The Pain Chain – Part 1
When profits dwindle, a familiar phenomenon occurs in corporations around the world. Feeling the heat from stockholders, the board of directors holds the CEO accountable. The CEO convenes a war council of top lieutenants, who pass the pain down the chain of command, through senior level sales management to land like a hot potato in the laps of front line HR and sales managers. They funnel the pressure the only place they can.
“Hey, my rear end is on the line here, people,” the manager roars at a closed-door sales meeting of XYZ Widgets. “If you don’t get the numbers up and sell more widgets, every one of you is going to be out on the street.” The room is silent. Salespeople momentarily stop mangling paper clips and look up from their doodle pads, catching quick glances from buddies who shake their heads as if to say, “Here we go again.”
“And,” the manager continues, “because the sales numbers are down, we’ve got to raise prices.” The energy level drops in the room. The sales team utters a collective groan. Body language symbolizes the worst fears of some reps. as they fall limply across the tables filled with new price lists and company-reporting regulations.
“Now, let’s be positive,” the manager says with a smile. “All is not lost. Yes, we’re cutting back on expenses and you’ll have to do more with less. But when the going gets tough, the tough get going. Look, I’ve worked this out. It’s simple. All you need is three sales each week to meet your quota. That’s not hard to do. Come on, troops, I know you can do it!”
What’s wrong with this picture? In the manager’s mind, she has communicated in the most positive way possible that selling is about results. The manager has worked out what she believes are the sales ratios. Quota divided by the number of salespeople divided by the average value of a sale equals a winning formula. And the manager is absolutely right. Selling is all about numbers. However, this approach that works well at the managerial or accounting level falls flat on its face when applied to frontline salespeople. When salespeople try to manage results instead of managing activity, stress and frustration increase, turnover goes up, and productivity hits all-time lows.
Manage Activity, Not Results
Someone up the pain chain says we’ve got to make a quota. This may surprise you, but few individuals or sales organizations even know how many sales they need to make on a regular basis to meet production goals. So, if you are even aware of the results, congratulations — you’re ahead of most sales professionals. But just because you know the bottom line you have to hit, there is no guarantee that you’ll reach your goal. In the real world there’s frequently a major disconnect between results and activity. When the well-intentioned manager at XYZ Widgets breaks down the challenge into three sales per week, while that seems more manageable, it actually creates a disconnect.
The problem is getting those results depends on too many variables in the sales process over which the salesperson has little if any control. Is the timing right for the client? Will the salesperson or client come down with the flu next week? Will the competition show up with something new? Was the last shipment late? Did the salesperson’s deodorant give out? Millions of unknowns must come together in perfect coordination for a sale to happen.