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Six Common Mistakes in Sales Management
Often a large percentage of company profits get eaten up by the salaries of Salespeople. Despite increased turnover, variable gross margins diminish, leading to calls for alternatives to personal selling.
It is the management who are at fault more often than not, rather than the salespeople. The simple reason is; management methods and styles are often not up to date hence the increasing popularity of people wanting to attend a management course.
Six of the most common mistakes made by sales managers are as follows:
1. Not reacting to changes in market structure
Many markets have changed their buying practices dramatically. Decisions are being made based on new criteria.
Example: Historically, craftsmen advised farmers on their choice of materials; today, it is the planners (architects, engineers) who have the decisive influence.
Example: Thesedays, local merchants seem to be losing their importance. As a result, of sales staff deal mainly with departmental buyers in large consumer organisations.
Today’s sales people have to deal with more highly qualified decision-makers who exercise greater powers than in the past. By revising sales documents, verbal sales techniques, and by encouraging staff to further their education and training, sales managers can ensure that their sales people are not out of their depth
2. Thinking only of short-term turnover
Sales success is dependent on a number of components nowadays, not just on short-term increases in turnover.
Example: The opinion of the architect is a very important factor in influencing the choice made by the clients. However, architects do not buy building materials directly from the manufacturer. Sales people are obliged to deal with the target group opinion leaders. This approach, however, does not immediately affect the turnover.
On the contrary, turnover remains stagnant. In the management structure very few people seem really prepared to forfeit a couple of percent of revenue in the short-term, for a deal which is seen as significant in the long-term. The sales people become further penalised, as they have to make do with lower incomes.
Strategic selling, however, cannot, be achieved simply by introducing a turnover-related system of payment. It is necessary to include qualitative criticism for long-term success.
3. Overhauled sales structures
If a particular sales structure was chosen once - be it in connection with the division of a sales district or with the allocation of goods or clients - does not mean that it will be suitable in five years' time. Despite the possibility of resistance structural changes should not be avoided.
Example: A company, producing medical equipment, supplies doctors with specialist equipment. The sales-force canvasses medical students as future clients. Even though many young doctors later relocate from their place of study, their sales representative continues to look after them, as the sales representative is not prepared to give up a currently profitable client to a colleague, the sales organisation becomes increasingly inefficient.
The sales management makes a crucial mistake by not charging the students for the advice given to them by sales people. Taking into account the building of relations with potential clients when restructuring the sales department, it is important to introduce a system of payment.
4. Control instead of motivation
Some sales managers still do not think much of current methods of management and staff control. They firmly believe that their employees will only produce results under constant pressure and constantly watched.
Example: A producer of proprietary articles makes his sales people phone him at 8 am every morning. The sales people are then called back to check that they are not at home. You can imagine what sort of effect this daily “motivation push” has upon the sales person.
There has to be a certain degree of control. Sales people should feel that their reports are a source of support instead of being used as to keep them in check. It is essential to support your sales people, help them to solve their problems (by accompanying them on client visits, for example). Covered on any good management course is a great skill of any effective manager and that is mixing effective challenges and support.
5. Not making full use of innovations
The best way of profiling the company and of pulling ahead of the competition is technical innovations. These make clients and competitors aware of your top achievements and underline your technical competence. Many sales managers however, underestimate the importance of technical innovations.
Two mistakes which are frequently made:
By launching the new product at a very low introductory price rather than extoling the product’s benefits, consequently, fails to cause it to take the lead among the competition as a technical innovator.
The technical innovation has been ignored. The sales manager has left it up to the sales people to launch the new product, instead of presenting them with a concept and showing them what is involved.
6. A lack of openness
There is a blatant lack of openness in many firms. The sales manager hides behind formalities such as visit reports and turnover statistics.
On the other hand employees, would prefer to have regular meetings to discuss their problems, to explain structural changes in the market, to discuss mistakes involved in the launch of new products. The meetings could also be used for clarification of unclear positioning and for making suggestions on how to look after the market.
Are you guilty of making any of the above mistakes? If so, make a conscious effort to change your style of management. Your employees will be thankful, and so will you! Attending a good management course can also help you to develop effective management skills.
