Defining High Performance
Front-line sales managers employ reps and influence their training, direct rep action plans and continuous execution from day one, offer (hopefully) feedback to reps and so reinforce effective selling behaviours, and are critical to the success or failure of sales-focused growth and transformation efforts.
These managers have a disproportionate impact on performance, and those who report to them are aware of it. In a global research of over 1,000 sales managers and sellers in sectors ranging from medical devices to professional services to technology and pharmaceuticals, we discovered that top-performing sellers are 83% more likely to evaluate their managers as helpful in assisting them in achieving their performance. The outcome is even more apparent for vendors with fewer than five years of experience: They were 240% more likely to be top achievers with a competent manager than new sellers who did not. It pays to have strong sales managers, yet this raises some crucial questions: What does it mean to be a high-performing manager, and what do these managers do?
Defining High Performance
Moving from “doer” to “manager” is tough in any function. You progress from being chosen—typically for performance as an individual contributor—to becoming the new person at the bottom of the managerial hierarchy who must learn the ropes. Sales managers must accomplish this while learning about their employees, assessing various strengths and limitations, connecting with others in the organisation, executing new administrative responsibilities, and reaching their figures.
To identify top performers, we focused on variables over which sales managers have significant influence:
At least 75% of the sellers on their teams accomplished their annual sales targets. This is significant since many other resource-allocation choices in businesses are based on sales estimates and the team’s ability to satisfy expectations. In contrast, most organisations deploy production, service, and other assets in reaction to successful business development activities – the organisational reality underlying the old adage that “nothing happens until you make a sale.”
Their teams won more than 50% of planned sales to prospects. This is a vital indicator of a cost-effective sales team. The selling cycle is the single most important driver of cash out and cash in in most businesses.
Their teams maintained premium pricing. Pricing is a critical moment in business development, and according to this study, sales managers are not regarded top performers when their employees discount their way to win rates.
With these criteria, 18.7% of respondents qualified as top performers, while the rest comprised 81.3% of the sample. Consider victory rates to obtain a feel of the impact of different levels of performance. Sellers who reported to top-performing sales managers had a 72% win rate compared to the national average of 47%. Consider a corporation with 200 sellers, each seeking 25 prospects each year (roughly 2 per month), with an average transaction of $150,000. Annual revenue is $352 million with a 47% win rate, $427 million with a 57% win rate, and $540 million with a 72% win rate. It’s difficult to uncover significant gains in other activities short of a blockbuster new product.
What Top-Performance Sales Managers Do
The study examined 100 abilities and behaviours across areas included in most sales management job descriptions (see Figure 1). The success of high-performing managers may be summed up in three words: rhythm, roles, and discussions.
Top performers are 51% more likely than other sales managers to have a regular coaching cadence with those who report to them. In turn, the coaching themes reflect that rep’s unique combination of skills and shortcomings.
Many managers associate coaching with discussing outcomes, which is a lagging sign. They coach on an ad hoc basis, focusing on difficulties after the event, and switching from one topic to the next arbitrarily. This is confusing for the recipient of feedback and contradicts a major learning principle: people develop at behavioural skills (rather than absorbing new knowledge) by identifying particular areas for improvement in advance and then practising that skill with focused feedback. Top-performing managers are proactive, understanding that consistent follow-up on an issue is essential for behavioural change.
There is also evidence that great performers are qualitatively superior trainers. For example, whereas all managers in the sample gave deal coaching at statistically equal frequencies, top-performing salespeople are 63% more likely to indicate that their boss excels at deal coaching that results in wins.
Smart leaders recognise this influence and invest in managers’ coaching abilities. “We identified that in order to make a meaningful change, we needed to focus at the sales manager level,” says David Coventry, vice president of Optus, an Australian leader in telecom goods and services. Our strategy was built on providing focused coaching to sales managers in order to assist them prioritise actions that would have the greatest impact. They established precise plans of action for their teams, obtained commitment from salespeople, and built a strict accountability framework to ensure that everyone followed through. The outcomes have been quite positive. We saw a 15% increase in connections over the previous year.”
A shift in professional identity is crucial to the move from salesperson to manager. Successful salespeople learn about their clients, products, tasks, and how to take care of themselves. Top-performing managers learn to care for people and accept responsibility for group behaviours and outcomes. They embrace their forecasting, territory planning, and effective leadership duties. According to the study, top-performing managers are 52% more likely to succeed in territory planning and organising how sellers manage pipelines, and 42% more likely to conduct meetings seen by sellers as important, not time taken away from prospecting or closing sales.
In other words, these managers genuinely manage. This may sound simple, but consider how much leadership advice boils down to “hire the best people.” Many corporations’ “strategy” for business growth is to hire historically top-performing sellers from other companies, pay them well, and then let them do their thing. However, without good managers, the result is frequently disappointment and high turnover. Talent is important, but so much of sales performance is dependent on carrying out the objectives outlined in a company’s plan and developing the internal and external selling abilities necessary to accomplish so.
Top-performing managers speed up the essential socialisation process. Return on talent does not occur with the acceptance of a job offer. It’s all about developing and allocating talent, which great sales managers do through area assignments, forecasting, and other responsibilities.
Influence is both given and acquired in any organisation. It necessitates competence and outcomes, as well as being recognised by others as delivering value. Sales managers are no exception. Top-performing managers made their numbers, but so did others. The difference was that the top achievers were viewed as effective by their sellers, who valued the talks with those managers. As a result, top-performing sellers were shown to be substantially more likely to devote more of their time to weekly coaching.
People are not mind readers. Managers develop trust and assist salespeople in taking the appropriate steps, learning, and improving via discussions. Top-performing sales managers are statistically more likely to thrive in leading talks with sellers about identifying opportunities, growing accounts, managing client contacts, and increasing pipeline. These talks assist salespeople in developing abilities, driving outcomes, and remaining focused and motivated. Sellers evaluated top-performing managers as 71% more successful at motivating, owing primarily to the quality of their collaborative dialogues.
The Importance of Interaction
Deadlines, frequent crises, performance expectations, and thousands of choices that must be taken in market time characterise life inside every sales organisation. As a result, most sales managers are pushed in several directions, focusing on coaching one month, a new training project the next, and a motivating speech the following quarter. These are all fine things to do, but without a pattern for effectiveness, the frequent outcome is managers who are global mediocrities.
In business, there is no such thing as abstract performance; there is only performance in this firm, implementing this plan, under these market circumstances.
For example, across sectors, significant determinants of managers’ performance, according to sellers, are: useful coaching, hiring, encouraging sellers, and territory/pipeline management. Good forecasting and territory planning fit with strategic objectives, and coaching promotes behaviours that deliver predicted outcomes. This, in turn, makes reps more susceptible to the manager’s coaching and training programmes, creating a virtuous cycle in which those managers get a reputation as desirable places to work (because their reps succeed) and become talent magnets, drawing reps with capabilities and coachable personalities.
It’s evocative of Andrew Carnegie’s remark when asked, “Which element is most important for business success: brains, capital, or labour?” His response: “Which leg of a three-legged stool is the most important?” The match of rhythm, responsibilities, and dialogues is what drives sales productivity and top-performing sales managers.
London School of Business and Finance
Nyenrode Business University
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