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Times are Tough, Lets Blame The Sales Force!!!

The Human Element

It is sometimes difficult to appreciate, but sales people are human beings as well. They may be thick skinned, apparently self motivated, persuasive, intelligent and more outwardly sociable than other job functions, but they are still people, with their own feelings, problems, issues, highs and lows etc.

Regardless of how hard a sales environment you are operating in, your sales team are your keys to success. How many companies do not employ sales people – none – Why? Businesses buy and sell products and services. A sales force in whatever format is crucial to the success and growth of your business. Therefore, as in any other job function, getting the best out of your people resource often gets the best results.

Sales people love making sales – it’s why they were put on earth! So, when sales become harder to achieve, it is a natural human reaction for sales people to become de-motivated because of this. If you are a golfer who loves to play three times a week, then rationed to two games a month, you won’t be happy! It’s the same thing.

This is not an article making excuses for poor performance, but highlighting the need to recognise the roller coaster of emotions that sales people put up with, often alien to their colleagues in other departments. The more conscientious ones will take on the additional psychological pressure of feeling responsible for the company performance, future or colleagues jobs when trading becomes difficult. The less conscientious or less able will use any available excuse to hide their ineffectiveness. The skilled sales manager will know the difference and manage accordingly.

However, before hitting on the sales guys to ensure the numbers are met, take a good long look at yourself, the organisation – even better put yourself outside of your organisation, looking in – you will be amazed at what you see!

Corporate/Company Responsibility

The first office to visit is your M.D./Chief Executive – the office where budget decisions, sales targets, revenue goals, corporate objectives are made.

One simple question. Is the business plan realistic and achievable?

If it isn’t, not only are you operating in a fools paradise, but the de-motivational effect on not just sales staff, but on all organisational personnel is incredible – if month after month your unrealistic targets are not met, the feeling of failure starts creeping into the company, which then breeds complacency, job insecurity and a lack of belief or confidence in what could be a perfectly good business – all because your targets are unrealistic.

How many companies share their coming year aspirations with their employees? Not many. How many explain how the numbers on the financial forecasts have been arrived at? Even fewer! How many bother to explain that through more efficient operations, better marketing, NPD, new distribution, pricing or currency advantage, faster delivery etc that sales demand will be supported through better company productivity and customer service? I rest my case!

Sales success is a two way street – demand created by sales has to be backed up and delivered 100% by the company in order to fully support this demand and create a seamless cycle between consumer, customer and company. Companies involved in product sales need sustained distribution to succeed. Think of the number of times a customer has been lost through poor customer service – this is a consequence of a badly run organisation, not a bad sales force. Sales people use up a lot of relationship favours with customers smoothing over the cracks of a bad organisation and sooner or later relationship becomes secondary and emphasis on restoring customer service and confidence, rather than concentrating on growth and development, takes over. As a corporate organisation, you have a responsibility to ensure that your sales team are equipped with the correct tools, and that they are backed up seamlessly by the organisational processes. This has to be the foundation of strong company performance during tough trading conditions.

Bringing this back to the theme of keeping the sales force motivated during recessionary periods, they will take heart, comfort and pride in the fact that the support and delivery network to back up their efforts is totally in place – this then becomes a selling point to customers, demonstrates to customers the true abilities of your business and gives confidence within the customer chain for increasing distribution of your products and services at the expense of competitors. It also, in a roundabout way, takes the excuse factor away from poor performing sales personnel!

As a business, take a good look at the following important operations and ensure stringent KPI’s are set against each. It would be interesting to see just how well you measure up:

Accounts:

How good is the invoicing accuracy? Poor accuracy of invoicing, whether above or below is simply poor administration on a company’s behalf, and leads to frustration within customer admin departments, and therefore frustration with your sales team – it can also be costing you money!! Set a KPI at 100% accuracy – there is no excuse for wrong input of data, which in essence is all invoicing is.

Credit Note Analysis - Do you analyse your credit notes? If you are experiencing high levels of credit notes, one or several things could be wrong within your organisation, from invoicing errors, mistakes on picking and shipping, losses with the carrier, warehouse theft etc.

Debit note offset – how many of you charge back to your suppliers the cost of faulty product, or in the case of manufacturing businesses, how aware are your production staff to defective produce? Do you set a KPI to cover debit note offset?

Debtor Days – How good are you in chasing up aged debt, or conversely how proactive are you in encouraging more business with your best paying customers? Sounds simple, but often overlooked. Can you list your ten best paying customers?

Supply and Procurement:

In Stock On Demand – you should be aiming for 100% stock availability, but at the same time effectively managing your total stockholding. How often do you look at your out of stock report and think what effect this is having not just on sales numbers, but also the longer term effect of customer confidence in your ability to supply their business? How often do you monitor slow moving stocks with your procurement department to ensure you are not tying up valuable cash in redundant stock or worse still that further production is not in the pipeline? Do you liaise with your Sales Director to regularly manage out overstocks from your business?

Warehousing and Shipping:

Stock take – How accurate is your stock take? – In this age of technology with instant data available to your sales force, you should be able to give 100% stock accuracy on a perpetual rolling basis. Use this as a selling point to your sales force and your customers – ultimately your competitors will not be as good, and this then becomes a point of value for customers dealing with your business.

Delivery On Time Every Time – do you monitor delivery performance from carriers against your stated terms? No good promising a 24 hour delivery if 50% of your parcels arrive in 48 hours – you look stupid, not your carrier. Insist on delivery reports from all your carriers on a weekly basis, deviation from 100% on time delivery requires immediate action. This safeguards your customer confidence as well as making your sales force efforts and promises upheld.

Marketing:

This is a huge area of influence on not only sales force and company motivation, but on also creating additional demand through recessionary periods.

How good is your marketing department? If you can honestly answer yes to the following points, they are pretty slick!

Competitor Knowledge – Do your marketing bods really know your competition? – their products, strengths, weaknesses, areas of exploitation, pricing strategies, potential new entrants and are also able to give an accurate and honest assessment of where your business and products stand amongst them in terms of benchmarking?

Market Knowledge – Trends, demographics, consumer knowledge, technical developments, seasonality, NPD – do you really know what to produce next?

Company Target Market – do you know for sure who your customer is? Difficult one to answer yes to, as the customer is constantly evolving!

Effective Advertising and Promotion – do your campaigns work in terms of increased distribution, sales and revenue, or are they just giving your competitors ammunition to attack you? How do you assess the effectiveness of your advertising –New distribution? Brand awareness? Increased sales? Whatever criteria you are setting, monitor and evaluate closely.

New Product Development – the life blood of any organisation! Does your marketing dept know where each of the company’s products sits in their own product life cycle? What is being developed that will not only sustain the company, but will inspire and motivate your customers (and in turn your sales force). Do you have a new product development plan? Do you also have an exit strategy for existing products?

Communication to Customers – does your marketing department product effective, concise information to existing and potential customers? If not, they should!!

Points of Difference – can your marketing department create enough points of difference to your competitors? If not, why are you operating in what will be a declining business?

Your Brand – how important is brand to your business? This will determine whether your efforts should be on brand, consumer or trade marketing, or a carefully considered element of each. Can your marketing department tell you which is more important to your business?

The importance of the link between strong marketing and effective sales management is clear – one cannot operate independently of the other with any value. From a motivational standpoint, it is important for marketing to be totally proactive with both customers and total company personnel in engendering confidence to sustain future performance. Especially in times of poor trading conditions, it is well documented that companies who market their products more effectively emerge stronger and better placed than competitors. However, the key element in this process is effectiveness. You must pre-set and pre-determine your success criteria for each and every marketing campaign and evaluate its success or otherwise.

If your company performance in the above areas are lacking, then expect a de-motivated sales force – it is they who are at the sharp end with customers, it is they who receive the irate phone calls when deliveries don’t happen, when invoices are wrong, when by your own poor performance as a business, they lose customers and distribution.

A good salesperson is only truly effective when they are fully backed up by a strong internal and external company performance.

Assuming that your internal systems and forward marketing plans are good, the other key element to your sales force success is your Head of Sales. Whatever title they are given – Sales Director, Sales Manager, Commercial Director, whatever – this individual is in a unique position within your organisation – they are the conduit between company and customer.

This person must have the ability to act as a true co-ordinator – ensuring the company plans are implemented through the sales force, and also be an effective communicator to the rest of the organisation. Customer feedback and information is crucial to every department within your business and your Head of Sales needs to be totally effective in providing this.

The interaction and relationship of your Head of Sales to your sales force is incredibly important. It is a common sense statement really, but how many overlook this? Your Head of Sales must not only manage the performance of each member of the team effectively, at the same time they must lead by example – through action, performance, attitude and communication. They must engender the “can-do” trait that is so important. In summary, they must be an effective leader, capable of praise, motivation and discipline in equal amounts. They must effectively communicate the company objectives to their team.

At the same time, they must be a strong and effective manager within the organisation, liaising and communicating well with every department – they must be able to highlight problem areas and affect solution. They must also have the ability to stand up and say no when unrealistic targets and objectives are put on them. Manageable and achievable growth is expected, miracles are not, and by agreeing to unrealistic, unachievable targets your Head of Sales has already demotivated their team leading inevitably to a higher turnover and instability of the sales force, and probably the failure of his/her own performance.

As a motivator to the sales force, they must be a problem solver, a person who can solve real issues and have the ability to recognise excuse!

Does your Head of Sales need to be seen as a friend to their sales team? In a word, no. Your Head of Sales should be friendly, polite, respectful and professional and earn and keep the respect of the team. This is not done by being over friendly or becoming too socially involved with your team, but by providing example and leadership to them. Discipline should be administered in a calm, composed way, highlighting the cause and demonstrating the solution. This is not be confused with being “soft”. Like any other area of business, people should be treated respectfully. Common sense again, but a member of a sales team that need frequent disciplining over performance related issues, is not the right person for your team and the situation, not the individual, needs addressing.

Stability is a major motivational influence on any sales force – constant changes in personnel create an atmosphere of uncertainty, regardless of the reasons behind the changes. Stability also helps achievement of objectives for your Head of Sales. Time can be spent focussed on achieving these objectives rather than on recruitment, induction, training and performance curves. Stability is created from belief – belief in the company, products, forward strategy, management team and fair re-numeration. Turnover of sales staff is inevitable with the need for personal advancement; however, a high turnover of sales staff is an indicator of a serious problem within the organisation.

The problems can range from inferior re-numeration through to dissatisfaction with company performance or company trust, which we have addressed earlier. One of the key areas of ongoing sales force motivation and stability is involvement – that they become an integral part of the company sales plans as opposed to plans being simply put on them. Active involvement in the setting of targets, objectives and results then imparts ownership and greater responsibility. This is of vital importance to managing ongoing performance through the Head of Sales. Involve the sales force at early stage marketing brain storming sessions, in company incentives, in team building exercises. They are at the forefront of your organisation and represent you.

We can all remember the times of lavish corporate entertainment, where a customer importance could be measured by the frequency and level of entertaining. This is now in the past – not only is lavish entertaining now deemed as frivolous, the crackdown from customer organisations in allowing their employed to be “incorrectly” entertained, has now made the art of entertaining much more low key. The same can be also said of sales force motivational entertainment or team building. How many companies now do a three day sales meeting with two days devoted to golf and spa days?

Team building of course is important within any organisation, but this should now be done more subtly and sympathetically with the financial constraints surrounding many organisations currently. Be mindful of this as clever team building does not need to cost money – it is the end result that matters.

For a lot of sales people, motivation equates to re-numeration. When they are earning well (regardless of how they are performing, which is sometimes a very different matter) they appear to be content. When times get tough, suddenly the company is the worst thing since unsliced bread and they wish to move to other organisations where they “think” the grass is greener. This is often, but not always, as a result of the poor management by their leader and of the company in general – they have not been made part of the organisation, just a spoke within the organisation. Often, this is realised too late and can follow or lead to a period of uncertainty within a business, but the process of effective sales force management is a permanently ongoing one. You are a fool to think that every individual can be managed perfectly – they are human, therefore they cannot. However, it is the responsibility of initially the Head of Sales, and then the organisational performance generally to manage motivation, aspiration, dedication and performance within the team. The skill is to develop and keep the good whilst whittling out the bad. By bad, I mean the people that despite all efforts are just not right for the organisation – we can all probably all think of individuals that the organisation has benefited from by their departure!

The results of good process and people management within an organisation are clear for everyone to understand. What is often overlooked is the cost, hidden or otherwise, of doing things badly.

Martin Gernon

Managing Director

MFG Consultants Ltd

About the Author

The author has held senior position in a variety of consumer orientated organisations and now is the MD of MFG Consultants Ltd, specialising in assisting SMEs in the Lancashire area get through the current economic climate.

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