Manage by Sales Objectives

There are specific management techniques you can use to build top salespeople and top sales teams. In business, one of these techniques is called management by objectives. In sales, we call it “management by sales objectives.”
The Economist reported on a performance study embracing 10,000 organizations in twenty countries involving about 150 researchers whose goal was to determine the most important predictors of high performance and productivity improvement. What they found was that there were three essential factors that predicted productivity and profitability in competitive markets. These three were setting targets, measuring results, and rewarding performance.

The Big Three

Top sales organizations set clear sales targets and quotas for each salesperson, for each week and month. They set specific action targets for each day. All salespeople know exactly what they are expected to do, day in and day out, from the time they start work until the time they finish.
The second driver of high performance was having clear measures and deadlines for the performance of each task leading to the sale. Salespeople knew exactly how they would be measured, how they would be paid, and the exact timelines and deadlines on which they would be judged.
The third key factor that drove performance was excellent rewards for high performance. The greater clarity that salespeople had with regard to how much more money they could earn if they achieved higher sales goals, the more likely it was that they would achieve those goals.

Manage Them the Same

Sometimes people say to me, “My people all work on straight commission. How can I tell them what to do? Can I set quotas and deadlines for them?”
The fact is that you must manage straight commission and straight salary salespeople using these exact same principles. My friend Jim Rohn used to say that “top people go where the standards are the highest.”
If you want to attract and keep good people, treat them like a crack team, with clear standards and disciplines that you insist on every single day. Impose clear controls on everything that they do and help them measure up to the agreed-on standards. The very best salespeople perform at the highest levels when they are working in a tightly organized, well- disciplined sales team.

Manage Them Differently

Salespeople have different levels of experience and ability. New salespeople should have sales quotas and goals that are commensurate with their knowledge and experience. More experienced, successful salespeople should have higher sales quotas. Sit down with each member of your team and determine the correct sales quotas for that salesperson, based on the individual’s background and the current market. Clarify the activities the salesperson must do each day.

Define the sales goals in terms of the daily activities necessary to achieve them. Establish clear measures of performance. Remember: What gets measured gets done.
In sales, you cannot control or determine where the next sale is going to come from. You can only control the daily activities of the salesperson, which will ultimately determine the number of sales that take place in any market. Although you cannot control the sales in the short term, you can control the activities that inevitably lead to those sales.

Tell Them What to Do

Make it clear that each salesperson is expected to make a specific number of customer calls each day. All salespeople are expected to follow up and meet with prospective customers face-to-face. They are expected to call back prospects that they have called on recently, as well as existing customers. They are expected to send out a specific number of emails or letters, have a specific number of interviews, and so on.
If telephone prospecting is the key to getting appointments, set a minimum standard of ten telephone contacts by 11:00a.m. each morning. When people come to work, they take their call sheets, sit down, and begin telephoning immediately. Your job is to make sure that each salesperson is doing his or her job, as agreed upon.
There is nothing that motivates a salesperson more than to have a clear, specific track to run on. On the other hand, there is nothing that demoralizes or demotivates a salesperson faster than coming into work and rattling around like a marble in a can, with no clear direction or specific activities required.

Discuss and Agree

With new salespeople, sit down and discuss and agree on the specific activities that they will engage in each day. At the end of each day, have a brief review with them, on paper, to make sure that they are fulfilling their commitments. After a salesperson has done this review for a while and begins to make sales and earn commissions, you can let off the pressure and check on the person once or twice a week. But at the beginning, have your new salespeople report to you every day. You know the rule: Inspect what you expect. Make sure that all of your salespeople know that you are going to be checking on them on a regular basis. Then, be consistent and persistent in measuring both sales results and activities.
Ken Blanchard says, “Feedback is the breakfast of champions.” One of your jobs is to give good counseling and reviews of performance each day. Discuss with your sales team what they have done, how it worked out, and how they feel about their experience. What did they learn?

Two Magic Questions

There are two questions that you should ask of a salesperson at the end of a call or at the end of the day. The first magic question is, “What did you do right?”
This is a positive question. You are encouraging your salespeople to review the entire procedure from the time they picked up the phone to call and make the appointment, through preparation, arriving at the appointment, making the presentation, and everything that took place in the sales meeting.
Aristotle once wrote that “wisdom is an equal measure of experience plus reflection.” When you help your salespeople to reflect on what they did right—the positive aspects of their sales work—you reinforce and drive the memory of these positive actions deeper into their subconscious minds. As a result, they will remember to replay and repeat these behaviors in their subsequent sales calls.
The second magic question is, “What would you do differently next time?”
The answer to this question is also positive. It helps salespeople to review their own performance and think of ways that they could improve “next time.”
Old-school sales managers would often grill their salespeople by asking them, “What did you do wrong? Where did you screw up? How did you blow the sale?” But psychologists have found that when you review the negative aspects of a person’s behavior, it is those negative aspects that are recorded and reinforced in the subconscious mind, making them much more likely to reappear in the next sales call.
On the other hand, when you talk to people about what they did right, and what they would do differently next time, they are much more likely to improve their performance—and far more rapidly than you might imagine.

A Sense of Mastery

One of the greatest of all motivations is the feeling of personal empowerment through learning and growth. People love to feel that they are developing a sense of mastery in their careers. When you help them think about how they could perform even better in the future, they feel happy about themselves, happy about you, and happy about the job.

ACTION EXERCISES

1. Develop and discuss clear goals and objectives for sales and sales activities for each salesperson who reports to you.
2. Arrange to meet regularly with each salesperson, or with the group in a sales meeting, to review and both get and give feedback on activities and results.