Sales Managers Top 7 Mistakes

Managing a sales team effectively is difficult. Many sales managers find themselves promoted to the position directly from sales because of their outstanding individual sales performance. They often have no previous management experience and are given little training to develop leadership skills. In the absence of direction and development they're usually compelled to take control of their sales force rather than develop and lead it. Here is a list of the top 7 mistakes made by sales managers, and how to overcome them: Micromanaging. While delegation is an exceptional tool for experienced leaders, it is extremely difficult for inexperienced managers to grasp. In the absence of confidence and self-awareness they frequently attempt to control every facet of a salespersons work day. They often base these instructions on what worked well for them in their own sales careers without taking into account individual strengths, personalities, habits and learning styles. Instead of removing roadblocks they create them, making a salespersons job more difficult and less rewarding. Efficiency, effectiveness and moral all suffer as a result. Creating blanket policies. Issues that arise in management are often specific to an individual salesperson(s) rather than the team as a whole. Individual conversations take time however, and can be uncomfortable. Sales managers tend to avoid confrontation by issuing blanket policies and communications that negatively impact the entire team. The team doesn't understand the reason for the policy/communication and as a result, feels unjustly suppressed. Mean while the individual(s) that was the cause never has the benefit of a direct conversation enabling them to understand the root issue and participate in the discovery of a solution. Requiring excessive paperwork & reporting. Insisting that all team members produce exhaustive reports about their daily activities is both inefficient and ineffective. While call activity might be an important coaching opportunity for a new salesperson, it probably isn't a good use of time for your top performer(s). "What's good for one is good for all" is nonsense. Team members should be assessed on an individual basis and asked to report on information that can positively impact them. Make sure the information tracked is relevant and important to their success and give them access to any tools and technology that can increase the efficiency of their reporting. Allowing mediocrity. There are almost always people on a sales team that will never perform at a high level, regardless of how much training and technology is invested in them. Evaluate people fairly but if it's clear that they aren't going to cut it, get rid of them. Putting off the inevitable is not good for them or the company. Not providing enough 1-on-1 time. We all have different strengths, personalities, learning styles, and needs. For sales people to grow they need individual attention and help. Figure out a way to get time alone with every member of your team regularly and consistently. Review the information you intend to discuss a day in advance - this will help you do a better job of listening and discovering areas of need. It's no different than selling; if you don't understand their needs, you can't show them how you can be a benefit to them. Not spending enough time on the street. To really understand how a sales team is performing managers need to get out on the street with them. There isn't a coach in the world that shows up for practice but skips the game. The field is where we see theory put into practice, and it's where true coachable moments appear. Not listening. Telling team members how to perform better isn't the same as teaching them how. We have to listen to fully understand issues, roadblocks, and what the solutions might be. There is always something to learn, even for managers. Not giving credit. Sales managers too often assume that they have to prove their worth by demonstrating the effectiveness of their own efforts. The reality is that managements effectiveness is reflected in the performance of the team. Give credit where credit is do. Promote the successes of individuals and of the team. It boosts their confidence and moral, and shows that you are more concerned with the success of the company than with your own success. It's difficult to manage a sales team effectively, but by identifying common mistakes and working hard to correct them, over the course of time, sales managers will find themselves capable of elevating individuals and teams to a new level of success. I am a certified professional coach, management and sales trainer, using the science of personality traits and communication, strengths and learning styles to help organizations develop elite teams, and help individuals realize unparalleled success. For additional discussions and insights, please visit my blog at http://trevinwecks.com/blog. Article Source: http://EzineArticles.com/?expert=Trevin_Bensko-Wecks

Improving Sales Force Effectiveness Using Six Sigma

Abstract For effective sales, companies need to differentiate how they allocate their limited sales resources among existing customers, customer service and new business development (prospects). When ranking Customers and Prospects, the common metric is usually either sales or profits. This paper will show how you can blend multiple desirable sales characteristics including Sales Growth, Close Rate, Payment History, Unit Volume, Repeat Business, along with Sales and Profit, to create an "Overall Performance Factor" for each Customer or Prospect. This Overall Performance Factor can easily be sorted to create an objective ranking of best to lowest performance in which you can prioritize and assign the appropriate sales resources to meet the company's objectives. Background Sales Process / Performance Improvement Project Customer Ranking - Shortcomings of the 80/20 Rule Multi-Measure Approach Needed Created a New Customer Ranking System This Property & Casualty Insurance company needed to evaluate their Sales Process. While they were profitable, earnings were flat for the last 3 years and their investors were punishing them with a low stock price. The analysis led to an evaluation of their Independent Sales Force. They sold insurance through independent agencies. These could be sole proprietors who sell one company's insurance products exclusively or larger multi-agent firms that sell multiple, and even competing lines. At the time of this project they had about 2400 independent insurance agencies. These agencies were their "business-to-business" customers. Ranking their independent agencies based on Sales (traditional method) quickly showed itself as being an incomplete view. They were concerned about multiple measures including Sales Growth, Consumer Retention and Profitability. The company needed to do great in all of these measures, plus Sales/Revenue, to meet the earnings growth expectations their investors were demanding. A Multi-Variable-Pareto calculation tool was used to develop a single customer (or independent agency) ranking. This tool used the principles of Pareto Analysis but allowed them to calculate an Overall Performance Indicator based on multiple performance factors. Multi-Variable Pareto Method Pareto Charts were developed in the late 1800's by an Italian Economist, Vilfredo Pareto. He used this analysis to determine that wealth was skewed to a small portion of the population. In his time, 80% of the land in Italy was owned by 20% of the families in Italy. From Vilfredo we derived the Pareto Principal or 80/20 rule. This is commonly used in sales, with 80% of sales generated by only 20% of customers. Pareto Analysis is a great business tool, but there is more to increasing profit than focusing on just sales, or even just profit. There are leading and lagging indicators of profit growth from the customer base. Measures The first step was to determine what measures defined great customers (or great independent agencies). A cross functional Six Sigma Sales team was formed representing Sales Executives, Sales Representatives, Marketing, Finance and Operations. The Insurance Company Six Sigma Sales Team defined great agencies as having: High Sales $ High Gross Profit % High Consumer Retention High Year-Over-Year Sales Growth By defining Sales Growth as important a measure as Sales $ they were signaling to their Account Executives that focusing on smaller but growing agencies was just as important as focusing on larger, low growth agencies. As you will see in the data below, many high-sales agencies had flat to declining sales. Forced Ranking Force Ranking mathematically equates these different measures for the overall calculation. This process simply makes the largest number equal to a 10. Then all other customers are proportioned with respect to the largest. This Factor is used in the Overall Performance calculation. Overall Performance Factor The Overall Performance Factor is a combination of each measure's factor. You can also weight each measure and use this to calculate the overall performance factor. The last step is to sort the customer list based on the Overall Performance Factor. Then you can make prioritization decisions about how to allocate Sales and Customer-Service time. Top Customers - Get them the most focus, time and service Average Customers - How can we move them up? Below Average Customers - Can use multiple strategies such as using an inside customer service rep versus field rep to service this customer, or remediate them Insurance Company - Customer (Independent Agency) Ranking (Note; the data below is an approximation of the 2400 agents) Agent - Revenue - GP% - Retention - Sales Growth - Ranking Factor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ustomer Differentiators The next step was to determine what characteristics statistically differentiated the best customers from all others. The team brainstormed all possible ways to segment customers. There were 72 different possible classifications. Three characteristics were common (based on statistical testing) amongst the best. These were: Did not already sell insurance Had a Business Plan Were in business for 5 - 10 years Results Instead of treating all customers equally, or rewarding sales agencies with high sales, but no growth, this company differentiated how they allocated sales resources to existing customers and prospects. Sales strategies were developed based on the ranking. Different ranks required different action plans to achieve improvement. Following the analysis, they recruited insurance agencies that were similar to the high performers, trained them to match the business techniques that were used by the high performers and provided marketing support that was most highly utilized by the high performers. Six months following the implementation of this project, this Insurance Company's earnings grew by over 26%. For more detailed information about this subject go to http://www.supplyvelocity.com/ for our white papers. Article Source: http://ezinearticles.com/?expert=Mitch_Millstein

How These Four Sales Management Tips Can Reverse the 20-80 Productivity Rule For Your Sales Team

The 20/80 rule (Pareto's Principle) abounds in life and in business. This is a pretty scary statistic as noted by Tom Stein in a posting at the AllBusiness website specific to sales. In his article, he provided five (5) steps to build a powerful and effective sales team where the goal to increase sales is realized. Now what would happen if the sales management could move some of those under performing salespersons in the 80% bucket into the 20% bucket without losing the productivity of the currently performing to over performing individuals? For this to happens requires these steps to be taken: First, referring to Tom Collins in Good to Great, it is critical to have the right sales people in the right seats in the right bus. When you understand their decision making styles to their talents (strengths) you can not only achieve great performance appraisals, but have a cohesive team where all members are rowing with the same energy toward exactly the same target. In other words, you have removed the slackers from your team and have helped the under performing to work smarter and not harder. Second, integrating a proven goal achievement process that unites the following: Personal goals Organizational goals Metrics Alignment to other departments The use of the same tool (goal worksheet) ensures sales goals are achieved as well as improves overall communication. Such improvements only strengthen another inherent weakness facing more organizations and that is consistent execution of strategic goals and initiatives. Sales Training Coaching Tip: Many individuals fail to achieve their own personal goals so how they achieve organizational ones? Third, reviewing the overall organization is necessary as well. The sales department does not work in isolation. Other functions and departments of the firm must all work together. Unfortunately, sometimes the inability to increase sales is just as much about internal obstacles such as structure, processes, rewards and other employees as it is about the individual performance of each salesperson. Sometimes it may also help to take a proven organizational assessment aligned to accepted criteria such as Baldrige. Fourth, results based, not competency based, sales training is also required. This approach to developing the skill sets of your sales team leverages everyone's talents. (See Tip #1). When a competency based approach is used, the strengths of individual team members are devalued because a now accepted competency has been created. This also creates an essentially "more hope to" false philosophy which again is not the best performance approach. When organizations invest the time to truly develop their sales teams including providing effective sales training, assessing for decision making styles and talents and incorporating a proven goal achievement process, then they can move away from the 20/80 principle. This action would increase overall productivity and realize the goal to increase sales. Now doesn't that make more sense? Free sales skills assessment by Results Sales Coach Leanne Hoagland-Smith who helps with sales coaching, leadership to sales management development. Schedule your free strategy session at 219.759.5601 Central Time. Are you Captain Wing It or Captain Focus It when it comes to your business and sales behaviors? Learn how to work smarter not harder by having a simple written sales action plan. Article Source: http://EzineArticles.com/?expert=Leanne_Hoagland-Smith

Growing Your Business Profits

Grow your business profits using dollars you have already spent on inventory! Today is a great time to revisit the idea of bartering! With organized barter more automated and efficient, it is a terrific time to take advantage of the increased buying and spending power in addition to the cost savings to operate your business. Many retail stores are closing their doors due to the lack of business and cash flow. Most retail stores believe that by slashing their prices they will cause more customers and traffic to the store. This might be true for that moment, but isn€™t the real objective to gain NEW customers and LOYAL customers? If a store has the inventory and capacity to increase sales without it affecting their hard cost of doing business, barter is a win/win situation. Barter customers bring other cash customers when they talk about the experience. While barter can drive new customers to your store, the new customers can tell their friends and family about their experience and you can gain cash business at the same time you are moving that inventory or filling excess capacity. Example: A business or retail store owns inventory and it is moving slower then expected or needed. Meanwhile the business owner has some immediate business needs that are critical to their business. If the business owner can market their inventory through an online barter website and attract new customers to purchase some of the items for full retail using barter credits, the business owner can then purchase the items for the business using that revenue rather than spending new money! Some examples might be new store signage or printing and advertising! The idea situation is the use the new barter revenue to advertise and bring in additional cash paying customers. Don€™t forget that your new barter clients will be loyal to you and also help promote your business as long as they continue to feel like valued customers and receive excellent value and service from your staff! Barter clients should be a welcome addition to your business and treated as friends. Remember they are also business owners and understand why you are bartering and want to help you grow and prosper in your business also. Cost of Barter: You might wonder what joining a barter organization might cost and also the fees associated with bartering. The fees to join or membership costs vary from each trade exchange. Most exchanges charge anywhere from $195.00 €" $495.00 and up as a membership application fee and monthly fees range from 0-$20.00 per month. Trade service fees on transactions vary from 10% trade or 5%- 8% cash on each transaction. The thing to remember is that you are paying only a transaction fee on what you purchase or sell. In addition consider that many times you can apply for a line of barter credit and spend into the system before you even make your first barter sale! Your local trade broker will also assist you by bringing you new customers to pay the trade credit line back! What credit card company or bank will do all that for you? In fact a great trade exchange will establish a barter budget for you to follow so that you aren€™t taking too many trade credits above what you will be spending in the system. In the barter economy your products and services are more important than your credit score. You can use your inventory to secure a barter loan and make improvements to your business! Consider how leveraging money you have already spent into advertising or maintenance or other ongoing expenses like printing, or landscaping, repairs or equipment maintenance or even purchasing new equipment can add additional profit and cutting costs to your bottom line. Consider how leveraging money you have already spent into advertising or maintenance or other ongoing expenses. Increase sales and profits with money you already spent! Whether you are a service related business or retail store you can benefit by increasing your customer base by up to 10 €" 15% and reducing overhead costs by spending that new found revenue back into your business and YES even consider giving yourself a raise in barter revenue to spend on personal needs. Turn that downtime or excess inventory into what you need or want for yourself and your business. I encourage any business that has a vanishing commodity such as advertising space, hotel rooms, empty seats or room in a cafe or restaurant to use barter to capture that potential lost revenue and turn it into future purchases and increased sales! Need more information on how Bartering can add to your bottom line profits? Ask The Barter Coach! Kathleen (Kathy) Smart is the President and CEO of SmarterIdeas Inc. http://smarterideas.com, and one of the founding principals with the International Business Academies Limited, http://ibalnet.com, an Atlanta Georgia based LLC Kathleen has had over 26 years of experience in helping business owners succeed. Kathleen hosts her own internet based radio programs where she interviews local business owners and individuals who can bring inspiration, information and education to entrepreneurs and business owners. Over the past year she has interviewed, teacher of the year, Ron Clark, Blue Man Group and many others. Her show is designed and dedicated to educate and inform entrepreneurs and business owners with information that can give them the tools that can help them turn that corner in their life or business. Article Source: http://EzineArticles.com/?expert=Kathleen_Smart

How to Price a Product to Make a Profit

If you own a small business, then you can understand how frustration a pricing strategy can get. It appears as though all of your customers are just bouncing from business to business, fishing for the lowest price over everything else. However, if you join in on this race to the bottom, your profits will suffer more than you can imagine. Read on to find out how you can price a product to make a really large profit. Here are 5 steps that you can take to really turn your product pricing strategy around and make your business more profitable than it ever was before: Step 1 - Stop racing your competition to the bottom of bankruptcy. In the history of business, discounters have never lasted very long, because there will always be someone that can do it cheaper and faster than you can. Step 2 - Stop paying so much attention to your competition. Instead focus on providing a huge amount of value for your customers that goes way beyond the price of the item that you are selling. Step 3 - Raise your prices. Someone has to be the most expensive, right? Why not you? Of course you have to use the value in order to justify the increase in prices. People do not pay high prices for fun, they pay high prices for what they get in return (status, high value, scarcity, excellent customer service 24hrs a day, etc.) Step 4 - Use emotional-based selling. never focus on the price. Focus on the customer and what they are feeling. If you can engage the customer's emotions when they are making a purchase decision, you can pull down the skeptical barriers to the sale. Remember that people buy on emotion and later rationalise the sale with logic. Step 5 - Never focus on price buyers. These are your WORST customers. The price buyer only represents about 20% (unless you are in the business of deep-discounts). Focus on the other 80% of your customers instead. These are the people that are more worried about the buying EXPERIENCE than the price. They are also concerned with value, quality, customer service, rewards perks, and many other things that keep them coming back. None of these are related to price. Of course you cannot charge absolutely any price that you wish. Your market will have to justify if the price is acceptable, but by adding a huge pile of value and selling with emotions, you can make a lot more profit than the next person in the same industry. Joshua Black is the developer of the Ultimate Pricing Report, a whole new approach to price strategy for your small business. Download the report here: http://www.product-pricing-strategy.com Article Source: http://EzineArticles.com/?expert=Joshua_Black