The 5 Stages of Sales Management
Anytime someone moves into a new role, there is an adjustment period to figure out how to be effective. When that transition is from an individual contributor to manager, that adjustment can be even more jarring. We all know the typical story with sales managers – they were a top performing salesperson, had ambitions to move up in their career, and then a position opens up and they are managing a group of salespeople.
High performing salespeople are often successful for reasons they do not fully understand. They have an attitude of “getting it done” to beat their quota, but in reality they naturally have the discipline to consistently execute the actions that lead to success. They are regularly prospecting, networking, building pipeline, qualifying that pipeline, and maintaining momentum with current opportunities. They follow a defined process, but often do not realize that they are doing it – it just comes naturally to them.
Building a great sales management team is key to a sales team’s success. Sales managers are the front line leaders that make or break an organization because they are the ones who have the most influence on a given sales person’s performance. Research from Vantage Point Performance shows that top performing managers generate $3.5 million more sales per year compared to low performing managers. Let me say that again, $3.5M more sales per manager! I will let you do the math based on how many sales managers you have – it adds up fast.
Every sales manager can go from good to great as they progress in their career by following a tried-and-true path. Here is an outline of the 5 common stages of sales management:
Stage 1: Initial
I see lots of sales managers in this stage when they are new to management, or they work for firms that are “stuck in the dark ages” when it comes to technology and developing culture. This sales manager only talks and cares about what is closing, and how much someone has sold. Nothing else matters.
One-on-ones rarely ever happen, and all this manager wants to know is what is scheduled to close this month and how she can swoop in on a deal to help win it faster. While we can all appreciate the need for a resolute focus on results, this sales manager is blind to the process that leads to those results.
Eventually the sales manager realizes that effectively moving through the sales process is not intuitive to everyone on their sales team, and she moves to Stage 2…
Stage 2: Motivate
In this stage, the sales manager identifies key steps of the sales process that are being missed. For example, she may notice that some reps get easily distracted in customer service issues or proposal writing. This prevents them from moving their late stage deals to close on time. Others sales managers may observe that their reps are not spending enough time prospecting, or building pipeline from the right subset of customers.
This sales manager is starting to realize the process side of sales, and that as a manager it is her job is to utilize her resources effectively to maximize their output. She is not an individual seller anymore. Now she is responsible for managing a large amount of payroll, and she needs to make her team more productive. In an attempt to encourage the right behaviors, the manager will start using incentives, contests and leaderboards to try and motivate the team. This approach works, especially if it is new to the team as it helps get people focused, and adding some additional incentives keeps things interesting.
Eventually the sales manager realizes that while this approach works at first, it is not sustainable. She cannot run a contest every month or throw a spiff at everything, which leads her to Stage 3…
Stage 3: Execute
Here the manager defines a more clear sales process with defined pipeline standards and sales KPIs for their sellers. These standards and KPIs are initially created by based on the intuition of the sales manager, and they are improved by observing what her top performers are doing consistently and what the middle and bottom performers seem to miss. While the sales manager is still focused on closing, she understands that “inputs drive outputs”.
In this phase, each salesperson has clear expectations on things like how many new business meetings they need to have every month, how much pipeline they need to build, a common approach to qualifying (and disqualifying) opportunities, how much qualified pipeline should be open at any given time (a.k.a., pipeline coverage), and a solid forecast approach. Here the full team knows what is expected of them, there is a common language the team is using, and by leveraging data the manager and salespeople are able to add some objectivity to the sales process.
While this is a big leap forward from the early “just close deals” approach, the sales manager begins to realize that having metrics and reports are valuable, but her salespeople will not stay focused on them if she is not reinforcing their importance regularly. That is when she moves to Stage 4…
Stage 4: Coach
In this stage the sales manager starts running what I like to call a “Closed Loop Management Process.” The idea being that in Stage 3 she has defined the key metrics to manage around, and she ensures that these metrics are regularly reviewed with her salespeople – in their weekly team meeting and in one-on-ones. As a sales manager develops her craft, she now begins to realize what being a “coach” really means. She helps set the vision for the team, has a plan to execute against, and works with her sellers to master their craft.
Now that operating measures are in place, the manager can keep an eye on them regularly, and sales people clearly understand their importance and that they will be held accountable. It is not all about the numbers, but these metrics are effective guides to use during coaching conversations. For example, if a rep is not hitting his monthly new pipeline goal, the manager knows this is where her sales coaching needs to be focused for that salesperson. In this phase, the sales manager is starting to become a sales leader.
As the manager and sellers continue to become more comfortable and familiar with where they need to focus their time and attention, they want the data to be more personalized and real time. It becomes frustrating when the manager and salesperson review their metrics at the end of the week as they are unable to change what has already happened. That is when the sales manager moves to Stage 5…
Stage 5: Align
Here there is full alignment from the executive team right down to the sales manager and her sales team. There is a common language around the key steps and measures of the sales process, metrics and goals are personalized for each salesperson, and everyone has a real-time view of where they stand. At any given moment, the sales manager can see if her team is ahead or behind on a key metric, which empowers her to make corrections and get things back on track.
Salespeople are not waiting for the next team meeting or one-on-one to find out how they are doing. They always know where they stand. This stage also allows for rapid onboarding as new hires come in with a set of clearly defined metrics they can execute on immediately, such as how many meetings they should have, how much pipeline to build, pipeline coverage, etc. Even better, goals can be set in a way so that they scale up as reps gain experience. Rather than waiting 3-to-6 months to close a deal and feel valuable, reps can start executing immediately and know they are on the right track to hit their quota.
An experienced sales manager uses all aspects of the stages listed above, and none of these stages are bad. Rather, these 5 stages provide a framework that you can apply to your sales team so you know where you stand, what you need to work on, and build a plan to improve.