The State of Sales Management Processes
World-class organizations focus on having the best people, processes, and technology. Each of these contributing factors helps sales organizations drive sales and achieve their goals.
VP’s of sales have shared with me that their number one goal is to build a world-class sales organization.
The STAR Sales Manager Survey added a question to understand what % of respondents felt that their organization had highly effective and well-understood processes.
Based on 25 years’ sales leadership experience I believe that the core sales management skills and processes are:
- Business planning/acumen
- Performance management
The STAR Sales Management Report showed that there was a high level of agreement that coaching (94%), managing performance (95%), business planning (94%), leadership (94%) followed by hiring top performers (79%) were important skills/activities. These results were similar to the findings from the 2015 report.
Given the high level of agreement on the importance of the five core processes, it was surprising to see that between 44-60% of respondents were in agreement that their organization had highly effective and well-understood sales management processes. The expectation was that this number would be much higher.
5 Critical Sales Management Processes
From the STAR Sales Management Survey, there is a split between organizations that have well-defined sales management processes. In light of this, let’s explore the impact of the five sales management processes and the implication of not having a highly effective process in place.
Coaching is the number one sales management activity that drives sales performance. It has been shown that companies that have a coaching method outperform companies who don’t.
Sales managers are more apt to coach if there is a well-understood process. With no process in place, managers are rarely held accountable to the documenting rep’s coaching plans and field visit reports.
The survey showed that only 44% of respondents were in agreement that their organization had a highly effective and well-understood coaching methodology.
Our proprietary Focused Coaching Methodology is now available in an online learning module that is economical and easy to implement. It helps sales managers develop their sales reps to improve on one specific skill set at a time.
With the absence of a highly effective coaching methodology, sales managers are left to coach based on their experience. The impact is sub-optimal sales rep development which in the long run will mean sub-optimal sales performance.
Business Planning Process
As business becomes more competitive, sales managers are required to become more strategic. Especially in how they plan to achieve their sales numbers. Business planning at the sales manager level includes identifying key customers in the region and allocation of resources to sales reps. Sales managers need to be very clear on the critical factors that are going to make them successful and build a plan on how they are going to make their CSF come to fruition.
Many companies are driving business planning down to the territory level. Reps create territory and customer plans, so they are better targeted and focused on the accounts that offer the biggest opportunities.
As part of any business planning process, quarterly reviews of the business becomes part of the process. The opportunity to look at your business, execution and make adjustments is an important part of business planning. As the saying goes “no one plans to fail, yet many fail to plan.”
We have helped some companies build business-planning processes and train their teams on business acumen. Drop me an email if you would like to learn more.
The absence of a strong business planning process means that there are discrepancies between regions and sales reps regarding the quality of their business plans and the use of business plans across the organization.
Systematic Hiring Process
Unless you are ramping up a new sales team or you have a high level of turnover, your sales managers are not hiring every day. However, the importance of hiring top salespeople is critical. The impact of a bad hire on a territory is very costly. Organizations who want to succeed are remiss if they do not take the time to develop a systematic hiring process.
Given the importance of hiring, it was surprising that only 44% of respondents agreed that their organization had a highly effective hiring process.
Simple yet effective hiring processes include a fit interview, a behavioral interview and the use of a psychometric profile. Adding different people to the process and using the same list of questions for each interview allows for a more systematic and focused approach to hiring top performing salespeople.
A well-defined and systematic hiring process significantly increases the likelihood of identifying top performers. For sales managers who are looking for a process and some great hiring tools.
We all know that the cost of a bad hire ranges from $500,000 to several million dollars in lost revenue. With a lack of a rigorous process in place, the chance of making a bad hire increases.
Goal Alignment Process
One of the key aspects of leadership is ensuring that your sales team is highly aligned to the common goals. We use a collaborative process to identify a small number of critical success factors.
Once the team has identified the CSF’s they build a plan on how they are going to attain each CSF and how they are going to measure what success looks like.
The survey showed that 60% of respondents were in agreement that their organization had a highly effective process to align goals. Relative to the other processes, goal alignment was stronger, yet there certainly could be improvements in many organizations.
As sales organizations grow, alignment is a key element in effective execution. In the absence of goal alignment in the sales force, companies will never execute effectively. Sales managers will be focused on their goals and the likelihood of these goals being aligned with the organization is poor.
Performance Management Process
There are many elements of performance management including objective setting, periodic performance reviews, and annual performance appraisals. Performance management can also look at the process of dealing with a rep that is not performing and how the company deals with non-performance.
From the survey, performance management was ranked the highest of the five core skills/activities.
60% of respondents in the survey were in agreement that their organization had a highly effective performance management process.
In the absence of a highly effective performance management process, sales managers are left to their own discretion on how to manage performance. This leads to suboptimal performance and in many cases a tendency to not address performance issues.
Having highly effective and well-understood sales management processes cannot be understated. The results of the survey show that on average only half the sales organizations have highly effective and well-understood processes. This is another indicator why so many companies fail to meet their sales objectives.
After reading this article, it would be wise to survey your sales management team. See how you well understood your key sales management processes are. Find out where are opportunities to make improvements.
Please share your experience and share how you feel your organization stacks up regarding key sales management processes.