1. Rethinking Sales Management
The diagonal bars on this slide are actually lines drawn very close together. To give the line ends a straight edge, an additional line was drawn over the ends.
David M. Fellman
www. davefellman.com

2. 1. The “rethinking” starts with four fundamental truths…
Rethinking Sales Management
The “rethinking” starts with four fundamental truths… 1.
If your salespeople knew how to sell more and make more money, they would probably already be doing both of those things.

3. 2. Four fundamental truths… Rethinking Sales Management
Any skills or knowledge which are necessary for success, but not present in a current salesperson, must be trained in.

4. 3. Four fundamental truths… Rethinking Sales Management
Any attitudes which are necessary for success, but not present in a current salesperson, must be motivated in.

5. 4. Four fundamental truths… Rethinking Sales Management
Sales Management is not about managing sales figures, it’s about managing sales people and sales processes

6. X ü ü ü The best place to manage from: Rethinking Sales Management
The top
The front
The beginning
The end ü ü ü

7. It all starts at the end…
Rethinking Sales Management
It all starts at the end…
Establish strategic objectives
Establish volume objectives
Convert to “action standards”
Enforce accountability

8. Strategic Objectives…
Rethinking Sales Management
Strategic Objectives…
What do we want to sell?
Who do we want to sell to?
What is our value proposition?
What is our competitive differential?

9. Volume Objectives… Goal or Quota? Quota implies consequences
Rethinking Sales Management
Volume Objectives…
Your Goal > Their Goals
Goal or Quota?
Quota implies consequences
Quota requires reward
Your quota or their goals?

10. Core Selling Knowledge:
Rethinking Sales Management
Core Selling Knowledge:
Your salespeople will encounter four kinds of people “out there”…
Suspects
Prospects
Customers
Maximized Customers

11. Convert to “Action Standards”…
Rethinking Sales Management
Convert to “Action Standards”…
Chris sold $500,000 last year
and earned $60,000...
$10,000 salary + 10% commissions
Chris wants to earn $75,000!
$75,000 - $60,000 = $15,000 cash
10% = $150,000 sales

12. Chris will target suspects/prospects with
Rethinking Sales Management
Chris will target suspects/prospects with
substantial volume requirements
2 new clients who will average $30,000
3 new clients who will average $20,000
3 new clients who will average $10,000
8 new clients………..….$150,000 sales

13. Chris will now make these “sales efficiency assumptions…
Rethinking Sales Management
Chris will now make these
“sales efficiency assumptions…
1 out of 3 prospects who agree to at least two
meetings and a shop tour will become a client
1 out of 3 suspects who agree to a first meeting
will agree to further meetings and a shop tour
1 out of 6 suspects will agree to a first meeting

14. Here’s the arithmetic…
Rethinking Sales Management
Here’s the arithmetic…
$15,000 cash = $150,000 new sales
$150,000 new sales = 8 new clients
8 x 1 of 3 = 24 follow-up meetings
24 x 1 of 3 = 72 first appointments
72 x 1 of 6 = 432 “prospecting starts”
432 / 52 = 8-9 “starts” each week!

15. Rethinking Sales Management
Call Reports
should be 80% for the salesperson and only 20% for the sales manager

16. Rethinking Sales Management
Sales Meetings
are the most effective means of sales/sales management communication
Daily
Weekly
Monthly

17. On a scale of 1-10, how would you rate your best salesperson?
Rethinking Sales Management
On a scale of 1-10, how would you rate your best salesperson?
On the same scale, how would you rate your worst salesperson?

18. Objectives & Subjectives
Rethinking Sales Management
Objectives & Subjectives
General knowledge of manufacturing processes
Specific knowledge of the company’s capabilities
Ability to “work the program”
Willingness to “work the program”
Understanding of the company’s value proposition
Ability to present the company’s value proposition
Questioning skills
Listening skills
Team skills and attitudes
Reporting and recordkeeping skills and attitudes

19. Objectives & Subjectives
Rethinking Sales Management
Objectives & Subjectives
General knowledge of manufacturing processes — 7
Specific knowledge of the company’s capabilities — 5
Ability to “work the program” — 9
Willingness to “work the program” — 5
Understanding of the company’s value proposition — 8
Ability to present the company’s value proposition — 7
Questioning skills — 8
Listening skills — 5
Team skills and attitudes — 7
Reporting and recordkeeping skills and attitudes — 8

20. How do you use this knowledge to improve your current salespeople?
Rethinking Sales Management
How do you use this knowledge to improve your current salespeople?
Evaluation
Improvement Plan
Priorities / Goals / Benchmarks

21. …so let’s think about exactly who you’re looking for!
Rethinking Sales Management / Hiring
More Sales Management mistakes are made at the hiring stage than anyplace else…
…so let’s think about exactly who you’re looking for!

22. Key Attributes Intelligence A competitive nature
Rethinking Sales Management / Hiring
Key Attributes
Intelligence
A competitive nature
An appreciation of the finer things in life

23. Key Attributes Ego Drive Ego Strength Assertiveness Empathy
Rethinking Sales Management / Hiring
Key Attributes
Ego Drive
Ego Strength
Assertiveness
Empathy
Attention to Detail

24. Due Diligence Before Hiring
Rethinking Sales Management / Hiring
Due Diligence Before Hiring
Multiple Interviews
Check References!
Caliper...

25. A Key Question: How much is your sales position really worth?
Rethinking Sales Management / Hiring
A Key Question:
How much is your sales position really worth?

26. Money Talks! What do you want it to say? Effective Sales Compensation
Rethinking Sales Management / Compensation
Effective Sales Compensation
Fundamental concept:
Money Talks!
Fundamental question:
What do you want it to say?

27. What do you want it to say?
Rethinking Sales Management / Compensation
What do you want it to say?
I want you to generate lots of sales dollars.
I want you to generate lots of profit dollars.
I want you to develop new customers.
I want you to sell more of our product line to established customers.

28. What do you want it to say?
Rethinking Sales Management / Compensation
What do you want it to say?
I want you to increase sales every year.
I want you to work a full day every day.
I want you to do a good job with administrative tasks, such as call reports, expense reports, and CRM maintenance.
I want you to work well with the rest of the team.

29. Another fundamental concept…
Rethinking Sales Management / Compensation
Another fundamental concept…
Please don’t think that compensation
is a substitute for management.
Compensation works best as a reinforcement for management.

30. Three components to support management and motivation…
Rethinking Sales Management / Compensation
Three components to support management and motivation…
Guaranteed component
Earned component
Incentive component

31. How do you determine how much you are willing to pay?
Rethinking Sales Management / Compensation
How do you determine how much you are willing to pay?
Sales Volume $__________
Gross Profit $__________
x % Share = __________ %
Comp. Fund $__________

32. Let’s look at an example…
Rethinking Sales Management / Compensation
Let’s look at an example…
Sales Volume $1,000,000
Gross Profit $300,000 (30%)
x % Share = 30%
Comp. Fund $90,000

33. Option 1: 9% straight commission based on gross volume
Rethinking Sales Management / Compensation
Option 1:
9% straight commission
based on gross volume
What does the money say?

34. Option 2: 30% straight commission based on gross profit
Rethinking Sales Management / Compensation
Option 2:
30% straight commission
based on gross profit
What does the money say?

35. Option 3: $5000 per month salary 3% commission based on gross volume
Rethinking Sales Management / Compensation
Option 3:
$5000 per month salary
3% commission
based on gross volume
What does the money say?

36. Option 4: $5000 per month salary 10% commission based on gross profit
Rethinking Sales Management / Compensation
Option 4:
$5000 per month salary
10% commission
based on gross profit
What does the money say?

37. 4 x $1000 short-term bonus opps 1 x $6000 full-year bonus opp
Rethinking Sales Management / Compensation
Option 5:
$2500 per month salary
5.0% commission
based on gross volume
4 x $1000 short-term bonus opps
1 x $6000 full-year bonus opp

38. 4 x $1000 short-term bonus opps 1 x $6000 full-year bonus opp
Rethinking Sales Management / Compensation
Option 6:
$2500 per month salary
16.6% commission
based on gross profit
4 x $1000 short-term bonus opps
1 x $6000 full-year bonus opp

39. Bonus Opportunities: Rethinking Sales Management / Compensation
Short-term Product Opportunities
Short-term People Opportunities
Short-term Behavior Opportunities
Long-term Quota & Reward

40. Compensation Review… Rethinking Sales Management / Compensation
Money Talks!
Most salespeople need both a push and a pull
Compensation (the pull) works best as reinforcement for management (the push)
You’re better off sharing profit than volume
Different strokes for different folks
There’s more to this than just money!

41. A Final Thought: because they didn’t get enough!
Rethinking Sales Management…
A Final Thought:
No one ever died from too much management...
…but far too many salespeople
have underachieved/underperformed
because they didn’t get enough!