It's never been harder to be a seller or a sales manager. The whole world of the sales organization and sales management — already changing before the pandemic — is being transformed. In fact, many of the trends affecting the sales function have accelerated.
Why is the old template for successful sales no longer applicable? New pressures reflect a changing environment for sales reps and other marketing and sales team members. Among those pressures are:
- High pressure to hit quotas coming off a year when many of even the best sales representatives had to scale back sales targets.
- Little time to perform — a 2018 article in Forbes reported that salespeople spend less than a third of their time actually selling or building the customer relationship as other sales activities such as prospecting through social media and learning about new products and tools consume more time.
- Limited guidance from above on effective sales management — within an account or across a region — beyond the sales management tools and CRM.
Let's take a look at what modern sales management is and how their job descriptions have changed in recent years.
What is sales management?
Sales management is the process of optimizing a company’s sales force to effectively utilize available resources to close deals. It’s absolutely essential for any company that relies on sales to drive revenue — which is most of them.
Sales management can be broken down into three main areas: sales operations, sales strategy, and sales analysis.
According to the American Marketing Association (AMA), sales management is “the planning, direction, and control of personal selling including recruiting, selecting, equipping, assigning, routing, supervising, paying, and motivating as these tasks apply to personal sales force.” These day-to-day tasks usually fall to a sales manager.
Sales managers also work with marketing and sales teams to create a sales strategy in alignment with the organization’s growth and revenue goals.
Sales management general functions
A sales manager’s role will vary depending on the size of the organization, the needs of the team, and the size of other, related departments like marketing and sales enablement. However, a sales manager’s role typically includes:
- Recruiting the right people
- Defining the sales territories
- Preparing a sales plan
- Pricing policy and price fixing
- After-sales service for new customers
- Defining remuneration and reward system for the sales force
- Putting together sales management systems and sales enablement tools
- Automation of certain tasks and resources in the sales cycle
- Reviewing sales metrics on a daily basis and determining key performance indicators (KPIs)
- Facilitating training programs for the sales department
5 crucial skills for effective sales managers
Given the immense pressure sales managers and teams are under, leading these teams requires a specific skill set. Many of these overlap with the skills needed to be a great leader in general. But their application is different for sales teams.
1. Project planning
It goes without saying that sales management requires planning. Be it managing goals and targets or preparing for market changes, these managers need to have foresight.
2. Clear communication
Communicating expectations is a key part of an effective sales manager’s role. Without this information, it is difficult for teams to stay aligned and on on-track to meet their goals.
3. Empathy
Great sales managers are empathetic toward their customers and their teams. In order to best meet the needs of potential customers and leads, sales teams must understand where these individuals are coming from. In the same vein, empathy goes a long way when managing a team. Especially those whose performance is based on intense goals and targets.
4. Coaching skills
Seasoned sales managers have a wealth of information and strategies in their toolboxes. They’ve likely experienced a wide range of situations and personality types. Sharing this information with and coaching their teams can be a huge benefit as it prepares them for difficult conversations and situations down the line. It also helps develop your sales team's skills more cohesively.
5. Feedback
Real-time and scheduled feedback keeps employees informed. Having strong lines of communication between sales teams and their managers keeps both parties aware of what is and is not working well. It also builds trust in both directions and opens the door for coaching opportunities.
What is the sales managing process?
The sales management process is the overall strategy that helps inform and prioritize day-to-day management tasks. Depending on the size of the company, one or more departments may exist to manage each of these priorities — or they could all fall to one sales manager. The critical functions of the sales management process fall into three areas:
Sales operations
Sales operations entails everything that involves your sales team and the daily logistics of how they do what they do. Operations include all of the human resources tasks — like hiring, onboarding, training, assigning territories, and setting (and adjusting) goals. It includes both strategy and tactics — both setting bigger goals and enabling step-by-step actions to see them happen.
Sales management strategy
Once sales goals have been set, the next step is to design a strategy that helps you meet them. Sales managers map out and create a sales funnel, which outlines each part of the customer journey. Strategy often overlaps with marketing, as it helps you define your target market and how to best connect with your ideal customer.
Sales analysis
An important part of a sales manager’s role is to follow the metrics. In order to make sure your team is efficient and on track to achieve their goals, sales managers study team results as well as the number of open deals and leads in the sales pipeline. Managers also need to be proficient at sales forecasting. Having a good handle on historical sales data will help the manager organize sales efforts and appropriate targets for growth.
Sales management objectives
The first, and most obvious measure of a sales team’s success is the metrics. Companies rely on sales teams to generate revenue and explain their offerings to customers. Sales managers analyze these numbers to determine whether they have the right sales talent in place, whether their sales training is working, their growth is sustainable, and determine the needs of the market.
Top-line revenue, gross margin and expenses are all influenced by the sales manager. However, it’s not just the bottom line that’s impacted by sales management. Relationships with sales managers are a hidden fact in the well-being, retention, and success of the team. Data from McKinsey says that relationships with sales managers are the strongest predicting factor in employee job satisfaction. However, 75% of sales reps feel that their relationships with their managers are the most stressful part of their jobs.
While high-performing sales leaders are often the obvious choice for sales managers, becoming a leader takes far more than putting up good numbers. In fact, only one in every six leaders is a good fit for sales management, with organizations choosing the wrong fit for management positions about 82% of the time.
Leaders have to have a mix of both hard and soft skills to be successful sales leaders. That means focusing on underdeveloped, underutilized, but critical skills — like sales enablement, communication, empathy, and coaching.
Companies where sales managers spend more than 50% of their time coaching are 1.4x more likely to be leaders in their industries.
Although most sales organizations have similar objectives, the industry and business model will affect which metrics are most relevant to track toward sales management objectives.
For example, sales management in a growing SaaS (software-as-a-service) company might focus on lead velocity rates, conversion rates, and monthly recurring revenue as an indicator of the health of their sales funnel. They might track quota participation and sales activities to judge the health of their sales team.
A more traditional company might focus more on win rate, average deal size, and sales expense ratio.
Sales managers are also responsible for:
- Increase sales volume
- Sustained profits
- Organization growth
- Market leadership
- Converting prospects to customers
- Compliment marketing activities
Investing in the development of sales managers translates into a 19.6% increase in revenue attainment. However, as outsized as the results of developing sales managers are, so are the impacts of neglecting this area of your business. Each underperforming sales manager costs an organization approximately $3.5 million.
Bottom line on sales management
Sales management is more than just the administration of the people who sell a company’s product line. Companies that hold such a narrow view of the role of sales managers are missing out on the most impactful long-term investment they can make in their organization’s success. Taking care of and motivating the people who take care of the bottom line is a smart way to improve morale as well as revenue.
At BetterUp we believe that while tools, training, and content are important elements to enabling the field, companies must also prioritize investment in the mindsets and behaviors that impact sales performance for individual contributors and sales team leaders.
