For salespeople, the current economy and the rise of the Internet pose a gritty one-two punch. If you work on commission, the Great Recession is more than likely a body blow to your paycheck. Meantime, technology is transforming the sales environment, delivering more product knowledge than ever to consumers – providing much of the pre-sale value that sales pros used to deliver. While that doesn’t herald the end of the sales profession, according to Wharton faculty member Linda Richardson, it suggests that companies need to do things differently than before.
“Salespeople are not needed for product knowledge anymore, so they need to be more prepared for strategic discussion,” says Richardson, who is also founder and executive chairwoman of Richardson, a global sales performance firm, and author of The New York Times bestseller, Perfect Selling (McGraw-Hill, 2008). “Salespeople are facing a sales environment that none of us ever faced before. And it’s taking a toll on morale.”
Salespeople realize that what it took to sell pre-recession is not going to cut it post-recession, she says. “So their organizations are giving them better technology and data. They can share information about clients. They can talk with people within their organization and get information about customers in seconds. They’re leveraging technology like never before. Managers can look at salespeople's pipelines. They can see into pipelines. They can give salespeople more support in the form of coaching.”
But there’s a rub: Are sales managers typically effective at coaching? Richardson believes that for many organizations, the answer is “No…. Most sales managers were promoted from sales because they were successful at selling,” she says. “But they might not be strong at coaching. A lot are super salespeople. But they need to know that coaching is the job, not being the super salesperson.” That’s why a key priority within any sales organization should be training sales managers how to be effective coaches.
Based on Richardson’s experience, this training can lead to dramatic outcomes.
At one major tech company, she says, “We trained 400 front-line managers to be coaches.” The six-month training began with a one-week intensive course. “Then our trainers worked with each sales manager once a month on a 40-minute phone call to help them carry out coaching plans and to embed coaching into the culture.” The results were impressive: Job satisfaction improved as well as the retention rate of salespeople and managers. The company saw a 17 percent increase in sales year over year, and a 29 percent increase in earnings per share.
Richardson recently worked with a professional services firm where, she says, there are fewer deals than there were before the recession, and longer times to close. After training sales managers how to coach their sales teams, she says, “opportunities within the pipeline grew 195 percent. Targeted sales approach accounts have added $140 million in the pipeline in one year. They spent $1.4 million on the training and were able to attribute $23.7 million in new business to it.”
At another large tech company, after sales managers learned to be more effective coaches, salesperson retention improved by 51 percent, manager retention by 86 percent, and overall sales volume by 18 percent.
Richardson’s data suggests that companies should invest in teaching front-line sales managers how to be world-class coaches. “If you can't afford a training course, do e-learning, or buy books,” she says. “There are many free resources on the Internet. Even the smallest companies can and should develop their sales managers.”