Sales is a results driven business, there is no way around that. Salespeople’s performance is often measured under a microscope every month, quarter, and year. Applauded when they surpass goals and criticized when they fall short, it’s easy to measure the performance of a salesperson. Go one step above them though, and things get a little more tricky.
Many companies have a hard time measuring the performance of a sales manager. Sales managers are in charge of providing the team guidance, coaching, mentoring, and helping build plans to meet quotas. It can be quite tricky to calculate how well someone is actually doing this.
Many companies resort to measuring sales managers based on total team sales results. While this seems to make sense, it only really reflects on the sales manager if the entire team is struggling. Typically, what happens is you will have some over achievers, some people right on par, and then a few stragglers. The blame always ends up falling on the stragglers for underperforming and the sales manager dodges any accountability.
So how can you make sure you are holding your sales manager accountable? What are the best things to look at in order to assess the effectiveness?
Amount of time spent coaching
One of the most crucial parts of a sales manager’s job is coaching. It is important to look at how much time a sales manager spends coaching their team. Is it all impromptu coaching when somebody asks for help? Or is time being set apart each week specifically to help mentor reps? The amount of time spent coaching reps coupled with those reps success is a great way to measure a sales manager’s effectiveness.
How quickly new hires adjust
Another key part of a sales manager’s job is to get new hires up to speed quickly. Look at how long it takes new salespeople to become productive. How many months does it take them to reach their first quota? If hire after hire is struggling to adjust quickly this is a very poor reflection of your sales manager. Vice versa, if new salespeople come in and quickly start meeting company goals, your manager is doing a great job.
Depending on the industry, being able to keep clients is arguably more important than being able to acquire new ones. What is your sales team’s churn rate? How often are they losing current clients? It is up to sales managers to make sure that the company is not losing customers. If a salesperson is mishandling the renewal of a client’s contract, the sales manager needs to be able to parachute in and right any problems. Churn rate is a great metric to measure how effective your sales manager is at overseeing the continuation of deals.
What is the turnover rate of your sales team? Great sales managers should have low turnover rates, and salespeople should want to work for their boss. How great is your sales manager at hiring and keeping exceptional salespeople? This is something that turnover rate can help you figure out. The Gallup studies tells us that the number one reason employees leave companies is because of their manager.
Sometimes the best way to figure out how a sales manager is doing is just to ask around. Sales managers are supposed to be great coaches and mentors to their reps. Ask salespeople how they feel about their manager.
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