Sales managers most common mistakes, #1 of 3

How strong is your sales structure? DaveKahle.com

By Dave Kahle

In most organizations, sales managers are the essential bridge between the company’s sales goals and the realization of those goals. The gritty day-to-day interactions between the sales people and their customers are frequently filtered through the perspective of the sales manager on their way up the ladder. The aspirations and strategies of the company’s management must be imprinted by the realism of the sales manager as they come down from above. Sales managers are the conductors who carefully orchestrate the tentative entanglement of the sales people with their management.

It’s an incredibly important and difficult job. Unfortunately, it is often the most under-trained job in the entire organization. Instead of providing information on the best practices and processes of the job, most companies hope their sales managers will have learned enough during their days as a field sales person to provide some roadmap as to how to do this job well.

Alas, only a small percentage of untrained sales managers ever really figure it out, arriving by trial and error and after hours of study at the best practices of an effective sales manager. The overwhelming majority find themselves caught up in the urgencies of the moment, the tempting details of all the transactions, and the continuing onslaught of crises, and are never able to set in place a systematic blueprint for their success.

The net result? Few sales people are effectively managed. All parties, executive management, sales manager and sales people, bounce from one frustration to another. Company objectives are met frequently by happenstance, sales people are not developed to their fullest potential and sales managers lurch from one crisis to another.

Certain common mistakes often arise out of this unhealthy situation. As a long time consultant and educator of sales people and sales managers, I frequently see these three most common maladies suffered by sales managers.

#1 – Lack of an intentional sales structure.

This is such a foreign concept to many companies that the term itself is unfamiliar. The structure of a sales force consists of all the articulated and unspoken rules, policies and procedures that shape the behavior of the sales person. It consists of such things as:

* the way sales territories are defined

* the way sales people go about their jobs

* the way markets and customers are targeted

* the way sales people are compensated

* the methods the manager uses to communicate with the sales people

* the expectations for the sales force

* the training and development system of the company

* the expectation for information collecting by the sales people

* the frequency and agenda for sales meetings

* the sales tools used by the sales people

and countless other such things.

A highly focused, strategically-designed sales structure can be one of the company’s greatest assets, as it ultimately shapes the behavior of the sales force.

Most sales structures, however, haven’t come under the critical review of the company’s management. Typically, the structure slowly takes shape over time. Decisions are often made with heavy input from the sales people, almost always in response to a single event. These decisions slowly become codified into the company’s written and unwritten structure.

As a result, many sales structures are vestiges of years gone by, the legacy of sales people who may not even be with the company today.

Why do you have the sales compensation plan that you have, for example? Is it because you crafted a strategic plan that directly compensates the sales force for achieving the company’s objective? Or, is it because it’s the plan you inherited?

Why do some sales people come into the office every week? Is it because you have determined that this is the most valuable use of their time? Or, is it because that’s just the way some of them like to do it?

Why is it that some of your sales people are highly organized, with well designed file systems and effective ways to track their interactions with their customers, while others continue to get by with scraps of paper and yellow pads? Is it because you have invested in a system that helps them become well-organized and information-savvy? Or, is it because that’s just how it’s worked out?

Can you see the point? Many of these structural issues – spoken and unspoken rules about how the sales person does the job – have evolved by the sales people in response to their own specific situations.

And most sales managers are oblivious to the impact of these decisions on the productivity and effectiveness of the sales person.

I recently had lunch with a friend — an entrepreneur who had successfully started and run a number of businesses. As we were discussing the pros and cons of organizing a sales force for his latest venture, he remarked that he has learned how easy it is to gradually cede control of the company to the sales force. One decision at a time, made in response to the passionate pleas of an individual sales person, would form, over time, the structure that governed the sales side of the business.

I was impressed with his insight. That very observation described the number one mistake that sales managers make – they accept the historically evolved status quo for the structure, and don’t invest time in focusing it to provide the environment for sales success.

Originally published on DaveKahle.com

About the Author

Dave Kahle is one of the world’s leading sales authorities. He’s written twelve books, presented in 47 states and eleven countries, and has helped enrich tens of thousands of sales people and transform hundreds of sales organizations. Sign up for his free weekly Ezine. His book, How to Sell Anything to Anyone Anytime, has been recognized by three international entities as “one of the five best English language business books.” Check out his latest book, The Good Book on Business.

Small Businesses Should Not View CRM as a Commodity

Low-cost CRM vendors expect you to enter your credit card over the internet and do not expect a human to interact with you.

Most small business executives view CRM software as a commodity product and it is easy to understand why. Today, there are several hundred solution providers that cater to the small business community.  They all offer the same basic functionality for managing accounts and contacts, activities, notes, e-mail and in some cases a sales forecast.  In fact, the market has become so competitive that it has created what is often referred to as a “race to the bottom” whereby every time a new competitor enters the market they believe that the best way to attain new customers is by being the lowest cost.

Well this has worked, at least for the consumer, because there are many solution providers that now offer a version of their product for free. Some offer it free for 2 or 3 users, some 5 users and some even more.  While small businesses may be enjoying this, I am not sure they appreciate the impact this has had on the sector and what it means for their business.  CRM solution providers have realized that providing software for free or for a few dollars a month is not a sustainable business.

Some have gone under or merged with larger organizations while others have changed their business model to remove the human cost associated with acquiring a new customer.  Free trials have now taken the place of personal demonstrations. There is no contract to sign anymore, instead you enter your credit card over the internet and pay month to month.  Customization is very limited and product training is offered via free videos.  Perhaps the biggest change is that customer service (whether you require some advice and counsel or just need your questions answered) is by e-mail only and may take 24-48 hours to get a reply.

While this doesn’t sound all that bad let’s not forget that we are talking about Customer Relationship Management which requires human intervention to be successful.  Industry analysts have reported that the failure rate of CRM implementations among the small business community has reached a whopping 73 percent.  This is clearly the result of the lack of human intervention that ensures the proper implementation, use and support of CRM software.  So, who is the winner in this environment?   Certainly not the consumer and not the CRM vendor either.

Every business large or small wants to improve how they market, sell, and provide service to their customers. But small businesses struggle in these areas because top level sales, marketing, and customer service personnel are hard to find and too expensive to hire. As such, small businesses need to depend on the skill set of the CRM solution provider to deliver this expertise coupled with their software so that they can realize the maximum value from the product. If the solution provider is unable to provide this value-added service, then all you are buying is a low-cost or free piece of software that in most cases will fail to get implemented and properly used.  But it doesn’t have to be that way.

While the majority of CRM solution providers that cater to the small business community are unable to provide sales, marketing and customer service expertise there are a few companies that offer very good affordable solutions coupled with this level of service.  One of these companies is Commence Corporation, manufacturers of Commence CRM. Commence offers comprehensive functionality supported by a team of sales, marketing, and customer service professionals with more than 15 years of experience in these areas. It’s what differentiates Commence and ensures that the CRM system gets properly implemented, your staff gets trained by professional trainers, and that you realize the maximum value from the CRM solution.  Learn more about Commence CRM at www.commence.com.

Discipline is Key to Successful CRM Installations

The key to success is discipline

CRM software is getting a bad rap and it’s not justified.  Some feel that the products available are over-engineered and too hard to use.  Others think they are too expensive and some believe CRM is just not for them. It is true that CRM installations are failing at an alarming rate, but there are also many companies that are realizing substantial value from their CRM software.  The key differentiator between success and failure is discipline. Some companies understand that they are going to have to invest time and resources to ensure the successful implementation and use of the software. Others seem to view CRM as a commodity product, like an appliance that you simply plug in the wall; these are the companies that have struggled with CRM.

The successful implementation and use of CRM software requires a firm commitment from management. They assign someone of authority who can take charge of the implementation. They appreciate that internal policies and procedures may have to be modified to address their business objectives. They proactively work with the solution provider to ensure that the new procedures are properly implemented, and that the staff is properly trained.  Depending on the level of functionality they wish to implement and how many departments are impacted, this can be a larger commitment than most companies anticipate.

As a sales executive I can tell in just a few minutes if the company I am talking with is going to be successful with our software.  I get those that are just ‘shopping’ for whichever vendor offers the most features at the lowest cost, or the small company that is simply looking for an automated Rolodex for their business. A free or low-cost CRM system will most likely address their needs quite well.

The ones I get most excited about ask me to review their requirements and provide some details as to how we have addressed similar requirements for companies like theirs. This is often groups of 10 to 100 employees that are trying to automate their internal business processes. They often ask for an implementation plan, who will be managing it from my firm, and what procedures we have in place to ensure the project stays on schedule.  They also want to know about training and how we will ensure that their future requirements will be met after the implementation is complete. This is clearly the profile of a company that is serious about using CRM software. They want to improve how they market, sell and provide service to their customers and they appreciate the level of commitment they need to make to ensure a successful implementation.  For these companies they know it’s a combination of product and value-added services that will result in a successful implementation and will make a substantial impact on the performance of their business.

Salesforce Functionality at a Small Business Price

Which one is right for you? Fast performance, lean and agile, top security, dependable...

Companies looking for a CRM solution for their business immediately think of Salesforce.com. Then they learn what everyone else has – it’s too expensive and too hard to use and they are right, but perhaps for the wrong reason.  Salesforce is a good product and a good company, but that does not mean their solution is right for every business.  No company can be all things to all people and Salesforce is no exception.  The company’s product addresses complex issues for enterprise level corporations and as such, incorporates a level of complexity that is simply not necessary for many small to mid-size businesses. That does not mean the product is too expensive or too hard to use. It just means that it is not the right solution for you.

The good news is there are a myriad of CRM solutions available, from basic out-of-the-box systems to ones designed for specific vertical industries like legal, banking or real estate.  While few CRM solutions can match the scope of functionality and scalability of Salesforce, there are some very good products targeted at the middle market that offer comprehensive functionality, customizability and affordability that many companies are looking for.  One of these products is Commence CRM, manufactured by Commence Corporation. Commence has been in the CRM sector for two decades and has a very good track record for the quality of their products and the customer service the company provides.

Commence CRM offers a robust suite of applications that rival Salesforce at a fraction of the cost. The product includes account and contact management, lead and sales management, marketing, a help desk with customer ticketing, analytical reporting, e-mail integration, mobile, an internet service portal and an integrated project management application.  Commence also offers a higher level of customizability than competitive products and offers an array of value added services for sales optimization and marketing.  The product is best suited for businesses with 10 to 100 users that need the functionality Commence CRM can provide, but not the cost and complexity of Salesforce.  Pricing ranges from $29 to $65 per user per month.

It Takes More Than Compensation to Unleash a Sales Force

Identify the obstacles then work to eliminate them.

By Dave Kahle

I’m often asked to help a company refine their sales force compensation plans.  As a consulting company, that’s work that we regularly do.  I believe in having a well-designed, effectively managed compensation plan as a fundamental part of any productive sales system.

But, it’s a mistake to think that the compensation plan is the entire solution.  It’s only a part.

The reason that a company will call us to help with the compensation plan is often a deeper issue.  Their sales are flat, or even declining.  They are casting about to find a solution to their lack of sales effectiveness, and have arrived at compensation as the culprit.

It may very well be contributing to the general malaise.  But it’s rarely the only issue.  Let’s consider some other factors commonly contributing to dismal sales numbers.

TRAINING!

Sales is a sophisticated profession where the skill set of the highest performers is significantly greater than that of the mediocre.  And the unfortunate, ugly truth is that most B2B sales people don’t know how to do their jobs well.  They have never been instructed in the best practices of the best sales people.  They have struggled to learn on their own, on the job, through trial and error.  Some of them have arrived at routines that have been successful for them, but most have not.

You can change the compensation plan all you want, but if you don’t instruct the sales people in how to do the thing that you are paying them to do, your results will be considerably less than spectacular.

Here’s an example.  Let’s say that you want to gain new customers.  So, you change your compensation plan to pay a premium for new customers.  That’s good, and some sales people will, as a result, put more effort to acquiring new customers.

But, that doesn’t mean that any of them know how to do this well.  While some will be attracted to the income, the lack of comfort associated with how to do it will be a far greater force, holding them back.

If you pay them a premium to create new customers, and then train them specifically in how to do that, you’ll find that your change in sales force compensation will make a dramatic improvement in their behavior.

The same can be said for any specific behavior that you want to encourage through a revised sales force compensation plan.  It won’t do you much good to emphasize key account penetration, key product line sales, etc., unless you take the time to show them how to do what you want them to do.

MANAGEMENT PRACTICES

The practices and routines followed by sales management can have a great impact on the performance of the sales person.  For example, if you change your compensation plan to emphasize acquiring new accounts, and your sales manager never measures the number of new accounts acquired, never measures the various steps in that process, never asks the sales person about it, nor holds him accountable in any way, your change in sales force compensation will be ineffective.

Sales managers need to measure the progress on every performance indicator encouraged by the compensation plan.  They need to have regular meetings with each sales person in which the topic of conversation is dictated by the sales manager, and focuses on specific progress on each performance indicator, and specific plans to achieve greater numbers. This process, by the way, is one of the key processes we teach in our Kahle Way ® Sales Management System.

STRUCTURE

In much of my other writing, I discuss the concept of “sales structure”.  Briefly, the structure is the set of written and unspoken policies, procedures, and expectations that surround the job of the sales person.  I like to characterize it as everything left in the sales department after you remove all the people.  It is larger and more specific than “culture” because it is often codified and institutionalized.  Some examples of elements of the structure include:

Sales compensation plan

Job descriptions

Territory definitions

CRM, or lack thereof

Call reports, planning itineraries, or lack thereof

Pricing guidelines

Sales process definitions

This is just a small sampling of the list that makes up the “rules” – the way things are done in your company.

The key rule here is that the structure must support the behaviors that you are reinforcing in the compensation plan. For example, if you emphasize the acquisition of new accounts, but several of your sales people have mature territories with few prospects left, the structure stands in the way of the compensation plan.

Most components of sales structure are vestiges of days gone by.  They were created, typically, in response to a crisis some time ago, and became codified.  Most companies aren’t even aware of many elements of their structure, because they have been so embedded into the routines of the company that they don’t even notice them anymore.

It’s not unusual to find elements of the sales structure that present obstacles to the attainment of the compensation behaviors. Not only are they not supportive, they stand in the way.

When you change your sales force compensation plan, look at every single behavior that you want to encourage, and ask yourself, “Is there anything in the way we do sales in this company that presents an obstacle to the sales person performing on this issue?”  Be open-minded.  You may even ask for some outside input.  Remember, many of the elements of your structure are so deeply embedded into your routines that no one even notices them.

When you identify structural elements that are obstacles to sales success, work to eliminate them.

PEOPLE

It is an unfortunate truth that many sales people, maybe as high as 40 percent of your sales force, should not be in their jobs.  While they may have all the product knowledge in the world, they just are not suited to deal effectively with the challenges of the job of the sales person:

constant rejection
the need to create positive relationships with everyone
the responsibility to effectively manage their time
the need to continually learn more about every customer.

Sales is a profession that is growing more sophisticated and challenging by the day.  Many of today’s sales people, who were adequate in terms of their aptitude and attitudes in the past, are not up to the rigorous demands of the job today.

You can have the greatest compensation plan in the world, but if your people are just not capable of performing, the plan will be a waste of time.

While I applaud every company’s efforts to revise their compensation plans, at the same time I have learned that compensation is only one part of the picture.  If you really want to revise your sales efforts, you need to attend to the other issues discussed above, as well.

About the Author:

Dave Kahle is one of the world’s leading sales authorities. He’s written twelve books, presented in 47 states and eleven countries, and has helped enrich tens of thousands of sales people and transform hundreds of sales organizations. Sign up for his free weekly Ezine. His book, How to Sell Anything to Anyone Anytime, has been recognized by three international entities as “one of the five best English language business books.” Check out his latest book, The Good Book on Business.