Sales strategy: How to get started
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Effective sales management
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|Effective sales management|
In this section, learn sales management tips to help you motivate and lead an effective sales force. Learn how sales force automation (SFA) software affects the sales team, how to drive user adoption of SFA technology, how to manage sales incentives and discover sales best practices to take back to your own organization. Once you've gathered some ideas, move on to the next section of the Sales Force Automation Learning Guide for more CRM learning tools.
Impact of sales force automation software
While there are advantages to using sales force automation software, there is no SFA software on the planet that will, on its own, shorten a sales cycle. As expert Liz Roche points out, SFA software is definitely a piece of the answer, but it must be considered only a part of the solution. The other pieces include having a single, structured sales methodology; appropriate training; alignment of business goals and compensation; and reliable forecasting.
Slightly more than half of the 3,435 sales professionals who participated in a 2005 survey from Reno, Nev.-based Miller Heiman Inc. said CRM isn't improving their sales efforts. It seems the problem remains one of adoption, said Jeff Brunings, director of marketing and research at the sales process company.
The survey identified 188 senior sales leaders who had grown sales revenue in the previous year and had also increased the average size of their deals and their customer acquisition rates. While an economic turnaround "lifted all boats," Brunings said, these companies were able to truly capitalize on the recovery. Yet, they still had CRM adoption issues.
Factors affecting technology adoption
User adoption is the No. 1 reason that SFA implementations don't meet expectations. As Roche points out, if sales representatives are not using SFA, it's probably because the technology doesn't mirror their sales process.
Here are some secrets to sales force user adoption from Roche:
1. Get the senior vice president of sales to tap a very successful sales rep ("super rep") to work with IT on the project. Best case, the sales rep is pulled out of the field for a month or two. I know, I know. But you've just got to stand firm that if the sales team truly wants this thing to work, that's the kind of investment it's going to take.
2. Examine your sales team's sales methodology and selling process, and document it if it's not already. As part of this, collect all selling artifacts (e.g., proposal templates, quote documents) to be centrally stored.
3. Examine all interfaces and automate as many as possible. Integration (e.g., not having to manually enter a contract in the contracts database) is a key benefit to sales reps.
4. Have your super rep do one-on-one or very small group training in person, with coaching available via phone after the fact. The training shouldn't be how to use the system; rather, it should cover how to sell more efficiently and effectively, with the system one tool that's used. All training must be process, not system-oriented.
5. Get your senior vice president and sales managers to interrogate pipelines and forecast exclusively out of the system. He or she should routinely call sales reps directly, bypassing management, to ask questions about deals in the system. This way, sales reps know someone is using the information that's entered. By the way, a phone call from the SVP is the best and fastest way to get all sales reps using the tool.
6. Restructure compensation to include utilization or some other type of bonus attached to timely use of the system.
7. Market, communicate and sell the system's value to the sales reps, according to their definitions of value. The super rep can help define this.
All too often, sales managers are surprised to see the system that sales reps had perhaps been clamoring for sitting idle. Managers can help avoid this problem by putting time and resources into figuring out how the new system can enhance the sales reps' ability to sell.
Here are some of Roche's tips on encouraging sales reps to use CRM:
• Talk to your team members and ask how they want to be motivated. Don't ask just the good reps; ask a sampling of reps of all abilities. Be very sure the system gives them something back (e.g., content about customers, content about other people, content about what to do in a specific situation).
• Create an environment of criticality and extreme visibility. Sales reps must be prepared to have their pipelines interrogated on a number of levels, including all levels of sales management: field/district management, regional management and the vice president of sales. The most critical element of system adoption is the use of periodic phone calls from the executive team to field sales reps and managers to discuss accounts in the pipeline or express interest in metrics/rankings.
• Train sales reps to use system-enabled processes, not systems alone. Pure systems training (e.g., learning features and keystrokes in a classroom) is fairly useless. Organizations must approach training from a process point of view -- where the technology is "baked" directly into the DNA of the sales process -- and this is just one of several process enablers.
• Recognize achievement. Sales reps are generally motivated by accomplishment. Specifically, it is the (public) recognition of accomplishment that drives action. Look beyond commissions to a variety of ways to recognize various achievements, instead of simply praising the highest performance against quota. For instance, introducing different contests (with cool prizes -- iPods, anyone?) at various times will help keep things fresh and interesting.
When it comes to existing customer relationships, sales reps can use SFA to expand on that relationship and get more value out of the customer. While executing this is challenging, if reps work with the extended enterprise (sales, marketing, customer service, product development) to understand how to use the information contained therein for deeper account penetration, they will be compensated accordingly.
"Assume that every customer interaction -- regardless of whether a transaction results -- goes through a lifecycle: engage (capture mindshare), transact (make deal), fulfill (deliver product or service), service (post-sale service and support). The participants in this lifecycle must all capture customer information, not only for the sales rep to have a panoramic view of all customer interactions, but also for every lifecycle stage to represent an opportunity to re-engage," Roche said.
"Bribing" sales reps to use SFA software by paying them to do so (or not paying them if they don't) rarely works -- unless it has the explicit approval of sales management, according to former SearchCRM.com sales expert Chris Selland. If SFA helps sales, they'll use it. However, it is necessary to prove how the system can improve sales. Sales managers who correlate compensation with use of the SFA system run the risk of losing the best reps.
Training is one way to encourage sales reps to get on board with SFA. Train sales reps to use system-enabled processes, not systems. This means mobility is of no consequence unless it is inextricably linked to how a process functions.
Pure systems training (e.g., learning features and keystrokes in a classroom) is fairly useless. Organizations must approach training from a process point of view -- where the technology is "baked" directly into the DNA of the sales process -- and this is just one of several process enablers. This requires a significant cultural investment in training, such as having sales reps themselves do the training, instead of having just an IT trainer or only offering online training. Roche recommends pulling well-respected, technology-savvy sales reps temporarily out of the field to design a "day in the life of" training program. These sales reps then "train the trainers" (other sales professionals) to facilitate one-on-one or very small group training sessions, where the focus is on teaching sales reps how to seamlessly incorporate technology into how they sell.
According to Roche, sales representatives are generally quite competitive and motivated by the perception of "winning" -- sales incentives should entice reps to be the best on the team.
"To incent this group, published stack rankings, a 'president's club' trip or some other visible means of identifying 'winners' works best when in combination with a good mix of variable and nonvariable compensation," she said.
Increasingly, companies are investing in technology to organize their sales compensation systems. In fact, the market for sales compensation management software is seeing a healthy rebound, according to a report from Gartner Inc.
After a recent downturn, the sales compensation software market is now growing 15% year-over-year thanks to hosted software, Software as a Service and new modeling and analytics functionality, according to the Stamford, Conn.-based research firm. That market growth results in large part from the fact that few businesses have any kind of packaged compensation management application and instead are relying on Excel spreadsheets and homegrown applications, much as IronPort did in the past. Only 5% of sales organizations have deployed prepackaged applications, according to Gartner's MarketScope for sales incentive compensation management software.
Motivating the modern sales force
Increasing complexity and rapid commoditization in today's marketplace have some experts questioning the changing role of today's sales professionals. Jeff Thull, president, CEO and founder of Minneapolis-based Prime Resource Group Inc. and author of Mastering the Complex Sale, contends that the success of sales professionals increasingly will depend on accepting responsibility for the success of their customers.
According to Thull, the successful salesperson is no longer a "performer" who can give great pitches and presentations, but rather, those who listen carefully to their clients, ask "diagnostic" questions and actively facilitate difficult changes. At the same time, sales is shifting from an individualistic and creative art form to a collaborative and methodical process. To succeed, it's critical to analyze customers, diagnose problems, determine treatments, measure outcomes and continually improve relationships in a disciplined fashion.