SALES PROCESSES, YOU SAY?
Clearly we believe that measuring Sales Activities is a key ingredient to better sales management. However, reporting data on salespeople’s doings is not sufficient to exercise control over a sales force’s performance. To truly exert influence over Sales Objectives and Business Results, sales managers must not only receive relevant data, they must know what to do with it. They therefore need a way to organize a sales force’s activities into a coherent operating system with predictable inputs and outputs. They need a set of formal business processes.
Other business functions like manufacturing or finance are typically managed with a higher level of rigor than the sales force. In large part, this is because other corporate functions have formal business processes in place that allow for consistent execution and robust measurement of their daily activities. This visibility into the gears and pulleys of a workforce is required in order to exercise control and continuously improve. In the absence of standardized processes to enable active management, sales leadership often finds itself in the war room attempting to herd cats rather than direct soldiers. Sales managers have unmanageable chaos rather than command over their troops.
This point was colorfully illustrated by a conversation we once had with a senior executive of a $400 million software company whose revenues had stalled. He was frustrated by his company’s inability to improve its sales force’s productivity, so he approached us for advice. Our initial conversation contained an exchange that went something like this:
Vantage Point Performance: So you have a little more than 250 salespeople in the field?
Discouraged Senior Executive: That’s right.
VPP: And what exactly do they do?
Executive: They find new customers for our software.
VPP: How do they find new customers?
Executive: You know. They prospect in their territories and then try to close whatever deals that they uncover.
VPP: And how do they do that? I’m trying to understand the processes they follow, so I can get a better sense of where the problem might be.
Executive: I don’t know what processes they follow—you’d have to ask them.
VPP: You don’t have any kind of standard sales processes for your sales force to follow?
Executive: No. It’s up to the salespeople to find new business any way they can. That’s their job. (Pause)
VPP: So you have 250 people in the field selling in potentially 250 different ways?
Executive: Potentially, yes.
VPP: How different are the customers they sell to? Do they all buy from you in a similar way?
Executive: Sure. Given the technical nature of our products, we end up selling to pretty much the same type of customer. Their buying patterns are probably very similar.
VPP: So do you think there might be a “best” way to go about selling to those customers?
Executive: I’m sure there is, but I don’t know what it would be. That’s why we have the sales force … to figure that out.
VPP: Well, OK, but if you have no standard sales process, then how can you measure how successful your salespeople are at doing whatever it is that they do?
Executive: Well, of course, we know how much they each sell. But that’s about it.
VPP: How long is the average sales cycle?
Executive: Around six months or so, on average.
VPP: And you don’t measure anything that they do for the six months leading up to a sale?
Executive: No, not that I’m aware of. (Longer pause)
VPP: So, you have 250 salespeople, with no formal sales process, doing something (you don’t know what) to your customers over a six-month period, and you have no metrics to track and improve the effectiveness of their selling activities?
Executive: That pretty much sums it up. I’m sensing from your question that you think that’s a problem?
VPP: Well, if your burning issue is an inability to proactively improve your sales force’s performance, I’d say that is the problem.
Executive: Hmm. I’ve never really thought of it that way. You’re probably onto something, though.
Like many, this senior executive knew very little about what his sales force actually did from day to day. His VP of sales had to-date employed the management-by-results approach of offering his sales reps very high commissions and then, “getting out of the way to let them do their job.”
Unfortunately, that strategy backfired when revenue growth slowed. Without formal sales processes and measurements in place, he had little visibility into his sales force’s activities and even less control over them. It is a very frustrating place for an executive to be.
This conversation took place many years ago, and most sales leaders today know that formal sales processes are required for effective management. However, the term sales process is still a very murky concept for most. During our careers, we have heard the term sales process used in as many different ways as one can imagine.
And that single fact points to a fundamental challenge of controlling sales performance: we don’t have a common framework or a common language to manage the Sales Activities that drive sales performance. We need a better understanding of the fundamental business processes that are at work within every sales force.
This post originally appeared on the Work.com Blog.