Frank Cespedes: Sales Management That Works

The business world, it seems, is changing faster than ever. Tried-and-true business models are being supplanted. Entire industries are being disrupted by upstarts with new ideas and ways of delivering what customers want. New companies burst on the scene with billion-dollar valuations, while old industrial behemoths become shells of their former selves.

Much of this change is driven by a revolution in data: how it’s collected, analyzed, and used in new and innovative ways to drive strategic and tactical decisions.

All of this affects the sales profession–in particular, how sales teams are built, trained, and managed, and how they succeed. Frank Cespedes recognized this and was motivated to write a book about it: Sales Management That Works: How to Sell In a World That Never Stops Changing.

Frank teaches at Harvard Business School and consults with companies in a variety of industries. He joined us on the Sales Lead Dog podcast to share some of the insights he gained while writing the book.

Staffing and Training a Sales Team

Frank notes that many types of selling exist. The techniques and approaches to selling cars, enterprise software, furniture, and medical devices are all different, and what works in one market might fall flat in another. There is no “one size fits all” approach.

This fact complicates the task of evaluating candidates for a sales team, because the skills and experience a sales professional gains in one company don’t necessarily translate to another one.

Another issue is that unlike disciplines such as engineering or accounting, few people go to school to learn how to become salespeople. A sales leader must depend on intuition and the candidate’s self-representation to make a hiring decision.

Once on board, a new salesperson, regardless of past experience, needs intensive training on the products and services, the market and competitors, and the customers before he or she can become productive. The first year is crucial to grooming new salespeople for success. And you can’t just “let them figure it out”–they are likely to become disillusioned and motivated to move on. “Sales training is a process, not an event,” says Frank.

The Role of Compensation and Incentives

Frank believes that traditional models for compensating and incentivizing sales professionals are also misguided. His thoughts on this topic include:

• Traditional sales management over-relies on financial incentives to motivate desired behaviors. These incentives invariably are driven by meeting specific numerical targets, such as sales calls, lead generation, and, of course, sales wins and revenue.
• Financial incentives are a necessary but not sufficient motivation approach. Sales teams need to focus not only on raw revenues but the profitability of each sale.
• The data revolution is driving transparency within the business, so that finance and other parts of the organization are better able to examine costs and profitability. Sales that cost more to win than they will realize in profitability should be discouraged.

Thoughts on CRM

Frank says that CRM is a useful tool but has its shortcomings. Different CRM providers have different terms for the same idea, which complicates training salespeople. Moreover, most CRM tools follow the traditional, single-channel “sales funnel” model of the sales cycle, which is becoming obsolete in a multichannel business world. CRM providers need to overcome these issues to see wider adoption of their products.

For more on Frank’s thoughts and insights from his book, listen to his interview on the Sales Lead Dog podcast.