The sales doctor Diagnosing failure in sales teams

Susan usually looked forward to January. It was a time for congratulations on exceeding the budget by a good margin. The year before last, her team just missed budget. She didnt have time to look at why, and decided it was one of those things a bad year. This time the budgets been missed by a long way.

Now Susan has two headaches. First trying to analyse why the sales performance wasnt up to scratch. Then figuring out how she is going to bridge the bigger-than-expected gap between last years sales and this years target.

Where does she start? What brought those sales in? How much of a factor was product superiority? Customer loyalty? Price? Her sales team? The teams sales figures did grow, but were they faster than the market or slower?

Spotting the symptoms

Whether sales have fulfilled expectations or not, sales team performance is often a present issue or one waiting in the wings. It can come in many guises:

Poor sales. You have a clear deviation from budget. This is the easiest symptom to recognise. The numbers dont lie.

Poor growth. Youve hit budget but are not capturing market opportunities. Slowly but surely youll lose ground to your competitors as they grow faster and enter new areas before you do. This is harder to recognise, as it relies on good market intelligence systems that enable you to assess market sector potential accurately. Many companies have grown their way to failure by not assessing the market potential well and setting their expectations too low compared to those of their competitors.

Poor cohesiveness and co-operation within the team. Individuals may be performing well, but opportunities are not being captured due to a silo mentality.

Poor team ethic (us v. them). Manifesting in a lack of co-operation with other departments (e.g. technical services), this can create real difficulties by damaging overall company morale and wasting time with infighting.

Team not aligned with company objectives and culture. If anyone in the company has objectives that dont contribute to the overall corporate objectives, they are wasting their own time and their companys. The culture of the company is an important compass that should steer employees decisions and their dealings with customers.

Team not aligned with customer buyer behaviour. Either the way the customers buy or the pattern of segments that customers are in has changed, resulting in a lack of effective coverage by your sales team.

Identifying the causes

Recognising a problem often leads to the question: How did we get like this? Being able to answer that question is a vital step towards dealing with the problem. Some common causes of sales team failure are:

No market intelligence system. How you assess and communicate with the market in relation to your offering are fundamental to long-term success. Good market intelligence will also help you to face ambiguous threats1, and inform decisions on the right structure to reach your customers in the future.

Missing or ambiguous measurement criteria. Sales people are almost universally motivated by achievement. Its essential for them to identify measurable individual targets (sales, profitability, call rates) that they can be held accountable for (and praised for hitting).

No useful reflective data. Often salespeople receive sales figures that are not in a format they can easily utilise or if a specialised tool is used, they lack the confidence to interrogate it. The result is that they dont know how they are tracking, and therefore cannot change their approach to correct bad trends.

No call reporting. The invisible sales team cant be measured. Sales revenue, despite being a sales teams primary output, is actually a crude measure of its activity. If your team are not doing their job, it can take six months or more to have an effect on customer buying behaviour and another six months to correct the problem. The time afforded to you to correct sliding sales, however, is usually measured in weeks rather than months.

Absence of territory business planning. After the targets have been given out, can each salesperson demonstrate where the business will come from at a customer level? More importantly, how they will get it and when?

Little appreciation or knowledge of company objectives and values. Studies have shown that employees who can state clearly what contribution they make to the overall company goals are more engaged with the company.

Engaged employees those who feel positive about their jobs perform better.²

It is vital to address these issues fast. Good salespeople will be frustrated with the lack of direction and success, and bad salespeople will be enjoying the environment for the same reason. The manner and process in which changes are undertaken, however, are critical to the success of the team. Process-driven performance change needs to address the factors in a logical order.

Starting the treatment

The first step in medicine is a thorough examination of the patient. Only then can a reliable diagnosis be made. The wrong diagnosis can lead to wasted time in treatment that does not cure the illness. The same is true here. A thorough and dispassionate internal and external analysis (see Figure 1) will tell you where the problem is.

Before any change is executed, the first port of call should be management. Do the key managers have the skills, time and tools to manage the team effectively? If structural change is required, will they be able to execute it or is help needed? Employees feel most fulfilled when they can identify how their objectives contribute to the companys overall success. In order to judge this, the salespeople need to understand the corporate objectives for the year. If these are not defined, define them. Then set out on a relentless campaign to communicate them. Once this is done, keep communicating them and reminding the team how they are doing against them.

The salespeople need to be given clear and early measurement criteria, along with clear data showing their performance against targets.

It is imperative that easy-to-use models are employed, showing trended data by customer and product type numerically and graphically. This will allow individuals to quickly track both good and bad trends in their territory.

The territorial imperative

The basis of a successful sales role is territory business planning. Too often, training time is devoted to the part of a salespersons day that is spent directly in front of the customer. Although this is important, face-to-face selling time (i.e. when they are actually in dialogue with a decision maker) can make up as little as 10% of the salespersons day. The rest of the time is spent travelling, seeing non-decision makers who have an influence over the decision, chasing orders, overcoming blocks, servicing existing customers, etc.

It does not matter how persuasive the salesperson is in a face-to-face call: if they have no overall direction, the sales process is often delayed or not realised. Any salesperson should be able to tell their manager how their target divides down into opportunities to be realised. This is important both for the salesperson to understand how targets will be delivered and for their manager to be satisfied that a plan is in place. The tool for analysis can be a simple Excel model or a more sophisticated Customer Relationship Management solution.

The important thing is that the need for planning is reinforced, and that the team are given the tools and training needed for collective review performance during the year. The business plans then naturally become the focus for review at the end-of-journey accompaniments or office reviews.

It is essential for the team to have a method for recording simply and consistently who they have visited and what products were detailed. Simple tools can provide good graphical data that can be shared with the whole team during sales reviews. This approach has immense power. It can become a focus for linking causes to effects: a change in call behaviour can be seen to increase sales further down the line.

The team can also become self-policing, as both group and individual data are seen by all. Far from creating divisions, this can help the team to bond by stimulating discussion and responsibility.

Reading the signs

It is often difficult to come to the realisation that a sales crisis is coming or is already here. The worst thing you can do is delay.

The sales doctors prescription says:

Have systems in place that allow you to act quickly on good evidence.

Foster visibility and openness as a trigger for changes in behaviour.

Get outside help if expertise or implementation support is needed. Now, Susan, about last years sales

SUMMARY Do: Set up a market intelligence system to harvest and analyse market data. Communicate corporate objectives early and often. Encourage openness in the team. Reflect and make decisions on reported data as a team. Remember that simple tools are often the best. Consult on structural changes. Regularly review territory business plans. Get help if needed. Dont: Assume falling sales are an external problem. Make structural changes without evidence. Overload the team with paperwork. Hide data. Treat business planning as an event its a continuous process.

References
1. Roberto et al, Facing Ambiguous Threats, Harvard Business Review Nov. 2006.
2. Mike Emmott, People Management (CIPD) 23 Nov. 2006, p.38.

David Coorey B.Sc. Dip.M FCIM FInstSMM has worked in a variety of Senior Management and Directorial positions across complex and diverse international businesses. He has received numerous awards, including Global Best Profitability Improvement Market and the Frost & Sullivan European Customer Services Award. He is Principal of the sales and marketing consultancy 37point5 Limited.