The Huge Mistakes that Sales Managers Make

The Huge Mistakes that Sales Managers Make

By Geoffrey James

Sales managers have a difficult job. Their employees tend to be independent and even secretive while the higher-ups tend to be demanding and unforgiving.

Not surprisingly, the tenure of a top sales manager is now around 18 months.

The purpose of this post is to identify the seven most dangerous mistakes that otherwise good sales managers make, along with some advice on how they can avoid making them in the future.

Note: this is NOT criticism of sales managers but my attempt to help them avoid the icebergs that might sink their team and even their careers.

BTW, most of this post is based on a conversation with the legendary sales trainer John W. Asher, CEO of Asher, Inc. and the remainder on conversations with dozens of sales managers and assorted sales gurus.

So, then, without further ado...

 

Huge Mistake #1:Hiring the wrong people and leaving them in place.

Why It's Huge:

Sales managers often hire people who have no natural talent and then keep them on board, hoping that they'll somehow acquire that talent. This damages the ability of the entire team to perform because it creates a lower standard of performance for everyone. It also lowers the group averages and can force the rest of the team to do extra work so that the entire team can make quota.

Why They Do It:

It can be very difficult to find talented sales people. Candidates who have worked inside other companies often have bad habits and candidates without prior sales experience are always something of a crap shoot. But the real problem is keeping the non-performers on board, which is usually the result of the sales manager feeling sorry for the non-performer or (worse) an inability of the sales manager to admit that he's not all that great a judge of sales talent.

How to Fix It:

Give every candidate for a sales position a personality assessment to confirm that they have the basic chops to sell. Continue to measure their performance to see whether there's a problem with basic selling skills. Provide training on skills that are lacking. If that doesn't work, do everyone (including the non-performer) a favor and force the non-performer to find a more compatible position elsewhere.

 

Huge Mistake #2:Failure to control sales and marketing costs.

Why It's Huge:

Many sales managers get hypnotized by revenue, without thinking about how much money it's costing to make that revenue. In the quest for rapid revenue growth, sales managers often lose track of spending, especially when that spending is taking place inside another group. Worst case, a company can end up in the situation of losing money on every sale, but trying to make up the difference by selling in volume.

Why They Do It:

Most of the time, it's pure parochialism. Since the money isn't coming out of their own budget, they figure it's harmless to "invest" in programs (like pricey ad campaigns) that aren't likely to have much impact o sales. The only problem is that top management quickly figures out that nobody is watching the bottom line and (surprise!) blames the sales team for under-performing.

How to Fix It:

Sales managers should specifically request that other groups not fund any activities that that don't have a measurable effect upon sales. Sales managers should also consider implementing a commission structure that pays according to profit rather than revenue, providing it's possible to communicate those metrics to the sales team in a meaningful manner.

 

Huge Mistake #3:Promising sales manager jobs to the best reps.

Why It's Huge:

The skill set for selling and the skill set for managing and coaching a sales team are completely different. While some people can do both, these paragons are relatively rare. Setting up sales management as a "reward" for sales performance makes it likely that the team will lose a top sales performer and gain a lousy sales manager. That's a pretty terrible trade-off.

Why They Do It:

In most cases, it's simply an attempt to keep a top performer from jumping ship, by identifying an upward career path. What's lost in the promise is that sales reps must focus on building relationships and closing business, but managers must focus on developing the potential of each employee. They're different jobs entirely.

How To Fix It:

Keep top sales people in sales positions, but identify and build an alternate career path that will increase their earnings and raise their recognition level. Then hire people with management and coaching talent for sales management jobs. You can still hire from within, but only if the rep shows interest and aptitude for coaching and mentoring.

 

Huge Mistake #4:Failing to establish an appropriate division of labor.

Why It's Huge:

Many companies expect the same sales rep to 1) create a brand image in the prospects' minds, 2) locate likely candidates for the product, 3) develop the account and make the sale, and 3) handle the ongoing relationship. These are very different skills and very few people can do all of them well.

Why They Do It:

This usually happens when an organization grows organically from a small firm or start-up. By necessity, the first sales pros have to be "jacks of all trades", because there's nobody else around to do all those jobs. As the organization grows, there's a tendency to keep doing what worked the past, even though it's neither efficient nor effective.

How To Fix It:

This is fairly straightforward management stuff. Step back, look at what's needed, then separate sales and marketing personnel by natural talent and work. Asher suggests segmenting the sales and marketing team into four groups with the following functions: 1) raising awareness, 2) locating qualified leads, 3) closing business with qualified leads, and 4) ongoing account management.

 

Huge Mistake #5:Failing to have a repeatable sales process.

Why It's Huge:

Many sales managers look to hire "self-motivated" individuals and let them loose to sell however they deem appropriate. However, if managers rely too heavily upon the natural talent of the sales reps to develop and close business, every rep ends up "re-inventing the wheel" because there's no way to share what's worked in the past (and what hasn't).

Why They Do It:

Ironically, most sales managers do this because they want their sales reps to be happy and independent. They don't want to be seen as micromanagers and therefore let the reps practice their "art" without interference. The intention is good, but the results can be awful.

How to Fix It:

Without going overboard, sales management should create and document a realistic and workable sales process. It should describes the various stages that the buyer typically goes through, and explain (briefly) how to help the buyer move to the next stage. Hold monthly or quarterly meetings to share what worked and what didn't, and fold those observations into the process, if appropriate.

 

Huge Mistake #6:Constantly changing the pay plan.

Why It's Huge:

Some sales managers have an addiction to changing the compensation plan. However, if the plan keeps changing, you can end up in a situation when, no matter how many hours the rep works, he or she can't break the pay ceiling. Soon the company won't be able to hire good sales reps, as the company will have a bad reputation.

Why They Do It:

Two reasons. Usually, pay plan changes are an attempt to react to new priorities from top management. However, sometimes (sad to say) pay plan changes are made in order to reduce cost-of-sales by paying the sales reps less for the work that they do.

How to Fix It:

Never make rapid changes in the pay plan. If priorities change, take a gradual approach, and get the sales team involved in determining what incentives will drive the desired behavior. Always pay promised incentives. Reward hard work rather than punishing it with pay plan cuts.

 

Huge Mistake #7:Creating sales stars at the expense of the team.

Why It's Huge:

Some sales managers set up one sales reps as the "star", while ignoring the hard work of other reps. The "star" gets all the hot leads and plenty of recognition while the rest of the team is overlooks. This alienates the rest of sales staff and sends the message that kissing up is the way to succeed.

Why They Do It:

Usually sales managers create "stars" because they know that the "star" will close the deals. The "star" therefore gets all the hot leads, creating an upward cycle, where the "star" keeps getting more, well, stellar, while the rest of the team languishes.

How to Fix It:

The key here is to keep the playing field level and hand out leads equally among the sales staff. Rather than creating a "star", sales managers should strive to develop the potential of everyone on the team, through ongoing training and coaching.