Most sales leaders and sales managers I meet manage numbers rather than behaviour. There is an inherent challenge for sales leaders given their reporting lines and responsibilities. They might report into the board; maybe the CEO, Country MD or CRO. When they report in they’re usually expected to report on the headline numbers – key metrics such as revenue or margin performance in the period, pipeline coverage, forecast and key deals for the coming period. They are typically knee deep in spreadsheets/CRM reports every single day, tracking updates and progress against forecast. Please don’t misunderstand where I’m taking this. Knowing and staying in control of your numbers is key. The sales team are the lifeblood of the business and therefore financial reporting and accurate forecasting helps the senior team drive everything from cashflow to strategic ]investment decisions.
BUT, sales leaders who do not recognise the need to manage the behaviour of their teams rather than their numbers or results, end up just simply being a conductor of the pressure coming from the top. In fast growing industries or in start-ups the problem can be masked for a good few years. Targets increase every year, growth leads to higher expectations, growth gradually becomes a harder fought battle and excellent performances are resigned to history on the first day of the new financial year.
At some point in time, as expectations grow, or the market tightens, sales people get their quotas at the start of the year and they’re not happy. The quota ‘feels’ unrealistic or worse they believe that it’s not possible. They start pushing back and then some of them begin to talk about leaving.
The problem is that they just don’t know ‘how’ to get to that number. They’re just staring up at £2m quota and feeling overwhelmed. It’s frightening. They feel out of control.
Sales people can't manage anything they can't control. Think about that for a second. As a sales person, you can't control yes's and no's, you can't control what the competition is going to do, you can't control what the market is going to do, you can't control interest rates. The list goes on. What you can control is your behaviour.
The number one task for the sales leader is to help everyone in the team convert their quota into a behavioural plan; what we call a recipe for success or a cookbook. That is all the things that they should do on a daily, weekly and monthly basis that they can control in order to hit that number. This requires us to backwards engineer from the quota until we get clarity on the activities, that if done, will result in success.
For example, if we start with a £2m target and we know an average deal is £200k then we know that we need 10 deals to make our quota. How many opportunities that get to proposal stage do we convert? If that’s 3:1 then we know we need 30 opportunities a proposal stage. How many first meetings do we need to get one to proposal stage? If that’s 4 then we now know that we need 120 first meetings. How many initial conversations do we need to get the first meeting? If the answer is 4 again then we need 480 initial conversations to get those 120 first meetings. How many contact attempts/dials, if we’re phoning, do we need to get an initial conversation? If that’s 10 then we now know that we need 4,800 initial contact attempts/dials. Wow. That’s 400 dials, 40 initial conversations, 10 first meetings and 2.5 proposals per month. Now I know what my behaviours needs to look like.
Ideally the sales leader has data on each individual to be able help them do this backwards engineering based on their personal ratios, but that’s often not the case. Where there is a lack of data, an estimate must be made as a starting point. Now the sales leader can track these behaviours and understand the conversion rates from one stage to another; allowing them to identify strengths and weaknesses at both an individual and a team level.
After a few months of tracking the behaviour, we have data to analyse. It might be that a member of the team is great at getting past the gatekeeper and setting up an initial meeting but only 1 in 6 of those first meetings move forward to the proposal stage. The job of the sales leader is then to coach and train that individual to perform more effectively in the first meeting. Is it a personal presence issue, is it a structure issue, a questioning strategy issue, is it a confidence issue? If we can work on each step and improve the ratios of each step, we can generate a significant shift in performance.
Every team member now understands how to hit their quota and begin to focus on behaviour and activity rather than being blinded by the size of the quota. The job of the sales leader is to measure, manage, reinforce and reward based on behaviour.
Keep demonstrating your grasp and control of the key metrics when you’re managing up the food chain but try not to confuse that with good sales leadership. Manage what you can control.
Behaviour and activity management is one of the key building blocks of a world class sales culture. If you’re interested in building a world class sales culture, want further insights from us or would like to attend one of our free to attend Leaders Briefing’s, then register here and we’ll get in touch.
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