The Sales Managers Role

Managing a sales team is about leading people to higher levels of achievement to deliver company growth and implementing the sales process the company uses to target prospects and convert them to paying customers.

The starting point to managing a sales team is not with the sales team but you, the sales manager or sales leader. To successfully manage and build a high performing sales team, the sales team needs a high performing manager.

                         “People tend to follow those who will lead them somewhere”

To manage the sales team to high levels of performance, the sales manager needs at a minimum the following four competencies: (1) general business and market acumen, (2) ability to deliver effective coaching, (3) strong leadership skills and (4) evaluating and communicating individual salesperson performance. Sales managers who build on these core competencies are on the right track to managing the sales team.

In today’s highly competitive market with longer sales cycles and maybe smaller sales values, for a business to successfully sell their products or services, the sales leader needs to have these competencies to effectively manage and lead the sales team. The sales manager responsibilities also extends so that the sales team not only understands the sales objectives but the company’s overall strategic direction. It is about managing the sales team so they want to fully apply themselves to their roles and maximise their selling skills to sell solutions to customers.

Walk the job: As a sales manager, you need to allocate the time to work closely with your team so that you develop an understanding of each person's motivation, strengths and weaknesses. This walking the job and communication will over time help a sales manager to put the right salesperson in the right sales role (hunter, miner, and farmer) that best suits the requirements of the sales process. A sales manager needs to organise the sales teams so that there is a range of different people bringing a range of different skills and experiences to the business.

Control: A sales manager can only control the outcome if they control what the sales people do! A balanced approach to managing sales people is about mixing activity based management with results based management. This is also known as Task V Individual in management schools. “Activity based management” is about giving the direction and coaching on the sales process and ensuring the associated activities get done. This could be coaching and educating sales people how many calls to make, how many appointments to set, what suspects to call, which products need to be pushed, etc.  The activities or tasks may be set by senior sales management or by the sales manager to assist the sales people to take ownership in managing their own sales business.

Remember that activity based management is not about trying to kill creativity or initiative in the sales process. It should be used to define the sales role expectations so that a sales person can take ownership of their role and clarifies the sales person question of “what do you want me to do?”

The “Results based management” aspect for a sales manager is to focus on the individual sales member’s goals, actions and target results.  It is about giving the sales team ownership and the ability to approach a sales process or task that suits their style. If a sales person likes to make a LinkedIn introduction prior to a sales call, then fine. This is about asking the sales person what their plan is to hit the sales target or what their personal goals are for a given sales period. Don’t be afraid to listen to the sales team’s views or insights on getting the desired results. It gives them freedom and shows you value their input.

If a sales manager gets the balance right between Activity and Results based management, sales teams realise their manager is leading them somewhere (bigger earnings, recognition, promotion, job enjoyment).

Now, I want to introduce “Playing Lines”.
Playing lines are set at an individual sales person level, they are at their widest when a sales person is delivering the results, and the playing lines are at their tightest when the results are not there.
Playing lines represents how much scope (weekly rather than daily reports, less drill down on the pipeline, reduced focus on the activity etc.) a sales person has earned from the sales manager when they are hitting their targets or results. If the results are there then the sales person employee enjoys the wider space in which to perform and be successful. The only things outside the playing lines are company policies, human resources issues, unethical behaviour or actions that could affect the sales team. The sales person understands they have a level of autonomy earned from the sales manager due to past performance and can only be retained by continuing to perform.

The flip-side is if the sales results start to suffer or the numbers are not coming in, then the playing lines start to narrow. When the lines narrow, activity based management or task dominates. Now the sales manager needs to work the basics with the sales person bye spending more time challenging approaches or activities. Ask more questions. Deeper drill down into the metrics and status updates. The sales person still has the space to determine their own plan, just not as much. If over time, results are still not achieved and progress is not made then the playing lines will get even tighter to the point of performance management.

Quick sales management tip: Want to boost your sales team performance? Then get the sales team spending more time selling. Managing a successful sales team requires the ability to spin the plates that matter.

A few more tips for managing a successful sales team.

Become a great sales coach

Create the space to let them do what they do best. Sell! 

Give them recognition and constant feedback.

Always remember, in sales management it is not just about the final numbers. As any high performing sales manage will testify, you need the business acumen to know that the sales pipeline needs to be constantly filled and kept filling via sales activities, and this requires the competencies of a proper sales manager. In order to maximise the revenue of the sales teams pipeline, the sales manager needs to be able to analyse what actions and activities are working, and what is not. A high performing sales manager will always focus on the realities in the sales process of what works for the company and the sales team.

As written about earlier, managing a sales team is a balancing act. Clear guidelines on the “playing lines”, sales role documentation and time spent on sales analysis can help sort the “what’s wrong from the “what’s working”. Strive to create the space to let the sales team do what they do best– sell the product. By working on the sales manager’s competencies and focusing on the sales process and sales training, a sales manager can enjoy a widening of the playing lines and drive bigger revenue streams to contribute to company growth.

Building Blocks for a Successful Business

The building blocks for a successful business are built around three factors: The Team, The Product and The Market. Each factor or a combination will most likely determine the success or failure of any individual business with a particular focus on the product to market fit. It is often said that a business fails for two reasons, lack of funding and lack of execution. Lack of execution (and indeed funding to acquire customers) can be the failure to get the product and market fit right. If the product to market strategy execution by the leadership team is not right, the cost to fund the business for lead generation, sales, marketing and product development increase to the point where value cannot be extracted.

What causes business success?

In business which factors contributes the most to success of the enterprise, the team, the product or the market? Or put another way “what is the biggest cause of success”? Also which is the weakest link: a bad team, a weak product, or a bad market?

Let us briefly dig a little deeper into these factors. Investors and venture capitalists often say they don’t invest in businesses they invest in people, so the team can be defined as the potential effectiveness of the CEO, co-founders and senior staff relative to the market opportunity. Can the team execute against the market opportunity they have identified, will their effectiveness overcome any lack of experience, and has the team the ability to deal with the “never seen it before" obstacles.

The product can be defined as to what problem is it solving and how impressive is the product to any customer or user who actually uses it: How easy is the product to install/set up and use? How feature rich is it? How fast can the benefits be seen? How transformational is it? How well-crafted is it? How has it been tested and what were the results?

The market is the size, number, predictions and growth rate, of those addressable customers or users for the product.

One other factor I have written about before is the Cost of Customer Acquisition; that is that the cost of acquiring a customer is lower than the revenue or profit that customer will contribute. The rate of customer acquisition has to do with execution and the ability of the team to move enough prospects through the sales funnel. Remember also that product quality will not create market size; Steve Jobs learned that lesson with his NeXT business. What a business needs is a desirable product, a big enough market and an economical way to target it.

So which factor is the Number.1 building block for business success?

If anyone conducted a survey amongst business people on the question of which is the most important factor in business success, they probably would get three different answers.  Some will say team, some on the product, while others will choose the size of the market.

As written about earlier in this article, if you ask entrepreneurs or VCs which of team, product, or market is most important, many will say team. This is an obvious answer because most of their knowledge and reference points in the beginning is the team as the product may not be built or ready to market plus the market will not have been fully evaluated yet.

Marketing and techies will say the product is the most important factor. The business is product driven, creates great products, then markets buy and use the products. The most valuable companies today are brands such as Apple and Google because they build the best products and without the product there is no company. Right? Try building a great team and having no product, or a great big market and having no product.

This leaves “The market”, where researchers, students of business success and business leaders will tell us that the market is the most important factor in a business success or failure. The argument is that in a big market (fragmented market or badly served by existing solutions), a market with lots of real identifiable customers, then the market needs will pull products out of the business. The market is ripe for change, has an appetite that needs feeding and the market will consume, viable products that will feed it. Maybe the product doesn't need to be the greatest; it just needs to work. And, the market doesn't care how good a team the business has, as long as the team can produce those viable products.

Has history shown us that the No.1 business killer is lack of market?

To expand on this a little further, maybe the business killer is not just lack of market, but more importantly a lack of product to market fit. Could the building blocks for a successful business be about being in a sizeable market with a product that can satisfy enough of that market to make profits?  Is being in business about “making things that people want and will pay for”

Take the example of search engines, smartphones, online marketplaces even cars, when there is a growing, sizeable market with an appetite for change. Is this the story of telephone directories morphing to the web as search engines, the evolution of the telephone into people’s pockets, the buying and selling of goods being streamlined online or the transportation of people becoming about journeys.

The flip-side is in a market with little appetite for change, a business can have the best product in the world and super leadership team, and it may not matter, the business is going to fail. A business can spend a heap of money digging for years trying to find customers willing to pay for a product, little reward for a lot of effort and the team eventually will disintegrate, and the business folds.

Has history shown us that the No.1 business success factor is market?

When a great business team meets a stagnant market, market wins. When an average business team meets a great market, market wins. But when a great business team meets a great market, then something really special happens. Now this is not to say a business can’t screw up a great market, it has been done many times, but assuming the team is effective and the product is accepted in the market, a great market will tend to return success for the business and a poor market will tend to return failure to the business. So does Market matter most?

A few things worth remembering

Great products are really, really hard to build. So surround yourself with a great team, as a great team will always beat a mediocre team, given the same market space and product appeal."

Great products can sometimes create new markets. Product that are so transformative to business or consumers it creates a whole new big market and the business becomes a gorilla. Think Microsoft.  

The team needs to know how and on what battle ground it will take on and beat the competition to gain market share.  

As a business leader or start-up, what should you do next? Focus on the thing that matters in your business strategy; get the product to market fit right. Product to market fit means getting into a good sizeable market with a product that can satisfy that market and capture value for your business. Do whatever is required to get to product to market fit. Seek out people who can help build your vision, change the product, change the sales model, move to a different market, tell customers you need some customer validation for the product, whatever is required.

Lastly, build a team that can make the product to market fit happen.  A team that can go out and get customers buying the product. Then get product usage growing across lots of customers. This turns into revenue (and profits) from customers as money comes into the business bank account.  As a result of the team getting the product to market fit right, the business is hiring sales and customer support staff. VC’s are calling because they've heard about your business and they want to talk to you about getting a slice of the action.

The Cost of Customer Acquisition

The true cost of customer acquisition is critical factor in a new business survival and often underestimated in a growing business. The cost of getting customers can be the difference between success and failure no matter how good a business believes its product to be.  I once read that the goal of any business is to acquire, develop and maintain customers at a profit. The develop and maintain aspects are more clear forward but let’s focus on the cost associated with acquiring new customers regardless of the channel.  

Every business needs to acquire new customers to make products and businesses work. Whether the product is aimed at enterprises paying big money or getting thousands of visitors to a website, how a business gets and the cost of getting customers is the important part.

The Definition of Customer Acquisition could be defined as “The process of persuading someone to purchase a company’s goods or services”. The cost associated with the customer acquisition process is a critical measure for a business to evaluate in tandem with how much value having each customer brings to the business.

Is The Business Ready for Customer Acquisition?

Paper never refuses ink and this saying has been true in many a business or sales plan when it comes to putting a cost on customer acquisition. The cost is not just the marketing or sales cost but the time and resource cost to getting new customers. Has the business planned for the sales cycle, the demos, the travel, product trials or has a website planned for the cost from free signups to paid, customer or product support prior to a customer making a purchase. In other words, can a business survive while potential customers go through the acquisition cycle? While a quote like “move fast and break things” is exciting in a company start-up situation, it may not be the best advice when it comes to customer acquisition. 

The decision to start spending investor or shareholder money taking a product to market and begin acquiring new customers should be given the weight it deserves. Entrepreneurs or a business might have spent months or years developing the product, so the execution of the customer acquisition strategy has to be thought out very carefully.

Even before you spend a cent on customer acquisition ask the questions “is the product ready for some/many customers”? Are there still bugs that will make the customer interaction with the product flawed? While the saying “done is better than perfect” to avoid feature creep is practical; it would be a mistake to launch a broken product and fall at the first hurdle.

To take a step back into the business plan around customer acquisition, can a business tick the box on questions like; how many sales calls per day do you expect the salesperson to make, do they have a target list of suspects and prospects, how much activity on the website can the servers handle? Do you have the customer support with the knowledge required to respond to the questions from new customers? Does the product value proposition the salesperson has to sell make sense to people outside the company? In other words, have you done customer validation? These are the type of questions that you need to answer before committing money to a launch.

Being Prepared Always Matters

Any customer acquisition process is not straight forward or predictable but especially so for new companies, but that doesn't mean a plan is not useful or necessary. The customer acquisition process is far from an exact science. There are many things that can (and do) go wrong, however there are some things that any business can do to mitigate risk and improve the chances of successfully acquiring new customers. Be clear with your team what “Cost to Acquire Customers” (CAC) means, is it paying customers, trial customers, engaged prospects or even website registrations.  In the long run it should only mean the cost to acquire a paying customer.

Estimate the Cost of Customer Acquisition

Money for new product or new business launches is hard won. The budget and time for a start-up may be tight, so the business needs to estimate “worst case scenario” the cost to acquire customers (CAC) before beginning the marketing or sales process. A businesses CAC is loosely defined as the cost of ALL the sales and marketing expenses over a given period of time, divided by the number of customers the business plans to acquire in that time frame. While no business can have a firm sense of the CAC until they begin acquiring customers, having an estimate will help the business leaders prepare to act accordingly.

Logic rules, no matter how excited a business is about getting it out there, do not underestimate the impact of starting the customer acquisitions spend before the product is ready. The greatest risk apart from alienating potential customers by launching a flawed product is the money a business can burn through before it realises it got something in the product wrong.  Every business should ask, what is the baseline product I am willing to “show” potential customers and in what target markets?

Thread carefully in the world of social media and PR, spending time and money on journalists to line up business or product coverage of your launch, only to find out that the product is delayed or has issues, can put the business credibility in jeopardy . Journalists lose interest pretty quickly and are never your friends.

Do Realistic CAC calculations

While a business waits for SEO efforts to kick in, a business may utilise Google Ad Words to drive traffic for (a) for lead generation or (b) sales. Take a look at this example. The cost per click works out at 50 cents, the resulting 1000 website visitors converting to a trial rate of 5% (50) at a cost of €500. These 50 trials are then converting to paid customers at the rate of 10% which is 5. So each customer is costing €100 in just lead generation expense excluding sales/product/support costs. For many companies in the B2C space or in the B2B space with software using the web as their main acquisition channel, it can be hard to get the consumer to pay more than €100 for the product or service

Many business underestimate or do not budget for a realistic CAC, if we take the above example the cost of customer acquisition can climb rapidly if leads require a sales person to convert them. This human interaction can be as simple as email follow ups right up to inside sales people doing multiple sales calls and demos. Depending on the trial/registration rate along with sales conversation rates the cost can vary from €400 to over €5,000 per new customer acquired, depending on the level of interaction needed.

Another CAC calculation is to look at the cost of a field sales force. The fully loaded cost of a field sales executive with travel, car, expenses and salary can push the CAC into over €10,000 in enterprise sales.

In trying to address the single most important early-stage question – customer acquisition – it is easy to waste a lot of money in the wrong channels and on the wrong customer acquisition tactics (lots of companies in the graveyard from just this one failure), especially the new companies that went  toe-to-toe with the big guys and can got blown away.

Every business has to execute in a different way

A business will only thrive by marketing and selling smart; acquiring customers in an economic way and in a way that differentiates the business from the crowd. To goal is to build a customer acquisition strategy for paying customers the business does not have to keep paying for every month.

Create Demand

In larger companies with deeper pockets while the customer acquisition isn't exactly simple, they do have more resources. The process of customer acquisition is more challenging for newer companies. Established business’s will utilise bigger budgets, have greater brand awareness, and an ever growing community of influencers. Most new businesses will not launch with a partnership with an established brand like Microsoft, Apple or Google where the demand for the product already exists. Instead a new business has to allocate sales resources and money wisely to fight (and a fight it is) to let potential customers or audiences know that you exist, explain to them why they should show interest, and initially even offering to go the extra mile by holding their hand through the sales process.

The focus of everyone in a new business is not only to create the brand but also the demand. Sales and marketing are not two different departments,  the person leading the marketing drive needs control spend on brand marketing and really understand how to execute lead nurturing, content marketing, web demand generation programs and work hard at marketing efforts that require time but not money. Marketing and sales need to work at the hip to generate a steady, growing stream of leads each and every month.”

Acquiring new customers means understanding what makes your customers tick and investing in inbound marketing strategies such as content and quality articles, got onto the forums, become a subject matter expert and invest in search engine optimization (SEO) as a longer term tactic.

The Business Model

Business model viability, in the majority of new companies, will come down to balancing two things:

Cost to Acquire Customers (CAC)

The ability to extract value from customers, or LTV (Lifetime Value of a Customer)

Web based companies have long understood these metrics as they have a much easier easy way to measure them. However there are huge benefits for all businesses to look at these same metrics.

To repeat the message from a few paragraphs back, to calculate the cost to acquire a customer, CAC, a business needs to take the entire cost of sales and marketing over a given period, including salaries and other headcount related expenses, and divide it by the number of customers that a business has acquired in that period.  (In pure web plays where the headcount does not need to scale as customer acquisition scales, it is also very useful to look customer acquisition costs with/without the headcount costs.)

To compute the Lifetime Value of a Customer, LTV, you would look at the margin that you would expect to make from that customer over the lifetime of your relationship. Margin should take into consideration any support, installation, and servicing costs.

Manage Optimism with Reality

To be in business requires huge optimism, and in a belief in how much customers will want to buy your product. Unfortunately this can lead businesses to believe that customers will be kicking down the doors to purchase the product. This has the effect of grossly underestimating the cost it will take to acquire customers. In too many companies there is little or no focus on how much it will cost to acquire customers. Vague strategies along the lines of web marketing, and/or viral growth with no numbers are not business.

To finish, a well thought out CAC plan outlines the need to acquire customers through a series of steps like SEO, SEM, PR, Social Marketing, content marketing, direct sales, channel sales, etc. with the cost of each step worked out. This planning brings honesty to the real cost of customer acquisition.

Getting Sold on Selling

Salespeople need to get sold on sales not just the sales process. One of the big questions any sales team needs clarification on is "what do you want me to do". Simple I hear sales mangers say, "Go sell". Which leads on to the bigger question, what is selling inside your company. You see time was selling was easily quantified. In the day of the door to door, all a sales person needed was the product to demo and enough streets with enough door bells to ring. Simple numbers game, keep knocking until someone opens, give the sales pitch and close.

As time went bye, sales moved inside, online, blended, push,pull, hunter,miner, gatherer and the systems supporting the sales process got more complicated. First we had contact management with software programs like Goldmine, then came CRM and now Sales Force Automation.Which makes me wonder, has selling got lost in the sales process?, are sales people more engaged in the sales process and systems than the actual selling itself.

The sales models for many companies have become more complex and less efficient, putting pressure on the rate they can acquire customers, productivity and even shifting the focus point from selling time to admin time.

To illustrate this point a friend of mine recently asked me to do a review the sales division of a growing software company. They have fifteen sales people and five people in marketing. I found that both teams spent over 60% of the time on sales process,reporting,updating and forecasting. These are all important tasks but the time allocation was skewed.

The guiding principle of all sales and marketing teams is to maximise selling time, lead generation and relationship building. That may sound obvious to any sales leader, but it is important to remember that the drive for data and sales insights can collide with the forces of rising complexity in the sales process. In fact, sales teams can over time slip comfortable into being sales processors against being sales winners. Companies must understand and clarify the scope of their sales teams while promoting efficiency throughout the sales process.

There are thousands of ways to kill a sale but only a few ways to win them. Some ways to kill a sale are obvious like not showing up to a meeting prepared, not following up, not listening, not establishing trust, going to proposal too early, not speaking to decision makers... the list goes on. These can be easy to identify and with some training and practice can be overcome.

Then there are the sales killers that hide beneath the surface that many companies and sales managers do not even know exist. They are the sales weaknesses in the sales process which when combined with a salesperson’s own make-up can act like weights pulling down the sales efforts and results.

Aligning your selling efforts with sales process takes work. Sometimes companies can be cautious about meddling with the sales force—directors and even owners need to overcome the common fear that disrupting it will hamper revenue. Then, other stake holders from not only sales, marketing and sales support but also other functions, such as finance, must work together to identify and prioritise the expected outputs from the sales engine. Next, successful sales teams transformations require support from the very top: someone has to take the lead, get the senior people from across the company to sit down, share data, and be willing to talk about what’s not working. This leader must override internal concerns, see the big picture, and focus on the best solutions to boost sales time  regardless of past practices.

Changing the sales focus may mean changing the sales talent as successful sales teams refocusing may change how people carry out their roles and the ways other stakeholders interact, from customers to marketing and back offices.
Finally, winning back and protecting selling time for sales people to sell requires vigilance. The growth of multi channels marketing and sales channels in the  B2B and B2C markets can demand non-selling activities into the sales teams day. In addition, old habits chip away at selling time: a salespersons ingrained response when a customer needs a quick answer to something is to drop everything and dive in, even when a well mapped out sales support or customer support mechanism is in place to handle any issue faster and better. The new mantra has to be “A sales teams time is better used to sell.”

An example of refocusing the sales team selling time, was an Internet company who set aggressive targets for sales metrics such as the number of new customer interactions per week. Giving the sales people goals they could not meet without changing their behavior forced them to adopt to the change in sales focus. Success became self-reinforcing: the more they stayed business of selling the better they performed.

In larger companies, viewing sales operations across departments may not be easy, nor is implementing changes that affect the entire sales process. Yet the more sales operations can be streamlined and admin reduced, the more likely customer satisfaction will improve as deals close quickly and sales pipeline grows faster. At these companies, the result can often be millions of Euros in higher revenues and lower sales costs.

Get the right sales people and channel in front of the customer at the right time.

It may not be enough to transform the sales teams by hiring people with the skills and capabilities to sell solutions to target sectors. Companies might have to restructure their sales coverage model, which means defining the sales roles differently. The questions to ask, include how much hunting versus gathering capacity to employ; what the role of sales specialists should be; whether to use one or multiple sales people to serve a segment or customers across different geographies.
When to hunt for new customers and when to mine deeper within current customers is one of the answers that needs to be made explicit to any sales team. Too many sales people often get comfortable serving their current customers, so an obvious initial step is to charge them with becoming more aggressive about mining the largest customers to their full potential. At the same time, however, the life blood of any business is acquiring new customers.

That’s why an effective coverage model needs to be deliberate about who should be hunting and where. Sales managers and sales mangement should meet regularly with hunting sales people to understand and actively refine their target prospects and beach-head plans. Given the degree of sales difficulty and the strategic value of acquiring new customers, sellers should receive a compensation recognition for breaking into new accounts.

Whether hunting,farming, social selling or mining, it’s critical to get the mix and sequence of sales skills and specialists right. Do not ignore a sales stream because there’s no sales expert in-house to cover the area with the skills the target customers considers crucial.
Sales people need to learn and be taught how to orchestrate effective teaming. Like musicians who seamlessly improvise back and forth after they have played together several times, salespeople who get to know and trust one another tend to sell together more effectively.

Sales people need to get sold on selling again, start a new romance with more new customer conversations, fall in love again with sales time and get an answer to "what do you want me to do?.

Brian
TBB