Sales & Marketing Management - Managing Right for the 21st Century

May, 2006

Sales & Marketing Management

By Fred Gebhart

Today's sales and marketing managers are hiring and supervising teams that span multiple generations with radically different ideas about work, worth, and time. Resources are tight, and management is being held to ever-higher performance goals at all levels. And employees are better educated and informed than ever before. That gives them the potential to become better performers, but it also makes them more demanding.

"The challenge today is management versus leadership," says consultant Don McNamara, president of Heritage Associates, based in Laguna Niguel, California, and author of Visionary Sales Leadership. "Managers implement policy, leaders make things happen. Too many sales and marketing managers—even senior executives—are making day-to-day tactical decisions and not paying enough attention to strategic direction. They know they have to increase profits over last quarter, but they don't allow themselves the time to analyze and chart the course that will take them there."

Generational differences are one of the thorniest workplace issues for many organizations. Managers today have to appeal to three, sometimes four different generations of employees and senior executives, says Joe Fisher, consulting network director for Human Synergistics International, in Detroit.

In some organizations, baby boomers are managing sales and marketing reps who could be their children (aka Generation X), and grandchildren (aka Generation Y). Other firms have Gen Xers managing boomers and Yers. A few firms have veterans at the helm, workers who predate World War II.

"You have to appeal to different sets of values without alienating equally valuable people from a different generation," Fisher says. "A fifty-year-old may be all about income. A thirty-year-old might prefer to work for less money and make significant contributions to the team. Just realizing there are differences makes it easier to communicate and to motivate."

Typically the world is all about hard work and loyalty for those oldest workers, most often top-level executives, who were born before 1945. Baby boomers, born roughly between 1946 and 1963, manage their lives for profit and status; boomers are the generation that gave us 60-hour workweeks and 24/7 availability to maximize work time and income.

Gen Xers, born roughly between 1963 to 1980, are willing to work hard, but demand balance between work and personal life. Gen Y, sometimes called Nexters, were born after 1980 and want to make a difference in the world. They expect reasons for everything they do, not marching orders.

"Generational differences are a huge factor in managing teams today," says Dianne Durkin, president of training and consulting firm The Loyalty Factor, based in Portsmouth, New Hampshire, and author of The Loyalty Advantage. "The older generation thought nothing of coming in to work at five a.m. The younger generation doesn't think much of it, period, and you have to motivate them all to work together effectively."

THE REALITY OF CHANGE

In a sense, managing and motivating sales and marketing teams hasn't really changed, says Ronald Put, vice president of sales for Aldon Computer Group, a software supplier based in Emeryville, California. Effective management still comes down to hiring the right people, training them, motivating them, and pushing out low performers. What has changed is that one management style no longer fits all.

"In the last three years, I have hired sales reps ranging in age from twenty-three all the way to sixty-eight," Put says. "My youngest guy can't even rent a car yet, but he's an awesome seller. My best inside sales rep has so much hardware hanging from her facial piercings that I don't know how she can enunciate clearly. But she is one of the best telephone closers I have ever seen. The key is working with every one of them as individuals. My job is helping each one achieve what is important to them personally, so we can all achieve the team goals."

Does it make sense to cater to individual employees? Absolutely, Put says. In three years as vice president of sales, he has quadrupled Aldon's revenues while retaining 60 percent of the original sales team. What has changed is management techniques, and it is the managers who must watch closely the true effectiveness of their salespeople.

Aldon brought in consulting firm Adventace to help boost sales and revenue. Like most consultants, Adventace, based in Gibsonia, Pennsylvania, has a proprietary method, in this case the High Performance Sales Environment, which simply entails measuring performance, says CEO Bob Junke.

"There is a key metric that addresses a pandemic problem," Junke says. "Too many sales reps are trying to sell to people who don't actually have the authority to buy."

Junke calls it "selling above the power line." People above the power line, the "A" group, have the authority to buy. Those below the power line, the "B" group, may influence the purchase decision but cannot give final approval.

The A:B ratio, he says, is a direct predictor of sales success. The typical sales rep calls on one A prospect for every six B prospects, compared with high performers who have a much more effective 2:1 A-to-B contact ratio. Best-in-class sales reps are calling on six to 11 A prospects for every B prospect.

"If your team is in that typical one-to-six ratio, your people are spending eighty percent of their time selling to people who can't buy even if they want to," Junke says. "How productive can they possibly be? How effective are you as a sales manager if you let them continue that less-productive pattern?"

MANAGING RESOURCES

Stan Martin, CEO and founder of Adroit Consulting based in Northbrook, Illinois, offers a similar conclusion with a different solution. For Martin, the key to boosting sales is to spend more time selling. Every hour a sales rep spends on service or tech support is an hour wasted.

"If the title says sales rep, you should be out there selling," Martin says. "Service and tech support are different functions that are best served by different skills. If you take away those nonselling activities from your selling team members, they have fewer things to distract them. They have more time to be more productive and to meet higher sales targets. You can achieve higher revenue with the same sales force by giving them more time to sell."

The tradeoff is increasing service and tech support staff. That's a great bargain, Martin explains, because service and tech support is typically a cheaper resource than sales reps. Substituting a less-expensive resource helps ensure that revenue grows faster than expenses.

"In today's economy, it is a matter of taking the same resources and putting them to more effective use," he says. "The net-net is a lower cost of sales and service on higher revenue. That's what any CEO would call more effective management."

Quint Studer, CEO of Studer Group, in Gulf Breeze, Florida, and author of Hardwiring Excellence: Purpose, Worthwhile Work, Making a Difference, offers a new take on the familiar 80-20 rule. True, 20 percent of any sales or marketing team will produce 80 percent of the team results. But it is equally true that the top 20 percent can and want to work independently. All this distracts most managers from the potential of their ordinary performers.

"We lose real potential by not developing these middle performers," Studer says. "Middle performers can really benefit from coaching and special attention. They offer your greatest potential for improvement."

And the low-end performers? Encourage them to move on, Studer says.

"I have to ask myself if I am working harder at the low-performers' success than they are," he says. "If the answer is yes, it is time to act. Low performers tend to suck energy from others, slowing the entire group."

GAUGING SUCCESS

It's easy for an outsider to read the signs of success—or failure—in a sales and marketing team. Like love, you'll know it when you see it.

"When you check into a hotel, how long does it really take you to get a sense of the operation?" asks David Ulrich, professor of business administration at the Ross School of Business at the University of Michigan, in Ann Arbor. "By the time you've met and dealt with the bell person, the front desk, and two or three others, you've got a pretty good idea of how the staff is treated, how they treat each other, and how they treat customers."

Ulrich sees corporate leadership as a brand. If the product brand that attracts and keeps customers matches and reinforces a management brand that attracts and keeps employees, the company is on a fast track to success. Think Horst Schulze's "ladies and gentlemen serving ladies and gentlemen" encapsulation of the approach taken by luxury-oriented Ritz-Carlton Hotels, which he founded. The company rocketed to stardom and buyout because the internal and external brands worked together.

"An outsider can assess a sales or marketing operation just as effectively," Ulrich says. "You can see the culture, the morality, and the morale within the first hour. Gut feeling isn't quantifiable, but it is absolutely legitimate."

Signs You Are Failing as a Manager

It's easy enough to trust your gut feeling about somebody else's sales or marketing operation, but how sharp is your instinctive evaluation of your own group? Probably not sharp enough to bet your career on.

Forget about sales goals, revenue targets, and lead-generation ratios for now. Those are trailing indicators, showing how things went during the last reporting period. Our red flags are leading indicators of trouble ahead. Here is Sales & Marketing Management's dozen warning signs that you are failing as a manager:

1. Team members stop greeting you in the morning, or don't come into your office as often as they used to. When communication starts breaking down, performance slumps.

2. Your boss stops greeting you in the morning. You may be the problem or it could be somebody else, but your job is on the line if you don't get the boss talking again. Your team knows it, too.

3. People in the office are looking glum, bored, or lifeless for no obvious reason. Bad weather or a bad quarter can throw any office into the doldrums, but if people seem depressed without cause, performance is flagging.

4. Sales and marketing reps aren't coming up with as many new clients, opportunities, and ideas as they used to. A successful team generates so many new possibilities that the manager's concern is focusing on the best ones.

5. The cost of sales is rising faster than revenue growth. At worst, you're headed for an ocean of red ink as costs swamp sales. At best, you'll be explaining a drop in productivity.

6. No one has called you on a bad, or even borderline, decision recently. Every manager makes mistakes, but only bad managers build teams that insulate them from criticism.

7. Sales or lead-generation reports show spikes at the end of each of the last three quarters. Minor blips in both sales and marketing are normal, but spikes of 20 percent or more above baseline numbers at the end of every reporting period means the team is either slacking off most of the time and scrambling to make up, or cheating outright.

8. You notice outdated information on department bulletin boards. You can't expect team members to do the right thing if they don't have current information. If people are used to discounting memos and directives because they are usually outdated, they're probably ignoring current information, too.

9. Performance evaluations are late. Everybody recognizes that there are more tasks than time, but letting evaluations slip tells employees that they are at the bottom of the pile. If the boss doesn't care about performance, why should they?

10. You are sending and getting a steady stream of notes, e-mails, and other informal communications instead of seeing people in person.

11. Confidantes (administrative assistants are great sources) tell you that some team members think you can't be trusted or have a personal agenda. People act as though their perceptions are real, so even if you don't have a personal agenda, team members who think you do will react badly. You have to re-establish trust in a hurry!

12. You're worried about losing your job. Every sales and marketing job is temporary; you knew that from the outset. But if you're constantly worried about losing yours, the distraction will degrade your performance even more. It's time to move on. —F.G.