I was delighted to be asked by the folks at InsightSquared to contribute to their series of "expert interviews" on key topics in sales and marketing analytics. Gareth Goh of InsightSquared fired off the questions, and I did my best to answer them. I hope you find some of the ideas useful in helping to improve sales performance within your own organisation. Here goes:
1) Gareth: How would you define sales management? How is this different from sales coaching?
Bob: I think there are actually three interlocking capabilities at play here: leadership, management and coaching. All three are important.
Leadership requires a clear sense of vision and purpose, and the ability to inspire. It’s the behaviour that encourages a team of people to perform at their best, to be motivated and aligned. Management is more to do with the nuts and bolts of running a sales organisation on a day-to-day basis. It includes key responsibilities like pipeline management or forecasting or general skills-based training.
You’re right to call out coaching as being a related but separate skill. It’s the ability to help the individuals within your team to make the best of THEIR abilities, to bring out their talents, to stimulate them to think differently, and to help them be more successful in their roles.
When I assess people in positions of responsibility at sales organisations, I tend to think in those three dimensions. What are their strengths as leaders, managers and coaches? An interesting combination of skills is required if you're to do all three well.
2) What is the number one skill missing from sales management?
I think it’s the ability to get the most out of each salesperson. It’s not just coaching - I think there are other ways where managers can maximise individual talents - but I would say coaching is a big element of that. Something which is perhaps less obvious is the ability to recognise the particular skills and winning behaviours of top performers across the organisation, and to distil those winning attitudes and behaviours in a consistent way across the whole organisation. That’s subtly different from, but every bit as important as, coaching at the individual level.
3) What is the biggest challenge facing sales managers today?
Bridging the gap between top sales performers and the rest. You can’t expect training people in sales methodologies to achieve much by itself. This sort of training might be a necessary foundation but it’s really only a small part of the story. Sales managers really have to recognise those winning habits and behaviours, which include things like what top performers do particularly well when it comes to qualification.
One of the distinct differences I find between top performers and the rest is they tend to be much better qualifiers largely because they have too much respect for their own time to waste it pursuing un-winnable deals. They have the confidence to qualify out at an early stage whereas you frequently see middle-of-the-road sales people hang on to similarly un-winnable deals because they think if they qualify them out their pipeline will look smaller. In practical terms, the opposite is true.
So I think improving qualification can go a long way towards bridging the gap. Another skill you typically see in top performers is the ability to look at things in a way that uncovers pain points, establishes context and focuses the broad value proposition of the vendor onto the very specific needs of the individual customer.
Some people seem as if they have just been born with these instincts but my experience is that they can be developed in others and that you can narrow the gap. But in complex sales environments, sales people must have a reasonable level of intelligence - both intellectual and emotional - and curiosity. If you have those foundations, you can use training and coaching to drive substantial improvements. If they don’t exist, it’s usually a hopeless case, and you'd be better off persuading them to find a job that involves selling something simpler.
5) How have data-driven cultures changed sales management?
Individual sales managers have different personalities. You come across managers who are at all points on the scale, between seeing sales as a heroic art, a science or as a process that can be engineered. But I’ve got to say that sales management cultures that are fundamentally based around the expectation of heroic but unscientific behaviour are finding things increasingly tough.
Effective modern sales leadership increasingly looks like a data-driven blend of science and engineering. If you don’t have the right data, it’s hard to identify winning and losing patterns of performance. But armed with the level of data that is now possible to extract from well-implemented CRM systems, you have the ability to look for patterns of performance, to identify what’s working well and what isn’t.
And that’s when an engineering-like focus on improving processes comes to the fore, and I think that data-driven cultures have highlighted the value of sales leaders having - at least in part - an engineering or process-driven mind-set. They are continually looking for systematic ways to improve performance.
6) What are some of the most critical KPIs that sales managers depend on?
I look for a handful of Key Performance Indicators. Firstly, it’s really important that we clearly define and track the stages through which the buying decision process evolves. I say buying process because what the sales person is doing is much less important than what the buyer is doing when it comes to accurately positioning opportunities in the pipeline.
Understanding the volume and value of opportunities at each stage in the pipeline is obviously important, but there’s a third metric that is equally important: velocity - the speed at which opportunities progress from stage to stage. Velocity turns out to be one of the most effective predictors of sales performance. Opportunities that move quickly are (depending on which study you read) 2-3 times more likely to close than deals that hang for around for ages without making significant progress.
Once you’ve got a handle on volume, value and velocity, you can slice and dice the data to learn a great deal about the health of your pipeline, the attractiveness of your various offerings and the competence of your different sales people. And you can judge the overall health of the pipeline by looking at the shape of the funnel.
Is it bottom-heavy, with lots of opportunities progressing to advanced stages but then being lost or abandoned? Or does your funnel slim down rapidly from the top, leaving a smaller number of highly-qualified opportunities to get the focus of your resources? You can probably guess which one is the more efficient.
That’s where identifying and encouraging winning habits is so important. What are the common characteristics of successful opportunities, and successful sales people? How can we use those insights to attract, engage, qualify and convert more of the right sort of prospects?
7) How important is sales and marketing alignment? What best practices would you recommend to accomplish this?
It’s critical. Organisations can’t afford for their marketing departments to be primarily or exclusively focused just on awareness and preference, or even on the volume of leads generated or the number of website visitors.
That top-of-funnel activity has to demonstrate a clear path to revenue. And sales and marketing departments must be on precisely the same page when it comes to identifying what an “ideal prospect” looks like, and knowing what really matters to those target customers and how they make buying decisions.
Sales and marketing alignment also requires a common agreement about how the organisation as a whole can systematically identify, attract, engage, qualify and convert more of the right sort of prospects.
Marketing’s responsibilities can’t and mustn’t be confined to “top of funnel” activities. Marketing has a vital role to play in sales enablement at every stage in the pipeline and in helping the sales team systematically eliminate the obstacles that might prevent an otherwise well-qualified prospect from turning into a customer.
8) How do you see sales management / sales coaching continuing to evolve in the future?
I believe that the successful sales managers of the future will be increasingly data-driven and have a process orientated engineering mind-set, as well as retaining many of the traditional people-centric virtues of sales leadership, management and coaching.
Some traditional sales managers will struggle to make the transition, and they’ll find themselves replaced by people who can combine the virtues I’ve identified. Coaching will continue to be a critical sales management skill, but it will be better targeted and better tailored because the manager can draw upon much better data.
We’ll have a much better sense of the winning habits and behaviours of our top performers - driven by a much better understanding of what it is that makes them successful, and we’ll be better able to diagnose where people with potential need to help.
I anticipate that we’ll also see a greater use of simulations to develop skills - a series of linked role plays that can help sales people practice and develop the necessary capabilities. Just as we currently train pilots, we need to find better ways of exposing sales people to a range of situations (both predictable and unpredictable) and seeing how they react, without crashing the deal.
In summary, we’ll have smarter sales managers, equipped with better insights, helping smarter sales people to systematically and progressively improve their performance. And if we do it right, we’ll have fewer missed forecasts and more sales people over quota. What’s not to like about that?
What do you think? Did I hit the spot? Are there any other aspects of sales leadership, management and coaching that you'd like to share?