August 20, 2009

'In the Dark' Sales Managers Cause Alarm

Many sales mangers don't have access to vital information regarding sales performance and potential. That effectively means they are driving in the dark and running the risk of an avoidable accident.

Sales is a Numbers Game!
We like to talk about numbers. We pull the calculator out wanting to really understand sales performance and potential and bypass hours of talking around the issue.
The fact is what gets measured gets managed, we want to talk to managers about their metrics. That is those variables upon which they will be judged and rewarded.
Managers want to talk about numbers too, but there is one big problem. A lot of the time they don't have them and cannot get them.
So when we ask managers about win rates, the number of sales meetings in the last quarter, the number of sales required next quarter we are often greeted with silence and a frown. When we ask about how these metrics vary across product lines, markets, or sales people the frown is even more intensive. Quite simply managers don't have access to key information regarding the performance and potential of their sales teams.
Managers Don't Have All the Information they Need.

Imagine driving without a dashboard telling you the speed you were travelling at, whether you had enough petrol to get you to where you are going.
Imagine not having the instruments to tell you if the breaks, lights, oil levels, or any of the functions important to staying on the road needed attention. Well this is what many well respected sales managers are doing when they don't have the information on the number of leads, meetings and sales cycles their team needs to work on at any one time. This lack of metrics is having major implications on how effectively they can manage communications with their peers, their team, their executives and their customers.
Visibility, Predictability & Control of Sales.
Sales forecast accuracy and sales reporting have long been a hot topic, and something that we are quite passionate about. We use the terms visibility, predictability and control because people can relate to them better. That is:

- Visibility of what is happening year to date (that is historical sales activity levels, sales revenue and margins).

- Predictability of what is going to happen to year end and thereafter (including booked and forecast sales, required activity levels and conversion rates).

- Control, that is the ability to impact on the level and effectiveness of sales activity, thereby immediately correcting any gaps and continually optimising people and process performance.

How to Achieve Greater Visibility?

Greater visibility comes at a price. It generally requires:
- Better Systems - that is the implementation of reporting systems, stricter forecasting methods, and even sales database, or CRM systems
- Better structures - such as a more structured approach to sales meetings, sales reporting and customer reviews
- Better plans and more importantly an approach to planning and target setting that sets out targets and metrics, not just based on sales, but on levels of activity (e.g. number of sales meetings required) and effectiveness (i.e. conversion rates throughout the sales cycle and ultimately win rates).
- Better processes - a more structured approach to the management of sales cycles so as to enable more accurate pipeline forecasts and the rating of individual sales opportunities.

Visibility is a Challenge.
We feel it is important that sales managers move from subjective measures to ratings based on the completion of specific elements of the sales process (e.g. documentation of needs analysis, contact with all members of the buying unit, or presentation of ROI model).

Many of these items will generate a kick back from salespeople and will require considerable commitment, effort and discipline to bed in successfully.
What is the alternative? Well, it is to keep on driving in the dark.

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