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Southwest HVAC News Guest Column

How Proactive is Your Sales Manager?
 
An Interview with sales specialist Jim Pancero conducted by Stacy Ward, Managing Editor, FEDA News & Views, the voice of the Foodservice Equipment Distributors Association

Sit next to sales consultant Jim Pancero on a plane and be prepared to rethink everything you thought you knew about sales, particularly if you’re in management or have umpteen years invested in the profession. Veterans are a favorite target and since the majority of frequent fliers are in sales, reeling one in takes minimal effort and two questions: “How long have you been selling?” and “How much sales training have you had in the last 12 months?”

“What’s amazing,” says Pancero, “is no one ever says I haven’t had any training, which is oftentimes the case. Instead, they say ‘I’ve been selling for 15 years,” implying that experience somehow trumps training or altogether negates the need for it.

That’s a problem for a great number of sales organizations, according to Pancero, who’s been involved in selling in one form or another for more than 40 years, earlier in his career as a top salesperson for IBM before opening his own training and consulting firm in 1982. Since then, he’s worked with more than 500 companies across industry lines and believes that one of the biggest challenges many sales teams face is overcoming the assumption that “experienced equals trained,” a sales management philosophy he says often dictates how sales managers lead their teams and ultimately determines their effectiveness in helping their companies become more profitable.

“With experienced equals trained, the assumption is if I have an experienced sales team, I don’t need a strong sales manager, and my people don’t need coaching” says Pancero, a recent speaker at the 2012 FEDA Convention. And by “strong,” he means “proactive or process-selling” managers, not “reactive transactional” sales managers—the two categories he uses to divvy up the skill sets and management styles of sales managers. Reactive transactional managers spend most of their time on maintenance and sales support, says Pancero, while the focus of proactive managers is the development of their sales reps and selling processes through leadership and coaching. One guess as to where he thinks most sales managers fall?

“Sales management is one of the weakest areas in the sales channel because the way the position is structured,” says the sales consultant. “That’s why I believe it’s also the competitive edge for most companies because there is so little proactive management across industry lines.”

Recently, News & Views sat down with Pancero to discuss the role of sales management in distribution and the sales philosophies he believes is sabotaging the efforts of most sales managers. Also included below are practical steps to help move your sales organization toward a more proactive approach to sales management.

Q: Jim, let’s start with the “Sales Managers Survey” FEDA emailed to its members at the beginning of the summer. What general observations did you take away from it?
A: Like most sales managers, the overwhelming majority of those surveyed spend their time on paperwork and problem solving. You’ll note that when you look at the list of responsibilities for a sales manager—budgeting, paperwork, customer service calls, personal selling and even hiring and firing—most tend to be reactive responsibilities and demand a great deal of time. The only proactive thing on that list is future-focused coaching and it has to be initiated. Less than 10 percent of those surveyed engage in future-focused coaching, and one of the reasons has to do with the number of salespeople they carry. Thirty five percent of survey participants carry 10 or more salespeople. Most sales managers have so many other things demanding their time they do not have time to be proactive.

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Q: Before we get into specifics about key terms like future-focused coaching, I’d like to talk about the role of sales management and how it’s perceived. What does that list of responsibilities say about how most sales organizations view the role of a sales manager? Secondly, what outside forces, thoughts, assumptions, etc., have helped to shape those perceptions over the years?

A: We have to step back and take a look at how sales and sales management evolved. Over the last 20 years, there has not been a lot of structure in selling, or what I call a predefined or multistep approach to sales. Instead, the focus has been on building relationships. Every salesperson has a unique sales approach and that approach even varies from customer to customer. It’s that painter vs. printer philosophy. Painters believe every customer is unique, every selling opportunity requires a different approach and what worked to win one customer will most likely not help them to win the next. Printers follow a consistent multistep selling process, developed by lessons learned from previous sales. Painters view selling as intuitive art, not needing nor requiring any consistent selling structures. So because most sales organizations are filled with painters, they do not see the value in having an involved sales manager, or having a great deal of structure in the selling process to move the needle forward.

Secondly, the assumption of “experienced equals trained” also has greatly influenced how the role of a sales manager is perceived within a company. Companies with experienced salespeople assume those salespeople do not need training, so the assumption is there’s nothing the manager can do except handle reactive responsibilities—special pricing, problem-solving, etc. Therefore, they do not see sales managers in a leadership, directional role; they see them in a maintenance and management role.

Another important point is that companies also assume their sales managers do not need any sales management training because they’ve been a successful salesperson. But the reality is that the job of a sales manager is one of the toughest in any company. Most businesses take their best salesperson, an expert doer, and promote them into sales management. Then, without any kind of training, that new sales manager has to figure out how to shift from personally doing everything to being a manager whose primary role should be to guide, coach and lead others to do what needs to be done.

Because of this thinking, a couple of things have evolved. No. 1, sales managers are required to carry territories. When I ask owners why they have their salespeople carry territories, they say that’s the only way they can justify their salaries, which means they do not put any value into a manager’s role as a coach.

Q: What’s the problem with carrying territories? Are there ever instances in which it makes sense?

A: As a rule of thumb, if there are three or less sales reps reporting to a manager, a manager will probably carry territory because unless the reps are new or it’s a unique situation, managing three reps is not a full-time job.

Q: You also noted that most sales managers have too many reps. What’s an appropriate ratio?

A: Ten to one for experienced sales pros is most likely a max per sales manager. However, if you’re adding new salespeople (new to selling, not just your company), then more than six outside reps reporting to a sales manager will push that sales manager back into the reactive transactional sales management role. Having said that, it’s not a finite number as much as it’s a variable scale, and the two ends are reactive and proactive. The more time that is taken up by other efforts—whether those efforts be a sales manager carrying their own accounts or other responsibilities—the more overwhelmed and less proactive that manager becomes. I’ve seen sales managers in charge of purchasing or something else that has nothing to do with sales.

Questions Your Sales Manager Should be Asking

Q: Can you give me an example that illustrates the difference between transactional and proactive management?

A: When a salesperson comes into a sales manager’s office, the transactional manager only asks two kinds of questions—what and who questions. “What do you have that you’re going to close?” and “Who’s it going to be working with next?” Both deal with issues in range and final efforts after the proposal has been initiated.

A proactive or selling-process manager moves up stream and gets involved earlier in the process by asking selling-process questions, or how and why questions. How are you going to sell that account? Why are you doing it that way? Their goal is to impact the sale earlier in the process, so they can improve the results at the end of the process.

If you don’t do a good job communicating all of your value and uniqueness fairly early in the selling process, and the sales manager only gets involved after the proposal has been issued, the only issue left to deal with is price. At that point, it’s too late to talk about value differentials. It’s the first 20 percent of the selling process that really determines your competitive differential and the value perceptions of your customer compared to the competition. That’s why it’s important for the sales manager to get involved before the proposal is issued.

A sales manager who says my door is always open, is a reactive manager because the assumption is the salesperson has enough vision to know when he or she is in trouble. The problem is most sales reps don’t know they’re in trouble until they’ve lost the sale, so I often suggest to sales managers to ask their reps to be prepared to discuss specific accounts during weekly meetings. And the kind of things they should be talking about is future plans. What multiple moves are they thinking about implementing down the line? What are they trying to accomplish? Are they calling on the right people? How are they getting higher, wider and deeper? Higher says you’re getting to the person that’s the decision maker. Wider says are you getting to the influencers that might be outside of the department, and deeper says are you talking to a customer’s frontline. What are the challenges they’re facing and how can your product or service help them? There are a lot of salespeople working very hard on the wrong things.

Q: There’s another great example you often give regarding the difference between how a proactive manager and a transactional manager handle a crisis. You use it to talk about the terms future-focused and history-focused.

A: Yes. If a salesperson walks into your office and says there’s a problem with the Johnson account, your first question will be what happened. That’s a history-focused question. Your next question will be a today-focused question: “How are you going to solve the problem?” It’s a third future-focused question that most managers do not ask: “How do we prevent this from happening again?” or “How many other accounts do you have exposed like this?” or “Why did this surprise you?” or “What kind of different information controls do we need to put in place?”

Q: And again, these questions are often not pursued because of time challenges or reactive overload?
A: In some instances, there’s just a lack of awareness. I would guess over 98 percent of the sales managers I have seen have never been through sales management training because when they’re promoted, the assumption is experienced equals trained.

The One Hour Sales Training Meeting

Q: If you’re an owner, how do you measure your sales manager’s performance in terms of proactive vs. transactional?

A: It’s a tipping point that tends to consistently move the needle toward more revenues or profitability. Your sales manager should be spending at least one hour a week with every sales rep (one-on-one). It can either be on the telephone or face to face.

Q: One hour seems like a lot of time. Can you give me an example of what that call would entail?

A: Whenever I cover this with a sales management team, that’s always the first question I get. I’ll give it to you in six 10-minute segments.
The First 10 Minutes: Start with an open-ended overview question. What’s going on in your territory?

Second 10 Minutes: What crisis or fires are you dealing with right now? These first two topics are the ones that every sales rep is going to want to talk about, so get them out of the way.

Third, Fourth and Fifth 10 Minutes: Have your sales rep pick three different accounts and spend 10 minutes talking about what their plans are and where they’re going with each account.

The Final 10 Minutes: Summarize what’s been talked about and review the action plans that everybody has agreed to.

If you do this the right way, it will be very difficult to get this done under an hour. By the way, this does not only apply to the sales manager and the sales rep. The manager of the sales manager should be spending at least two hours a month reviewing all of the notes that the sales manager gathered during his coaching sessions. Sit down and discuss where they’re going with the reps and offer help as to what the sales manager can do to better assist their reps. This not only encourages accountability, it also ensures the owner has a clear understanding of what their sales reps are doing.

Q: I’d like to try something different for the next round of questions. I noticed that during your presentation and in many of your “You Can Always Sell More” articles, you have a few key phrases you often use to explain the nuisances of proactive sales management. One of them is “working on results instead of the sales process” and another is “stop letting your salesperson off the hook.” How do they fit into your overall philosophy that any salesperson can sell more by being proactive?

Working on Results Instead of the Sales Process

A: If you only focus your attention on the results discussion, you’ll lose a lot of sales at the beginning of the process that are not savable unless you dramatically cut your price, which significantly reduces your profitability. This goes back to my earlier comments about communicating value. Proactive sales management really relates to higher profitability because the more value that’s communicated or set up in the beginning of the sales process, and the more people that understand what your value proposition is and how it differs from the competition’s, the more willing the customer is to look beyond price. Even though they know you’re higher, they see your value and the lower total cost.

This is what all of the coaching and the sales efforts are about—that one moment when the customer questions your price. You may have to give a little bit of a concession, but you don’t have to match your competitor’s price. The major challenge of selling is that customers tend to assume that multiple vendors from the same industry have equivalent features, so the job a sales rep really becomes to educate the buyer on what the differences are and how one is more relevant or applicable over another.

Stop Letting Your Salespeople Off the Hook

A: Price is not the primary determinant in your industry; the difference in value is the primary determinant. In other words, if the customer does not see value, they will buy the cheapest price. So if the sales rep comes in and says, “we lost the Johnson account because our price is too high,” what they’re saying is they didn’t do their job as a sales rep.

I teach sales managers to never again accept “we lost because our price is too high.” It’s not the reason you lost, it’s a symptom. You lost because the customer didn’t see enough value and the symptom is that’s why they beat you up on price.
By agreeing that price was the reason for the loss, the sales rep doesn’t have to change anything or consider what else they could have done. Why didn’t they see more value or why didn’t the salesperson walk away sooner once they realized they were dealing with a price buyer? If you don’t hold them accountable for the sale, you’re missing out on a proactive opportunity to coach: “What could you have done differently?” and “What can we do differently the next time?”

Becoming More Proactive: Steps to Get You Started

Q: Ultimately, though, if change is going to occur, it seems to me that it not only has to be systematic but companywide. What steps can a company take as a whole to help their sales managers become more proactive?

A: Let’s break this down into three parts: action steps for the owner, the sales manager and the rep:

For the Owner: Evaluate where your sales manager spends their time. How much and how frequently are sales reps receiving coaching help? Another question is how much coaching help is the sales manager getting—other than just transactional discussions? It’s also important that the owner speak makes the sales manager accountable. Speak with him or her and make sure they understand the important role of coaching, but don’t just stop there. Consider how you can help the sales manager free up more time for future-focused coaching. Look at getting a junior person involved in some of the major accounts to handle some of the paperwork and the smaller details.

For the Sales Rep: It’s about proactively going to your sales manager and asking for help. Ask him or her to walk you through your most important accounts and look for ways to improve. About 80 percent of what a reactive and proactive salesperson will do and say will be identical. It’s that additional question or the extra moves to set up the next discussion that sets them apart. Being proactive is like playing pool, where you don’t just shoot the ball that’s easiest to put in the hole. You have to think about running the whole table and all of the moves it will take to clear it.

For the Sales Manager: Add a proactive coaching function to every phone call with a sales rep. For example, end your calls with one final question: “What are you doing with this account?” or “What’s the next opportunity do you have coming up?” It doesn’t have to be separate meetings; it can be five minutes at the end of a transactional conversation that can add more future-focused opportunities.
As far as time, I’ve worked with a lot of sales managers who use their drive to work as a coaching opportunity. Or, you may need to schedule coaching time first thing in the morning and you can meet with a different rep each day. If you wait and try to fit it in with your schedule, it won’t happen.

Q: What is your response to those who are content with business as usual and seem to be doing fine without restructuring the sales process?

A: A sales organization will still achieve a certain level of sales if they only have order takers or their reps choose to deal with existing customers and not prospect, or do not bring new ideas to the customer. Even with that level of effort they can still generate some sales. The only question becomes is that satisfactory to you as an owner. Is that enough sales to keep you satisfied? The answer overwhelmingly is always no.

The Anatomy of a Sale

When a customer buys, there are four steps. First, they have to identify a problem and decide it’s worthwhile fixing. Secondly, they must identify the specific solutions, products or services they feel will generate the most effective or loss-risk solution. Next, the select a vendor they want to use or trust to help them fix the problem. The final step, of course, is the purchase or commitment.

Reactive selling waits for the customer to do the first three steps on their own and is trusting the relationship is so strong that they will be the first choice when the customer is ready to take action. A proactive salesperson, on the other hand, doesn’t trust in the odds and begins moving up stream in the steps, much earlier in the process, to see if he/she can create an interest in the customer by identifying problems, providing alternative solutions or by showing why they’re the best vendor to meet the customer’s needs.

It’s the sales manager’s job to find out where the rep is in this process. Is the salesperson moving up stream or focusing on Step 4? The further up those four steps you move, the less competitive pressure you’re going to have when it’s time for the customer to make the final decision.

About Jim Pancero

Sales advisor Jim Pancero has the most advanced, leading-​edge “business-​to-​business” sales and sales man­age­ment train­ing avail­able today. Everything he does is exten­sively researched and has one bot­tom line focus…to increase an organization’s strate­gic com­pet­i­tive advan­tage and mar­ket uniqueness.

For more information visit http://www.pancero.com/


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