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Management by Tactics : A sales management supervisory technique and its effects on sales performance
Ask any person involved in a sales supervisory position what they consider a sales person’s most important daily task and you will most likely receive the same response: “Sales/Prospecting Activities”.
Although most companies monitor and make efforts to control sales activities, few companies have a formal means of optimizing tactics. Leaders should take the time and effort to design performance measurement systems that are based on a balanced set of metrics and then reward their sales reps based on the desirable behaviors and the positive outcomes that result.
Management by Tactics™ : The Input Focused Protocol
Management by Tactics or MBT is a term, which describes a supervisory technique applied by progressive sales management. A Canadian sales strategist, Dr. Giovanni Di Girolamo, along with his associate consultants, conceived it in 2005. Through their research and personal experiences, they discovered a process, which consistently yielded, unsurpassed results from sales representatives – regardless of industry, sales experience or type of client (new or existing).
The principle behind this is a process where sales managers/directors, along with their sales force, identify the day-to-day activities required to achieve sales objectives and focus their energies in controlling such activities (known as “input”) – rather than simply focusing on results (a.k.a. “output”).
The latter applies to Management by Objectives or MBO, a technique first popularized by the late management guru, Peter Drucker, which places a great deal of emphasis on the outputs – in our case, the sales results.
Tactics v. Strategy
Tactic equates to an action plan for attaining a particular goal. The terms tactic and strategy are often confused: tactics are the actual means used to gain an objective, while strategy is the overall campaign plan, which may involve complex operational patterns, activity, and decision-making that lead to tactical execution.
Research and Consequences
The research that was conducted in a 12-month period, by the Canadian sales strategist and his team, consisted of twenty-nine subjects from a sample of four companies representing different types of industries. During this study, sales representatives from the four companies worked exclusively with output goals – namely sales objectives. Data were collected. This stage of the research was referred to as the “Pre-Test”.
The researcher then proceeded to implement the Management by Tactics method. In this phase of the research, the sales people were given input goals, such as the number of telephone calls to be made, number of prospects to visit along with various sales presentations to be performed. This stage of the research was referred to as the “Post-Test”.
Results from all four companies suggest that there is indeed a relationship between variables. Not surprisingly, MBT had a positive impact on sales performance. The outcome was as follows:
• In the absence of applying MBT, all representatives in the study under achieved sales objectives between 21% to 75% of their target.
• On the other hand, when all sales reps were given input goals under the MBT system, the weakest sales rep attained 100% of target – while the other two reached 117% and 118% respectively for a combined average of 112% of sales targets.
Observations & Effect
Management by Objectives (MBO) is a results oriented management system, whereby; top management involvement in the process is crucial along with employee agreement to the same organizational objectives. In sales, the manager and sales person identify and negotiate specific goals for the upcoming period. Subsequently, the sale rep and manager sign a performance agreement that specifies these goals as performance standards. In contrast, Management by Tactics (MBT) focuses on the effort and activities by adopting the following philosophy:
• Activity information and feedback encourages greater incentive and effort.
• Micro-management equals detail oriented, whereas, macro-management
equals the big picture.
• Behavior oriented sales people outperform the results oriented type.
• Clarity of tasks to be accomplished and feedback are two key factors at motivating sales people. Link rewards to performance.
• Activity reports should be submitted by the sales people and reviewed by sales management during scheduled coaching sessions. These include:
1) Weekly activity report;
2) Observation report
(is used to evaluate the salesperson’s overall ability to perform the job and includes various factors crucial in obtaining results);
3) Annual evaluation form.
No doubt, we have all heard the saying from various management authorities, “What gets measured, gets done”. Sales leaders and their sales force should focus on the process/activities rather than the end result, as output control has no direct effect on end performance. By working backwards, namely, taking the desired output and breaking it into activities required to achieve the output or end result, has been proven to be the most practical approach.
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When Faddy Sidaros, a Regional Sales Director for Pitney Bowes, was asked what he considers to be his biggest challenges, his emphatic response was: “Coaching the coach to be on the same wavelength and linking the sales representatives’ personal goals to those of the company.”
There is no doubt that sales are the heart and soul of any public or private enterprise. It’s about the need for a constant stream of new business, which brings in the necessary cash flow. This should explain why nothing happens until a sale is made. That simple point underscores the critical importance of sales to the business – regardless of its size. However, in today’s global marketplace, owners and managers face many challenges related to fulfilling the customer’s ever-changing needs and expectations. With that come refined methods of selling a product or service to a well-informed and discerning customer – especially with the advent of the information age and plethora of choices.
Sales management can be most easily defined as planning, implementing, and controlling personal contact programs designed to achieve the sales and profit objectives of the firm. Overall, sales managers and sales directors are responsible for leading the firm’s sales program. More specifically, they are accountable to reviewing and analyzing sales performance against programs, quotas and plans to determine effectiveness. To excel in those areas requires discipline, planning, executing, as well as frequent checks and balances.
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