I'm often amazed at the number of times I've come across companies who ask their sales managers to manage customer accounts, instead of managing the company's sales. Some sales managers, or directors, might have one or two direct customers where they manage the day to day transactions of the account. While their main responsibilities are to manage sales representatives, they may also be in control of certain high value key accounts. The intention is to keep them up to speed with current market trends, and to maintain long standing relationships. However, is it really a good idea to have a sales manager manage accounts instead of concentrating on managing sales?
Being a Sales Manager Means Managing the Sales Process
Splitting their responsibilities between managing sales representatives and customer accounts can make it extremely difficult to excel at either of these responsibilities. It’s often difficult for companies to understand that having their managers do both can actually impede the progress of their sales representatives, and the growth of the company.
What are the reasons why it’s better that sales managers concentrate on manage sales people instead of customer accounts?
1. Sales Managers Should Be Focused on Growing Company Sales
Sales manager’s goals should be focused on growing business across all territories, and not on any specific account. The manager must adopt sales strategies that concentrate on customer retention goals and aligning company wide sales strategies with all territories.
2. Sales Representatives Need Support
Sales representatives need to be given votes of confidence about their abilities to handle larger customers. Education is key, but ultimately transferring those direct accounts from the manager to the sales representative, will not only increase the knowledge base of the representative, but also allow the manager to manage sales.
Sales representatives need to stand shoulder to shoulder with someone who will help resolve internal disputes, and ensure the level of service is maintained across all accounts. Internal strife between departments can only cause delays and those delays can cause customer service problems. The goal is to have a seamless process or work flow in sales. The sales manager is ultimately responsible for ensuring his/her sales representatives aren’t fighting amongst themselves and against other internal departments.
3. Adopt Strategic Plans for Growth For All Territories
A successful sales manager is able to take company wide strategic planning initiatives and bring them down to a level where individual sales representatives can concentrate on making things happen. In addition, it's the sales representative's responsibility to provide pivotal information on their given territory in order to allow the company to determine their overall market share. Sales professionals must know how to perform a sales gap analysis on a given account and feed that information over to the manager or director of sales.
One way to grow sales across multiple territories, while also getting up-to-the-minute market pricing information, is by running a back-end rebate and reward program like the one described in the above video and table.
"But, These Key Accounts Have Developed a Relationship With The Sales Manager and Don't Want Anyone Else!"
The concern I hear the most is that some of these larger accounts have become accustomed to being managed a certain way, or are used to a certain level of service. These customers come to appreciate the long standing relationship. They would prefer to stick with someone they see as being important or at the very least, having some pull and influence.
They are not likely to accept being handed off to just another sales representative when they currently have the ear of the director or sales manager. It’s a level of importance they have come to appreciate. This is not easily resolved, but must be done so that the manager can concentrate on initiatives across all territories that grow business. So, what's the solution?
- Use a Gradual Sliding Scale on Commissions When Transferring an Account
Allowing a sales representative to take over a large account assumes they would benefit from immediate commissions on sales they did not make. To correct this, companies can easily set a threshold on commissions. In this case, the commissions for the sales representative would only kick in after a certain value, or only for those new orders the sales representative closes. Another way to accomplish this is to delay the commissions so that they only take affect after a given period, be it six months or one year.
- Incentivize Sales Managers to Grow All Territories
The ideal situation is where the goals and objectives for the sales manager force them to provide the keys to growth for all representatives. The compensation that is paid to sales managers should involve the overall growth of the company, and not one or two individual customer accounts.
If the sales representatives perform well, then the sales manager should perform well. It’s that type of incentive that should drive the manager to concentrate on managing sales and not individual accounts. What are the consequences of allowing a sales manager to manage an account and not sales?
Perhaps the biggest reason why sales managers should never handle individual accounts is because of the eventual decline in service. When faced with having to manage a team of sales representatives, or grow the accounts they manage themselves, the manager can often find they are limited in time needed to do both successfully.
While the intention is to maintain the level of service for these key accounts, the exact opposite occurs. Ultimately, the manager will be forced to pursue the organizational goals to grow business. This tends to force them to spend the majority of their time working with those who report to them. Then end up being nothing more than a high priced customer service representative to these key accounts, instead of a proactive and results driven sales professional.
One way to better manage the entire sales process is to focus predominantly on securing large volume contractual supply agreements. To see a sample Kan-Ban agreement go here. To see a sample blanket order agreement go here.
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