“Give me the numbers this month”. And there goes the first bullet. If we had to pick one phrase that encapsulates how not to manage a sales team, this is probably it. Knee-jerk forecasting and a fixation on near-term revenue. A principle that destroys the potential value sales leaders can bring to their sales teams and it’s all down to the pressure of numbers. Yes, the board and senior leadership team have to demonstrate revenue and organic growth to shareholders. However, that short-term focus simply creates a culture of fear and quashes the quality of the execution.
So, rather than driving dysfunctional behaviours, what can sales leaders do differently to stop killing the win rate? A causal effect of the numbers obsession is managers not fully understanding the difference between funnel management and forecasting. Forecasting is a financial estimate of the deals that will close and the revenue that will come into the company. Funnel management is the discipline of looking at the active sales pursuits and then discussing the four ‘r’s’ – how to put the best resource around the right opportunities, at the right time, in the right way.
It sounds cleverer than it is. It’s basically all about planning. If we compare the sales resource to a sports team, the activity around forecasting would be akin to calling the players prior to the game and asking what the score will be. In the absence of clairvoyancy skills, it is pretty impossible to predict. On the other hand, good managers would coach their team in the lead up to the game. Discuss what tactics they might take, examine the competition and then in real time during the game give them advice, coach them and change direction to reflect what’s happening on the pitch.
Ask any sales manager if this is an important part of their role and the vast majority will say yes. Ask them how much time they spend doing it and the likely response would be a long list of valid excuses – from having to complete reports for other departments to resolving issues around customers not getting good products, to vacant heads and recruitment headaches. Sales managers are often forced to take the shortest route from A to B. If they don’t report accurately, there are negative consequences from above. Yet, they can get away with not coaching their sales people, as most organisations are less concerned about how they get there as long as the numbers are right.
There is a huge sense of irony here. Fundamentally, sales managers are killing forecast accuracy, yet good forecast accuracy is very much a result of effective funnel management. Done well, leaders can move away from the short-term pain and stay focused on the long-term gains.
The process should start with analysing the overall shape of the funnel. Looking forward at least one sales cycle and exploring the balance of opportunities throughout the funnel. How many active opportunities are present? What stages are these at? What is the product mix and the average deal size of opportunity? This will help managers to visualise how the content of the funnel is going to drive the content of the results when they finally come in.
Managers can then link the skills and activities of their sales people to maintain a healthy funnel. Coaching around opportunities and investing their time in driving success rather than measuring the results. Thinking about what kinds of prospects are being brought into the funnel and what are the next steps for active opportunities. By connecting funnel management and opportunity management, managers can plan who they need to get in front of and then coach their sales people around each opportunity.
Coaching for Clarity
What motivates a sales person most, remuneration, recognition or clarity of task? It’s not surprising that every piece of research puts clarity of task top of the list. Sales people have to deal with ambiguity on a daily basis. Customers failing to pick up the phone, having to second guess situations, lack of information and limited resource – uncertainty across all areas. What they need is clarity from their leaders to understand what their priorities are and a planned process to help them get there. That is what good coaching is. Giving people the belief and tools to make the execution successful. Leaders that are clear about their vision and direction will have engaged and empowered sales people.
If we look at any other sector, whether it is sport, medicine or the military – the organisation has to support the individual and help them to be effective and successful in a credible way. Saying “give me the numbers this month” or “do that heart surgery” could damage more than just the win rate. Time has to be invested in each sales person and that should happen at management level. Bad sales managers just inspect and deliver against their own objectives of reporting the results, rather than helping the seller. Good sales managers understand the value of funnel management and use it as a coaching tool. It’s time to stop killing win rates and start eliminating the competition.