How to run sales and management teams in 2020
In this article, I scratch the surface of running a B2B sales organization successfully in the modern world.
My Experience:
I have supported and been a member or responsible for sales teams during my career in different positions. Inline and matrix organizations for start-ups or running businesses. The common nominator for all the positions has been to first set up a money-making concept and/or improve the profitability of the business and then grow and scale the business to the next level. This order of working has led to many growth investments as management has had the confidence of the teams to bring in the results.
Key roles I have held: Product Manager, Production Manager, Cross divisional sales coordinator, Profit turnaround manager, Business unit director, Global VP Sales & Marketing, Key Account Manager for global and international customers, Global VP Sales, and Supply chain, Director Sales operations or working as an entrepreneur in SME’s sales teams.
Lately, I have worked with international partners to run the sales of my own consulting company and I have been on SME company boards responsible for developing sales strategy and sales processes. This experience has given me the opportunity to look at sales from different angles and to understand the needs and roles of different organizations and functions to successful sales.
To me, a key input to successful sales comes from a committed and trusting management, customer-centric sales organization, service-minded customer service, reliable supply chain, supporting and challenging financial control, and marketing. Other important areas are production, product management, R& D, HR, communication, and BI.
The boundaries of sales and marketing are not very clear anymore in today’s world and sales have developed in the direction of marketing. In today’s world sales and marketing should work very closely together, in smaller companies salespeople are actually doing the marketing for themselves today.
Typical traps for reduced sales performance:
Lack of visibility to future
● Lack of systematic market data collection process
● Underperforming forecasting and demand planning process
● Quick changes in the demand and supply need causing difficulties in keeping lead times and customer promises
● Low customer and business understanding of customer challenges
● Lack of customer segmentation, low level of focus
● Lack of true performance and financial data
Underperforming sales deals
● Wrong price/quality ratio of the products = wrong positioning
● Lack of market data
● Lack of true performance and financial data
● Lack of data for pricing the products correctly
● Low customer and business understanding of customer challenges
● Lack of customer segmentation and planning
● Low level of focus
● Lack of product understanding
● Poorly performing products
● Bad money collection process leading to overdue
● Customer bankruptcies and payment problems
● Lack of sales skills leading to low performance
● Sales channel conflicts
● Insufficient documentation and communication in the organization about the customer promises and deals made
The low motivation of salespeople
● The political decision lead the organization
● Silos in the company structure with low understanding of customer demands
● Too complex organization models, lack of accountability
● Conflicting compensation for different functions
● Unsystematic sales process and feedback
● Lack of support from the boss and management
● The low trust level in the organization leading to sub-optimizing
● Slow performance leading to lost opportunities
Create a winning vision and strategy
” Get everybody involved and passionate. ”
As a head of sales, you must be open to everybody’s opinions and ideas to be successful in achieving what the company has set as business targets. The manager must understand, give input, and be disciplined to strive and achieve the company level vision, strategy, and key financial targets. One must understand the current gaps and how the sales team can company achieve the next level targets.
The new generations
”In today’s world fulfilling self-actualization needs have become important. ”
Young generations need a purpose and they have a demand for business ethics. This is due to higher standards of living which makes it possible to fulfill needs that rise above the basic needs of human beings. There is a higher awareness of global challenges and greater financial freedom and growing options for people on how to lead their own lives. Maslow’s hierarchy of needs clearly describes this:
1.) Physiological needs
2.) Security/Safety
3.) Love/Belonging
4.) Esteem needs ( growing importance )
5.) Self-actualization needs (growing importance)
Target Setting
“The target setting should be ambitious and create emotions.”
Incremental growth and small steps don't lead to innovative and creative working mode. People think they achieve their results with the same methods as the previous year, especially in growing markets. The objectives and targets should be in line with the company vision and strategy. Salespeople and supporting functions (production, supply chain, R&D, product management, finance ) should get involved in building the strategy and get, excited, and motivated by the vision. This process should lead to buying-in to achieving the goals.
“Prepare yourself for quick changes in market development or your company performance”
In the corporate world the target is many times given and comes from above in the organization, In SMEs, this is a more simple process and targets can be discussed and finetuned with the CEO or the board. On the other hand for a sales team to be successful in achieving company targets one must raise the bar over the company’s targetted level. This is due to the fact that there are always surprises in the markets and also in the performance of the company and thus some of the sales projects don’t materialize due to these reasons. One can calculate the previous year's lead conversion rate and decide how much above the targetted sales the leads must be. The other aspect is capacity utilization which must be taken into account. This can also affect largely the profitability in cases where fixed costs are not flexible according to the running rate.
Compensation
” The whole company should have a sales attitude and common sales-related targets.”
Creating purpose and motivation for all individuals is a key priority in today’s world. Motivating, promotion, recognition, and compensation models are of high value.
Everybody must have the attitude of selling and nobody can alone make successful selling. The key to successful selling is that all departments and functions make a common effort to develop, market, and sell the company, organization, and product to customers. This approach sets high requirements to clear vision, strategy, and target setting that is driving everybody to work in the same direction. The compensation models in all departments and functions should strengthen the achievement of set goals. It is also important that the compensation methods have the right focus to achieve short and long-term targets.
See separate article about compensation methods from my earlier medium publications.
Culture and values
” Trust, discipline, accountability, team spirit, customer understanding, and innovativeness are the key inputs for building culture and values for success.”
Trusting people, training them to business and customer understanding, involvement in building company vision and strategic objectives, timelines and responsibilities is very important. One must create an environment of trust, innovativeness, and service-mindedness across the organizations. If one is e.g. punished for challenging plans while decisions have not yet been made it will create an environment of fear and people are not giving 100 % effort to the success of the organizations.
Sales process
”Understand and develop the money-making concept, create a path for growth, and scaling the business.”
I have always wanted to do what’s best for the business, so I have always led and run the businesses as if they had been my own. I have followed simple principles of looking into new development steps in 4 areas of the business (4Ps): People, Product including Service or Solution, Process, and Profit. The starting point and cornerstone for all development is understanding the customer’s explicit and implicit needs and segmenting the customer base into categories and developing clear and focused strategies and objectives for each segment. Parallel you need to work on the 4Ps and make sure that the customer objectives can be reached in a profitable way.
” The whole sales marketing process has become largely automated and reverse.”
The whole process has changed in recent years, it is a kind of reverse process today. Customers can make their decision based on recommendations and online data even without meeting a single salesperson. Of course, there are big differences between business segments. The above-mentioned is very common in a B2C business, In B2B and when products of high value and long lifetime are sold the need for personal contact is still very important; whether online or physical contact.
Sales and marketing should work together in filling the sales pipeline. Marketing is looking more into market developments and improving the online presence and how customers will find the company and services in the online world.
“Provide a solution to customers’ implicit or explicit needs.”
Sales are creating their own leads and taking over the leads provided by marketing efforts and convert them into offers and deals with as high a percentage as possible. Contacting sales should be made easy in those channels where customers are present. In the best case, the first contact and interest are coming from the customer without any push from the sales. The sales should be able to understand customers' business and needs and provide a solution to customers' implicit or explicit needs. This means that sales by understanding the customer and business can find the real needs behind direct obvious ones and turn company offerings into attractive solutions and together with the customer sales can find new untapped opportunities for the client.
Organization
“Traditional sales process and skills don’t work anymore”
A salesperson should be interested to learn the businesses of the customers, be curious, innovative, service-minded, solution, and result-oriented, and have good social and communication skills. These are very high demands. One could say that traditional sales processes and skills are totally out in the modern world.
Even in doing cold calling selling simple products one must be well aware of what are the real needs of the customers and selling just a product and price is not enough. One must also sell the company, oneself, service, and product and appeal to customer's emotions to be able to turn calls into sales.
“What are you really selling?”
This means of course e.g. that when selling an alarm system one must actually sell a security to the customer. In the above case feeling insecure about the environment and the safety at home is rising the emotions of the customer and makes him or her think about the safety of the closest people and this will increase the need for the actual product for sale. One can upsell and down-sell the product or service depending on the stage customer is in the process. E.g. upsell could be to sell turnkey safety solutions and monitoring the safety or down-sell would be just selling the physical product.
Agility is also a must. In today's world, a company can reach the global market immediately, and growing a significant business can be done in the best cases in a few years as compared to the old world where it could have taken decades. This development is true also e.g. in the manufacturing of products but of course on different scales.
Performance and follow-up
” Clear accountability leads to high motivations and responsible actions. ”
Starting a new business year means looking back on what has been achieved on the company, business, and a personal level and understanding the individual's challenges, and being open to feedback as a manager. One should empower the salespeople to do their work as independently as possible. This means that you should provide them with personal targets, a window of freedom for your own decisions, online support systems for decision making, and set up follow-up systems. The follow-up should have as core content data of sales performance. During regular meetings, one could concentrate on challenges, development needs, coaching, support, and career planning.
“Face value should not affect your decisions.”
Clear responsibilities feedback based on data and facts creates trust and possibility for individual development. A manager should collect and provide the teams with collected company-level data, situation reviews, and holistic market data that they cannot collect by them selfs. Intelligent CRM systems can handle this type of information online for everybody and make information sharing easy. underperformers are recognized and coached and led to an improvement path. These people must be given second chance but if this is not working they must be led to new challenges. This is important to keep the morale high in the organization. Face value should not affect these decisions.
Below some thoughts about the process structure and tasks for modern sales management.
” Create your sales process, document it, and train people.”
Yearly
1.) Vision, strategy, targets, tasks, responsibilities, and timelines
2.) Sales performance reviews based on data
3.) Compensation for last year results
4.) New targets and compensation
5.) Two-way feedback discussion based on measurements e.g. 360
6.) Career planning and opportunities
7.) Development, coaching, and training needs
By Q
8.) Sales network meetings
9.) Personal performance reviews
10.) Strategy reviews
11.) Management instructions and holistic view of the company performance and market developments based on BI and feedback from the organization e,g, management, sales, marketing, R&D, and supply chain.
Monthly
1.) Forecasting and allocation management
2.) Pricing instruction
3.) Running sales management team meetings
4.) Communication
5.) Personal calls and coaching of sales
6.) Collecting customer feedback and meeting customer top management
7.) Learning, studying, and personal development
Product and service
”A good product sells itself a bad product is impossible to sell.”
Marketing should lead the development with R&D and production with strong input and reality check from sales to current and new product offerings to different segments and geographical areas.
Sales management must be the voice that is pushing the company into developing the product and service markets need. This means a very active role in communicating, training the organization about customer demands, needs, and future expectations. Sales should give feedback and input to marketing, production, HR, R&D, Product Management, Supply chain, and financial control. On the other hand, all the functions should have also a high understanding of the customers and feel responsible and be rewarded for customer success, not only sales.
In my previous articles, I have described related issues like:
Vision and strategy development, innovation processes, and compensation methods from different angles.
Thanks for reading this article and good success for your sales in the coming years!
Heikki Hyvärinen
Founder, Partner
H&H Advisors Oy
