Sales Management System

What is a Sales Management System? It’s a practical system for building a top-performing sales force by scripting their approach, managing their activity with a CRM software solution (customer relationship management), measuring their performance, and tying their paychecks to results. If we do those four things with any sales team, we’ll have a highly productive sales team and we’ll see revenue growth.

Why is a Sales Management System important? In the book the E-Myth by Michael Gerber the ideal business model is achieved when Systems run your Business, Your people run your Systems and You lead your People. With this in mind, it is absolutely critical you have a Sales Management System regardless of what or how you sell. The SMS defines your sales process, how you track and manage your sales funnel or pipeline, how you compensate your sales team and more.

Like many of the Silver Bullets in my 5 Steps to Freedom Framework, the Sales Management System (SMS) does not stand alone. It is inextricably linked to the Tactical Marketing Plan and is the final and often most critical piece of both the Prospect Continuum and Sales Continuum.

Many people suggest that Marketing and Sales are really the same thing, but I strongly disagree. This does not mean that one person or team cannot be responsible for both, but they have to realize they are actually doing two very different things including

  1. Marketing creates leads who are interested in who you are or what you offer
  2. Sales finds opportunities with the interested leads and converts them into revenue.

Before getting into the detail there are 3 sales truths to be aware of. You do not have to agree with them, but as truths they are what they are and must be accepted.

  1. Sales is about just 2 things; find someone to talk to and then talk to them. This is an even more abbreviated definition of marketing and sales. As simple as this sounds it is highly complex when the layers of the onion are peeled back.
  2. Sales is a Process and not an Event. In the absence of a process your sales is based on Luck. Regardless of your process, if you skip or miss a step you are significantly undermining your probability of a win.
  3. As a Salesperson you cannot control your Results, but you can control the Activities that lead to Results. This sucks because most salespeople are compensated, not based on their activities, but on their results.

If you search Sales Management System online, you will get over 10 Million results so where do you start? To keep it fundamental I recommend any SMS have at least these four components which I will briefly introduce separately,

  1. Sales Process
  2. Sales Training (or Empowerment) System
  3. Sales Tracking System
  4. Sales Compensation System

Sales Process. Remember the Sales Truth that Sales is a Process and not an Event. Regardless of what or how you sell, you must have a sales process and everyone who has a sales responsibility must follow the process.

Your process only has to have as many steps in it as are necessary to maximize your overall sales conversion rate and revenue per order or per customer. The fewer steps the better as long as the sales objectives are being met or exceeded. Creating steps or complexity where not needed is a waste of time and effort and your sales team will figure this out and push back. Your sales process should cater to both creating new customers and selling to existing customers. If you depend only on revenue from existing customers you are in danger, over time, of having no customers. Death of a business is basically having no new customers to sell to. Your best customer is an existing customer as you have no direct cost of acquisition, and they offer the potential not just for more sales but for testimonials, endorsements and referrals to help create new customers.

I teach a generic sales process that can be adapted to any and every sales situation. My process is a blend of the steps and activities that include both marketing and sales. If you have not yet reviewed what I call my 30000 foot view of sales you should do so now. If you want to get into even more detail, look at what I call the Prospect Continuum; in my world view of sales, the handoff from Marketing to Sales occurs once a Suspect has been created where a Suspect is a Lead that has expressed interest in what you offer or sell.

Sales Training (or Empowerment). Every business should have some type of ongoing sales training program or system. It can be an organic capability or it can be outsourced. Regardless of what or how you sell, your sales training program should be organized, scheduled and tailored specifically to your process and overall sales objectives.

A word of warning; avoid the one size fits all approach to sales training, especially if you bring in a contractor or sales training company to train your team. If you are starting from scratch to create and implement a sales process I would work with a sales expert to assist you with this critical first step. Once the process is defined and ready to go you can then create a training program to support the process. The mistake too many companies make is they have a process (even if they have not formally defined it) and they bring in a sales expert who often teach their version of selling that may or may not fully follow your process or target your objectives.

Sales training should address the following minimum subject areas

  1. Sales process training
  2. Sales activities that drive the sales process including things like how to qualify opportunities, creating quotes and proposals, closing and more.
  3. Sales basics that should be practiced weekly or daily. These are not activity specific and include things like sales planning, booking appointments, rejection handling, presentation skills, questioning skills, listening skills, follow up skills, etc.
  4. Sales attitude and behaviours. Sales is Tough! One of my 4 Pillars of Sales is Sales is the Best Paid Hard Work, Worst Paid Easy Work you will ever do. It is critical that any sales training program specifically address the attitudes and behaviors of sales and not just focus on the Acumen and Aptitude or ‘technical’ learning of selling your specific products or services and process.

Sales training should be both formal and ad hoc. If you view sales training as a check box that has to be filled in, you will likely not achieve the desired results. Sales training should be part of your overall business culture. Use every opportunity to offer sales training and advice to your sales team. It should be regularly scheduled. Sales leaders should use regular sales meetings to have a short 5 t0 10 minute training update. You do not need to take your sales team out of action for full days at a time but rather should focus on consistently providing some type of training as often as possible.

Sales Tracking System. You must have a method for tracking your sales activities. The most used system these days is a CRM or customer relationship manager. Googling CRM will get you over 100 Million results!

I am a huge proponent of using a CRM but if you are going to have one here are my 2 cents. If you do not offer value and benefits to the sales team for having a CRM it will never be fully utilized. If your sole reason for having a CRM is to provide management oversight and reports and as a tool for measuring sales team activity and performance, it will be met with significant resistance by the sales team. If your belief is ‘resistance is futile’ and you operate under the premises that the stick is better than the carrot and you will force your sales team into using it properly, you will find implementing the CRM a frustrating and exhausting task. I have seen top performing salespeople leave a company over exactly this issue so tread lightly. If you have a CRM in place then you can set expectations as part of the hiring process.

Your CRM must be able to follow your process; you should not have to change your process to cater to the CRM. Your CRM should integrate with other software programs you currently use like Outlook or Gmail, your marketing autoresponder, any standard marketing tools you use like LinkedIn or other business and social media platforms. The less manual entry that has to be completed the better.

How the CRM manages your accounts, contacts and opportunities is critical. The Account is the primary entity that should be tracked. Within the Account you can have Contacts (who can come and go) and can be both prospects and existing customers. Opportunities are unique, should be connected to the Account but also linked to one or more Contacts in the Account as needed. Each opportunity should be seen like a file folder that is created when the opp is identified and holds a link or record to every interaction with the Account and/or contacts within the account during the sales process and is closed when the business is won or lost. You should be able to change or transfer ownership of the Opportunity as is progresses through the Process including to Fulfillment or Delivery if won but it should always be connected in some way back to the responsible sales person.

One piece of advice. As a sales leader you should focus on tracking what I call Qualified Opportunities and what it takes to be Qualified. In simple terms an Opportunity is Qualified when, as a minimum, you know who the buying decision maker is, when the buying decision will be made and if there is budget for the purchase. An opportunity can be ‘Real’ without being Qualified and should be monitored to ensure it moves ahead but not Opportunities should be ‘tracked’ by sales leadership. Allow the sales team to create Suspect Opps; these are Opps where they identify there might be a real opportunity developing but it is too early to know for sure. Having Suspect Opps that management does not pay a lot of attention to allows the sales team to create placeholders, create reminders and drive activity to determine is there is something real happening or not. This is particularly important for larger enterprise customers with longer buying cycles and multiple decision makers.

Dashboards and reports should be customizable by at least your local superuser. If you have to get the software provider to do all this for you it will be a constant expense you need to be aware of up front and cater to in your budget.

Without a huge effort and sometimes with a single click you should be able to see key things like

  1. Total pipeline within a defined timeframe like month or quarter or year
  2. Stage of the sales process the opportunity is currently
  3. Next steps or action items with due dates
  4. Highlights of what are often referred to as stuck or stale opportunities. Stuck normally refers to opps that have not moved in some defined time period like a week or a month. Stale refers to opportunities that have had no updates for a period of time. Both can be triggers for the sales team to revisit or for sales leaders to drive reviews.

Most software CRMs are now cloud based and offer free trials or evaluations. Take the time to really do your planning and research up front; nothing is more frustrating than making an ill informed buying decision only to have to reverse direction later.

Bottom line is you need a sales tracking system. Maybe paper will work, perhaps excel is a better option but a well chosen and implanted CRM will pay for itself many times over with many hard and soft benefits.

Sales Compensation Program. This is the final must have piece of the SMS. If you do not already know this fact or truth, Sales team behavior is totally driven by how they are compensated. Change the compensation for your sales team, one way or the other, and you will change their behavior. Salespeople will take huge amounts of time to figure out how to maximize their income and will do only those things that get them to that position regardless of what the sales leader tells them to do or focus on. Having led both international and domestic sales teams for public and private companies, I can unequivocally confirm this to be true.

Creating and implementing sales compensation programs can be challenging. It is not a do once and forget activity; it must be constantly measured and monitored. If you do not have experience with doing this I would recommend getting help with this. There are so many variables and decisions you need to make it can make your head spin. For example

  1. Will the compensation be a salary plus commission?
  2. Is the salary guaranteed regardless of sales performance or is it draw based?
  3. Is the commission a flat rate or scale based?
  4. Is the commission based on gross revenue or gross margin?
  5. How often is the commission paid – weekly, monthly, etc?
  6. Are there commission accelerators?
  7. Do different products offer special incentives to focus on ie do you offer SPIFFs which formally means Sales Performance Incentive Funding Formula
  8. Etc, Etc, Etc..

I recommend you try not to change the basics of the compensation plan often and definitely not mid-year unless it is to add incentives to drive revenue or margin growth. Reducing income potential mid-year will most likely totally demoralize your sales team and could be disastrous for your business. If your comp plan is too lucrative and you are losing money overall because of the sale comp portion of the overall cost of sales, then you have a poorly designed sales comp plan. 

So overall you can see that putting in place a full featured and comprehensive Sales Management System can be both time consuming and intimidating but if done well it can have a huge impact on your revenue and margin.

If you would like to have a follow up conversation about how you can implement a Sales Management System or improve the one you have, feel free to reach out for a chat.

Thanks for your time and I wish you the best of success!