“The Challenge of Meeting Sales Goals” introduces a high-level discussion about why so many B2B companies struggle to meet revenue targets, highlighting how poor planning and poor execution impact sales performance. This blog will explore some typical actions that a sales leader might take to address either missing sales goals or projecting to miss sales goals.
We will not delve into organization-wide gap closing measures as illustrated by an executive at a Fortune 100 client: “After the first quarter miss, we spend the next three quarters in institutional gap closing measures that detract from our ability to interact with customers and close business.” These reactive actions are rarely effective, but create the levels of action and the necessary response in many organizations to meet the need of leaders to “do something” in face of adversity.
We will focus on five key tools in a sales leader’s bag – actions that he or she likely has control over that require little to no organizational oversight. These actions include:
- Skills Coaching and Training – Many sales leaders continuously evaluate their teams for gaps in capabilities. There are copious skills training programs aimed at augmenting sales skills, and while sometimes effective, training often reflects the “flavor of the month” pattern as organizations and leaders try to stay abreast of the most popular and latest sales methodologies.
- Territory Adjustment and Alignment – Following skills training, sales leaders commonly look to “move the chess pieces around the board” in an effort to realign their territories and regional gaps with sales people of different skillsets and capabilities. This could be as small a shift as assigning a key account to a sales person with more of a hunter skillset to open new doors, or it could be as drastic as reorganizing and redeploying the entire salesforce.
- Tools and Rigor – Few sales organizations maximize the potential of their CRMs. CRMs are often chockfull of bad, old, or duplicated information. Additionally, the sales processes and tracking methodology tend to deteriorate over time without constant reinforcement. As a result, many sales leaders will periodically perform CRM clean-up and tracking rigor (managing to the milestones) initiatives which may be temporarily helpful, but are difficult to maintain.
- Compensation Plan Adjustment – The next thing that a sales leader will do is go to the compensation plan to provide extra “grease” to motivate their sales team. When well thought-out and done in conjunction with HR, finance, and a compensation professional, working with the compensation plan can be an effective tool for a sales leader. However, there are plenty of cases where ad-hoc spiffs and bonuses miss the mark and fail to produce the desired results.
- Performance Evaluation and Management – Finally, a sales leader will use end-of-year performance evaluations as an extension of the skills coaching mentioned above to leverage a formal process to adjust their sales team’s behavior and performance. This is often used to reward the sales members that do well and to remove sales team members who are systematically not achieving success or showing the potential to do so. The latter creates the opportunity for a sales leader to re-invigorate the sales team by bringing in new blood. And while managing and rewarding performance is absolutely critical, without understanding the underlying causes of performance variation, it may demoralize the team by rewarding chance or creating unnecessary churn.
All five of the actions listed above can be effective when done with care, patience, and ample planning. However, when they are not properly planned and executed they may have the exact opposite effect of what the sales leader hoped for, and in some cases, they may work against each other to negate any positive effect on sales performance. For example, coaching and training are some of the most cited requests of sales team members in employee surveys, yet overindulging in this training can have a negative effect on a sales person’s customer facing time and their ability to close deals.
Another example is using spiffs and bonuses to drive specific sales actions and push particular products. Usually the reason a product, service, or solution is failing to resonate with a customer is product management and marketing related, not due to the sales effort, so spiffing an action does nothing but drive up the cost of sales that were already going to occur.
Finally, performance managing someone out of the organization is sometimes necessary, but many sales leaders feel pressure to adjust their sales team too quickly. One executive we worked with felt that it took 12-18 months to bring a new salesperson up to speed, but there was no organizational patience for this timespan. The result was unnecessary and costly churn which exacerbated the sales goal misses instead of fixing them.
There is good news, however. The Commercial Sustainability StrategySM has a more holistic approach to addressing sales goal misses and often works to magnify the above actions to drive increased sales.
Written by: Marc Cottle
About the Author: Marc Cottle is an experienced sales leader with 15 years of experience; he is a Principal with McMann & Ransford and leads the Commercial Practice at the company.
