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sales management strategies » ManageBits

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In my last article I summarized some basic strategies and tactics for building an effective Sales organization. I mentioned the importance of setting up and enforcing those strategies into the sales organization through strict polices and rules. These operational tools are imperative to your successful sales organization and should be incorporated into your day to day sales operations. One of these important sales operational tools is the Sales Management polices, in which you state clearly your organization’s vision and guidelines for the sales management and field sales. When creating a sales management policy, make sure you at least cover these types of categories:

1.    Section for general guidelines
2.    Roles of the Sales Executives
3.    Roles of the Sales Managers
4.    Rules of conduct
5.    Sales Meetings guidelines
6.    Most important of all, Compensation Policies.

In the section for general guidelines, you must make it apparently clear that the entire Sales organization must follow the published Sales Rules and Policies that the Organization puts forth. Here are some examples of general guidelines I have used in the past.

General Guidelines

•    The President is responsible for booking control. (Depending on industry and size of Organization it may be a different position that controls booking. However, a specific person, not group; needs to be responsible and accountable for the accuracy and privacy of the numbers)
•    Except for the President and GM of Sales, no other Employees and Managers are allowed access to the booking data of the Company. (This is even more important if your organization is a publicly listed company)
•    Only the CEO, President, and Lawyers, can sign off and approve any legal contracts among customers, distributors, and Group Companies. (This is extremely important these days!)
•    All Project Leaders are also accountable for their own booking performance

In the next couple of sections, you need to list out the important roles and guidelines for your Sales Executives and Sales managers. In this way, there can be no misunderstanding on their authority and responsibilities.

Sales Executive Roles

•    Only the Sales Executive (SVP, VP) can approve the giving of gifts to customers.
•    Only the Sales Executive (SVP, VP) can approve the following: booking split across Subsidiaries, Regions, certain discount approval levels (see Sales Rules), and types of evaluation licenses.
•    Only the Sales Executive (SVP, VP) may approve University Programs; No salesperson or employee are allowed to grant any product to any University or College. (Of course this one is industry specific and depends on situations)

Sales Manager Roles

•    The Sales Manager (Dir, Dist Mgr) decides the hiring and firing of salespeople, with the Sales Executive having the final approval.
•    While the Sales Manager (Dir, Dist Mgr) is responsible for territory assignment, it is the Sales Executive who determines the sales quota and commission structure, in accordance with the published Sales Rules.
•    The Sales Manager (Dir, Dist Mgr) and each individual Sales Representative must update the sales forecasting system accurately and weekly.
•    The Sales Executive and the Sales Manager (Dir, Dist Mgr) need to be very careful when dealing with the commission split of Sales; Sales Representatives are not allowed to attend or negotiate any commission split discussions. (see Sales Rules)

The section “Rules of Conduct” is probably the most important part of your Sales Management policy. This section sets the tone for your Sales Organization along with the published Sales rules. This part of the policy can be seen as the Standing Military order from command and can not be wavered from at all. Here is a list of examples you can draw from.

•    No salesperson is allowed to give or loan any product to any customer, institution, or outside organization without prior approval from the Sales Executive (SVP, VP).
•    All Sales territory cannot surpass a radius of 1-hour traveling distance (by airplane).
•    All salespeople will follow the same Sales Rules.
•    Each salesperson will follow the two-quarter rule, which can only be waived by the Sales Executive (SVP, VP). The Two-quarter rule means that a salesperson has to meet their given quota within two quarters or else face termination.
•    When a Sales Rep misses one quarter’s quota, he/she has to make it up in the following quarter; otherwise, he/she will be terminated, but the Sales Executive (SVP, VP) can waive the job termination.
•    Sales Associates (Junior Sales) have to stay on their assignment for a minimum 2-year period before they can qualify to be promoted into a regular Sales Representative position.
•    The expense report for a salesperson’s activities only covers the salesperson’s travel, entertainment meals, and cell phone expense. A cap, approved by the Sales Executive (SVP, VP), is imposed on the amount of money that a salesperson can submit in his/her expense report.
•    All Sales Expenses Reports must be submitted for processing within a month after expenditure. All expenses that are submitted after the month deadline will not be accepted for reimbursement.

The next section is about Sales meetings. In my opinion, sales meetings should be kept to a minimum and be extremely efficient. Sales need to be on the street closing deals rather than being held up in bureaucratic meetings. So usually in this section, I would just state organizational meetings, for example:

•    Weekly Sales update meetings will be held by each (Territory, Group, Region, etc) on every Monday morning and run by either the Sales Executive (SVP, VP) or Sales Manager.
•    Except for the Annual sales meeting, each (Territory, Group, Region, etc) will hold its own quarterly sales meetings at their own locations.
•    All quarterly sales meetings are held during the first month of each quarter. All sales persons are required to attend without exceptions.
•    The Annual sales meeting is held on April 3rd through April 6th of each year regardless if it falls on a weekend.

Finally, the Compensation section of the Sales Management Policies. This section is extremely important to the Sales force and should be carefully crafted and executed. If done correctly, your sales force will be extremely motivated and your revenues will show for it. If done incorrectly, morale will be low and it will be difficult to increase revenue. Of course, industries vary and the size of companies, whether they are public or private will influence compensation trends and practices. But remember, once you set the compensation, do not change it around often, at least not more than once a year. If you do, you will negatively effect your sales organization and the mistrust it creates will be very difficult to repair. Please take a look at some examples of compensation polices that I have used in the past.

•    The compensation of each salesperson is commission based (see Sales Rules), while that of sales management is based on salary plus bonus.
•    Base Salary of Sales varies based on local cost of doing business, Commission rates are uniformly based on Grade levels of each Group Company.
•    Sales support personnel (Tele-sales, Maintenance collection, Secretary, and others) are paid a straight salary with a non-fixed bonus.
•    Customer Product Engineers are centralized & geographically distributed. They are paid a straight salary with a non-fixed bonus.

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Many years ago, I heard a saying that “Sales is a form of art and Sales Management is science.” There are countless books, articles and seminars out there that teach methods and practices on the art of selling and even sales management. The true successful salesmen have a natural ability to sell which is innate to their personality, much like the natural artist that can paint, sculpture, and perform superbly. People can learn the mechanics & methods to sharpen their sales skills, but will never achieve the success of the natural artistic salesman in which selling comes as second nature. However, sales management is definitely a science in which you can follow successful guidelines and processes to manage an efficient winning salesforce. Unlike direct selling where the natural Salesman shines, Sales Management needs to be run extremely efficiently and methodically for grand success. Sales management does not need the artistic values to close deals, it needs to be stringent and effective for the organization, making sure sales are in line and revenue streams are constant and growing. Effective Sales Management needs structure and rules in order to keep Salesman in line and productive. The Sales Organization also needs a decisive strategic focus in which to rally the force and funnel all resources and efforts to one common goal which is to win deals and increase revenue. In coming up with a solid strategy for your sales organization, one must consider some basic aspects of competitive strategy, organizational & operational strategy, and good common business sense.

When developing a competitive strategy, you need to know yourself really well and know your competition. Here are some fundamental values you should think about when developing your strategies:

• Know your market, customers & competitors real well (Research, Intelligence)

• Develop a solid plan based on your situation & strengths

• To win over customers, you must understand their needs first & always keep your commitments to them

• Continuously develop new products & improve on existing ones

• Use innovation to penetrate markets and then occupy & expand your market

• Maintain strong price/performance on all products

• Use service & support as additional strategic weapons

After establishing some of these fundamental values, there are also many types of tactics you can use to achieve your competitive strategy. Depending on your market environment, competition, market share and size of organization; will determine what type of successful tactics to incorporate into your strategy. I will describe some basic tactics that are universal in nature and quite effective when established correctly.

Competitive Tactics (Organizational Perspective)

• If your organization is weaker, attack your competition from their vulnerable spots, avoid head-on or direct confrontation; However, if you are stronger, surround your competition and destroy them completely, don’t ever give them a chance to recover or re-group

• When you attack or confront your competition, use a path which they are not watching for or protecting, move fast and hit hard; during attack, avoid their strengths and attack their weaknesses.

• By using a flanking strategy, identify vulnerable niches or leaking holes and conduct a surprise attack very swiftly

• Destroy your competition’s morale and fighting spirit from within, use (intelligence) extensively

• By using a relentless non-stop surprising attack on your competition, you will always be able to keep market leadership

• Be flexible in changing tactics, including position, packaging, price, promotion, selling, etc.

• Remember this “Attack First, Hit Hard, Move Fast, & Be Merciless!”

• Establish fear and respect among competitors

• Publicize winning accounts and success stories for the sales team

• Build a complete sales database and network on prospects and customers

– Sort, analyze

– Track inter-relationships and moves (jobs/companies)

– Know the people (position, background, family, schooling, hobbies)

• Develop and maintain sales-assisting activities

– Ads (Digital and/or Traditional)

– trade shows

– promotional events

– buy or trade customer lists

• Emphasize post-sales support

• Focus on Major Account Management

– Form special “tiger teams” (e.g., 10 person teams) to conquer certain major accounts

– Completely and systematically cover the entire market area

– While not ignoring any prospects, focus on the key target accounts making up the old “80/20” rule

– Use 1-to-many sales tactics to supplement the usual 1-to-1 sales techniques (e.g., prepare multiple pens for simultaneous PO signing — make it a ceremony)

Competitive Tactics (Individual Perspective)

• Always create a win-win situation in any deal

• Fully understand your prospect before launching your sales effort

– Conduct a systematic and thorough investigation on all prospects

– Find the key spot or vulnerable point and penetrate using it

• Build trust with customers

• Focus on prospects with high buying power

• Focus on prospects with high marketing value

• Express appreciation to your customers

– Give a Gift after concluding a sale

– Pass along positive comments especially to supportive individuals

• Know your Contacts well

– Pay attention to the greeters (e.g., receptionists, secretaries, security guards)

– Check out their internal publications (e.g., get yourselves and your team into their internal publications)

– Get involved with their trade associations

– Check out their signs, bulletin boards, websites, blogs, etc.

• Remember a great salesman never leaves a customer empty handed; he either gets the PO or sucks the customers brain dry (gathers important intelligence for future use)

After setting up a decisive competitive strategy, your organizational and operational strategies must align together to support and drive the organization to achieve those goals. In preparing the sales organization, you must envision your group as a vast solid Oak tree growing and deepening its roots laying down the solid foundation for a powerful effective sales force. As a leader you must understand that your people’s hearts become the core of the business and that you should learn how to leverage their strengths along with your management group’s wisdom to win over your competition. In order to build that strong sales organization, you need to take any necessary steps to formulate the organizational & operational strategies into a cohesive and effective organization. Here are some examples that will guide you in that direction.

Organizational & Operational Suggestions

• Make sure you hire good and strong leaders. Whether they are VP of Sales, Sales Directors, Sales Managers or even Senior Sales reps, successful strong leaders also attract and motivate great people.

• Make sure you hire more than enough Sales people (More feet on the Street, more area covered, however, make sure the sales are deep harvesting their territories and not just cherry picking low hanging fruit)

• Walk around and talk to employees directly

• Communicate with all managers

• Interview departing employees (Good source of internal information)

• Liberate middle management & empower them to improve productivity (source: GE)

• Spend at least 40% of your time on “people”

• Develop a strong Culture that focus on Sales and values it.

• Focus primarily on numbers: revenue, cost, and profit

• Don’t make money through political or government power circles, if possible (Unless that is your business)

• Tightly control costs but spend money wisely; right place, right way, right time

• Insist on cash, don’t make deals on credit

• Emphasize credit checks and background investigation BEFORE concluding deals.

• Know your customer inside and out: family, background, schooling, hobbies, and finances.

• Always be prepared for future downturns and surprises. Build backlog and have a savings cushion

• Treat your (sales organization) people well (Respect them, Promote them & their function, give them glory)

• Motivate, lead by example

• Manage using a military style

– You are either on the team or you are not.

– Team members must have the will to stay, fight, and win.

– Train your sales person as though you are in a real war.

• Set extremely high targets

– Give high financial reward

– Attract top-notch sales talent

– Set a high 3-year sales goal

– Drive sales

– Measure overall performance on a quarterly basis

• Objective performance evaluation

– Use numbers to evaluate, control, track, reward, and punish

– Must be as objective as possible

– It’s the only defensible position

• Stretch your people, challenge them

– Put each person into tough situations to stretch them

– Burn their bridges so there’s no retreat (e.g., checking into a luxury hotel without cash; the successful cash sale creates the cash for the hotel tab)

– Punish non-performers swiftly [give them one chance for redemption]

– Pass along positive comments between supervisors and subordinates

• Attitude

– Attitude is all important

– Know your product & competition

• Learn your product well before selling it (know the ins and outs)

– Persist

• Sales begins with rejection

• Be polite but be persistent

• Set high goals for number of contacts before giving up is acceptable

• American Sales Association Statistical results:

• 48% of sales people withdraw after the 1st rejection

• 25% withdraw after the 2nd

• 12% after the 3rd

• 5% after the 4th

• The remaining 10% of the total sales people account for 80% of the total sales deals

– Always be in selling mode

• You are not selling just a product

• You are selling hope, a bright future

• You are selling the ability to contribute to society

– Work hard

• Be dedicated to reaching your goals

• Sell day and night

• Sell in the prospect’s or customer’s office and home

• E.g., sleeping on the train at night to save time at home for selling

• Work efficiently

• Fight to the end

• Grasp opportunities as they appear

– Have an optimistic and aggressive attitude (e.g., selling ice in Antarctica, selling underarm deodorant in China)

– People will respect you only when you respect them

– Find solutions to seemingly hopeless situations; Be creative and innovative; Think out-of-the-box; Always try new tricks.

– Never quit until you’ve closed the deal

– Never quit until you’re #1 (e.g., Selling into New Year’s Eve)

– Never quit until you win

– Be #1 by a wide margin

Once your competitive strategy is decided upon and your basic organizational & operational strategies are locked in cohesion, you need to make sure that your sales organization understands these strategies and have clear and precise orders to follow. In order to make sure your salesforce complies and efficiently carries out your strategies, an organization needs to develop and publish a clear set of Sales Management policies, a strict rule book for the salesforce, and an organized accurate forecasting system to keep track of key data. These operational tools need to be strictly enforced and communicated regularly to make sure all important situations are covered and accounted for. Once these policies and rules are enforced, the Salesforce can now clearly focus on their tasks of generating income and revenue for their organization. Hopefully, once you have worked out the kinks of these operational tools, the salesforce will have no room to play any games or try to get creative in bypassing the system. Remember, these polices are for the best interest of the organization and not for the interest of the salesmen. I will go into more details about these operational tools in my following articles, where there will be examples on types of Sales management polices and Sales Rules to incorporate into your own organization.

One last thing, please remember that Salesman should be encouraged to be 100% selfish and greedy for their commission. Make sure they are extremely well compensated for their successes and then they will perform, but if they fail, punish without mercy as an example to others for failure. Sales Managers should be encouraged to be 50% greedy for commissions and 50% for the organization, whereas Sales executives should be expected to be 100% for the Organization. If you can achieve this type of mentality then you will see your revenues grow.

 

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