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Sometimes You Just Have to Cut Your Losses

The first rule for getting out of any hole, is to put down the shovel and stop digging, right? Knowing “when to say when” on a poor performing sales/branch/district manager is a tough call for any sales leader to make. But in the end, performance is the yardstick of measurement, right?

As we are halfway through Q3, you have to face the facts: your team is not making the revenue budget. You were assured things would change in Q2 after a slight miss in Q1, but certain offices have continued to post poor results. Do you hang on and hope things will get better?

No change. No change.

Seems so simple, but then you rationalize that you don’t have a readily available replacement (that is another issue) and an open leadership position further disrupts your sales efforts. Additionally, you convince yourself that revenue v. quota is only one dimension of their role. The sales manager's activity is solid and their team likes him/her.

Do you know what’s just around the corner? A new year. It is highly unlikely your budget will go backwards.

Actions and facts speak louder than words. In sales management, there are leading indicators that are predictors of future success outside of revenue budget. These are readily available measurements if you know what to look for.

The Sales Manager Yardstick

Budget Performance/ Pipeline

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

2. 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.

3. 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.”

4. 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

5. One on Ones: does the manager complete 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.

6. 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.

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

8. 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.

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

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

The Stack Ranking

After you review the above areas, 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 through 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 consistently. Click on CONTACT to start the conversation today.

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