Why Sales Managers Are Driven to Drink

If you’re not already there, here’s an exercise that will drive most sales managers to drink (as if just being a sales manager isn’t reason enough for hitting the bottle). You are about to take a walk into the world of what should be, but isn’t. Let me explain.

There is a good chance that your sales team isn’t bringing in anywhere near the amount of sales they could be bringing in and here’s how you can figure it out. But no hitting the bottle until after you have gone through the exercise. By then you may need a stiff drink!

What Could Have Been

Go back over your sales records for last year and find the annual sales volume for your top producer. Now, multiply that number by the number of salespeople in your company. That’s what your total annual sales could (or should) have been. Now compare that number with last year’s total sales. Surprised at the result? Probably. Stunned by it? Maybe. Shocked at the difference between the numbers? You may have a problem!

What Should Be

Let’s assume your company’s six salespeople did $21.5 million last year and your top producer brought in $5 million of that. When you multiply the $5 million by 6, you get $30 million. That $30 million represents your company’s true sales potential, assuming each of your salespeople is operating at the same rate as your top producer. So why aren’t they? Why aren’t your sales nearer to the potential? That’s the sales manager’s dilemma.

I wouldn’t be concerned if your annual sales were over 80 percent of potential or, in this example, if your sales were over 24 million. I start getting more and more concerned as the percentage gets lower. If you find that your total annual sales is less than 75 percent of your true sales potential, I believe you’ve got a problem. And the more salespeople you have, the bigger your problem because your shortfall is spread over more people.

How to Make It So

So, what can you do about it? One thing you can do is cull the herd and get rid of your poor performers. Years ago, I heard of a California company that had a policy of firing the poorest performer each month. Talk about a salesperson-of-the-month award! The policy didn’t do much for staff morale or teamwork, but it sure kept the salespeople on their toes.

A second approach is to clone your top producer’s skills and attitudes. And I’m here to tell you that the first sales manager to develop a top producer “reproducer” or cloning device is going to get very rich. I’m not holding my breath on this one.

So if we eliminate these first two solutions, what are we left with “” sales management, leadership, and some work. Here’s what you can do.

What to Do

First, make a list ranking your salespeople by annual sales volume with your top producer at the top. Beside each of the other names, calculate what percentage his or her sales are in relation to your top producer. The list might look something like this:

  • Bill       $5.0M 100%
  • Jenny $4.5M 90%
  • Carl     $3.8M 76%
  • Tom     $3.1M 62%
  • Dick     $2.7M 54%
  • Harry   $2.4M 48%

You shouldn’t worry about anyone who, like Jenny, is running at 80 percent or better. You also shouldn’t be too concerned about Carl or Tom at this point, primarily because you have Dick and Harry to worry about.

You need to talk to them about their lack of performance and uncover the reasons for it. Notice I used the word reasons. A “reason” is something you uncover, an “excuse” is something most salespeople, particularly poor performers, will give you. Typical reasons might be territory differences, product mix, personal problems, lack of product knowledge, skill deficiencies, poor attitude, wrong person, disorganization, no drive, or one of the three main reasons people don’t do what we want them to:

  1. They don’t know  what to do.
  2. They don’t know  how to do it.
  3. They don’t  want to do it.

It’s your job as the sales manager to figure out which reason or reasons are causing you grief. You need to close the gap between your sub-performers and your top performer.

Closing the Gap

It could simply be that your sub-performers don’t realize their performance is below par. Have a one-on-one discussion about performance and performance expectations. While I don’t advocate rubbing a marginal performer’s nose in my top performer’s numbers, I might average my top two or three people and use that number as an acceptable benchmark for performance.

As soon as you try to compare Dick or Harry’s performance with Bill’s, they’ll give you the argument that they’re not Bill and that Bill gets all the breaks, has the best territory, has better accounts, is better looking, whatever. Excuses, excuses, excuses. But compare their performance with the average of your top three performers ($4.4 million) and they have fewer (fewer, not “no”) excuses left.

Most salespeople, if they have the right attitude and the requisite desire, drive, and discipline, will take kindly to being coached to their full potential. Most often, it’s the sales manager who will provide that coaching. (Notice, I use the word coaching here, not harassing.) Sometimes it’s useful to use an outside coach as he or she can bring an unbiased and different view of the problem along with a broader set of possible solutions.

Avoiding the Bottle

You can’t solve the problem if you don’t know what it is or who has it. This simple sales management exercise will help you uncover who has a problem and outlines some effective ways to deal with it. Either that or it will drive you to drink!