What can a sales manager do when his or her salespeople begin struggling and sales figures start shrinking, apart from popping antacids and saying a few prayers? Turning around a faltering sales team may be the sales manager’s ultimate challenge.
The stakes aren’t high for managers alone. In most organizations, the sales team produces the fuel that generates bottom-line success. Lost sales can ripple through an organization, sometimes with disastrous consequences.
To make matters worse, some sales managers overreact to such challenges. They blame employees and try to intimidate them into working harder. A classic example of this behavior can be seen in the movie “Glengarry Glen Ross.” Actor Alec Baldwin, who plays the sales manager of a real estate office, gives a startling “motivational” speech that alternately threatens and insults his sales staff. Using obscene language, he calls them failures and tells them if they don’t produce higher sales they’ll be fired. Clearly this is a demotivational strategy that seems more likely to create increased turnover than sales.
Unfortunately, turnover among sales staff can be extremely expensive for an organization. Factoring in the direct costs to recruit, orient and train each new salesperson, along with the indirect costs of lost productivity, the expense of replacing a single salesperson could rise to as much as 150 percent of each exiting salesperson’s annual salary. The indirect costs are always harder to quantify, but may be equally devastating, such as lost sales revenue, lowered employee morale and increased customer dissatisfaction. Considering these potential costs, when an organization’s sales team is stumbling, the smart strategy is to coach each team member for increased productivity and success.
Setting New Standards
The first step in coaching sales team members to increase productivity is to develop a profile of each salesperson that reflects his or her overall performance level and capabilities. The best approach may be to use an assessment tool that can make this task much easier. There are many quality assessment tools to choose from that are accurate and objective.
Following that, force rank the entire sales team into three categories: top, average and low performers. However, make sure that all individuals are performing the same job so the comparisons are accurate. Also, keep in mind that the criteria for these categories shouldn’t be restricted solely to total sales dollars. Other factors include repeat business, customer satisfaction, account size and customer loyalty. Once you have your sales team grouped appropriately, you can begin to analyze those factors that seem to make a critical difference to sales results.
The second step is to analyze the top performers group to determine which traits, characteristics and skills they share. Factors to consider include the mental abilities, sales skills, character traits, work habits and motivation that make each of them successful in their positions. Armed with that information, sales managers can create a profile that will help them evaluate their remaining sales staff’s performance.
The third step is to study the differences between the high performers and the average and low performers. Can the differences in sales results be attributed to differences in temperament, training, natural capabilities or work experience? Can the characteristics that make the high performers successful be transferred to lower-performing salespeople? Is it feasible to try improving the performance of average and low sales performers by using a template modeled on the highest-performing sales team members?
If the low and average performers have the right stuff, then the sales manager can develop a plan to coach them up. If they don’t have it, no amount of coaching will get them to the top levels. In that case, the sales manager should consider transferring them to another position, or perhaps terminating them.
However, if the sales manager thinks it is possible to improve the entire sales team’s results by using the performance model created by the three steps above, it’s time to implement a sales development strategy.
Coaching Up Team Members
Once the sales manager has developed new standards for selling performance, the next stage is to implement an action plan to “coach up” the low and average sales performers. The idea is to design individualized development strategies to increase the entire team’s sales results. Those strategies may include skills training, strategy development, performance management coaching, position redesign or individualized goal setting.
First, the sales manager needs to make sure that each salesperson’s critical skills and priorities align with the organization’s needs and priorities. Even within a sales organization, individual salespeople’s strengths and preferences may vary widely. For example, a sales team member who demonstrates greater strengths and preferences for prospecting sales may not be the best fit in an organization where the prevailing need is for closing sales. However, when the salesperson’s skills and preferences align well with the organization’s requirements, it’s time to set goals that will drive performance.
For the most part, sales managers tend to be effective at conveying an organization’s financial needs in terms of total sales dollars, but goals need to go beyond the numbers to improve the skills and capabilities of sales team members. The goals must also be specific, measurable, attainable, realistic and timely.
Effective goals also have to reflect the stages of the selling process and should encompass the skills necessary to achieve those goals, such as product knowledge, research skills, developing leads, maintaining profit margins and building customer satisfaction, among others.
Following are four examples of SMART sales goals:
• Increase annual sales by 15 percent to $2 million by the end of the fiscal year.
• Open 10 new accounts within the Southwest region by June 30.
• Decrease customer turnover by 20 percent within the Northeast region by Dec. 31.
• Complete a training course on the latest product enhancements in the third quarter.
Managing Sales Performance
But setting goals is only one aspect of “coaching up” to improve sales team performance. Managers also need to take a close look at the process followed by salespeople to cultivate, develop and close new customers. In the “Glengarry Glen Ross,” Baldwin’s brutal sales manager boils the sales process down into a single, solitary, simple function — “Always be closing.”
While closing is an important step in the sales cycle, a savvy sales manager also considers the broader skills and strategies necessary for success. A sales manager should also look at how each member of the sales team cultivates new prospects, understands customer needs, identifies and reaches key players and decision-makers, provides unique solutions to customer problems, negotiates prices and terms effectively, closes each deal, maintains relationships, solves delivery or quality issues, generates repeat business and obtains referrals to other sales prospects from customers.
The framework for this in-depth review is an individual development plan, which should be created for each member of the sales team. No team member should receive an exemption from the process, no matter how experienced or successful. The sales manager should explore each salesperson’s techniques for prospecting, developing new business, closing sales, etc. The IDP indicates directly what each salesperson should start, stop and continue doing to become more effective, including milestones to review and document progress.
While the IDP discussion needs to be a two-way dialogue between the sales manager and each team member, it’s also useful to solicit feedback from one or more clients to create a 360-degree perspective. More data is always better than less.
The IDP enables sales managers to advise team members on how to build strengths and improve areas of weakness. Goals for improving sales effectiveness should be set, along with regularly scheduled follow-up meetings and progress reviews.
Following the strategies above to improve sales team performance doesn’t usually yield results overnight. It’s a process and, like any process, it has to be followed step by step to be effective. However, investing the time and patience to bring out the best in a sales team can yield big dividends.
When sales figures fall into a slump, these techniques can drive a turnaround that leads to higher sales performance and renewed confidence by the sales team. Another potential benefit is reduced turnover among salespeople, which reduces costs. Taking a methodical and focused approach as outlined above may be the best way to assure ongoing success and steady sales growth.
However, keep in mind that the process may not always result in higher sales. A certain amount of staff turnover is inevitable, given the impact of declining sales revenue within an organization. While it’s never easy to decide which team members may have to exit, managers who possess clear criteria and concrete performance measures are better able to make the right decisions.
To some impatient sales managers, the process outlined above may seem tedious. It’s only natural for aggressive managers to push for immediate actions and quick results. But for most sales leaders, implementing major changes such as these shouldn’t be rushed. It’s not that a sales team can’t achieve impressive results within a short span of time — some can. However, most organizations should strive instead for steady sales increases and long-term growth.