Sunday, May 4, 2008

How to review a sales team

Sales teams thrive on a balance of structure and freedom. Enough structure that they know what they have to work with and what’s expected of them, enough freedom that they can be creative, run their own territory and make money.

I have found that taking a sales team through a territory review process a couple of times a year can help them, and help me, find that balance. I am on my way to New York tonight to participate in one of the team’s reviews tomorrow with my VP Sales, Todd Rudley.

The first thing that is important, before you can ask a sales person to walk you through his/her strategy and plan, is to be clear on who has what territory. At FirstRain we have defined over 30 territories in the US and Europe (we don’t sell in Asia yet). Every territory is defined by accounts (eg. US majors #1 has a list of named large accounts), by alphabet in a geography (eg. New York A-D), by assets under management (eg. SouthEast <$2B) or by pure geography (eg. Corporate West - a list of western states).

Some sales people have one territory, some have 2, depending on the richness of the territory today for our current products and on the experience of the sales person. By defining the structure now though we reduce confusion within sales today and as we grow.

So, on to the review itself. It’s a meeting where the sales person makes a presentation with his/her manager to us – to Todd, me and then if other execs are interested they are certainly welcome to join us and hear what’s happening first hand. The sales rep develops a presentation that covers:

- the territory and an overview of the total opportunity within it

- their quota and progress against quota year to date

- the current quarter’s campaigns – both strategy and tactics to develop and close

- the longer term campaigns that affect the latter part of the year (or the following year)

- their process for developing accounts – eg. if it’s a cold calling type of territory how many calls per day and what’s the conversion and closure rate?; if it’s a major account strategy how are they approaching development of the key relationships?

- their forecast

- what’s working for them with the product and marketing

- what’s not working – what additional help they need.

In my experience everyone will approach their presentation slightly differently, even if you give them the same structure, but by covering these topics we get a good feel for both how the sales person is doing (will they be successful or not on the path they’re on) and what additional resources and support they need to be successful (our job is to get them what they need – obviously).

It also gives sales management insight into their own forecast. Having gone through the reviews do they still believe their own forecast or not – would they change it? This is especially important for a small company where as CEO you need to be very on top of cash burn, as I have posted before.

Our new quarter started May 1 and I have 7 back-to-back reviews tomorrow, on the hour for 7 hours. Should be interesting…

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