Sales can be hard to manage, so it’s natural to want to hire a Head of Sales.
The issue is that hiring the best salesperson you know is unlikely to work. Why?
Let’s breakdown the real problem. Why is sales hard to manage?
Sales Performance Measurement
Managing performance can be difficult if you’re only measuring revenue. Revenue is a lagging indicator that tells you what happened months ago. If there’s a problem with revenue, it’s potentially months before you can fix it.
To measure performance and forecast you need to measure leading indicators of sales performance too. This can vary a bit between organisations, but often in B2B sales you can measure a few easy ones:
- Pipeline value
- Quoted value
- Deal Days
- Win Rate
- Gross Margin
At least this will give you an indication of what’s coming. If it takes you 30 days to close a deal and you win half of what you quote then if you’ve quoted $600k you are likely to win $300K in the next 30 days. Knowing your GM will enable you to track profitability before it happens. If that’s not enough you have time to do something about it.
Sales forecasting is too often down to salespeople to give an opinion on the likelihood of any given sale and under pressure they’ll likely be optimistic.
Sales Management
Selling is a verb. It’s a doing word and that means activity is important but most SME leaders and some corporates don’t know what their sales people are doing every day. If there’s little of the right activity, there’s little chance of getting the right results.
The key here is to demonstrate the value salespeople can get from managing their pipeline and associated tasks in a CRM. All too often the CRM conversation is focused on tracking and metrics rather than efficiency, bringing everyone more money. Everyone one hates a compliance burden, but when you give someone a performance hack it sparks a transformation.
You can’t manage what you can’t measure. If you can’t see and discuss the activities that are and aren’t happening then you’re flying blind. This is the stressful part that has business leaders hunting for a Head of Sales hire.
Salary and Commissions
There is little that is more demotivating for a salesperson to be fighting over commission payments due or otherwise. Sadly this happens a lot because the targets that trigger commissions are often not accurately measured, or the structure is not well documented.
Unrealistic targets and vague role descriptions are also common. The targets are often based on what cash is required for the business rather than a documented sales plan, backed by research that proves to all that the target is achievable and someone accountable and payable for it.
The most common issues that cause management and sales too much stress are poorly structured commission structures, unrealistic targets and poor performance measurement across the team.
CRM Set up and Adoption
Technology is the most powerful multiplier in sales. But the time to value is often too long for meaningful adoption until processes are documented and the CRM aligned to them. Many organisations are excited by AI but are not able to functionally use it in sales because you can’t automate something you don’t understand.
With a properly functioning sales system integrated with a CRM, performance measurement and management becomes a 30 minute a week proposition for a senior manager.
Without, everything from lead management, sales calls, discovery meetings, win rate, quoted value, deal days, win probability, sales insights and much more are left to chance or are guessed at.
Hiring & Retaining Salespeople
Salespeople are excellent at interview. That’s their superpower, their trade. That makes it hard for business owners and senior managers to cut through to determining whether they have the right candidate or not. What usually happens is the person who best fits the perception of what is required with the most experience gets the role. When the salesperson realises that there is little support of structure to sales in the organisation and accountability is lacking the good ones leave.
Like most things in sales you need to take a scientific approach and put in profiling systems that allow you to develop the role and set up for it and then hire the right fit for that role. Typically salespeople are hiring the new salespeople and often that means the decision is often a bit one sided on the rapport side. When business owners are hiring they tend to hire the more task driven people but they are often reluctant to talk with strangers. It’s critical that these biases are removed from the hiring process.
Sales Doer to Sales Leader
As with many professions the best salespeople become the managers, but rarely with the management training, or business process improvement skills required for a successful transition. It does not matter whether the new Head of Sales is promoted from inside or an external candidate, they are unlikely to have all the skill sets to do their job effectively without help.
It is likely that we will need a consultant to work with them to implement the sales system that is required to be successful at scaling the revenue and the team in the organisation. Developing sales processes that scale takes a particular skill set, as does ensuring that the processes are aligned with the technology, namely the CRM.
If you’re still reading, you will be familiar with the aspects that can make managing sales a challenge. This is why hiring a Head of Sales may not be the silver bullet you hoped in might be. Many of the articles written in trusted publications like HBR and others on this topic are from research on corporations that already have good scalable systems and processes. It is simply assumed that these things are in place. For the SME market they rarely are and the complexity of what’s involved is underestimated.
In summary I would simply recommend that if you hire a Head of Sales, put in a budget for a sales consultant too, to assist with the process improvement, change management and the alignment with technology.