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SPIF Tips #41: How to Solve the Biggest Sales and Marketing Problem

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Improving productivity and

predictability is the biggest problem in sales and marketing. The reason for it is that managers struggle with a conundrum: Should they focus their sales team on results, or on activities?

  • Managing results

When managers focus on results, salespeople tend to develop their own approaches to their jobs. Managers can tend to function as “closers,” removing roadblocks to winning enough business to make the numbers at the end of the month.

This approach leads to big problems. By pure chance, some salespeople will produce more than others. It becomes difficult to distinguish between salespeople who are doing a good job and those who are lucky. An “every man for himself” attitude can start to prevail. Companies become captive to their biggest sales producers, whose performance cannot be reliably duplicated by others. Salespeople might bring in poor quality customers, or resort to excessive discounting. Sales revenue can become unpredictable.

Managers struggling with these kinds of problems naturally tend to switch their focus to their salespeople’s activities.

  • Managing activities
    In this environment, management sets up a “method” or “process,” often from some outside authority, like a sales training or CRM company. The process dictates levels of activity and expectations for how salespeople are to prospect, qualify, and sell. The goal is to change salespeople’s behaviors so they can get customers to buy “value” instead of price.

Unfortunately, focusing on activities also leads to big problems. It usually adds workload to salespeople’s already packed calendars. The activities may not apply to all prospects. The can be ineffective at causing more customers to buy. If salespeople are still accountable for results, they can start resisting. They might say, “Do you want me to follow the process, or do you want me to make quota?” Or, they simply give lip service to the process while otherwise ignoring it. When compliance is demanded, their attitude can change. They might say, “I made my 50 phone calls today, can I go home now?” whether they are closer to making quota or not.

Managing activities creates a “process for process sake” problem. Self-respecting human beings hate process for process sake. So, the pendulum can start to swing back toward results. Some companies swing between managing results and managing activities many times as new executives are brought in. In either case, any productivity improvement that might occur is unsustainable.

What is the solution to this "bipolar management disorder"?

 

Bipolar Management Disorder - Two Faces to the Same Coin

The key to resolving this dilemma is to recognize that both approaches share a common fatal flaw: Both ignore what goes on between the ears of the employees.

Managing results treats employees like magic "black boxes". It keeps replacing the boxes in the hope of finding ones that might produce more. On the other hand, managing activities treats employees like cogs in a big machine, where they are just supposed to do what they are told.

In both cases, the missing link is how a successful outcome is created. 

Managing results unwittingly sets up a box around "what salespeople do" and says "we don't care how results are created, as long as we get them. Managing activities unwittingly sets up a set of activities inside that box and says "just do exactly what we say."

Unfortunately, the world of sales and marketing is constantly changing. Businesses have to take into account the fact that prospects and customers might want to use web pages, apps, salespeople, print ads, Adwords™, cold calls, self-assessments, samples, demos, lunch-n-learns, boardroom presentations, or something else.

 

The real issue is “How do we figure out the most effective way of bringing in customers?”

Figuring that out is not a matter of replacing salespeople, or getting them to use magic words, or to follow someone else’s procedure for conducting a sales conversation. It is about enabling everyone (including managers themselves) to learn why certain things work, and other things do not work.

People are more able to try something when they understand why it is important. Thinking is required to learn why a prospect is qualified or not, or why a decision maker should buy from you or not. Deciding what to do about these things requires judgment.

And, thinking and judgment cannot be developed if they are not cultivated.

The fatal flaw in traditional (bipolar) sales and marketing management is that it ignores thinking, learning, and judgment. Sales and marketing management needs to change to explicitly include a method for learning. It needs a means of making changes that result in improvement.

 

Why Does Traditional Sales Management Suffer from Bipolar Disorder?

It’s not your sales manager’s fault.

Just as in any production system, sales and marketing work aims to create value, and also produces some waste. For example, websites and brochures people don't read, or proposals no one buys.

Unfortunately, the way sales managers have been taught fails to distinguish value from waste in an objective, measurable way. It doesn’t matter whether you are producing widgets or customers. To control, predict, and improve the work requires people to work in teams, and for those teams to have shared quality standards, specifications, and measurements.

Without such a framework, managers can’t help teeter-tottering between managing results, and managing activities.

Fortunately, prospects and customers typically follow a predictable path as they attempt to realize, prioritize, and solve their problems. You can identify those stages (the customer's journey). Value is created in sales and marketing when the customer takes an action you want them to take. Everything you do which facilitates those actions creates value. Everything else creates waste.

This sets up natural, observable cause and effect relationships. It shines the light of reason on the murky, emotional, slippery world of sales and marketing. It provides a structure that simplifies and clarifies the typical anecdotes sales and marketing managers have to deal with.

The scientific mindset of process excellence provides the necessary foundations for this way of thinking:

  • Managers can lead their team to define the observable stages and qualities of customer behaviors that confirm value is being added. With practice and discussion, salespeople can learn to use these standards to observe and analyze their sales opportunities. (This is what manufacturers would call “standards,” or “specifications.”)
  • Likewise, managers and salespeople can define methods and tactics aimed at influencing specific customer behaviors. With practice and discussion (and an explicit method for improving, like PDSA), salespeople can compare their performance with others, and learn how to improve their skills. (This is what manufacturers would call “standard work.”)

Sales teams cannot rely on approximations, gut feel, and tribal knowledge. They cannot succeed with “injections” of best practices or software from outside the company. All such attempts create immune reactions, because they are attempts to bypass what employees think.

The key to succeeding with process excellence in sales is the principle of respect for people. Respect for your people enables you to engage them. First, you’ll need to understand their frustrations and concerns. You’ll need to adjust to the degree of specificity that is useful for them (this can vary a lot). Defining terms and identifying data helps identify and solve problems employees may have. Then, you can move on to engage them in identifying the most important of the customer's problems as they travel along their journey. And, this is what causes sales funnels to flow faster.

  • A machine tool company set up a web page that helped their manufacturing engineering prospects provide some technical feeds and speeds information in return for a cost per part on two competitive machines compared to the firm's radical new machine design. Within the first 30 days, three entirely new prospects from around the world completed the web page. Salespeople would never have found these individuals through their traditional cold-call prospecting efforts.
  • A water filtration company's national account managers struggled with errors and service issues. They worked with the service team to create a hand-off package and train an inside salesperson focused primarily on national accounts. Errors declined 65%. Customer satisfaction increased, and time available for working new accounts increased 40%.

Improvements like the above cannot happen with sales training, CRM systems, or by pushing salespeople to work harder. Further, any attempts to purchase a sales process or import “best practices” from outside the company are actually disrespectful to sales teams. That's because they bypass what the sales team thinks.

Next week, I’d like to describe a bit more about the management context that enables sales to improve.

In the meantime, please write in the comments section below about examples of bipolar management disorder you might have seen in your career?

I’ll respond to each of your comments and questions.

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