Identify and Correct Sales Performance Problems

We have all known salespeople who have gotten into a sales slump. It happens to companies too. We’ve all been there, but we need to know what to do about it. It is easy to identify a salesperson who is having difficulty or when an organization’s sales are down, but it is much more difficult to correct the problem and energize performance.

Managers must understand the difference between a temporary period of low sales and a true performance problem. This is difficult, because the peaks and valleys of seasonal sales and long sales cycles may camouflage the problem.

Typically, managers try to improve sales by taking two approaches.

            - First, they may take a hands‑off approach, hoping that the salesperson will resolve the problem on his or her own or that the company’s sales will simply rebound soon.

            - The second approach involves encouraging a salesperson to keep a positive attitude. Many sales managers try pep talks to the sales team and other quick fixes. Neither approach provides long‑term results.

The first step in solving a sales performance problem is to identify the root causes of the problem. It is important not to focus solely on the symptoms. Regardless of whether there is an individual or group performance problem, effective sales management techniques will increase sales and improve results. Let’s examine what causes performance problems and how to resolve them.

While individual performance problems are triggered by a variety of situations, the root causes can be traced to two key areas: poor sales call quality or low sales call quantity. Any deficit in the quality or quantity of sales calls will eventually result in lowered performance. Quality is evidenced by factors such as how well the salesperson develops rapport, uncovers customers’ needs, relates the benefits of products or services to meet needs, and closes for commitment. Sales call quantity, or activity level, is evidenced by activities such as presentations or proposals. Observe the salesperson’s skill and effectiveness at each step of the sales cycle to determine the quantity and quality of sales calls.

By identifying key activities such as prospect qualification, system design, proposal, and Aclosing@ calls, prospects can be tracked through the sales cycle to a close. Monitor the effectiveness of a salesperson in moving the prospect to the next step of the sales cycle.

For example, by determining the number of prospects needed to generate a proposal and the number of proposals needed to get one closed order, a success ratio for each step of the sales cycle can be calculated. These ratios allow the salesperson or manager to define the activity level needed to create and sustain the desired performance level.

Be aware of changes in an individual or group’s success ratio. For example, if it typically takes three proposals to get an order closed and the number has recently increased to five, the situation should be examined more closely to determine whether a problem exists. Again, to resolve the problem, look for the root cause, not just the symptom.

By comparing activity levels and success ratios to previous results and possibly other salespeople, performance problems can be identified. By ensuring that the quality and quantity of sales calls are sufficient, a salesperson’s performance problem can be corrected. Even adequate or good performance can be increased by improving the quality and quantity of the salesperson’s interaction with the customer.

Organizations as a whole can also experience sales performance problems. In many cases, the symptoms camouflage the real problem. It is essential that an organization examine current sales transactions. Look for trends or changes compared to past performance. Is order dollar volume declining? Is gross profit shrinking? Is your organization selling to different customers? It is important to know if your product or customer base is shifting. Examine the product mix of orders. Are enough high margin products and services included to offset price‑sensitive ones? Are you losing profit by underestimating or undervaluing service or support? These are the kinds of questions that have to be answered before you can determine the true nature of an organization’s sales performance problem.

When sales begin slipping, the speed and accuracy with which a manager addresses the problem is a critical factor in restoring high sales performance. Effective sales management pays dividends and produces results. Take time now to examine the quality and quantity of your sales management actions. Are they sufficient to ensure salespeople have excellent quality sales calls and a high level of sales activity?