One of the most difficult career transitions in business is the promotion from star sales executive to sales team manager. In fact, I am willing to bet that there is no step on the corporate career path littered with as many corporate corpses as this one.
It is the poster child for the Peter Principle, whereby a salesperson who consistently beats quota is taken out of the individual contributor role and put into a management position. This promotion path is typically fueled by the salesperson's ambition to move upwards and the higher-ups' desire to try to make every salesperson operate like this star performer.
Unfortunately, amazing salespeople often make terrible managers. On top of that, it's a well-kept secret that sales managers find it nearly impossible to make more money than a top-performing sales rep. As a result, we get terrible sales managers who are miserable because they are failing at their job for the first time in their career and being paid a pittance to do so.
So what should a newly promoted sales manager do in this difficult position? Well, I can tell you what I did, and how this helped me become the CEO of my company within two years.
About six years ago I was perfectly happy running strategy for a technology startup called Velocify when my boss tapped me on the shoulder and told me he'd like me to run sales. It was a little bit of what rugby players call a "hospital pass"--when you get the ball seconds before the opposing side hits you, making it more likely you'll end up in the hospital than scoring points.
Sales had been declining for more than a year and I think the CEO was a little desperate. I had served in sales-type roles before, but never had the word "sales" in my title and didn't know much about how to run a sales team. Here are the three things I focused on that led to fairly quick and significant success:
1. Data Rules, Instinct Doesn't
Velocify sells to sales teams, so I was able to see how a lot of sales teams operate. What I found was that a lot of good sales managers operate on instinct more than anything else. Because I'd never been an actual salesperson, I didn't have any muscle memory or instinct to go on. In retrospect, this was probably my greatest asset.
Instead of instinct, I had to rely on gathering a large amount of reliable data that I could then use to drive performance insights. We created a system based on key performance indicators (KPIs) that actually moved the needle in terms of conversions and focused the team on hitting those KPIs. For instance, we focused on speed to contact attempt and the relevant number of follow-ups rather than what I discovered were relatively worthless metrics, such as the number of call attempts made and talk time.
2. Eliminate Bad Egos
Salespeople generally have big egos. Some ego is good: it drives sales people to be competitive. Some ego is bad because it makes salespeople do silly things. After a couple of weeks of speaking with and observing my sales team and prospects, I realized there was a lot of bad ego at play.
At Velocify we sell to sales leaders. So we often had a double bad ego situation. My sales team saw it as a badge of honor to never give discounts on our product and our prospects saw getting a healthy discount as a necessity to move forward. It was impossible for either side to back down. Classic sales managers would have coached their teams to "sell value and maintain price." But I was a not a classic sales manager: I was a pragmatist. I told my team I was raising the list price in four weeks, after which they would be required to discount to the old prices and would need an exception from me to actually charge list price.
This had two outcomes. A lot of near term revenue was knocked free as prospects had a deadline before pricing went up and my sales team got into the swing of appropriate discounting. Ironically, today we have established a reputation whereby we almost never need to discount, but back then it was necessary and doing so gave us the shot in the arm we needed to get things moving.
3. Create a Sales Laboratory
I often refer to our sales team as "the lab." Once our sales started really humming, success was intoxicating, but I refused to get stuck in a rut.
I wanted my sales team to be an exemplar for our customers, to do things better than anyone had ever done them. So I tried new ideas continuously. My sales team frankly got a little bit weary of the constant change, but always monitoring the impact of each change we made to sales process or the rewards system enabled us to fine-tune our sales engine to run like the Ferrari of inside sales teams.
Unlike a conventional sales manager I don't think I even once told my salespeople what to say in a sales conversation; after all what did I know? I focused on the science of sales and not the art of the conversation.
In six months, we went from a significantly declining year-over-year new business conversion rate to a 30 percent increase. By the end of the first year, we increased sales by more than 40 percent and the following year sales were up more than 50 percent. It transformed the company and what we learned in the process continues to inform how we build software that is transforming the sales industry today.