Sales Management by RJ Calvin Book Synopsis
What questions should a business manager ask in the interview process in selecting a sales person? How should she create the sales force organization? What kind of training should the business manager provide for the sales force? What principals should go into constructing the sales force compensation plan? How does the sales manager motivate, manage, and evaluate the sale’s team members and their productivity?
Robert J. Calvin, president of Management Dimensions and adjunct professor at the University of Chicago Graduate School of Business, addresses these questions in Sales Management.
Sales Management is a tactics and strategy book for managing a sales force primarily directed towards B2B industries. Mr. Calvin’s management tactics are built upon the foundation of determining the appropriate sales force strategy in alignment with the corporate strategy, market dynamics, and competitive landscape. Many of the tactics suggested are more appropriate for large corporations than small and medium sized businesses, however the underlying principals can be meaningfully applied to firms with revenues as low as $ 3 million.
“A sales force is no better than its management.” Mr. Calvin squarely lays the blame for poor sales performance on poor sales management throughout his text. Managers must manage first. This echoes many of the statements made in other management books regarding problems of mid-level managers that come from the ranks of top-level-doers. With the perspective of top-level doers, these mid-level managers instinctively desire to jump in and do the work whenever they notice a problem. Mr. Calvin warns against such actions. For him, “A sales manager’s job is getting work done through people. His or her success depends on the success of the sales people.”
Providing a walk-through of a litany of hands-on management issues, Mr. Calvin covers hiring, training, compensation, promotion, evaluation, and motivation of the sales force. In making hiring and promotion decisions, Mr. Calvin suggests that sales managers should strategically determine their objectives with the acquisition of talent and tactically act to fulfill their needs with the best qualified, spending more time on creating an appropriate pool of candidates to review, and less time conducting interviews. Once a salesperson is on the force, managers should address specific behavioral, performance, reporting, and other problems through customized training and staff-development programs. In conducting evaluations, managers should remember that “(the sales person is) neither angel nor devil and that both fear and love (are) needed to correct the problem.”
Mr. Calvin notes that many sales managers would rather avoid performance issues and delegate or postpone evaluations. He warns strongly against such acts. A sales manager’s job is to ”set standards, be critical, sit in judgment.” Rather than letting a problem continue indefinitely, managers should first take remedial steps. When those steps fail or when the corrective action begins to require too much management time, the next step is to “weed the garden and let the cream rise to the top.”
Appropriately, compensation and motivation are handled in separate chapters.
For constructing a compensation plan, Mr. Calvin begins with the concept that managers should “…first pay sales people more than they are worth, then make them worth more than what you pay them.” While the IT sector was not mentioned specifically, he did report industry statistics from Sales and Marketing Management, September 1999. These statistics revealed total compensation for top-level Solution Sales and Value-Added Sales averaged at $90,200 and $98,800 respectively. While these numbers are half of what I have seen in long, complex, multi-million dollar sales environments, they do provide a data point for setting compensation levels.
In constructing compensation plans, Mr. Calvin suggests that business decision makers begin with determining the total compensation dollars, then break down this total compensation into base, at-risk, expense accounts, cell-phone reimbursement, laptop provisions, and other items that must be borne by the firm or the salesperson. In constructing the at-risk portion of the compensation plan, mangers will need to “reward actions and results … which are most important to the company’s success.” Often, this is not the total revenue generated by a single sales person. For instance, a financial software firm compensated salespeople on the number of demos, trials, and presentations while a management consultant firm compensated salespeople for identifying decision makers, making presentations, and obtaining requests for proposals.
In motivating sales people, Mr. Calvin reiterates that monetary compensation represents an important motivator of salespeople, but it is not the only determinant. Other issues, such as the desire for promotion, recognition, team-membership, achievement, esteem, and job security are also at the forefront of motivating factors. Sales managers should keep notes on their employees, similar to the profile salespeople are required to keep on clients. This profile can be used to understand the motivating factors of individual salespeople. “The sales people are the sales manager’s internal customer.”
For business leaders and sales force managers, Sales Management provides an in-depth checklist and get-to-work guideline for performing the task of creating, managing, and improving a sales force. If you are a salesperson having difficulty landing the next position, Chapter 2, Hiring the Best, Terminating the Rest, is a good survey of the hiring process from the manager’s perspective. For other members of the business community, Mr. Calvin provides excellent insight into the process of management, more specifically, sales management.
Midnight Missive Newsletter, July 22, 2002