Sales management for the rest of us
by Miki Saxon–
I used to write a column called Ask Miki for the Oakland Tribune and I occasionally still get interesting questions to which I respond directly. They often use a yahoo.com address, but are interesting and relevant, so I thought I’d occasionally share both letter and answer with you.
Dear Miki, I’m president of a small ($2.5M) company. I have three sales people who I manage myself. Although we’re doing OK, I’d like a better way to judge the pipeline in order to more accurately forecast our revenues and reduce nasty surprises. Part of the problem is time, but I’m also not sure I know the right questions to ask my people. Currently we track the following:
- Est sales date
- Est sales amount
- Probability of win
Any ideas?
JB
Hi JB, Based on my experience, you have a lot of company! I frequently find that the people managing sales in startups and small businesses have neither a sales background nor a lot of time to devote to the subject in spite of its importance. In addition to structuring your compensation to focus your salespeople specifically on the product mix you want them to sell, you need to set up a simple structure to make sure that they ask the tough questions. Asking the tough questions is Sales 101, but that doesn’t mean it happens.
First you need the definition of a tough question: Any question to which you don’t want to hear the answer.
In sales the hardest question the salesperson asks is the one to which the potential client will say “no.” It’s what’s called a “closing question” and it can take place anytime after the first hello. Salespeople often avoid closing questions to keep the discussion going, kidding themselves and their boss into thinking it’s a live one. A no means having to make more cold calls to refill the pipeline whereas it’s more comfortable to believe that they can heat it up again with additional contacts.
More subtly, salespeople (like the rest of us mortals) want to be liked. By asking the question that will either take the deal to the next level or be no, the salesperson is risking not being liked any more, i.e., rejected, AKA, no.
I doubt that there’s even one salesperson alive who at sometime in their career hasn’t clung to a deal long after it should have been put to rest—if for no other reason then to make the pipeline look good. What you, as the sales manager, must do is create a structure that makes sure that a deal shows dead when it’s dead. Sure, that deal might be resurrected at some point down the road, but it doesn’t belong in a pipeline meant to forecast revenues.
To create the structure you need to analyze the steps that it takes to make a sale in your field. A step means moving the deal to the next level. For example, the levels might be:
- First contact (telephone call, email, networking, trade show, etc.)
- First meeting w/ presentation
- Additional meeting(s) (the number depends on what you’re selling)
- RFP/proposal
- Close
There are many small closes within each step, but what you don’t want to do is micromanage your salespeople (or anyone else, for that matter) by timing every single tiny step possible within each level and having them report daily on the status. The point is that a deal shouldn’t remain more than two months (and depending on your business that may be stretching it) in the same level. The best way to determine this is to sit down with your salespeople and analyze past deals as opposed to you (or anyone else) setting an arbitrary amount of time that “feels right” or “seems logical.”
Your sales people should set their own schedules and track of their own pipelines. Meet with them once or twice a month, weekly when a person is new or is having problems, depending on the deal timeline you’ve established. If a deal is due to move to the next level in Feb. but doesn’t and is moved to March and doesn’t, then the salesperson needs to be able to factually defend it. If it doesn’t move at the next stated deadline then it should be taken out of the pipeline. Removing it from the pipeline doesn’t mean that the salesperson severs contact with the company, but it does mean that the deal isn’t forecast as revenue producing—for either the company or the salesperson!
