CEOs Make Lousy Sales Managers

By Gil Cargill on September 5

That’s right; my observation is that most CEOs manage their organization’s sales and marketing processes incorrectly.  I hasten to point out that this is not a criticism of CEOs, but it is a reflection on the lack of formal sales management education that is present in most higher-learning institutions.

As a matter of fact, how many of you know someone who has a four-year diploma in sales management?  The answer is probably very few, if any, of us know people who have a diploma in this vital arena.  Furthermore, the traditional way to manage sales organizations is with lagging indicators.  CEOs rarely manage any other function in their business with lagging indicators.

Rather, manufacturing is always managed with leading indicators.  Accounting, finance, purchasing and payables are always managed with leading indicators.  Tragically, the functions of finding, acquiring and retaining profitable revenue are allowed to be managed with lagging indicators.  Let’s take a quick test to see if you are one of those CEOs who manages his/her sales organization utilizing the wrong indicators.

If you start a meeting or a conversation with the leader of your sales team with a question which reflects history, then you are managing with lagging indicators.  An example of this would be the way most sales conversations start, which is “How did we do last week, month, quarter, et cetera?”  Rather, I suggest that you embrace the new math of sales excellence.

New Math of Sales Excellence

The new math of sales excellence focuses on five key metrics which, when managed by the CEO, produce spectacular improvements in the sales results produced by the organization.  These indicators are: 1) # number of first meetings; 2) $ dollars per transaction; 3) % closing percentage; 4) L length of the sales cycle; and 5) FTE full-time equivalent salespeople.

The fifth metric may be a little fuzzy.  You see, most sales organizations don’t have full-time salespeople.  Yeah, you pay them full-time and they work for you full-time, but they don’t sell full-time.  So, if you have a sales force of ten but, if half of their business day is occupied doing non-sales administrative tasks, then your full-time equivalency is only five salespeople.

By improving each of these five metrics, you will realize a compounding improvement in your top and bottom line.  For instance, if all five are improved as little as 10% each, the compounding impact is a staggering 72.8% improvement in your top line.

Now, obviously, improving all five by 10% is virtually impossible, but what would happen if two or three of them were improved by 5%?  Now, your improvement would be in the 30% range and that, as they say, “ain’t too shabby!”

So, in conclusion, make sure that you get feedback from your sales process telling you how your team is doing against each of these five metrics.  As the trends show improvement, so will your top and bottom lines.

To get more information on the new math of sales excellence, please click here and send me an email stating in the subject line, “New Math of Sales Excellence”.  I will contact you immediately and show you how I can help you implement the new math of sales excellence in your organization.  As always, I wish you…

Good Luck and Good Selling!!!

Gil Cargill
Sales Acceleration Coach
Direct: 310.362.0615
Mobile: 310.447.4102
www.gilcargill.com

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