Effective Sales Management and Leadership Strategies
What is Sales Management
Sales management responsibilities
- Recruiting: You are in charge of hiring new sales people
- Training: You are responsible for ensuring your sales people deliver the best possible customer experience.
- Shadowing: To get to know your sales people & their interactions with customers, you need to be out in the field with them.
- Meetings & aligning teams with objectives: You will also set objectives & key results, & ensure your goals are communicated clearly.
- KPI management: You need to get your entire team aligned around key metrics.
- Forecasting & reporting: You need to report on sales performance while keeping an eye on long-term growth expectations.
Sales management objectives: Revenue generation, increased sales volume, sustained profits, sales department growth, market leadership.
What is a Sales Manager
Leader, coach, mentor, communicator, motivator…
Basic Leadership Styles:
- Low structure, high consideration: Leader strives to promote group harmony & social need satisfaction
- High structure, high consideration: Leader strives to achieve a productive balance between getting the job done & maintaining a cohesive group work.
- Low structure, low consideration: Leader retreats to a generally passive role of allowing the situation to take care of itself.
- High structure, low consideration: Leader devotes primary attention to getting the job done.
Structure & leadership:
Sales managers who display structure clearly define their own duties & those of the sales staff. They assume an active role in directing their subordinates work. Policies & procedures are clearly defined. Salespeople also know how well they are doing because the supervisor evaluates their productivity & provides feedback.
Consideration & leadership:
Behaviors that provide evidence of consideration include: regular & effective communication as a high priority. Each salesperson treated as an individual. Good performance is rewarded often.
Coaching
The manager helps the salesperson improve performance in a specific area. Steps of coaching
- Document performance problems
- Get the salesperson to agree that improvement is needed
- Explore solutions
- Get a commitment for the salesperson to take action toward improvement.
Training
Framework for an effective training program:
- Conduct sales training assessment
- Formulate training objectives
- Determine sales training budgets
- Determine who will do training
- Set dates & location for training
- Conduct training programs
- Evaluate results.
Characteristics of training: Requires a communication process, requires a change of attitude & behaviour, is complemented by practice
Training needs: general (strategies, sales tactics, relationship skills, persuasion skills), specific (business, product, price), sales management (routes, visits), auto-image.
Sales Compensation
- Straight salary: There are no incentives.
- Salary+bonus: Salary & bonus if target quotas are met.
- Base salary+commission: Sales people receive a fixed annual salary & a commission on sales.
- Straight commission: No base salary, sales people are only compensated on sales.
- Variable commission: The commission rate can change based on whether sales goals are met or they are exceeded.
- Residual commissions: Sales people may receive an initial commission for a first sale & a smaller commission as long as the customer continues to order.
Assessing Sales Force Productivity
Quantitative criteria: Sales volume in $, sales volume compared to the previous year, sales volume by product, number of new accounts, amount of new account sales, net profit per account.
Qualitative criteria: Attitude, product knowledge, communication skill, selling skills, initiative, team collaboration.
Dashboards
1) Financial perspective: Revenue, expenses, net income, cash flows, asset value.
– How we will look to our shareholders?
The strategic goal is the long-term shareholder value & is driven by 2 factors: revenue growth (expand revenue opportunities & enhance customer value) & cost efficiency (improve costs structure & increase asset utilization).
2) Customer perspective: Customer satisfaction & retention, market share, brand strength.
– How must we look to our customers?
Identifies target customers & market segments & measures the organization’s success.
Increase customer satisfaction: improve customer satisfaction by reducing average lead time, facilitate customer through quality service & understand customer needs & requirements.
Increase customer retention rate (customer profitability, improved quality & accuracy).
Reduce customer complaints.
3) Internal process perspective: Inventory, orders, resources allocation, cycle time, quality control.
– To satisfy our customers, which processes must we excel at?
Focus on internal operations that create value for customers. There are 4 main themes:
- Operations management process: Processes that produce & deliver products & services (supply, production and distribution).
- Customer management process: Processes that enhance customer value (selection, acquisition, retention, growth).
- Regulatory & social processes: Improve communities & the environment (health & safety).
- Innovation processes: Create new products & services (new ideas, R&D portfolio, launch).
4) Learning/growth perspective: Employee satisfaction, turnover skills & education.
– To achieve our vision, how must our organization learn & improve?
Reflects the capability that a company should have: human capital (skills, knowledge & attitude), organizational capital (leadership & organizational development), information capital (systems, databases).
Sales Control
Includes the indicators that directly influence the volume.
- Annual sales control (allows periodically check compliance with the objectives of sale by each seller).
- Mobile sales control (trend analysis)
- Diagnostic control (customer portfolio, visit control)
Sales Representative Behavior for Evaluation
Involves the evaluation of qualitative parameters that complete the analysis of the seller’s performance.
- Time dedicated to commercial activity
- Complementary activities carried out
- Default rate
- Quality service provided
- Seller knowledge and skills
Typology of Sellers
a) Counter clerk or delivery: Recipient of direct & immediate orders. Has little chance of choosing the buyer. You can occasionally cross-sell. Extensive knowledge of a product range required.
b) Technical salesperson: They sell highly technical materials. Clients are usually high volume. Technical knowledge of the product is required. Meetings require extensive planning.
c) Promoters, sellers to prescribers, demonstrators: Help & instruct users of products & services. They inform about news. Analyze customer needs. It’s very important to know how to manage time & take the conversation to commercial topics.
d) Trusted service sellers: Emotional sales that must be made from rationalism. Require detailed explanations. They need the capacity for conviction & to generate trust.
e) Indirect or political salesperson: Responsible for a large sales of basic supplies. Products with little differentiation between competitors. The point of differentiation must be sought to close the sale. The sale must be carefully prepared. Requires deep knowledge of the client.
f) Shop & commerce traveler: Sellers to retailers (B2B). Repetitive selling. Requires regularity in the service & monitoring of the customer’s stock. Customer help.
Characteristics of a Good Communicator
a) The voice: Has the power to build trust. Activates psychological actions in the interlocutor. Generates emotional resonances. Soft calm voice generates friendship & tolerance.
b) Verbal language: It’s the main means of expression of the personality. It must be always adapted to the interlocutor. The vocabulary must be simple, clear & direct. Avoid vulgarity & enrich the vocabulary.
c) Non-verbal language: Physical contact (shake hands). Keep distance (6 feet). Body posture (natural & secure). Controlled breathing.
d) The smile: Most important facial expression.
e) The look: Fix your gaze on the eyes of the interlocutor to show trust, transparency & respect.
Communication barriers: Words, prejudices (judging by aspect), boxes (labeling by the first impression), similarities (understand things the same way), Avoid assumptions, judge (approve or not what someone tells us).
Establishment & Development of Client Relationships
A personal selling is defined as: process of building relationships with the client, needs identification process, adjusting the offer to the need, communicating the benefits to the client.
In the sales process, a client perceives value from 3 sources: the physical product, From the company that guarantees the services provided by the product over time, The seller who is representative of the company and must balance the profitability of the company and customer satisfaction