One of the most important pillar of building a high performing sales team, is the performance of your sales managers. So, how do you evaluate the performance of a sales manager?
If your organization is like most of the sales organizations, the answer is very simple – Does he hit his sales quota?
Sales organizations function like a clear top-down organization. The sales VP or CSO or whatever he is called gets a quota (based on the CEO’s commitment to the stock market or to the board members and investors), say $100 Million.
He then adds a cushioning factor and distributes this to his direct reports. Lets say he has 4 direct reports – the total sales quota for these reports add up to $110 Million. They then distribute this among their direct reports with a cushion added to their quotas. You get the drift.
However, the question is, if this is the best that we can do? Also, does this improve the effectiveness of the sales organisation or undermines it? Does it truly measure the sales managers effectiveness on what they are supposed to do?
In my opinion, this is not the right way to measure the sales managers success.
Because, sales quotas should be the measure of success or failure only for those who actually go out and sell for a living.
The role of a sales manager is to enable his team to exceed their sales quotas. The key word there is – ENABLE.
The primary responsibility of a sales manager should be the following:
- Recruit well.
- Ensures that they are become productive quickly
- He needs to monitor their effort, attitude and performance.
- He needs to coach his team as per each individuals requirement.
- Reinforce positive behaviours and discourage non-positive behaviours.
- Needs to help/coach each one of his sales executives to exceed their sales quotas
So, if they are responsible for the above, how should they be evaluated?
In my opinion, a sales managers success could be measured by:
- Has everyone in his team exceeded their sales quota?
- As they say, the strength of any team is equal to the strength of its weakest link. Who in his team is the weakest performer and by how much in comparison to his quota or the team? This should have a bearing on the sales managers evaluation.
This also means that all the managers of the sales managers should also be evaluated using similar metrics.
One drawback of this model is that this could tempt the sales managers to set low sales quotas for all their sales executives to ensure that they all over-achieve their quotas and hence the sales managers get good evaluations. The counter-balance here is for the CEO to achieve by setting the bar high for the sales organization quarter after quarter.