Sales plays a large part in the success of many companies. The sales team serves as the revenue engine for organizations. But to get the team to a productive point where they are meeting or exceeding revenue goals requires a comprehensive sales management approach.
As part of that, it’s important to understand the sales management process and how to develop a winning sales team.
Let’s begin by reviewing the role of sales management.
What is sales management?
Sales management encompasses the managers who lead a sales team. These sales leaders oversee the representatives who are communicating directly with customers to pitch a company’s products and services. But they do more than that.
Sales managers set the sales process designed to achieve revenue targets that maximize profits for a company while delivering value to its customers. To accomplish these goals, the managers develop their company’s sales operations and implement techniques to enable their teams to succeed.
A sales organization is typically comprised of sales representatives, analysts, and account managers led by the sales managers.
That said, sometimes teams can be broken down further with sales managers overseeing only the sales reps, or conversely, managers might possess an expanded role with both sales and marketing management responsibilities.
The sales reps, sometimes referred to as account executives, are the ones performing the sales pitch to potential customers, called prospects.
Analysts are responsible for data analytics; today’s sales teams are data-driven, and the analysts tackle tasks like sales forecasting. In contrast, account management is focused on nurturing customer relationships post-sale.
The sales managers serve as the glue to hold the disparate parts of a sales organization together. To understand how this is done, let’s examine the sales manager’s responsibilities in more detail.
What are sales managers responsible for?
Sales managers are responsible for three main areas:
- The structure and approach of the sales operations
- How data and reporting is used in those operations
- Defining the overarching strategies that enable a company to attain its revenue goals
A number of considerations in these areas will help sales managers drive success. We’ll look at some of these key components here.
While managing sales is a large responsibility, that responsibility extends to all aspects of the team, such as:
- The hiring and development of the people in the sales organization
- The structure of the team, such as how sales reps are broken out and how account managers are assigned
- Keeping the team motivated
Because the sales rep job is not easy, the sales manager must carefully select who to hire. The rep must call upon many prospects to close a sale. Consequently, the sales rep must be articulate, personable, and thick skinned.
Beyond hiring, sales managers must define what success looks like, setting revenue goals for sales reps to achieve. But setting goals is not enough. Sales managers must know how to motivate their team.
In sales, confidence is everything. Since a primary responsibility of a sales team is prospecting for new business, sales reps must be able to weather repeated rejection.
Also, the manager must balance the company’s need for revenue growth with realistic targets for that growth. If the targets are not achievable, sales reps can become discouraged and may leave the company.
Moreover, reps who exceed the targets should be rewarded with bonuses. And since most sales positions incorporate a commission structure, all reps should be eligible to obtain a commission with the close of each sale. At the same time, that commission amount must be determined carefully to ensure every sale remains profitable for the company.
Consequently, a large part of a sales manager’s job is to juggle competing priorities to bring balance to the team so that they remain motivated, confident, and well-rewarded while the company can achieve its goals for profitability.
Another piece to this puzzle is for the sales manager to determine how to structure operations. This means defining how sales territories are divided, which market segments the sales team will prioritize and pursue, and how account managers are assigned to clients.
The sales manager must even determine whether to use an inside sales team, which pursues customers primarily via telemarketing, or a field sales team, which uses the traditional door-to-door model.
For instance, an inside sales team might make sense to service customer segments with low spend levels to keep costs under control.
A data-driven approach is required for today’s sales managers. In order to define realistic revenue goals, the sales manager must model a sales forecast and execute sales planning, which involves activities such as analyzing the following attributes:
- Sales pipeline, which shows the outstanding deals being worked on by sales reps
- Close ratios, which measure how many deals were completed compared to the number of presentations delivered
- Average deal size by dollar amount
- Sales velocity, which measures how long it takes for sales reps to go through the sales cycle to close a deal
Typically, this work is done by a sales analyst as it takes time to collect and analyze historical data as well as to build a realistic model.
Analysts must also understand factors that affect their analysis, like industry trends and the competitive landscape.
Sales management defines the sales organization strategy. This involves a number of factors such as:
- Making compensation decisions, including which types of sales can earn commissions or bonuses
- Setting quotas to ensure each team member is pulling their weight
- Packaging up products and services in different ways based on the customer segments being targeted to increase the sell-through rate, i.e., how frequently a product or service is sold
- Leveraging motivational tactics like sales contests
The sales strategy is key to the financial health of the company as well as to the productivity of the sales team. Commissions and bonuses should be aligned with the products and services that deliver high margins. To provide a commission on a low margin product could cause a net loss, and so, it does not make sense to incentivize sales reps to pitch low margin offerings.
Also, quotas are needed to determine if a sales rep is helping the team achieve revenue goals. If not, the rep may require additional training or support, such as a mentor, to help them become more productive.
In addition, how a company’s offerings are pitched can impact close rates. If the sales pitch is not resonating with prospects, then you may need to repackage your offerings.
For example, if an advertising agency offered the ability to produce television commercials which were bundled together with more popular digital advertising options, it could weigh down the sell-through rate on the digital offerings. Therefore, the commercial production might need to be carved out of the bundle.
Another tool in the sales manager’s strategy kit is to incentivize sales reps through contests. Sales reps earn bonuses by selling the most of whatever goal you set in the contest, such as bringing in the most sales. Contests are great at generating short-term sales boosts, but use them too often and reps may tire of them.
Sales management strategies to follow
Regarding sales strategies, let’s now review those that particularly help to build an effective sales management organization.
1. Coach the team
While it may seem simplistic, too often I’ve seen sales managers fail to devote time to coaching the team.
At the same time, I’ve seen struggling sales reps suddenly perform well after the sales manager worked one-on-one with them.
Tips for coaching:
By using sales management software, like customer relationship management (CRM) software, to regularly analyze team performance, a sales manager can quickly identify a rep who is underperforming. From there, the challenge is to figure out the areas that the rep needs to improve.
- Determine the weak points: A sales rep could be underperforming because of the rep’s confidence with the sales pitch, the ability to respond to client objections, or some gaps in knowledge about the company’s products or services. Work with the rep one-on-one to determine where they’re having trouble.
- Apply the appropriate tool: Once the problem areas are identified, the manager can use the appropriate technique to help the rep improve. For example, if the rep is struggling with the sales pitch or client objections, use role playing to help the rep practice and strengthen their approach.
2. Shadow sales reps
A sales manager can learn a lot by shadowing their reps. This involves going along with the rep to customer meetings, or joining a sales call and quietly listening in.
Through this technique, managers can identify warning signs of a struggling rep early on or capture best practices to share with the rest of the team. It’s such a valuable tool that I’ve even worked at companies where the CEO participated in shadowing.
Tips for shadowing:
Because it’s not possible for a sales manager to shadow all reps, take factors such as costs into account. For instance, if the manager has to travel across the country to join a rep, perhaps it’s better to participate by phone.
- Determine objectives in advance: The manager should decide why shadowing makes sense. Is it to see how a new rep is doing? Is it to collect best practices from a top rep? This decision also helps to identify the reps to shadow.
- Make the rep feel at ease: A rep will naturally feel heightened stress if the boss is coming to a sales meeting. So the manager should give reps the heads-up about joining and the reason for the shadowing to help them feel at ease.
3. Target the right buyers
Not all customers are in a position to buy a company’s products or services. Some may not have the requisite budget. Others may not be a good fit to benefit from the company’s offerings.
Since it takes time for a sales team to find and acquire customers, sales managers should ensure their reps are not spending time pursuing prospects who are not a good fit.
Tips for targeting the right buyers:
As part of the training sales reps receive, they should be informed of the characteristics of the buyers who are a match for the company’s products and services.
- Use a buyer persona: A buyer persona is documentation outlining the types of customer characteristics that are ideal for the company’s offerings. It summarizes attributes such as the minimum amount a buyer must be willing to spend to buy the company’s products or services. This tool allows sales reps to match up a prospect with the buyer persona to ensure they are not wasting time.
- Perform online research: Many sales organizations are involved in business-to-business (B2B) sales. As a result, the client typically has a website or other online presence that allows the sales rep to research the prospect before reaching out to them. This research step is the initial means of pre-qualifying a lead. Sales management should make online research part of the team’s best practices.
4. Leverage CRM software
Sales is a numbers game. A sales rep must have a certain number of prospects in their sales pipeline at any given time to achieve the necessary close rate to hit revenue goals.
Tracking that information as well as the myriad other details about clients as they pass through the sales cycle can quickly become overwhelming. That’s where CRM software comes into play.
Tips for using a CRM:
Today’s CRM software is powerful and rich in capabilities, but not all of its tools will be used by sales reps. Consequently, the team should be trained on those features that they will use on an everyday basis.
- Monitor the key stats: The team should have sales dashboards set up to help them monitor their pipeline and track where each potential customer lives in the sales cycle. Did the lead become a prospect? Is the prospect on the verge of converting to a sale? The CRM should be used to stay on top of these details.
- Perform sales analytics: Because all customer data should be housed within the CRM software, sales management has a central database from which to perform the various customer analytics, such as tracking sales velocity and average deal size. An example is Agile CRM and its snapshot of each rep’s productivity, including revenue generated, deals closed, and calls made. As a result of the CRM’s powerful reporting abilities, many sales management organizations live and die by the strength of its CRM.
How to best use a CRM for sales management
A CRM can not only help sales management and the entire sales organization stay organized, the software offers other benefits as well.
- Consistent sales workflows: CRM software can track potential sales via each customer’s movement in the sales cycle and provide reports to sales management. This allows a manager to ensure the team is working leads and closing sales in a consistent manner. In this way, sales managers can establish best practices and use the CRM to validate that reps are following those practices.
- Improved sales forecasting: Because the CRM shows all deals in the sales pipeline, a manager has a better sense of the revenue potential on the table. This allows the manager and sales analyst to know if enough deals are in place to achieve revenue goals for the month or quarter or if additional leads must be generated.
- A repository for all sales content: Some CRMs support storing training material and other documentation, like a slide presentation used in a sales pitch, within the CRM. This allows for a centralized place where the team can go for materials, reports, customer contact information, and more.
Because of the many CRM options, each with various pros and cons, it’s best to peruse examples of CRM software to understand what each software has to offer and follow a software implementation plan once you’ve selected one.
A final word about sales management
Many elements coalesce to create a winning sales team. Because success can vary due to factors like the strengths and weaknesses of the sales reps, it’s important to evaluate current processes and be willing to adapt.
By continually refining and looking for opportunities to improve the sales organization, sales managers can put the team in the best position to meet and even exceed revenue goals.
View more information: https://www.fool.com/the-blueprint/sales-management/