Measuring sales management performance | Page 2 | Sunday Observer

Measuring sales management performance

27 November, 2022

Measuring the performance of a sales manager is a challenging task for many business organisations. They are officially responsible for leading, coaching, and mentoring the team and assisting in the creation of target-achieving strategies. Calculating how well a sales manager is performing is something that might need special attention.

Sales managers, particularly those in field sales management, perhaps confront the biggest challenge in an organisation in keeping tabs on the performance of a successful sales team without being physically present in the field or at a store.

Companies resort to using the outcome of the entire sales team as a general basis for evaluating the sales manager’s performance. This was the key method of performance measurement for the sales manager for many decades, and it makes perfect sense.

However, it only reflects on the sales manager if the entire team underperforms and fails to meet sales goals. As a result, if the sales team has a few overachievers, the sales manager’s actual management skill is hidden, and he can conveniently avoid accountability.

So how can the company management make sure that they are holding the sales manager accountable? What are the most important factors to consider in determining whether the sales manager is capable of managing the team adequately and effectively?

The revenue generated by the sales team is the lifeblood of a business. Hence, compared to other functions in an organisation, sales revenue is known to be more important to a business. Therefore, the first task of performance measurement is to keep close track of the achievements of individual sales quotas.

The organisation needs a healthy sales team with a majority of achievers to sustain the operation.

For example, if only 50% of the salespeople in a team reach their goals, the overall performance of the sales manager is a failure. If the underachievers are either fired or quit, which happens frequently throughout the world, the sales manager naturally becomes responsible for covering up the gap until the vacuum is filled with new recruits.

This can burn out a sales manager. Hence, by defining a metric of “how many team members are at or above the company can get an impression of the sales team’s health and the effectiveness of the sales manager.

Win rate

Measuring the sales manager’s win rate against the team’s forecasted sales opportunities throughout the entire sales process is essential.

Management expects sales managers to coach their salespeople during the early stages of the buying cycle by comparing forecasted to closed deals. This will help to ensure that the sales team has all the necessary selling skills and knowledge to achieve breakthrough sales performance.

As a result, performance metrics such as revenue, profits, and rate of closing are critical indicators of a sales manager’s performance. A good sales manager has a high participation rate, while an average manager has lower participation and achieves plans through a few efficient subordinates.

Keeping track of the sales manager’s ability to track his or her team is also an important factor. The manager should coach salespeople during the earlier stages of the buying cycle according to a metric that compares forecasts to closed deals to ensure that they have the full set of selling skills needed to achieve breakthrough sales targets. The amount of time the sales manager spends on coaching and the effectiveness of such coaching are imperative to producing results.

It is the responsibility of the sales manager to get new recruits to adjust to the selling process as quickly as possible. Hence, measuring how long it takes new salespeople to become productive must be monitored. If the newly hired salespersons take an extended time to reach their assigned quotas, it will paint a poor picture of the efficiency of the manager. Although this seems unreasonable, it is part of the job of a sales manager simply because a good manager has to marshal his team efficiently. On the other hand, if the new recruits perform successfully and meet their quotas, it reflects the success of the sales manager.

Churn rate

Salesmen constantly confront the challenge of retaining customers. Most often, maintaining existing customers may be more crucial to success than gaining new customers may be more crucial to success than gaining new ones. Therefore, sales managers must consistently monitor the churn rate of the team. Sales managers are responsible for making sure that the business is not losing clients. If the churn rate is high, the sales manager’s performance can be rated low.

The sales manager must be able to go in and fix any issues if a salesperson is handling customers improperly and if there is a likelihood of losing an existing customer. The churn rate is an excellent indicator of how well your sales manager is managing the progress of deals. By nature, selling is a profession with immense challenges. Salesmen most often work under tremendous pressure due to a number of reasons. On a regular basis, they confront rejections, travel fatigue, competition, and even general market conditions such as economic situations in the market. Hence, the staff turnover rate in a sales team is perhaps the highest in an organisation compared to other functional departments.

Reducing the sales staff turnover is one of the major challenges for any sales manager, anywhere in the world. Not only leadership traits like skill and efficiency but also the personal approach of the sales manager towards his team are of paramount importance.

Because of the gruesome recruitment process for filling sales vacancies, companies take sales staff turnover as a serious negative factor when measuring the sales manager’s performance. A great sales manager retains good salespeople while taking positive steps to develop weak ones. Some companies conduct periodic surveys to monitor the sales manager’s personal behaviour and to learn how subordinates perceive their superiors. Generally, successful sales managers are great coaches, mentors, and empathetic leaders who earn the respect of their subordinates.

In order to succeed, sales managers must have the complete trust of the entire sales team, a feat that is not easy to achieve. The team members must feel comfortable looking up to and obtaining guidance from their leader.

Important area

However, these analyses must be done extremely carefully to avoid bias. For example, a staff member may provide positive or negative information to management on a personal rather than a professional basis. Similarly, the wrong type of questions may call into question the manager’s legitimate power and authority, and he will lose credibility in front of the team if incorrect personal views were provided to management based on personal grudges.

Monitoring sales promotion efforts is also an extremely important area to measure the performance of a sales manager.

The job of the sales manager is to increase sales revenue by any reasonable means. Sales management is not merely monitoring a sales team and driving them to achieve goals. Hence, the sales manager must effectively and creatively engage in sales promotion efforts in addition to his leadership role.

Also, how successfully the sales manager is supporting internal promotions within the company is a crucial indicator that is frequently overlooked. How effectively the sales manager supports his subordinates to develop their respective careers is important.

The individual development of the team members to the next level is a responsibility of a sales manager, and organisations recognise their sales managers’ leadership capacity through such a matrix.