What Differentiates Top-Performing Sales Managers
Front-line sales managers employ reps and influence their training, direct rep action plans and continuous execution from the start, 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 supervisors have a disproportionate influence on performance, and those who report to them are aware of this. In a global survey of over 1,000 sales managers and sellers from 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 meeting their performance goals. The effect is considerably more pronounced for dealers with fewer than five years of experience: When compared to new sellers who did not have an effective manager, they were 240% more likely to be top performers. It pays to have competent sales managers, however this raises some serious concerns: What does it mean to be a high-performing manager, and what do these individuals do?
Defining Outstanding Performance
In any role, transitioning from “doer” to “manager” is challenging. You progress from being chosen — usually for your ability as an individual contributor — to becoming the new person at the bottom of the managerial ladder who must learn the ropes. Sales managers must accomplish all of this while learning about their employees, assessing their various strengths and limitations, connecting with others in the organisation, executing new administrative chores, and reaching their targets.
To identify top performers, we concentrated on variables over which sales managers have significant influence:
At least 75% of the sellers on their teams exceeded their annual sales targets. This is significant since so 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 response to successful business development activities – the organisational reality underlying the old adage “nothing happens until you make a sale.”
Their teams won more than half of the suggested sales to prospects. This is an important indicator of a cost-effective sales team. In most businesses, the selling cycle is the single most important driver of cash out and cash in.
Their teams kept premium pricing. Pricing is a critical moment in business development, and according to this study, sales managers are not deemed top performers when their employees discount their way to higher win rates.
Using these criteria, 18.7% of respondents qualified as top performers, while the remaining 81.3% comprised the remainder of the sample. Consider victory rates to obtain a feel of the impact of differential performance. Sellers who reported to top-performing sales managers had a 72% win rate compared to a 47% general average. Consider a corporation with 200 sellers, each seeking 25 prospects each year (roughly 2 per month), with a $150,000 average transaction. Annual revenue is $352 million with a win rate of 47%, $427 million with a win rate of 57%, and $540 million with a win rate of 72%. Other than a blockbuster new product, it’s difficult to uncover significant gains in other tasks.
What Do High-Performance Sales Managers Do?
The study examined 100 abilities and behaviours from several categories seen in most sales management job descriptions (see Figure 1). The success of top-performing managers can be summed up in three words: rhythm, roles, and discussions.
When compared to other sales managers, top performers are 51% more likely to have a regular coaching cadence with those who report to them. As a result, the coaching themes reflect that rep’s unique combination of strengths and limitations.
Coaching is often associated with discussing outcomes, which is a lagging sign. They coach on an ad hoc basis, focusing on difficulties after the event, and jumping from one topic to the next without regard for context. This is confusing for the person receiving feedback and contradicts a fundamental 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 critical to behavioural change.
There is additional evidence that great performers are better coaches on a qualitative level. All managers in the sample, for example, gave deal coaching at statistically equal frequencies, but top-performing salespeople are 63% more likely to indicate that their boss excels at deal coaching that results in victories.
Smart leaders recognise this influence and work to improve managers’ coaching abilities. “We identified that 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 mechanism to ensure that everyone followed through. The outcomes have been really positive. We increased our connections by more than 20% over the previous year.”
A shift in professional identity is crucial to the move from salesperson to manager. Successful salespeople educate themselves about their clients, goods, tasks, and how to care for themselves. Top-performing managers learn to care for people and accept responsibility for group behaviours and outcomes. They accept their forecasting, territorial 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 that sellers regard as productive, rather than time spent away from prospecting or closing sales.
In other words, these executives manage. Although this may appear obvious, consider how much leadership advice boils down to “hire the best people.” Many businesses’ “strategy” for business development is to hire historically top-performing sellers from other organisations, pay them well, and then let them do their thing. However, without good management, the result is frequently disappointment and high turnover. Talent is important, but so much of sales performance is dependent on carrying out the duties outlined in a company’s plan and developing the internal and external relationships necessary to do so.
Top-performing executives hasten the essential socialisation process. Return on talent does not occur when a job offer is accepted. It’s all about developing and allocating people, and good sales managers accomplish it through area assignments, forecasting, and other responsibilities.
Influence is both conferred and gained in every organisation. It necessitates skill and outcomes, but it also need being recognised by others as contributing value. Sales managers are not an exception. Top-performing executives met their targets, but so did others. The difference was that high performers were perceived as successful by their sellers, who appreciated talks with such managers. As a result, top-performing sellers were shown to be substantially more likely to devote more of their time to being trained each week.
People cannot read minds. Conversations are how managers create trust and assist salespeople in taking the correct actions, learning, and improving. Top-performing sales managers are more likely to thrive at conducting talks with sellers about recognising opportunities, building accounts, managing customer contacts, and growing pipeline. These discussions assist sellers in developing abilities, achieving outcomes, and remaining focused and motivated. Top-performing managers were judged 71% more successful at motivating by sellers, an impact attributed primarily to the quality of their group interactions.
The Value of Interaction
Any sales organization’s life is filled with deadlines, periodic crises, performance pressures, and dozens of decisions that must be made in market time. As a result, most sales managers find themselves being pulled in several directions, focusing on coaching one month, a new training project the next, and a motivating speech the following quarter. These are all admirable goals, but without a framework for success, the typical outcome is managers who are global mediocrities.
There is no such thing as abstract performance in business; there is only performance in this firm, implementing this plan, under these market circumstances.
According to sellers, important determinants of managers’ performance across sectors include: useful coaching, recruiting, encouraging sellers, and territory/pipeline management. Forecasting and territory planning should be aligned with strategic objectives, and coaching should be used to build behaviours that will produce projected outcomes. As a result, reps are more responsive to the manager’s coaching and training programmes, establishing 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 abilities and coachable personalities.
It reminds me of a remark attributed to Andrew Carnegie when asked, “Which element is most important for business success: brains, capital, or labour?” “Which leg of a three-legged stool is most important?” he responds. Sales productivity and top-performing sales managers are driven by the match of rhythm, responsibilities, and discussions.
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