Management of Sales Effort in Economic Recession and Recovery

The way you are managing your sales staff my cost you market share in the recovery.

There are two basic ways to evaluate sales representatives: results or effort. Using results makes sense for experienced sales reps in an average market environment.  Many people will manage with effort (counting calls made, visits made, hours logged, etc.) for new sales people, on the theory that if you get them to build the right habits, you can then switch over to managing by results after they have come up to speed.

But in the recession, management realized that results would be lousy, even for good sales people.  So they stopped evaluating by results.  Oh, the structure of the rewards system was still results-oriented, but poor performance was tolerated because, heck, we're in a recession.  But this left companies with no evaluation whatsoever!

So you'll switch back to using results once sales increase.  But by then it will be too late!  The first round of orders will go to those sales people who have been making the effort: making the calls, visiting prospects, even when nobody was ordering.  If you wait for the recovery to get back to evaluating people, you'll lose market share before you know it.

Here's what I'm saying to my business consulting clients: use your sales or contact management system to set up a process to ensure that the calls are being made.  Make sure that no prospect is being lost in the cracks.  For example, if there are 143 prospects who should be contacted once a quarter, senior management needs a report that tells them how many of those prospects actually were contacted last quarter.

You have to evaluate your sales staff on something.  If it's not going to be results, make it effort.