The Challenges Facing Sales Management A white paper by Silent Edge
Deals taking too long to close and lost pipeline are two of the biggest challenges for sales directors to overcome. Why is this? What can be done to overcome these hurdles? Coaching and Competencies: A match made in heaven? - October 2012
Contents Introduction 1 Challenges: The sales cycle and pipeline 2 Causes: Management Capability 3 Causes: Evaluation Measures 4 Causes: Training Strategy 5 Page Causes: Sales Managers 6-7 having Individual Sales Targets Solutions: Solution Selling 8 Solutions: Coaching Culture 9 Conclusion 10 Credentials 11 This publication may not be reproduced (in whole or in part) in any form without the permission granted by Silent Edge Ltd.
Coaching and Competencies: A match made in heaven? - October 2012
Introduction The following white paper is based on the responses of a cross-section of sales directors surveyed in late 2012. The sample encompassed all industries, and respondents worked with companies ranging in size from blue-chip to SME. Participants were asked to complete a survey querying the challenges that sales directors commonly experienced, areas in which they felt their respective businesses were doing well, and perceived solutions to existing maladies. The results indicate a highlevel of consensus in the issues highlighted by respondents. As such, this white paper is intended to both clarify existing obstacles faced by the sales director community, and to explore potential means of overcoming these obstacles. The length of the sales cycle and difficulty closing the pipeline were pinpointed as the biggest challenges for sales directors. Possible reasons for these common problems were also identified through the survey responses. Key points of difficulty highlighted by respondents were: 1. Poor management capability 2. Inaccurate evaluation measures 3. Inadequate training strategy In turn, perceived solutions included: 1. Solution-based selling 2. Embedding of coaching cultures Sales directors face a multitude of challenges in driving team performance, and most will have encountered all of these issues to varying degrees in their tenure. Recognising the challenges and potential avenues for improvement is essential to creating performance uplift. We hope that this research will prove useful to sales directors looking to build a high performing sales force. The length of the sales cycle and difficulty closing the pipeline were pinpointed as the biggest challenges for sales directors. Key discussion points for this white paper: 67% of sales managers have their own individual sales target to achieve. 49% of sales directors felt that, although deals are closing, it takes a very long time to do so. 22% reporting lost pipeline as their biggest challenge. 49% of sales managers have had no more than two days training in the last two years. 82% of sales directors may not be accurately measuring the performance of the sales force. 60% of sales directors find that traditional training courses do not change the behaviour of the sales force in a sustainable, long-term way. 96% of sales directors stating that they want their sales force to sell solutions, not products. Only 16% of companies use accredited coaches. 91% of internal coaches have been found to have had no more than 4 hours training. 1
Challenges: The Sales Cycle and Pipeline Sales directors might be surprised to learn that there are considerable similarities between the problems people in their position face, regardless of industry or company size. Responses showed real consensus in terms of the primary challenges that sales directors face with their sales forces. Lengthy sales cycles Every sales director is familiar with the dragging frustration of the too-lengthy sales cycle. Conversations are taking place, and prospects look promising, but the amount of time and resources required to close the deal is too draining for the business. Almost half of all sales directors reported that the length of the sales cycle is their greatest challenge. A full 49% felt that, although deals are closing, it takes a very long time to do so. The length of the sales cycle impacts on everything from team morale to revenue flow. Managing timescales is an important, if tricky, responsibility for any conscientious sales director. And achieving an acceptable level of resource investment in the pre-closure sales cycle is clearly a challenge for many sales directors. Pipeline not closing The disappointment of an unfulfilled prospect is a common experience for sales directors. Although any director needs to have thick skin, it can be highly concerning if hot leads are constantly dropping off. This was the second most often cited challenge facing our sample, with 22% (this was specified in the responses by individuals who chose Other ) reporting lost pipeline as their biggest challenge. There can be many reasons why seemingly hopeful deals don t close a number of which will be discussed later in this white paper but clearly the level of lost leads is problematic for a number of sales directors. The uniformity of responses is reassuring in so far as it suggests commonalities between different organisations. It may be that there are habitual inefficiencies taking place across industries and companies, causing endemic issues with pipeline and sales cycles. This white paper will look to the responses of sales directors to uncover the potential causes of and solutions to these challenges. What are the biggest challenges you face with your sales force at the moment? 2
Causes: Management Capability Managers sit at the very core of the organisation, and their capability levels impact on the entire team. If a manager is not equipped to manage effectively then it is not just one individual that suffers, the performance of every salesperson is affected as a result. This is why it s so important to monitor the capability of the management community and address any capability gaps. However, this survey indicates that 49% of sales managers have had less than two days training in the last two years. This means that nearly half of all sales managers are subsisting on an average of less than one day of annual training. This figure is particularly concerning when one considers the results of our previous research, which indicates that over 83% of sales managers are promoted to their position because they perform well as a salespeople first. Sales management is a highly complex and demanding position. And the skills one needs to be a good manager are far from the skills one needs to be a good salesperson. Where adept salespeople are often competitive and individualistic, a manager s primary role is to support and facilitate the performance of the team. The famous phrase great players don t make great coaches is particularly pertinent here. Managers who are promoted from within the sales force will need comprehensive training in order to become effective coaches. It is only with this training that they will be able to drive the performance of their direct reports, and create a high-performing sales team. The fact that such a high percentage of sales managers seem to be undertrained suggests that even sourcing new sales managers from other companies, individuals with experience in the role, may not be enough to ensure they have the adequate skills. A lack of coaching and leadership from the management community may be a key cause of the challenges with pipeline and sales cycle outlined in the previous section. These figures suggest that improved management capability may have a profound impact on the performance of the sales force as a whole. How many days sales management training have your managers had from your company in the last 2 years? 3
Causes: Evaluation Measures A comprehensive understanding of the performance of the sales force is essential to any sales director. They need to know exactly how the team is operating and to what level so as to make effective decisions about talent management, recruitment and relevant training interventions for their direct reports. This means that access to evaluation measures is absolutely central to the effectiveness of any sales director. The quality of evaluation measures was found to be a concern for those sales directors surveyed. The key issue seemed to be around the accuracy of measurement criteria. Because of this inaccuracy, many sales directors encounter problems with the reliability of the evaluation process. This study found that 82% of sales directors may not be accurately measuring the performance of the sales force. Whilst an overwhelming 98% report that they do have some process in place to gauge ability, over half of this number 58% - only measure according to KPI s and performance against target. Although this may be an effective way to get an idea of how salespeople are performing, there are many factors that can skew these results. A salesperson who seems to be performing well and exceeding their target may have a better territory or selling in to previously established accounts for example. Some salespeople bring in one big deal that make their numbers look good, but don t perform thereafter. A team who seems to be doing well against KPIs could be depending heavily on the sales manager, without whom they would struggle to meet targets. Additionally, a further 13% of sales directors don t use any empirical evidence to inform their staff assessments. They rely instead on the opinion of the manager(s). Sole dependence on the subjective view of individuals is detrimental to the accuracy of the assessment; managers may have preferred salespeople, they may be working to different standards or looking for different qualities in their staff. 82% of sales directors may not be accurately measuring the performance of the sales force. Without an objective, best practice framework against which to judge, the evaluation process can produce highly misleading and inaccurate results. Without an objective understanding of the ability and the capability gaps in their sales force, sales directors are ill-equipped to make decisions about talent management and relevant training interventions. Thus, poor evaluation measures may account for the challenges mentioned on page 2. How do you assess your sales team for their sales capability? 4
Causes: Training Strategy The question of training strategy follows on closely from the discussion of evaluation measures on the previous page. How many days professional sales training do your staff get a year? 40% Sales directors across the board can struggle to allocate resource and make decisions about training solutions, particularly when they are deprived of an accurate picture of their sales force s ability. However, this study suggests that there is a further problem underlying training strategy; one of volume. This survey finds that 80% of companies provide less than a week of training per year, whilst 40% have less than 2 days. A further 12% have no training whatsoever. These figures suggest that a large proportion of the sales forces concerned could be under-skilled and ill-equipped to quickly close deals and manage the pipeline. 12% 16% 12% 20% The statistics suggest that the problem is not merely limited to under-training. This study finds that 60% of sales directors find that traditional training courses do not change the behaviour of the sales force in a sustainable, long-term way. This means that of the very limited training that is taking place, more than half of it is having no long-term effect. It is unsurprising then that sales directors seem to invest so little in training solutions, as the majority of the time they seem to have no lasting impact. The lack of ongoing training, and the failure of existing training solutions to improve the performance of the sales force in a sustainable way, may account for the challenges sales directors face in driving the team to perform. This study finds that 60% of sales directors find that traditional training courses do not change the behaviour of the sales force in a sustainable, long-term way. 5
Causes: Sales Managers having Individual Sales Targets The question relating to sales managers being set individual sales targets is probably the most controversial within this white paper and a significant contributing factor to the mismanagement of sales teams throughout many organisations. With an astonishing 67% of sales managers having individual sales targets their motivation will inevitably become split. Do they go after their personal target or do they spend their time managing their sales team? They will nearly always go after the former as most would be successful salespeople (83% of sales managers got the job because they were good at sales). So you now have a super salesperson called a manager. Their ego will also drive their determination to hit their personal target as they wouldn t want to be seen to be the one missing target within their team. This can also lead the sales manager to take over the best opportunities or leads in the team thus having a negative impact on the rest of the team and their motivation Do you have a coaching culture? 41% 27% 59% 73% Size of sales force The reasons for setting sales managers individual targets could be many. The recession would have been a contributing factor as sales teams may have been downsized and sales managers pushed back towards a more active selling role in a more streamlined team. 67% of sales managers are set individual targets. How many of those effectively coach their teams? With 73% of organisations with a sales force of between 1-20 stating they have a coaching culture, questions would have to be raised regarding the effectiveness of such a culture considering the majority of sales managers within this category are set personal sales targets. Over 60% of sales managers from this category of sales force size do not regularly observe individuals in live selling situations be that face to face or over the phone, if at all. So if there is a coaching culture, what are they basing their coaching sessions on? More importantly is there a true understanding within the organisation of what an effective coaching culture should look like? It is also interesting to note that 41% organisations with a sales force of 21+ do not have a coaching culture. 20% 6
How often do your managers go out with each member of their team or listen to telesales calls? 13% 23% 5% 7% 23% 40% Size of sales force 20% 45% 5% 20% Do your sales managers take over the meetings that they attend with their field sales staff? 63% 41% 41% Size of sales force 18% 17% 20% 7
Solutions: Solution Selling Solution selling has long been viewed as the most effective strategy for closing longer term deals and minimising the length of that sales cycle. By listening to client pains, and responding with a solution that is tailored to their individual needs, salespeople have a much improved chance of gaining buy-in and moving to the next stage. This strategy is known as solution selling or the sales value proposition (SVP). The average salesperson scores just 32% against best practice in articulating SVPs. Solution-selling has come to the fore of business strategy in recent years. The results of this study reflect that fact, with 96% of sales directors stating that they want their sales force to sell solutions, not products. Of the sample surveyed, 71% feel that there is a solution selling culture in their business. These are encouraging figures; however the statistics are clouded somewhat by recent studies indicating that the average salesperson scores just 32% against best practice in articulating Sales Value Propositions (SVPs). It may be the case that, although solution-selling provides an effective means of addressing the common challenges faced by sales directors, the average salesperson needs more training in order to sell on value. 8
Solutions: Coaching Culture Perhaps the key element that ties everything else together is the coaching culture. The existence or lack of a coaching culture impacts upon management capability, evaluation methodology, training outcomes and the general capability of the sales force. Do you want a coaching culture? Management training in coaching skills can equip sales managers to objectively evaluate their teams, and coach them on areas of difficulty. An ongoing coaching element within the organisation ensures that the knowledge and skills gained through training is reinforced and built upon. This reduces the need for timeconsuming and cost-intensive training interventions. This study finds that 67% of sales directors think that there is a coaching culture within their business. It is important to note here that previous studies have shown that, although 96% of organisations purport to want a coaching culture, only 16% of companies use accredited coaches. Furthermore, 91% of internal coaches have been found to have had no more than 4 hours training. The Association for Coaching requires at least 50 hours of training in coaching before they recognise a sales manager as an official coach. Without this experience, sales managers are not equipped to coach effectively and embed coaching into the culture of their organisation. There is clearly much demand for coaching cultures, and coaching has been shown to have a considerable positive impact on the length of the sales cycle, pipeline closure, management capability and overall team performance. However, this study finds that there needs to be greater levels of investment in coaching to ensure that the benefits are realised. Only 16% of companies use accredited coaches. 91% of internal coaches have had no more than 4 hours training in how to coach. 9
Conclusion Amongst sales directors, there is broad consensus about the challenges, their root causes, and the solutions available. This suggests that sales directors have broadly similar experiences in this respect. This paper has focussed primarily on the inefficiencies that may be causing sales directors difficulty, and has looked to pool the collective knowledge of directors, so as to determine what can be done to remedy these inefficiencies. The common issues with management capability, evaluation measures and training strategy seem to be key causes of pipeline and closing problems. Sales directors as a whole broadly recognise that these key performance determinants can be managed through both solution based selling and perhaps more effectively, through embedding a coaching culture. Here lies another hurdle for sales directors. To successfully embed a coaching culture within sales teams, the sales manager must have the time to allocate for coaching individuals and the team. We have seen in this white paper that over 67% of sales managers are set individual sales targets which ignite motivational conflicts and potential root causes of sales force mismanagement. The common issues with management capability, evaluation measures and training strategy seem to be key causes of pipeline and deal closing problems. By virtue of their role and background, sales directors have a broad gamut of knowledge and experience. By amalgamating this understanding, sales directors can make informed decisions, invest resources wisely, and create uplift in performance. When it comes to building a high performing sales force, knowledge is power, but so is the empowering and enablement of managers. It is undstandable in some ways why sales managers are set targets, because 83% of sales managers were the best salespeople that were promoted. But, great salespeople are not necessarily great sales managers and with all these conflicts the amount of time these sales managers can effectively give their teams for coaching is minimal. Therefore, sales directors may suggest the organisation does have a coaching culture but it may not be effective. To help increase the number of deals closing, should sales directors just set team targets and let sales managers be managers who actively coach and develop their teams? 10
Credentials Silent Edge are a sales performance authority; industry accredited and academically recognised as a premier provider of sales force development. We achieve a minimum of 8.6% revenue uplift for our clients. We also help salespeople reach their potential. Our individualised development programmes and best practice measures significantly improve performance. Our approach is founded on objectivity, tailoring and sustainability. Our impartial evaluation measures accurately reflect capability. This means that training can be precisely tailored to address specific issues. We also create coaching cultures within organisations, so that improvements last and continue over time. Our individualised training programmes and best practice measures significantly improve performance, and assist in the recruitment, retention and management of talent. A business s greatest asset is its people. We re advocates for our industry, and are committed to raising sales standards across the board. Academically proven to improve sales skills As an authority on best practice across a range of industries, Silent Edge utilise research studies and industry standards to generate objective guidelines for perfect performance. Our award-winning technology platform the Sales Performance System allows sales managers to assess individual staff against best practice and identify specific areas in which individuals or teams need to improve. Silent Edge remove the element of subjectivity from the evaluation process, and then tailor our skills development workshops to address capability gaps identified through evaluation. This ensures that clients save time and money by following the relevant course. Because of our commitment to sustainable change, Silent Edge create coaching cultures. 95% of what is learned in a classroom is forgotten within a month. That s why we pass on our knowledge by training sales managers to act as coaches within their organisation. This means that improvements continue long after the program ends. This combination of cutting-edge technology, over 450 competency frameworks for sales roles and academically endorsed methodology make Silent Edge an authority on the sales industry, and a market leader in skills development. 11
Silent Edge Limited 77 Mount Ephraim Tunbridge Wells Kent TN4 8BS T: +44(0)1892 502 200 F: +44(0)1892 502 201 Email: info@silentedge.co.uk Web: www.silentedge.co.uk Coaching and Competencies: A match made in heaven? - October 2012