This article looks at the performance improvement process and the role of the sales manager.
We will look at the performance improvement process below. We know that most managers would understand this process. The purpose of this article is not to tell you to do it, rather explain how to implement the process in order to achieve a tangible change in results.
Based on research conducted by Prosell into sales management effectiveness, the following piece will outline the five elements that must be in place for a performance improvement program to be effective:
- Key performance indicators (KPIs)
KPIs set for employees should be an intelligent mix of both 'lead' and 'lag' indicators. Lead indicators provide an insight into how well someone is managing their sales process, while lag indicators provide information on the results of their activity.
Useful lead indicators are:
- Approach-to-first-meeting ratio,
- First-meeting-to-prospect ratio,
- Prospect-to-order ratio, and
- Average order value.
Lag indicators are:
- Revenue achieved, and
- Number of sales won.
Common errors - Only tracking lag indicators. Lag indicators can only tell you that you've just gone over a cliff. The appeal of lead indicators is that they may be able to tell you that you're approaching that cliff before you go over the edge.
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Objective data
Gather information on performance against the KPIs. Good managers use a balance of both quality and quantity measures over a period of time to assess patterns and build a picture of 'capability'. This must include 'live' observations, as they provide the only way to objectively evaluate actual execution.
Common errors - Managers relying only on systems (quantity) data rather than observation (quality) data as well. Under time pressure and a lack of assessment tools, managers don't spend enough time observing salespeople on live calls and instead focus on poring over spreadsheets.
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Review forum
A review provides an opportunity to explore performance strengths and weaknesses with a view to agree on plans to alter performance. It is critical that regular one-on-one discussions of effectiveness take place. Group reviews - such as sales meetings - do not assess effectiveness.
Common errors - Using reviews as a panic session when performance is poor, rather than regular coaching sessions with every team-member. Individual reviews improve communication and capability.
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Reviewer's skills
A competent manager needs to be able to identify the level of skills used and to coach for better performance. It is often (and wrongly) assumed that because the sales manager was once a top salesperson, they have the ability to recognise good and bad sales capability and the skills to correct it. This is the most critical part of the process.
Common errors - Reviewing the performance and not the performer. Good managers use performance reviews to help team members identify areas for improvement and develop their skills, as well as discussing achievement against target.
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Closed loop process
Check activities and their impact as regularly as is needed to improve performance.
Common errors - Assuming one session with a team member will fix everything (and therefore trying to do too much in one session), rather than regular development.
This article, and those listed beloow, cover how to analyse sales performance, how to fix some of the most common issues and the manager's role in this process. You need to measure ratios to identify ineffective practices, you need to isolate and improve key skills, and managers must relentlessly observe feedback and drive strategies for improvement.
Read the article "Finding And Fixing Sales Performance Problems - Defining The Problem"
Read the article "Finding And Fixing Sales Performance Problems - Defining The Solution"