Metrics do matter
Typically as business owner, you and the sales manager would agree on one or two metrics as the primary measure of success. Percentage increases on previous year’s sales is a simple baseline and for a sales pipeline, the number of prospects and potential size of each order is a commonly applied metric. See here for the best tools to track business metrics.
Measuring individual performance
If your business has many sales territories then a simple set of metrics such as average number of sales visits and orders derived across the entire organisation, can be another baseline. Your sales manager can compare each rep’s performance against the business average and see which reps are lagging behind their peers in terms of productivity.
Resources to measure sales staff performance
To take this one step further, management could look at industry data through research or a trade association and compare their performance against benchmarks for their industry. The sales manager could set key performance indicators (KPIs) to give recommendations based on the rep’s current territory size, coverage rate and comparison to average or benchmark.
Managing the sales manager
Leading from the top does not mean micromanaging the sales manager. Yet not all business owners are good coaches, and may be remiss about checking in with the sales manager on a regular, systematic basis. It’s reasonable to expect that the sales manager knows how to do their job but without a structure in place, there is the opportunity for less-than-optimal performance. Even more troubling is the risk that tensions can arise.
Sales targets are meant to challenge sales teams but unintended consequences arise if the business owner fails to have regular and effective reviews with the sales manager. Calling a sales manager in when under pressure is a sure-fire way to heighten tensions. The pressure on the sales manager can get pushed down to the reps at a time when, compared with previous years, there are fewer selling opportunities that enter the pipeline and make it to completion.
Recent Revenue Performance Index 2014 data points to a decline in the rate of conversion of prospects to sales and revenue, suggesting that sales reps are finding their jobs more difficult. Implementing a few simple changes can set the stage for stronger working relationships throughout the sales structure:
- Business owners need to set a consistent process for managing the sales manager. A bi-weekly appointment may be fine for a seasoned manager with a strong team. The best laid plans get interrupted from time to time so if there is a delay, reschedule the meeting rather than cancel
- Set an agenda; it doesn’t have to be like an annual board meeting – a few simple items like a rep performance form and the acknowledgement that dialogue is always open regarding coaching or training issues
- Measuring the sales manager’s performance is a key function of the business owner. Here, a key metric might be the sales teams’ prospects and forecasted sales
If there is an issue with under-performance or metrics falling too far short of KPIs; a non-confronting question to the sales manager would be, “How can I best support you in doing your best work?” In other words determine what assistance they need and build a plan to deliver what is needed so they can do their “best work”.
Ultimately, it’s not about the accuracy of forecasts or technologies, or even process best practices – it’s about supporting sales teams to do their jobs. And this is achieved through leadership and the delegation of the sales management role to an empowered manager.