Facebook Twitter LinkedIn

Managing Sales Performance

Originally published: 12.01.07 by Tom Piscitelli

Setting a goal and creating a plan for achieving it and not reviewing performance regularly is like setting out for a road trip without ever looking at the route you mapped out. Maybe you’ll get there — maybe you won’t.

Can an owner or sales manager count on the salesperson to keep track of performance and make the necessary adjustments to ensure goals are reached? My experience says this doesn’t happen very often.

It’s a sales manager’s job to “manage.” That includes reviewing performance, giving appropriate feedback, creating an action plan for performance improvement when necessary and routinely repeating this process to ensure success.

Selling The Performance Review 

Tell your salesperson that you’d like to go over his results from the past few months and he’ll suddenly remember he needs to go help the installers on a job he just sold. While you are constantly encouraging him to get out of the office, this is one of those times you want him to stay.

Unless your team members have worked for a large company, it’s unlikely they have ever had a performance review. If they have, I doubt that it was a positive and constructive experience. It should be both.

And unless you’ve worked for

a large company, it’s equally unlikely you’ve ever given a performance review.

It’s important for everyone to see the benefits in doing this. The manager will have the opportunity to review the sales data with the salesperson. The facts don’t lie. This will put everyone on the same page and have everyone speaking the same language regarding sales performance and improvement.

If you haven’t done this as a manager, trust me when I say you will find relief and comfort in really understanding what is happening with all the expensive leads you are handing to the salesperson. You may not like the results he’s getting, but you will know where you are and you can start working on getting better results.

This exercise will produce even more benefits for the salesperson, although he may be reluctant to see them at first. Some sales people see management as a roadblock. However, I’ve never met an owner or sales manager who wasn’t in favor of his salesperson making a sale. The first point to get across is that you want them to be very successful and earn a lot of money — even more than you at times. Once this understanding is established, the performance review can accurately be described as a time for the salesperson to explain what is working and what needs to be improved. The sales manager should encourage openness and embrace suggestions even if they are a little off the wall. With the conditions set, the salesperson will come to see the performance review as a time to be recognized for good performance and a time to get support for even better performance.

What Should Be Measured And Reviewed? 

Last month I said a goal must be measurable, timed and written. And each goal must have a supporting strategy, or statement, of “how” the goal will be reached. Finally, each strategy will have a supporting plan that includes the details on what will actually be done. All of these should be reviewed, discussed and revised if necessary. If you’re unclear about what these are and how they are connected, please review Setting Sales Goals, November 2007. Also visit the Download Center to view Sales Goals Performance Evaluation, November 2007.

Here are key sales performance measurements: 

  • Annual sales goal 
  • Year-to-date (YTD) progress against the annual goal 
  • Monthly sales goals and monthly results 
  • Monthly gross-profit-margin results 
  • Monthly leads goal and actual by the sales person 
  • Monthly goal and actual by the salesperson
  • Monthly close rate (number of leads given divided by number of sales closed)
  • Monthly close rate by source of lead
  • Monthly sales per lead (monthly sales divided by the number of leads)
  • Salesperson’s monthly and annual income

Conducting The Performance Review

Given that measurements are done monthly, there should be monthly performancereviews. Don’t panic — once the reviewing process basics are established, this will be an efficient meeting typically lasting no more than one hour. Certainly any manager can invest one hour a month in making sure that the salesperson is on track. After all, nothing happens without a sale.

Schedule the review for the same time every month. You should consider this a priority and expect the same from the salesperson. The salesperson should update his goals and get them to you prior to the meeting so you can review the data, make notes and plan general comments.

Start the meeting by asking the salesperson how things are going. Let him speak on whatever comes to mind and be sure to take notes so he knows you are listening and that you care about what he is saying. When the salesperson is done, comment appropriately and if any issues need to be discussed in detail put them aside until after the review.

Have the salesperson review his results, line by line, and make comments. This is the time for you to acknowledge good performance and ask questions about how underperformance can be improved. Again, make notes about your discussions and agreements.

Once the review is completed, summarize the overall results and outline next month’s action steps. Reinforce what is going well and encourage the salesperson to make the improvements you have agreed on. That’s it!

When Performance Lacks

If you’ve followed this monthly process you have a “paper trail” of performance — or lack of performance. If a salesperson is consistently underperforming, you are set to have an objective and candid discussion about the need for immediate improvement or termination. My experience is that once it gets to this point the salesperson isn’t surprised and is often already looking for another job. Don’t hesitate to act decisively when the facts are clear. Everyone, including the person you fire, will appreciate it.

It’s simply a matter of getting the process going. Share this article with your salesperson, get his feedback, have him create a goals-strategies-plans worksheet and get the first review under your belts. After three months you’ll both be on autopilot and enjoying the additional success it has brought to everyone.

Good Selling!

Tom Piscitelli is president of T.R.U.S.T.® Training and Consulting. For more information on how his System Selling In-Home Sales Call Training DVD, CD and Self-Study Workbook can help you sell more jobs at higher margins and higher prices go to www.sellingtrust.com

Articles by Tom Piscitelli

Stop Bidding, Estimating, And Quoting

The most successful and most profitable hvac contractors don’t create success by being the lowest-priced job. They are among the highest; but they can show the customer why the extra money is worth the investment.
View article.

Creating Clients For Life

Customers who are not treated well at every turn become history; customers who value how they were treated and what they received for their money are your future clients, and represent your future income and success.
View article.

The First Sale Is The Appointment

As a service provider, setting the appointment is the first step in convincing the potential customer that you are the right choice. Get them to contact you with a customer-friendly, informational website. Make sure you have a friendly and informed receptionist to take calls and make appointments.
View article.

Creating Customer Trust

People want to buy from someone they trust. You can be the most knowledgeable hvacr person there is but if the customer doesn’t trust you they won’t buy from you.
View article.

Overcome, Conquer Sales Stereotypes

Find out how the customer thinks and feels about the buying process, about the problems they have, about the company who does the work…and then help them get what they want in a way that makes sense to them.
View article.