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Know When to Say When

By Mike Jacoutot, Managing Partner

The year is officially halfway over and the facts are undeniable: your team is not making the revenue budget. You were assured things would change in Q2 after a slight miss in Q1, but they have continued to post poor results. The first rule for getting out of any hole, is to stop digging, right? One executive I know put it purely as “No change, no change!” Knowing “when to say when” on your sales/branch/district manager is a tough call for any sales leader to make. But in the end, performance v. budget is the yardstick of measurement, right? Seems so simple, but then you rationalize that you don’t have a readily available replacement and an open leadership position will further disrupt your sales efforts. Additionally, you rationalize that revenue v. quota is only one dimension of their role. The sales manager activity is solid and their team likes him/her.

In sales management, there are leading indicators or predictors of future success outside of revenue budget that are readily available if you know what to look for. They include…

The Sales Manager Checklist

Budget Performance/ Pipeline

  • Sales v. Quota: why are they missing their number? Is it closing of new client opportunities or due to client attrition?

  • Client Retention: client retention is the new acquisition. What is the revenue and retention of their clients year over year? What percentage of clients are effectively cross-sold additional products and services? Compare to the division or company average.

  • Pipeline Activity: take a look hard at pipeline activity. Pull historical win ratios forward to calculate your predicted close rate and time to close. Don’t get lulled into optimistic forecasts. “If you want to learn the future, study the past.”

  • Open Sales Days: are you on budget with the number of sales reps? There is no excuse for only having five sales reps when you are budgeted for six. Quickly calculate the office revenue and divide by 240 days and then divide by the number of budgeted sales reps (Ex: $3,000,000 divided by 240 and then divide by six =$2,083 per open sales day). That is what it is costing the company in revenue each day the position goes unfilled.

People Development

  • One on Ones: completes weekly one on ones with each sales rep and coaches to strategy, activity, and skill. I liken these 1:1’s to weekly “game films” in football. This is perhaps the most important thing a sales manager can do. It creates a cadence of accountability and performance along with an opportunity to coach the sales representative weekly.

  • Time in Field: spends at least two days each week in the field coaching sales reps. This “windshield time” keeps the sales manager’s finger on the pulse of their customer/prospect base. If less than two full days, you hired an office manager, not a sales manager

  • Sales Training: at least every other week, preferably first thing Monday morning, holds a sales training meeting reviewing product and service offerings, shares successes, and targets new clients. The target activity then becomes part of the individual 1:1 and “windshield time.”

  • Bench Building: is the manager conducting at least one interview per week? Sales is a high turnover position and building a talent pipeline is key to future success

  • Promotions: how many sales reps has this individual promoted into management? This is a great indicator of hiring and development skills.

  • Turnover: how does this sales manager’s turnover rank against others? Too little turnover may indicate a lack of accountability too much may be an indicator of deeper problems.

The Stack Ranking

After you review the above, stack rank the manager against their peers. Knowing what you know now, would you rehire this person? If they rank below the 50th percentile, hiring that manager means you would actually weaken your team. If you rank them above the 50th percentile, you need to take a hard look in the mirror.

At Butler Street, we help companies and their people grow by building a “system of reinforcing activities” that provide for continued and balanced improvement. We assess your current state through our Client and Talent Diagnostic and provide you with a clear roadmap for areas of improvement. We can help you turn your results around quickly and give you the ability to execute with speed and consistency. Click on CONTACT to start the conversation today.

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