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Ascertaining the Real Value of an Effective Sales Manager?

Effective Sales Manager talking with his team reviewing results
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What is the value of an effective sales manager to your business?

A question of the value of an effective sales manager is one that many CEOs consider when they are looking at lack-lustre results or high staff turnover in sales. This blog post is a little confronting as it may hit some home truths, but it will certainly give CEOs something to ponder.

Recently I was sitting in a client executive meeting where a sales manager was reporting on their team’s performance for the last calendar year. The financial report demonstrated 94% achievement of sales goals and a reduction in profit margins. There was a staff churn rate of 27%. All have a cost to the business, directly and indirectly. Could this be considered an effective sales manager?

As the sales manager explained the results, he provided statements in relation to the performance of individuals from his team who he believed were contributors to the poor outcomes. On first impressions, you would consider him to be knowledgeable and his observations and actions to be right in light of what he was presenting. The CEO was frustrated as this was now the third year in a row the numbers had not come in, and it was affecting the business; it had plateaued.

It was time to explore if he was an effective sales manager. A number of the executive team started asking questions. For each question, there was an undeniable well-thought answer as to what had affected the results. It was convincing to listen to, and for non-sales inductees, it sounded fair. However, my observation was the sales manager was applying his well-honed selling prowess and was selling his story to the meeting attendees.

As each of his answers contained two primary contributors to the non-performance. Firstly the market place had increased in competitiveness and secondly, the performance of individual team members with specific customers or territories. Nothing about his strategies, changes to strategies, and what he had done differently to counteract the problems.

Rather than questioning his views of the market, I asked him how he was managing the people in his team. He became somewhat annoyed and defensive to the question, but with his CEO looking on, he was obliged to answer.

He said he believed in autonomy with the people in the sales team so they could show their best abilities. He did not believe in performance management or micromanagement. People in his team knew what to do, and he had absolute faith in their ability to perform to their best. Now, this is not an unusual answer to get from sales managers.

I asked him how much interaction he had with them each week or month, and he advised that they were in constant contact when he was needed. He left it up to each person to call on him when they had a problem. I then asked him how the customers were managed, and he bestowed the value of the relationship each salesperson had with their customers. This is not good management practice, nor is it the practice of an effective sales manager.

The focus then switched to the churn rate of sellers. I asked was the primary reason the people were leaving or being moved on. He advised that it was hard to find good sellers who had the industry experience and product knowledge for the job. New sellers were draining on time and resources, and they just did not fit into the company.

As you read this, you may say, ‘This is deja vu to our meetings’. You can step into many sales businesses and experience the same conversation. It is the way they have been educated to operate sales teams by their prior sales managers. It is the mantra that most non-sales executives listen to and accept as being sales management.

If your business is plateauing and/or not hitting targets you need to rethink what is happening.

Sales managers are there to plan, implement, and deliver results. They are paid to make decisions and provide guidance to the team members to ensure they do deliver. They are supposed to have more knowledge, skill, and capability than their team members hence the title and pay cheque.

Herein lies the problem, and let’s play devil’s advocate:

The sales manager is taking a hands-off management style that abdicates his/her responsibility and pushes all the responsibility to the individual team members. The team members are like any other employee, if you don’t provide them with clarity, focus, guidelines, and support, they end up just doing what they thought was right and often that is in conflict with what the company wants.

Rarely does an individual in a sales team push themselves to see the tougher customers, break new business, or have the hard conversations that are required to win larger sales. They find customers that are easy to meet with, easy to please, and will just tick along purchasing each month. The customers, in fact, end up managing them by asking them to do non-sales tasks but are deemed as good customer service. Many Australasian salespeople are customer service representatives on wheels providing good service and product knowledge.

Some argue that that is the way people like to be managed, and I would have to agree. If I could get paid for doing what I felt like doing with customers I like and not being responsible for the end-of-year results, I would be happy too. But that is just not how the business operates.

If a sales manager withdraws from providing daily-weekly guidance to a team, they are unable to add value to the team, influence productivity, and deliver results, then What is their value? If they are unable to identify when team members need coaching and, importantly, unable to monitor their decision-making and barriers with specific customers and sales opportunities, what is their value? Fundamentally they are too removed from the team to be able to add value.

Therefore your value to the company against payment is not justified. A sales manager has made themselves redundant by abdicating all their responsibility as a business unit leader. We reiterate a business unit leader not just a sales manager. You are employed to make business decisions and manage business-related matters that occur around the sales team and customers.

You can only change the results of a sales team by managing activity. To do that, you need to have a clear plan with each person of their activities, a deep understanding of their issues and performance, and provide them with advice, coaching, and experience to improve what is occurring.

For some reason, sales forces tend to fall behind when it comes to current practices and best practices. With all the information available to them, they continue to just live in a time warp hardwired back to the 1990s (or before then). They seem to be the last to know things have changed.

Sales management has changed. There is an increased emphasis on coaching and that coaching can increase sales by nearly 30%. Nothing has a greater impact on the performance of a team.

Companies can protect themselves from underperforming sales managers by ensuring they have robust sales operational procedures and processes. A robust sales process that people must comply with and management of the team is to a pre-defined and measuring system. If the sales manager is uncomfortable with those basic business requirements, then the answer is simple. They are redundant in that role with the company.

If you would like to discuss your specific business situation, please contact our office.

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© 2014 Adele Crane. All rights reserved.

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About the Author: Adele Crane

A leader in Implementation Consulting.
CEOs and Managing Directors have relied on Adele Crane to solve challenges with the performance of their sales and marketing since 1990. Her consulting experience in delivering results in 90-120 days is unprecedented by any other known sales and marketing consulting professional in the world. As an author of 3 acclaimed books, appearances on major media, and publications in USA, NZ and Australia, Adele’s experience brings fresh thinking and contemporary practices to business.