Ways to manage and motivate sales performance improvement.
Take on the devil or the deep blue sea. Doing both, will likely leave a sales manager wrung out, like clothes that have been fed through an old-fashioned washing wringer, too many times.
You can pay, and hire the best mercenaries available. Top people with a proven and demonstrable skill command very high salaries. Whether they are mercenary by nature does not matter. The market sets the going rate. Alternatively, you can hire beginners and train them.
If your market position or performance is premier league, you will find it reasonably easy to attract top talent. Otherwise, offering top salaries and benefits may not be enough to lure the best of the best. League division two people with ability that has yet to be tapped, are much harder to spot.
If you take on beginners, you should expect to succeed with one out of three and those who become established are difficult to retain. Their success makes them attractive to larger, more prestigious employers with deeper pockets.
Why not balance both approaches? As the saying goes, ‘jack of all, master of none’. Paying high levels of remuneration will necessitate higher sales targets and a higher ratio of salespeople to managers. The broader the span of control the less time is available for nurturing talent and Coaching tends to be pushed aside by the necessity of getting results. Despite best intentions ‘Try Outs’ are left to sink or swim. Some do make it and enjoy rapid escalation of their income.
Leaving aside the issues of selection, let’s consider what’s involved in developing best in class sales team.
1. First we need to define best in class performance by collecting productivity measurements of competitors. This is easier than it seems however, to gather the data, someone has to spend some time doing the research.
2. Next we need to collect comparable data for the sales team we want to develop. The difference provides a measurable productivity improvement objective.
3. Now we can make sales people aware of the productivity measures (key performance indicators) we are paying attention to and how much improvement we consider they should be aiming for.
4. Once people's productivity is being publicly measured, they are likely to take the initiative to bridge the gap or at least ask management how they are expected to achieve the improvements which opens the door to a dialogue about sales competence and training.
5. Having a sales competence model which salespeople can be measured against equips managers to answer the question, "what should salespeople do to achieve the productivity improvements asked of them?"
If a measurement and monitoring system is properly designed and managed, sales people will take responsibility for their own development. People do what is measured.
Those salespeople who consistently over achieve will not be affected by the measurements. They will pay attention if they are interested or ignore the system with impunity if they are not. These people are already world class and if you have some, the most important task of the sales manager is to keep them.
For those who are not so consistently productive, revenue or profit performance is often perceived as an unfair measure of their competence for a wide range of circumstantial reasons. Transparent productivity and competence measurement can be positioned as fair and equitable as well as independent of territory assignments.
Productivity measures should take into account individual costs and use of resources. If revenue or profit targets are based on a productivity metric, sales targets could be made consistent regardless of the experience and remuneration of a sales person.
For example, a graduate sales trainee earning £18k plus an on target element of £10k might have a total resourcing cost including overheads, support resources, expenses, and training of £70k. With an annual profit target of £140k, this person would have a productivity ratio of 2. Using the same productivity ratio, a proven performer producing an annual profit of £360k could have a cost budget of £180k and an on target total income of £72k. In the same way, someone responsible for £600k of profit could be paid £120k for on target performance. With this approach, a team might sustain sales people with all levels of sales experience and ability without being seen to be unfair.
Establishing initial benchmarks and setting up a reliable and consistent measurement and reporting process requires some considerable forethought, planning, and preparation.
Equally, defining a sales competence model that takes account of an organisations specific sales circumstances should be thought through carefully.
Both of these projects may require outside resources if they are to be concluded in a reasonable time however, once complete, management and maintenance of the system will require less resources than were necessary before.
Motivation, process, and Kaizen (continuous improvement) are the watchwords of top sales managers.
Prepared by Clive Miller
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