The Primary Mistakes That Prevent Getting The Reps and The Results You Want

And How To Solve Them

It takes significant time and effort to find and retain a high performance independent rep agency.  To maximize your return on sales management investment, you need to prepare a strong foundation.

To achieve reasonable sales productivity, there should be  at least $1 million or more in annual sales potential  in a territory with good potential.  To achieve  optimum sales performance requires a highly motivated rep agency plus good sales management practices.

A. Abdicated Management

It’s a prevalent attitude among sales management that sales development and marketing can be delegated.  For sales, manufacturers want to delegate it to independent reps.

SOLUTION: You shouldn’t expect to delegate your company’s income.  You need a management system that will direct reps into the highest potential accounts and then help them get the expected results.

B. Obsessive Management

Asking salespeople, or reps, to submit subjective commentary status reports is counter productive.  You don’t want/need to know everything that happened on every sales call.

SOLUTION: You only want the facts, but you should help the rep gather them.  You need to determine each target account’s sales potential, and then help the rep to make a sale.  You also need to know each agency’s true earnings objective, and then help them reach it.

• Learn the four things you can do to increase your sales – and the rep’s earnings – while building your earnings.  Ask for  Knotes & Comments  206.

You can generate more accurate forecasts and higher sales productivity with sales development accounting

You’ve identified your target accounts, and you’re now accurately measuring work-in process.   You’re well on your way to helping each salesperson make a reliable sales forecast.  When your salesperson is filling out an Account Data Sheet for each account, you’ve helped each salesperson to categorize and document qualification data.  The further along in the qualification process an account becomes, the better idea the salesperson has about whether he (and your company) will get an order, when he’ll get it, and for how much.

Self motivation is the strongest incentive

Now, identify what the salesperson to wants – or needs – to earn.  From the interview process, you should have a good idea of why and how much each salesperson expects to earn from your company.  Are they looking to your company for basic earnings because they just lost a principle and they have to replace that income?  Do they have one or more children going to college and they have those expenses?  Are they looking ahead to retirement and need to build their investment portfolio?

The question is, what is their sales motivation?  You should know if they can reasonably expect those earnings from the assigned territory.  You’re already making it easier by designating what information they should collect.  For a motivated (and skilled) salesperson, this is all you need to do.  This is more than most of his principals do.

They are making a work-in-process inventory to make it easier to meet their earnings objective.  You can’t get stronger motivation than that – unless you bring up their earnings objectives when their spouse is present.  Thus the reason for a joint interview when hiring.  If this isn’t a new salesperson or rep, you can still get into an earnings expectation conversation with each current salesperson in conjunction with telling them how much you are doing to help them reach their goal.

The forecasts will continually become more accurate as they get experience in using the process.

For assistance in establishing  marketing accounting tools, and implementing Sales Performance Quality Assurance™, ask for Knotes & Comments 104 and 201, or call us, or email us.

You can generate improved growth and profits with sales development accounting

If you want to improve  your management of sales results, whether you’re  selling through independent reps or employee salespeople, consider adding an accounting tool to your marketing strategy.  It has been repeatedly proven that the key to improving results is using a structured system.  When effectively implemented, a structured sales process adds reliability to the achievement of profitable growth.

One benefit to Sales Performance Quality Assurance™ is that sales development progress can be measured with relative accuracy.  Let’s consider the sales work-in-process inventory.

A Work-In-Process Inventory reveals the value of sales development progress

When you have a checklist of  information you need to close a sale,  it’s easier to collect the information.  When you document the information, it’s easy to see what’s missing.  Now divide the list of information needed into groups and give each a status designation.

Thus, you have a work-in-process status designation that reveals how far along the sale has progressed, and presumably how much effort has been made or time expended.  This is much more precise that asking the salesperson, “When are you going to get a Request For Quote?”

Next, we’ll determine how to improve forecast accuracy and sales productivity.

For assistance in establishing a marketing accounting system, and implementing Sales Performance Quality Assurance™, ask for Knotes & Comments 201C  “You Can Achieve Profitable Growth by Treating Sales as a Production Process” and 203C “You Can Have The Control You Want.” Then call us or email us concerning your specific challenge.

You can generate improved growth and profits with sales development accounting

For many manufacturers, controlling sales results is more erratic than effective – particularly when selling through independent manufacturers’ reps, but also with employee salespeople.  It has been repeatedly proven that the key to improving results is using a structured system.  When effectively implemented, a structured sales process adds reliability to the achievement of profitable growth.

In manufacturing, if you want to know what you have achieved during a time period, you generate an earnings statement.  But if you want to know where you stand at a point in time, you generate a balance sheet.  In addition to accounts receivable and payable, the key numbers in a balance sheet are inventory – both finished goods and work-in-process.

While cost accounting can reveal the value of product work-in-process, an incremental sales process inventory is harder to determine.  One benefit to Sales Performance Quality Assurance™ is that sales development progress can be measured with relative accuracy.  The key lies in the design and documentation of the sales development process.  There are a number accounting benefits to SPQA. Let’s first consider territory potential.

Territory Potential – The number and size of available target accounts

How many target accounts are there in each territory, and how many are there in each industry type?  If you have identified target accounts based on valid projections of sales potential, any “good” rep – or employee salesperson with incentive compensation – will follow your guidance.

If you want to measure sales potential in dollars, estimate the average sales volume available from each account size (Large. Medium, and Small) and type (NAIC) classification.  Just remember, these dollar numbers will be estimates.  They only become objective numbers when the account has been screened for sales potential.

In future posts, we will cover work-in-process inventories, sales forecasts, and sales productivity. For more information, ask for Knotes & Comments 201 “You Can Achieve Profitable Growth by Treating Sales as a Production Process,” and 202 “Establish Measurability to Enable Manageability.”

In an article titled “The New Science of Sales Force Productivity”[1] Harvard Business Review espouses a methodology that Growth Development Partners has been offering since 1974.  Our challenge is to beat the drum louder, and in more places.  This web site is an effort in that direction.

It appears that Growth Development Partners has been an almost invisible ground breaker for decades.  “The Salesperson As An Investment” was written back in 1981.  This article is available for the asking from this web site.  See: “Get a Special Report on Profitable Sales Force Management”, which describes the Sales Production Quality Assurance™ methodology.  The other pages on this site provide additional insights into SPQA™.

The HBR article on The New Science of Sales Force Productivity specifies “four levers” needed to “boost reps’ productivity in a predictable and manageable way.”  The levers are:

• Targeting,
• Optimizing automation, tools, and procedures,
• Analyzing and managing rep performance by measuring both internal processes and results, and
• Sales Force Deployment –matching sales, support, marketing, and delivery resources to customer needs.

You can order the HBR explanatory article, and/or get the Growth Development Partners “how to” guides by ordering:

• K&C-101: If You Want Better Results, You’ll Need A Better Strategy!

• K&C-102: If You Covered The Territory, How Much Could You Sell….”

Click here to get both KC-101 and KC-202 for $5.00.

• K&C-201: You Can Achieve Profitable Growth by Treating Sales as a Production Process

• K&C-202: Establishing Measurability to Enable Manageability

Click here to get both KC-201 and KC-202 for $5.00.

Then, if you’re thinking of expanding or replacing some of your sales coverage, ask for –

• K&C-303: Applying Quality Assurance to Sourcing, in addition to the free

• K&C-301: The Salesperson as a Human Resource Investment