Sales managers are expected to be the beacons for their team, with every answer to all of their problems. Unfortunately, sometimes sales managers need coaching and training help themselves…which is where Jack Derby steps in.
Jack, a self-described Head Coach, founded Derby Management in 1990 to focus on three key areas: strategic and business planning, sales and marketing optimization and angel, venture and public equity fundraising. Prior to this, Jack had also accrued decades of C-level experience at several different companies of varying sizes and industries. He is also currently serving as a Professor of Marketing at Tufts University here in Boston. In short, Jack has a wealth of sales, marketing and management experience.
We recently had the pleasure of speaking with Jack on several topics and picking his brain to share his views on sales plans, sales processes and the most important sales performance metrics today.
1) In your view, what makes a sales manager or a sales executive successful?
Obviously at the baseline, they are very good sales individuals. They know how to sell, they have a passion for selling. You couldn’t take in a great engineer or engineering manager and make them a sales manager. Once you take on the responsibility of managing a group of sales individuals, a big part of your job is that you need consistent training. It’s like getting regular certifications in other jobs – a successful manager has to have consistent learning and consistent engagement in asking, “How am I going to be a better sales manager?” Most sales managers don’t do that – they got to the position because they were the best salesperson, and they may have taken some seminars on sales management, but the majority aren’t formally trained. You need consistent training and learning.
2) What is a sales plan? When you advise your clients, how would you like them to think about sales plans?
To a degree, a sales plan is anything you want it to be, as long as it is something deliberate. All salespeople want results and are typically held responsible for just that, “results”, which in the world of sales is and should be “quota”. As managers, we also provide, suggest, and demand specific objectives over a period of time. The problem is that the no salesperson can manage either results or objectives. All they can manage are activities, and it is activities that become the essence of the best sales plans. We want to see 30-60-90 day plans. That’s it: defined activities over just 60 selling days in a quarter. Once time is broken down into activities over a short period, it’s much easier for the salesperson and their manager to work to getting to the results.
3) Let’s talk about sales processes. You coach a lot of executives on improving their sales process. What does an effective one look like?
The best sales process begins with clear definitions on terms and common language of those terms among all of the salespeople. We like to see a sales process begin with “qualify”, which is the definition line between the world of marketing, who is held responsible for delivering lead gen quotas, and the world of sales, which begins at the top of the sales funnel with a short process on qualifying that lead as to whether it meets BANT requirements. “Qualify” is followed by “Discovery”, which is followed by “Validate”. Those three TOFU (top of funnel) process steps are always there in every sales process we build. What comes in the next two or maybe three steps are up to the customization of the sales force, but may include such steps as “Prove”, and “Propose. The last step in the process is the actual “Close” So overall, 5 to 7 steps with enablement tools and training at each step. The key to success with this is that it then becomes “the way we sell”. For example at one of our long term customers, it becomes “the Brainshark way”, or “The LSB Way” (Lake Sunapee Bank). The process becomes engrained as part of the religion and culture of the company.
4) What is your approach to sales coaching and how do you think it should be done in the ‘right’ way?
I came up with the word ‘coach’ because I hated the word consultant – I wanted to find something more conducive for a conversation with more junior employees. We don’t train our sales professionals very well. Think about the Red Sox – are they just playing game-to-game? Nope, they’re always training and practicing.
I once had the opportunity to talk to Larry Bird and I asked him why he was such a good three point shooter. He said it was pretty simple: “We train for several hours as a team. I stay on the court for another 90 minutes after and just practice that three-point shot.”
So you take a professional athlete, a soldier, a surgeon and they all receive regular training. In sales, we don’t have that, and it comes down to coaching. Coaching might be training, or mentoring, but it comes down to a coach working with an individual sales team or salesperson as to how they can more efficiently and effectively improve their game. We talk about our salespeople as players, yet we just don’t coach them enough.
You want to optimize and enable your salespeople. I’m very big on sales coaching in short bursts – 75 minutes here, 60 minutes there – instead of taking a three hour session just to teach them how to shake hands, or something. That type of long session is too much overload for the reps. You want to coach in short bursts, using data and information that you can get from your CRM.
5) What types of incentives do you think sales managers and executives should set for their teams?
Incentives for sales managers and reps should be a mix of base, compensation and stock options. The appropriate balance for that should be a highly competitive base salary and a commission plan that is paid quarterly. You want it quarterly so they have a regular flow of money. You should also have kickers – if your employees hit these kickers, you should be happily writing out those checks.
For managers and executives, you always want stock options as part of the incentive package. What I’ve found is that sales guys or sales reps tend to care less about stock options; they care more about the compensation plan and a base that they can pay the mortgage on.
6) What are some of your favorite sales performance metrics that you think are the most critical for managers to track?
I think the most important is measurement-to-quota. I made a commitment to my boss, the CEO, we negotiated the quota, and no matter what happens, I’m ultimately going to be measured on performance quota.
Having said that, all B-to-B companies in the United States, their overall quota achievement last year was only around 68%. Something is wrong because that’s just a shockingly low number. Below that, it depends so much on the definition as to what makes up a quota assignment. If I’m a SaaS company, that quota is probably based on ACV. In order to make my ACV quota, it’s going to be based a lot on the sub-metrics of what’s in my sales process, versus a revenue quota. Within our own quota metrics, some important ones are the number of discovery calls per week and numbers of validation letters sent out and responded to – certainly those are the most important metrics that will inform us of how we’re going to close.
Generally, there are lots of great sales metrics, especially for SaaS companies. But every company in every industry should be religious to sales metrics today.
More about Jack Derby
Jack Derby is the founder and President of Derby Management, a management consulting firm specializing in both emerging and middle market growth companies. Prior to founding the company in 1990, Jack also served as CEO, Director or President of several companies, including Mayer Electronics, CB Sports and Litton Medical Systems. He is also currently a Professor of Marketing at Tufts University and a lecturer in business planning and marketing at MIT School of Mechanical Engineering.
