buying/ Selling Processes
Different Role in the Sales Cycle
Whatever the drivers of role distinction in your organization, you must ask yourself, What do these people actually do? What are their objectives, and what are their critical day-to-day selling activities?
Alternatively, two people with the same title may really represent different roles.
Regardless of nominal titles and organizational relationships, you need to assess which distinct selling roles reside in your organization before you can proceed to process matchmaking.
Who Needs a Process?
Once you have identified the nature of the roles in your sales force, the next step is to select the specific sales processes that are most appropriate for each. In the previous chapter, we shared how categorizing the Sales Activity numbers on our war room wall had revealed five discrete sales processes. By examining the metrics and what they were intended to measure, we were also able to deduce the key activities and goals of each process. As we considered these activities and goals in even greater depth, we were able to identify the context in which these processes are the most useful. We will now explore these situations, because if you understand the contextual value of each sales process, it will become apparent to you which of the processes your selling roles require.
Call Management. Remember that a Call Management process is intended to improve the quality of individual customer interactions through the thoughtful planning of a sales call. This helps a salesperson preview the upcoming interaction, identify desired outcomes, anticipate the conversation, and generally plan for any contingencies that might be reasonably predicted.
So to understand when Call Management would be an appropriate sales process, we asked ourselves, What type of sales call would warrant such caution on the part of the seller? The obvious answer is a call for which a negative outcome will have a meaningful and unwanted consequence on the sale. There must be some gravity to the sales call, or else a salesperson could leave the outcome to chance and save herself the extra effort of planning. So foremost, Call Management is a relevant sales process if:
A single sales call can greatly affect the outcome of the sale.
In other cases, one bad sales call can kill the deal. This is particularly true for prospecting calls, when a poor outcome typically means that the entire opportunity is dead on arrival.
Another type of interaction that is a candidate for Call Management is a call with a high degree of uncertainty as to how the conversation will unfold.
The content of sales calls is highly variable, and the customer’s behavior is uncertain.
Therefore Call Management is also most appropriate if: The sales role makes a low to moderate number of sales calls.
Opportunity Management. An Opportunity Management process is intended to help sellers strategically pursue and win deals that involve complex buying behavior. They force a salesperson to take inventory of all the factors that could influence the deal, like the buying process, its participants, the competitors, and other contextual details. Once the landscape is known, the seller then devises an approach to win the opportunity and executes her plan of attack.
An Opportunity Management process is relevant if: The sales role pursues complex, multistage deals.?
By definition, an opportunity is an individual pursuit that has a discrete beginning, middle, and end.
Account Management. An Account Management process is used to maximize the long-term value of selected customers. It helps you to align your company’s goals with those of your customer and to find compelling ways to strengthen your business relationship. Recall that the key Account Management activities are assessing your customer’s needs, aligning your goals with theirs, developing an action plan to create mutual value, and executing the items in the plan. Beyond just planning what you want to get from your key customers, a good Account Management process helps you determine what you must give them in return.
Account Management process is relevant if:?
The seller pursues multiple opportunities over time with the same customer.?
There is an economic justification for the additional level of effort.
Territory Management. A Territory Management process is intended to help salespeople allocate their time most efficiently across a large group of assorted customers and prospects. By forcing sellers to prioritize their customers and execute their call patterns accordingly, this set of activities makes certain that your sales force’s effort is directed at your preferred types of customers. Unlike the three previously discussed processes that boost salesperson effectiveness, Territory Management activities help drive organizational efficiency.
Territory Management process is only relevant if:?
The sales role makes proactive outbound sales calls.
The seller is assigned too many customers to fully engage them all.
You want to treat different types of customers differently.
Sales Force Enablement. Sales Force Enablement activities are intended to increase the sales force’s ability to execute the previous four processes. But unlike Call, Opportunity, Account, and Territory Management activities, Sales Force Enablement is a collection of management decisions that are primarily the domain of sales leadership. Whether it pertains to recruiting, organizing, training, coaching, equipping, or assessing salespeople, management must decide how to invest its resources to make the biggest impact on sales force performance.
So rather than asking in what situation Sales Force Enablement activities would be relevant for your sales force, the real question to ask is:?
Which roles should be responsible for performing these specific activities??
We will not attempt to answer this question because it can only be answered in the context of your own organization (see Figure 6.3). Depending on how your company is structured and where the competencies reside, responsibility for these activities could belong directly in your field sales force, in a sales operations group, in another business function, or even with an external partner completely outside of your company. The goal is to find the most qualified resources for the specific Sales Force Enablement activity in question.
If your human resources department doesn’t recruit the best salespeople, then don’t let it recruit for you. If your corporate training group doesn’t have the best sales trainers, then don’t let it train. If your sales managers aren’t the best coaches, then give us a call. Sales Force Enablement activities are too critical to a sales force’s performance to have them reside in a place of convenience. You need to identify the most capable resources to enable your sales force and then point them toward very specific outcomes. With focused effort by best-in-class resources, your sales force’s ability to execute its key activities can increase dramatically.
Process-Role Matchmaking
Now that you have your sales roles clearly delineated and some guidelines for which sales processes could be relevant for each, it’s time to play matchmaker. As you might have concluded reading through the preceding paragraphs, picking the right processes for each selling role is not always a straightforward feat. Often, there is more than one process that aligns with a particular sales-person’s job description. Unless your sales roles are very narrowly defined (which is not a bad thing), you will find that their daily activities capture elements of multiple sales processes.
For instance, you may have a role in your sales force that is responsible for prospecting within a region (Territory Management) and then pursuing the multistage deals that are uncovered (Opportunity Management). In another case, you may have sellers responsible for servicing dozens of small customers (Territory Management) as well as maintaining a handful of strategic accounts (Account Management). And in either case, the nature of their sales calls may warrant Call Management activities. It’s easy to see how a salesperson’s day-to-day activities can be reflected in more than one sales process, and you might need to employ more than one process to measure and manage them effectively.
To assess which processes you should have in your own sales force, create a chart like the one in Figure 6.4. This will help you identify your individual selling roles and take inventory of the formal processes that might be relevant to each. This example comes from a past client of ours that we took through a similar exercise.
Whether you discover that your sales processes are mis-aligned or your selling roles are ill-defined, it’s rare that we find sales forces with perfect harmony between the two. Salespeople’s responsibilities and formal sales processes often change over time, so they can slowly drift apart. Given that reality, it’s smart to take a periodic look at what your salespeople are actually doing and which processes you have in place to manage them. Again, when the wrong processes are imposed on a sales force, it not only causes a sense of frustration in the field, it causes a lack of control in the war room. Putting the right levers and pulleys in place is a crucial step along the path to proactively managing your sales force’s performance.
Too Much of a Good Thing
When you finish mapping your relevant sales processes to your individual selling roles, you may look down to find that a single role does have three, four, or all five sales processes selected. 1 In fact, most roles in your sales force are likely to have multiple processes in play unless you’ve defined the roles very narrowly. So if you do have complex roles that demand layers of sales process, is it wise or even reasonable to impose such rigor on a sales force? Will too much of a good thing turn your building blocks into a suffocating procedural nightmare? We think not.
Generally speaking, we see a trend toward sales forces having a greater number of more specialized selling roles. Management long ago began to separate “hunters” from “farmers,” but the number of boxes on the frontline org chart continues to grow. From industry specialists, to product experts, to sellers who serve niche markets, the roles we find in sales forces are becoming more diverse in nature and more narrow in scope. This not only makes the seller’s tasks easier to master, it also reduces the management challenge of hiring, developing, measuring, and compensating complex roles.
We work with many sales forces that have several formal sales processes deployed in the field. It is neither impossible nor impractical to do so once you’ve determined which sales processes will help you attain your Business Results more predictably and manage your salespeople more productively.
RIGHTSIZING YOUR SALES PROCESS
Implementing a new sales process is no trivial affair. To receive the maximum business impact from the new process, you must approach the implementation effort from an overall change-management perspective. It involves more than just directing the sales force to engage in different types of activities — it also requires you to alter the environment in which the activities take place. Management guru W. Edwards Deming is credited with saying that “A bad system will beat a good person every time,” and nowhere is this more true than in a sales force. If you don’t support your desired behavioral changes with new metrics, tools, and skills to reinforce and measure the change, your sales force will quickly revert to its previous state.
Therefore, it’s critical to determine how much change is actually needed in order to reap the benefits of the new sales process.
Candidly, management often overestimates its ability to direct changes in its sales force.
Our point is that it’s necessary to find the right level of effort between inadequate change management and process overkill. Either extreme will render an otherwise perfect sales process highly irrelevant to the sales force (see Figure 6.5). It will become yet another flavor-of-the-week project that is ignored until its death.
Our own approach to change management can be best described as comprehensively minimalist. As we just mentioned, we feel very strongly that when you implement a sales “process,” you must also consider the comprehensive system in which the salesperson operates (see Figure 6.6). We always begin by considering the strategy — in this case, how the individual role is defined and what it is intended to accomplish within the context of the larger sales force. We then design the process itself, which is the collection of key selling activities that must be performed. We then examine the tools that are required to support the sales process, as well as the skills that are needed to successfully execute the activities. Finally, we develop a set of metrics that will enable the effective measurement and management of the process. This holistic approach to change management enables sustainable change through multifaceted design, training, and reinforcement.
While our approach is comprehensive in scope, we try to deploy the minimal amount of rigor required to accomplish the process’s objective.
OFF THE SHELF OR OFF THE MARK?
We mentioned that we are often asked, “Which sales process is best for our company?” With almost equal frequency, we field a similar question: “Which sales process is a best practice?” As you know, our response to the first question is that you don’t assign processes to companies — you assign them to individual selling roles. Our answer to the second question is that the best-practice sales process is the one that is right for the role, properly sized, and resides within a system that supports and reinforces it. Probably no surprises there.
Earlier, we defined a “best practice” sales process as one that
Is relevant to the role
Is properly sized
Resides within a system that supports and reinforces it
In brief, off-the-shelf sales processes can be perfectly on target with the needs of a particular selling role, sometimes. They can also miss the mark by so much that they are less than worth-less — they are a drag on sales force productivity. Whether you choose to build or buy your formal sales processes, you must make sure that they are the right size and shape for your particular roles and that they are integrated into a comprehensive change management framework. Only then will you have the right building blocks in place to effectively measure and proactively Manage Your Sales Force.
DOES THAT ALSO COME IN GRAY?
There’s one final point that we need to make about the nature of sales processes, and it’s that there are many different varieties of each. That is, you can buy or build many different types of Call, Opportunity, Account, and Territory Management processes, depending on what your salespeople are trying to accomplish. The key is to understand the underlying methodology of each variation and select the flavor of process that’s appropriate to your task. Let us use the Call Management process to illustrate this, since it’s one of the most widely used sales processes.
STATUS CHECK
As we began to consider how a leader would use the new sales management code to increase control over sales performance, we put a sharp eye on the highly manageable Sales Activities and the five formal processes that encompass them all. These processes are the fundamental building blocks of control over your sales force because they provide your managers with the tactical gears and levers they need to effect behavioral change in the sales force. In the absence of formal sales processes, management’s task is reduced to asking for desired Objectives and Results without the means to influence them. With sales processes, managers actually have something to manage.
We then explored the relevance of each sales process to any given sales force and concluded that relevant processes can only be determined by examining the actual activities of individual selling roles. Our insight: the nature of each role determines which processes should be deployed in your sales force. Choosing the right sales process is actually an exercise of matchmaking your individual roles with the five sales processes. This act of selecting the right processes is the key step to gaining adoption by your salespeople. See Figure 6.7.
In addition to selecting the right processes for each role, our experience has shown that there are two other conditions for the successful deployment of a formal sales process. One condition is that the process must be sized appropriately for the role. If a process is too rigorous for the day-to-day activities of your salespeople, then it will be ignored and eventually abandoned. If it’s too little process, then its overall impact will be limited. Therefore, it’s wise to ascertain the minimum level of rigor required to enable better measurement and management of the role.
The second condition is that the process must be surrounded by the other components of a holistic change management system if the impact of a new sales process is to be sustained. Notably, the process needs to be supported by the right training, tools, and metrics to integrate the new process into the daily workflow of your salespeople. Otherwise, inertia will pull the sales force’s behaviors back into a well-worn rut.
We also shared our observations regarding off-the-shelf sales processes. While they can be a perfect fit with little alteration, their prepackaged form can violate our tenets of a best-practice sales process — that is, that they are relevant, right-sized, and supported by complementary components of the overall system. Management discretion is advised when choosing whether to build or buy its formal sales processes. A single miscalculation can lead to disaster.
And finally, we highlighted the fact that not all Call, Opportunity, Account, and Territory Management processes are identical to one another. There are different varieties of each process that are intended to support different tasks. Once you identify that you need a certain process in your sales force, you must further verify that the particular process methodology aligns with your salespeople’s needs. Otherwise, your process will produce suboptimal outcomes.
With a comfortable grasp of the building blocks required at the Sales Activity level of our sales management framework, we turned our attention to identifying how you would select and align all of the vital metrics from the top to the bottom of your organization. Business Results and Sales Objectives, here we come.