Today’s post is by Michelle Vazzana, CEO and a founding partner at Vantage Point Performance, a leading global sales management training and development firm. She is co-author of Cracking the Sales Management Code: The Secrets to Measuring and Managing Sales Performance. Vazzana is also author of Crushing Quota: Proven Sales Coaching Tactics for Breakthrough Performance, due out in October 2018.
One of the most important things separating great managers from their less-successful peers is how they choose to spend their time with the salespeople they manage. Sounds a little obvious, doesn’t it?
But it’s not just time spent; it’s time spent engaged in meaningful pipeline conversations.
Our two-year research efforts into the practices of high-performing sales teams showed a strong correlation between team performance and pipeline management. High-performing managers held dedicated meetings to talk in depth about early-stage deals. Could there be an easier, more obvious pathway to improved sales?
We received data from 512 sales managers across 12 industries around the world. The goal was to identify specific management practices that led to a higher percentage of sales reps at or above quota – with an emphasis on practices that led to higher participation across entire sales teams.
So, what’s a “high performing” manager? Those with 75 percent or more of their team members at or above quota the previous year. Forget about using revenue numbers to assess performance. We’ve seen too many instances where superstar salespeople skew revenue production upwards, masking the true performance of their sales managers. In fact, when we examined manager effectiveness using revenue attainment as the measure of success, the average managers (or middle 50 percent) were hovering just below quota. This seems like fairly good news until you dig a bit deeper.
The lowest performing managers and the average managers had the same percentage of their salespeople making quota. This means 75 percent of managers in our study had only 48 percent of their salespeople making quota. Contrast that with the top 25 percent of managers, who had 65 percent of their salespeople at quota. It’s only by examining the proportion of sellers on a given team making quota that a manager’s true effectiveness can be evaluated. The more salespeople at quota, the more effective the sales manager. Period.
Now that we’ve shown you the evidence behind the success resulting from pipeline coaching sessions, let’s look at three keys to make it work for your team.
1. The Magic Number is 3
Managers who spend about three hours per month in pipeline discussions with individual sellers produce 11 percent higher average revenues than managers who spend less than that number of hours per month per salesperson per month. There’s something magic about the three-hour point, so dive deep into individual opportunities during your allotted time.
2. Make a Commitment
Managers with great team results schedule appointments for their opportunity planning discussions, while low-performing managers are more likely to have ad hoc meetings. In addition, high-performing managers were significantly more likely to coach fewer opportunities – and coach these opportunities in more depth. Of course, all managers scrub pipeline data to create a forecast; however, the best managers then move beyond inspection into high-impact coaching conversations.
Here’s a real-life example. When Vantage Point began working with sales managers at a large global company, average close rates were 25 percent of forecasted revenue. Following our suggestions, managers began meeting with reps twice a month for focused discussions on early-stage deals and close rates climbed to 37 percent. Eighteen months later, close rates were at 54 percent. The takeaway? The pipeline coaching conversations doubled the company’s close rates. With such a simple solution at hand for all, failure to institute this practice is tantamount to sales management malpractice!
3. Early-stage Deals
Our study required sales managers to indicate the typical position of deals in the pipeline that they typically coached. Low performers were far more likely to coach deals in the late stages, whereas a significantly larger percentage of high performers oriented their coaching to the early-stage deals. In addition, low performers were more likely to use scheduled time to update the forecast and clean the pipeline. High performers were more likely to use their scheduled time to develop the best strategies for opportunity pursuit.
Sellers working for high-performing managers spend their time pursuing only solid deals and, therefore, have higher close rates. How so? Top-flight managers closely examine the deals reps put into the pipeline. They ask challenging questions to make sure the deals are real – and discard those that are not. Conversely, low-performing managers appear to focus on the size of the pipeline rather than its quality. As a result, low-performing managers tend to have sellers with unhealthy pipelines – full of unwinnable deals.
When sales managers make this one simple change to their management approach – when they add scheduled, in-depth, one-on-one discussions about early-stage deals to their regular pipeline scrubs – team performance improves remarkably. What have you got to lose by trying this approach with your team?