Carmen Sandford, a sales manager from New Jersey, sent me an email in response to my post "Can Your Managers Manage the Sales Department," challenging my assertion that the way the sales function is managed is and will continue to change. Carmen's contention is that nothing has changed or will change in her company and they've been using a CRM program for going on two years. She believes that if my claim that this technology is changing the role of sales management her company would have begun experiencing such change by now.
She, of course, is hardly the only one who challenges my belief that technology will bring about a fundamental change in how managers manage and even what a manager is. In fact, I've been challenged by salespeople, sales managers, corporate executives, sales trainers, consultants, and even-to my surprise-by some product developers.
Nevertheless, to me it is more than obvious that sales management and the way the sales function is managed MUST change due to the introduction of CRM, SPM and SFA programs.
Until the introduction of computer technology, sales managers had little in terms of real metrics from which to manage their assets-both human and non-human. Of course they had call, pipeline and commission reports. They had the final sales numbers for their team and their individual salespeople-they made quota or they didn't.
But a great deal of what a manager bases decisions on is illusion. Call reports and pipeline reports are inflated with false data. Even with fully accurate reports, the amount of information from which to make decisions is limited. This set of data even when combined doesn't give much of an overall perspective of what is happening within the sales team and gives even less perspective on what is happening with an individual salesperson.
Metrics technology is beginning to change that. I do emphasize beginning.
Sales force metrics technology in many respects is in its infancy. Although there are dozens upon dozens of product choices on the market, those products go off in many different directions. Some products, such CRM are salesperson data entry based. The salesperson must enter a great deal of data to follow a lead, and the product typically doesn't follow the lead from initial contact throughout its life including details of sales, products, commissions, and the other sales related information a manager needs to be able to identify the needs and issues of a salesperson or the specific training and coaching issues an of a salesperson.
Other products are more automation based and do capture sales and product related data but there isn't uniformity within these products. Some are designed to control compensation management, which can be complicated in some instances, not to uncover individual salesperson or sales team activities and behaviors. Still other programs concentrate on building an overall customer or sales team profile for sales and marketing purposes. And, naturally, there are programs that focus on the metrics of individual salespeople.
To complicate the product mix, some products are standalone, such as CRM products; others must be integrated with a CRM program.
The array of products available creates a difficult decision for companies contemplating the purchase of a system:
• What needs to be monitored?
• What will the information be used for?
• Is it possible to accomplish the company's objectives completely or do they have to sacrifice? If they do, what?
• Are their managers prepared to utilize the information gathered? If not, how, when and by whom will they be trained?
As the industry matures, the functions and spread of data will increase. As they become more uniform in their objective (not necessarily in exactly what data they capture, but in objective), managers will be faced with more and more data they must use to help them manage their teams and the department's other assets.
In addition to having the issues above, systems are not immune to false data, of course. Salespeople must work within their CRM system. They can enter real data, false data, or no data. The program's usefulness and the reports it generates are only as valid as the data entered by the sales team. The more automated systems also rely on the data the salesperson enters into the CRM program. Consequently, the reports generated have the same potential deficiencies as the current reports a manager is getting in the form of call, pipeline and commission reports.
Nevertheless, since these programs are gathering a great deal more information, patterns, problems and new opportunities will emerge from the data. As the programs become better at picking up real data and eliminating the opportunities to skew reports with false data, the information gathered and the reports generated will become increasingly accurate.
One of the first roles of a sales manager is going to be monitoring the data entered. Working with their sales team members to insure the data is as accurate as possible will be on the front-line manager's back. He or she is going to be key to the performance of the program. Needless to say, data will never be 100% accurate-humans involved in the process, you know.
Yet, even with minimal monitoring today's programs are capable of generating a great deal of information that is more than accurate enough to make radical changes in a sales team and how the team is managed.
The current programs that generate metrics for individual salespeople payback the salesperson, the manager and company many fold if used correctly for coaching, mentoring and training. If analyzed correctly, the data generated can help identify not just general areas of activity and skill that need improvement but can identify very specific activities, behaviors and skills that if addressed properly can have immediate and dramatic impact on an individual's sales. Likewise, these programs can identify hidden markets, uncover new prospect profiles, competitor tendencies, and gaps and voids in the sales team's penetration and the company's marketing.
As this data becomes available, managers will increasingly become coaches and trainers. Their role will change from herder of the group to front-line training department. Yes, I know, that is supposed to be within the job description for most managers now. For the vast majority, that role is either ignored or only given token attention, not because they don't want to address it, but because they don't know how to address it. Metrics technology will change that, leaving them with the issue not what are the problems that need to be fixed but of how to fix the issues uncovered. That 'how' is going to be a tremendous challenge for most managers.
Likewise, as the technology mines more information about the local market, prospects vs. customers, and competitors, the traditional role of manager as front-line market analyzer will also come to forefront. Market and competitor analysis is another area many managers have been charged with in their job description that they have ignored, given only token attention to, or in many cases have not had sufficient information to perform. The vast amount of new, detailed information they are about to face will force them to take this aspect of their job seriously, and analyzing the data and making well-reasoned recommendations will become another major issue for them. Again, like coaching and training, it will be a significant challenge for the majority.
Finally, the financial management of the assets under their control will also become a major area of concern. Just as with coaching their team and analyzing their markets, controlling assets has likely been one of their responsibilities-but one whose ultimate outcome has often been left to chance. No longer. New technology will make asset allocation and return on investment far more transparent. Managers will have more responsibility and liability than ever before in this area. Managing dollars and assets by gut feeling or covering up misspent dollars and misallocated assets will become increasingly more difficult.
Metrics technology may not change the job description of sales managers, but it will change the role and function of managers. Their activities and decisions will become far more transparent to themselves, their sales team, and their managers. No longer will the final bottom-line of whether numbers were met or not be the only concern of managers. They will increasingly have to become full-fledged managers, managing rather than simply herding.
A corollary outcome will be a change in the way sales managers are compensated. As they move from being herders of the flock to being full managers, their compensation will become more broad based. Bonuses and commissions will no longer be based on the final sales numbers but will be tied to other aspects of their responsibilities.
And as these changes take place, companies will have to rethink who managers are and who they promote into management. The traditional practice of promoting top salespeople into management roles as a reward for sales performance will go the way of the dinosaur in successful companies. Management potential, analytical and problem solving abilities, the ability to coach and train will become overriding factors in the selection of sales managers, not whether their personal production numbers were high.
These changes won't be overnight and will vary from company to company, but change-radical change-is coming. Frankly, many managers won't make it. Many companies will struggle as they work through the process of change through trial and error (probably more error than success). It isn't likely to comfortable for the sales team, the management staff, or in the boardroom. But it is coming.
Tomorrow-why salespeople hate metrics technology and why CRM, SPM and SFA companies are selling the wrong people.
The Management Curve is a blog dedicated to discussion and debate about the impact sales metrics programs such as CRM, Sales Performance Management and Sales Force Automation Programs are having and will have on how the sales function is managed. Hosted by Paul McCord, the blog also features articles and commentary by other sales trainers, consultants, product developers, and the sales managers and salespeople who actually use the products.