I had a meeting yesterday with the CEO of a small business that currently has six people on their sales team. He is stuck in an awkward place because they are now big enough that they need to have a sales team, but they still don’t think they are quite big enough yet to have a dedicated sales manager. This is a tough spot that tons of business owners find themselves in. He needs to build sales to propel the business to the next level (so he can justify hiring a rock star sales manager). But until then, it means that the responsibility of sales management falls on him.
That is where the problem lies. Because despite being great business leaders and perhaps brilliant salespeople, CEOs in general don’t have what it takes to be great sales managers. How can I make such a sweeping statement? Simple. It’s because I know that being a great sales manager requires significant time, something that is in short supply for any CEO.
Unfortunately, CEOs like the one I spoke with are forced to muddle through the sales management process as best they can out of necessity. Finding a way to balance this role as effectively as possible with their other CEO duties is critical to getting over the hump and growing their business enough to adequately support a high-performing sales team.
With that in mind, I put together a list of the Top 5 Mistakes I frequently see made by CEOs managing sales. More importantly, they are accompanied by tips on how to fix them.
Here are the five main problems CEOs run into when managing sales:
Reason #1: They make non-strategic sales hires out of desperation.
This one is simple enough. Businesses with smaller sales teams may avoid hiring until they are way past overdue to bring an additional salesperson on. By that time, they already needed new revenue coming in yesterday, and they are crunched for time. Plus, they are less likely to have the resources, time and know-how to successfully attract, screen, hire and onboard a salesperson who is going to be a revenue machine. So they often make impulsive hires based on gut feelings and resumes. These impulsive hires frequently end up being a slow, sad drain on the company’s bottom line. So there is a gap the size of the Grand Canyon between what they want to get and what they end up with.
The fix: GET HELP! Seriously, hiring and onboarding for sales is an art and a science. When you are counting on getting a rock star salesperson, plan ahead and get some help. Trying to save money in the short term by doing this in-house is likely to end up costing you an average of 3-5 times the new hire’s annual compensation. So instead of boosting your revenues it can hold your company back. This happens all the time. Rizan Flenner recently wrote a blog on iSEEit.com about how much a bad hire cost his company. He guessed $120K wasted on salary and training . . . and nearly $4 million in lost revenue.
If you know it’s time to hire and you are ready to invest in a new team member, do so strategically. For example, we use a screening tool that can tell you with 96% accuracy whether a candidate will actually perform. Out of 750,000 salespeople who have been screened with this tool, 92% of the candidates it identifies as recommended to hire rise to the top 50% of their sales force within 12 months. This takes the gamble out of hiring.
Reason #2: Failing to have a consistent onboarding process.
If you think that a new salesperson will be able to succeed based on watching you or other salespeople interact with some leads and existing clients, you are not alone! Unfortunately, it takes more than that. According to a recent Sales Management Association research brief, only 31% of companies described their onboarding programs as structured. This is where most companies fail. But those who do have a structured, consistent onboarding program in place have more positive results and shorten the time to productivity by 37%.
The fix: Don’t forget to factor in onboarding time, processes and training to empower your new hire to be effective. Put together the tools you need for an effective program once and you will have it to re-use again and again. I recently wrote an eBook which goes into significant detail about effective onboarding programs which should be very helpful to anyone who does not currently have a formal hiring and onboarding process in place for sales. If you are doing your onboarding yourself it provides a great model to work from.
Here’s an example of one thing you can do easily as a CEO managing sales:
Reason #3: Not having a systematic, repeatable sales process.
This is an area we find flawed in almost every company we work with. Salespeople haven’t been taught effectively and aren’t comfortable enough with the product/service to sell it. As a CEO, you may be inclined to think that your sales team knows your service/product as well as you do, which is not likely the case.
The fix: Create a repeatable sales process that will allow every salesperson to be knowledgeable about your product or service. Your process might include a set of templates and training materials that you can reuse ─ such as scripts and questions ─ and will also include regular, ongoing practice time.
If you train your team on commonly-asked questions about your product or service, they will know how to respond. Practicing with them ahead of time allows your salespeople to avoid situations where they could falter under pressure; they will be comfortable with anything that comes at them. Following a well-designed, repeatable sales process with tools such as scripts and role-plays will increase confidence and allow salespeople to become better questioners, listeners and advisors. And, there will be greater consistency of message and experience across the company.
Reason #4: Failing to account for motivation and incentives.
By default, people often expect that others will think the same, perform the same and be motivated by the same things as them ─ until they have a reason to think otherwise. This is a common pitfall with CEOs and even non-CEO sales managers, because (let’s be honest) you are where you are because you’re a rock star. You are a do’er and a go-getter, you care about increasing company revenues and you may never have been short on motivation. That may be less true of your sales team. They may be motivated to different degrees and by different things. Understanding their motivations will help you obtain better sales performance from them.
The fix: Talk to each member of your sales team individually and find out what motivates them. What is their goal? Is it to buy a new house, become sales manager, get a ton of recognition, or maybe even to spend more time with their kids? Not everyone is money-motivated. You may care about corporate revenue and the number of deals closed, but that may or may not move them. Once you know what drives each individual, you can work with them to ensure both of your goals are met by aligning the benchmarks to get there. Everyone will be happier, and that will be reflected in your sales performance.
Also, make sure your sales compensation plan is consistent with your goals. For example, you may tell your sales team that you want them to close 5 deals on X product this month, but if your compensation plan is set up so that they make more commission when they close product Y, you are setting yourself up for trouble.
Reason #5: Not spending enough time coaching.
This is perhaps the biggest challenge for a CEO managing sales. The other items don’t necessarily require as much time and constant attention on an ongoing basis. For your sales team to be consistently successful and become a high-performance machine you need to spend 50% of your time actively coaching your sales team. Collectively, individually and correctly. And 50% of your time, as a CEO, is out of the question.
Coaching means pre-briefing, de-briefing, sitting on calls without jumping in, having regular meetings and holding salespeople accountable.
The fix: In the short term, fake it (a little) until you make it. The amount of time that you have as a CEO to devote to sales management is neither sufficient nor sustainable, but until you can get a better solution, here are some sales management hacks that will help you make the most of your limited bandwidth. Keep in mind that these steps assume that points # 3 and #4 are being addressed, at minimum.
- Work out with each individual salesperson their math of success, or activities required for them to meet their personal goals and your mutually-agreed benchmarks.
- How many deals must they close to meet goals and how many leads and opportunities are needed to close that number of deals?
- Make sure goals are realistic and appropriate.
- Account for lead generation and opportunities in the pipeline.
- Use this template to help you work through the math of success with each person.
- Ensure every salesperson understands what is expected of them in terms of goals and activities.
- Make sure that their activities are appropriate and logical to meet their goals.
- This will be their weekly plan of action.
- Have periodic sales team meetings to stimulate cross-pollination of ideas for doing things better, identify what is and isn’t working, themes in feedback from customers and prospects, etc.
- Schedule individual SET IN STONE sales meetings with each salesperson weekly (preferable) or bi-weekly. These are critical, so don’t put them off. If your days get crazy quickly, schedule these for first thing in the morning. Do them via Skype if you have to, but make sure they happen. They should be 30-45 minutes each.
In the meetings, review their weekly plan of action and whether they took the steps to do what they committed to do.
- What will they do differently next time?
- Does their plan need tweaking?
-What is the next step for each opportunity in their pipeline? If there is fluff in the pipeline, get it out of there. Move it or blow it up.
- Review their year to date success and what behaviors they may need to change if they are doing the right activities but still not getting results.
- If their performance is “in distress,” carve out some time to pre-brief and de-brief to help coach them through some of their sales calls, and accompany them on some calls if necessary.
- Once you have this system in place, and assuming points three and four were addressed (having a systematic sales process and accounting for motivation and incentives), you should think about getting rid of any salespeople who are not performing. Replace them with high-performing salespeople through a better hiring and onboarding process as discussed in points one and two.
CEOs managing sales are in a tough, but relatively common predicament: they need to grow sales but they don’t have the time to do so.
The top five sales management mistakes for CEOs to watch out for:
- Making non-strategic sales hires out of desperation.
- Failing to have a consistent onboarding process.
- Not having a systematic, repeatable sales process.
- Failing to account for motivation and incentives.
- Not spending enough time coaching.
The fixes are:
- Get help for sales hiring. Use candidate assessments to take the gamble out of it.
- Create a re-usable onboarding program that will set each salesperson up for success.
- Use tools and training time to create an ongoing and consistent sales program.
- Learn each salesperson’s motivations, leverage them to meet both of your goals together and be sure you aren’t being undermined by your compensation plan.
- Use sales management “hacks” to do the bare minimum for sales management that does not suck, until you can find a better solution.
That’s it. If you had time to read this blog post you probably had time to do a meeting with one of your salespeople! If you’d like to chat with me about more interim fixes and hacks to make sales management more effective under less than optimal conditions, let me know. Also, be sure to take advantage of the downloads and subscribe to the blog if you want more actionable sales management tips.
Download our CEO as Sales Manager Leadership Toolkit here.
Do you agree with my choice of the top five mistakes CEOs make managing sales? If you’ve been (or been managed by) a CEO managing sales, please chime in on the comments and tell us about some of the biggest challenges as you see it.
Here are other posts we have written about CEOs as Sales Managers:
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