2020 B2B Must Have: Sales Manager Effectiveness

According to Sales Management Association research, only 15% of sales managers believe that their companies provide the right amount of sales coaching. If you combine that information with a recent Gartner survey that identified sales manager effectiveness as a top three priority for sales leaders in 2020, an interesting picture begins to emerge.

Organizations are starting to understand the dramatic impact that a good sales manager can have, but there are challenges to achieving desired results. According to our research in Crushing Quota and Cracking the Sales Management Code:

  • 75% of sales managers see less than half of their reps making quota.
  • There’s a 39% difference in revenue performance between the top and bottom quartiles of sales managers.
  • Bottom managers brought in an average of 3.5 million less revenue than their high-performing peers. (One of our recent clients estimated the cost differential closer to $10m per manager.)

Sales Managers and Their Practices Matter

Often, companies promote the best salespeople into sales management positions. The hope is that the highest performers will, in turn, create teams of high performers and get the most out of each seller.  But, does that theory hold true in practice?

In our study, sales manager difference was extreme and revealed some disturbing truths:

  • The top 25% of managers exceeded their revenue targets by 15%, but the bottom 25% fell short by 24%. That’s a whopping variation of almost 40% in revenue production.
  • The top 25% of managers got 30% more of their sellers to quota.

So, what are your high performing managers doing? And how can you, as a sales operations leader, help all your sales managers consistently perform at high levels?  There are many areas to ponder and examine.

Individual Practices Matter

You need to look at the specific practices your sales managers use that lead to a higher percentage of sellers at or above quota:

  • What types of interactions do they have with their reps? How frequently? What do they discuss?
  • Do they have more formal or informal interactions?
  • Are certain discussion topics more closely related to success than others?
  • Do they spend more or less time doing forecasting and reporting?
  • How do these practices differ by sales role?
  • Are they spending more or less time in the field than lower performing managers?
  • When they coach, what point in the sales cycle are they focused on?
  • When they spend time in the field, what types of sales calls do they attend?
  • Do they spend more or less time in the field than your organization requires?
  • Who initiates planning discussions (manager or seller) and what are the reasons?
  • What level of planning rigor do they expect from their sellers?

These questions are important, but they cannot be answered by looking at company-level performance. You must dig into the practices of individual sales managers and consider the nature of the roles they manage. The devil is in the details—and you need to get to a granular level to identify specific practices that matter.

The Truth Behind Commonly Held Beliefs

It’s always desirable to find the “one best way” to do something, right?  Because if we can just find that one best way, we can all replicate it and be successful.  That’s the thinking anyway.  But, our research shows that there is no such thing in selling or sales coaching. That said, we have uncovered coaching approaches that make a huge difference in sales team performance.  Quite a few will probably surprise you. Take a look:

True or false?  Successful sales managers spend more time in the field.  FALSE.

The lowest performing managers in our study were the ones who spent the most time in the field. They attended sales calls more frequently and reported that they spent more time in the field than their organization required. In contrast, the high performers attended sales calls less frequently and spent about the amount of time required–or slightly less—in the field.

 New truth:  Field time alone does not impact success.

True or false?  Successful sales managers spend more time coaching each seller. FALSE.

The lowest performing managers in our study reported providing the largest amount of coaching. Interestingly, when we examined the responses of the lowest performing managers, the math didn’t often work! For example, it’s physically impossible to have a team of 10 sellers and coach each one of them 20 hours per month! The critical mass of managers–those with less than 50% of their teams at or above quota–reported the highest hours of coaching, that they coach frequently but don’t spend much time in discussion, and primarily help sellers plan only when the seller requests help.

New truth: True discussion between manager and rep—based on importance of an opportunity or sales call—has the most positive influence on salesperson performance.

True or false?  Successful sales managers are more likely to formally schedule regular coaching conversations. FALSE.

Much to our own surprise, most managers, no matter the performance level, schedule opportunity coaching conversations and execute sales call coaching on an as-needed basis.  The high performers just conducted their calls differently. They had more in-depth discussions but held calls less frequently. In addition, higher performing managers kept calls as scheduled over 90% of the time, typically focusing that time on coaching on the early stages of the sales cycle.

New truth: Coaching discussions focused on opportunity strategy and planning for key calls leads to healthier pipelines and improved close rates.

True or false?  Successful sales managers are more likely to require formal call and opportunity plans.  TRUE.

Most sales managers report that they mandate formal call and opportunity plans.  However, the higher the performance, the more likely formal plans are required.  Higher performers also require formal plans for only a subset of calls and opportunities, while lower performers are more focused on getting this information to scrub the pipeline to prepare for their forecasts.

New truth:  Sales manager success is directly tied to a host of coaching approaches and decisions, including:

  • Frequency
  • Duration
  • Topics
  • Sales cycle phase
  • Who requests the planning conversation
  • Realistic planning expectations