How to motivate sales managers effectively
Mafpels trading blog
When managing sales, the correct development of sales department KPIs significantly affects their development. When choosing criteria for rewarding a sales manager, it is important that they fully influence the KPI set for them in the plan. Otherwise, KPIs will not work to increase sales. On the contrary, instead of additional motivation, they will lead to demotivation of managers.
To avoid mistakes, you need to carefully work out the key functions that are defined for a sales manager in your business. The specialists at Mafpels Cyprus have analysed two examples of choosing motivation for a manager.
To avoid mistakes, you need to carefully work out the key functions that are defined for a sales manager in your business. The specialists at Mafpels Cyprus have analysed two examples of choosing motivation for a manager.
What does a sales manager influence?
Example one. The manager independently seeks out new customers ‘cold’ and develops existing ones. In this case, we set him a monthly shipment/sales plan in monetary terms – and everything works like clockwork.
Example two. The sales manager processes incoming requests/leads, for which the marketer is responsible for their availability, quantity and quality. In this case, it is not possible to set a monthly shipment/sales plan in monetary terms as a KPI for the manager, because he does not have a comprehensive influence on the sales process. If there are not enough requests/leads during the month, the manager will simply not be able to fulfil the plan. Or there will be many requests, but most of them will be cold leads that cannot be converted into sales – the manager will also not be able to fulfil the sales plan.
Example two. The sales manager processes incoming requests/leads, for which the marketer is responsible for their availability, quantity and quality. In this case, it is not possible to set a monthly shipment/sales plan in monetary terms as a KPI for the manager, because he does not have a comprehensive influence on the sales process. If there are not enough requests/leads during the month, the manager will simply not be able to fulfil the plan. Or there will be many requests, but most of them will be cold leads that cannot be converted into sales – the manager will also not be able to fulfil the sales plan.
What indicators should be used as criteria for rewarding a sales manager in this case? The answer is simple: the indicators that he influences. In the second example, the manager influences the conversion of incoming requests into sales and the average cheque. That is, having received ten requests, he can sell goods only on two of them. In this case, the conversion rate will be 20%, according to experts at Mafpels company. Or he can sell five out of ten requests, and the conversion rate will be 50%. This depends on the manager's level of professionalism, of course, provided that these requests exist and are ‘warm’.
How can a manager influence the average cheque? At a minimum, in addition to the main product for which the request was made, additional services or goods should be offered that will allow this product to be used more effectively. It all depends on the business. If it is wholesale, then offer a wider range, perhaps another group of goods, and so on.
How can a manager influence the average cheque? At a minimum, in addition to the main product for which the request was made, additional services or goods should be offered that will allow this product to be used more effectively. It all depends on the business. If it is wholesale, then offer a wider range, perhaps another group of goods, and so on.
Mafpels management specialists emphasise that when implementing and applying a KPI system (and other types of motivation as well), it is very important to choose indicators that employees can fully influence and know what actions they can take to achieve the desired result. This applies not only to sales managers, but also to other employees. Do not forget that KPIs are motivation for results. Without the right motivation, there will be no good results.
You can also read about the implementation of the KPI system in another publication on our website: https://mafpels.com/en/blog/kpis-of-sales-department
You can also read about the implementation of the KPI system in another publication on our website: https://mafpels.com/en/blog/kpis-of-sales-department
Conclusion
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