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“A Sales Manager Walks Into a Company…” Part 1
Blog / Sales Management / Apr 12, 2016 / Posted by Nikolaus Kimla / 1215 

“A Sales Manager Walks Into a Company…” Part 1

In our continuing series on the pain points of being a sales manager, we have explored the categories of sales manager pain points, the primary pain point of being a sales manager, the technology a sales manager really needs and the vital subject of management.

Now we’re going to dive into some very specific pain points for a sales manager—those encountered when a sales manager is newly hired into a company.

It starts like many old jokes–“A sales manager walks into a company…” But it certainly isn’t one–just ask anyone who has been there. When a new sales manager does walk into a company and is hired, he or she is expected to take the sales team—and the company bottom line—to new heights.

It is a tough position. All eyes are on sales manager–the company executives from above, and the sales reps from below.

That sales manager is going to be faced with a number of pain points. They are listed in this blog post (and in its Part 2) in roughly the order in which the new sales manager should handle them.

Note: For the sake of this blog, let’s assume that our sales manager is not inheriting a drastic situation, in which sales and the team are both doing awful. We’re going to assume that they are at least capable and somewhat successful.

Also for the sake of this blog, we’ll assume our sales manager is named Lisa.

Making That Quota

Closing Ratios

Now that Lisa has come into her new position as sales manager, her first concern will be making the quota that has been set for her, and her team. She’ll need to figure out if that quota can be met, and how it can be met.

To start with, Lisa will need to know the closing ratios for each one of her sales reps. Let’s hope they’ve already been calculated—but if not, she is going to have to get busy and figure them out.

Once individual closing rations are obtained, they need to be summed up into the closing ratio for the whole sales team.

Number of Opportunities

Closing ratios will go into figure out the next raw figure Lisa will need: the number of opportunities needed in the pipeline to make the quota.

If the quota for a quarter is $2 million, and the closing ratio for sales team closing is 25%$8 million in potential opportunities  will be required in the pipeline in order to make the quota. If the average opportunity value is $25,000, there would need to be 320 opportunities in the pipeline.

Number of Leads

If those opportunities aren’t already in the pipeline, then Lisa is going to have to work backwards to leads. She needs to discover, for the team, the conversion ratio of leads to opportunities, for each individual rep and for that sales team. That will allow her to understand how many leads are need in order to obtain that required number of opportunities.

If the lead conversion ratio for the sales team is 1 in 10, then to achieve 320 opportunities in the pipeline, the sales team would need 3,200 leads—or 960 leads per month.

Other Factors

There will be other factors that come into play, that Lisa may need to take into account. For example, a larger-than-normal deal size could mean that the sales velocity—the time it takes from lead to a closed sale—might be longer. A larger deal size can also have an impact on closing ratio. Or if a particular source of leads proves incredibly abundant, lead qualifying will really have to be applied so that nobody is working a bunch of suddenly worthless leads.

Lisa will work all this out, because we know she’s smart, and she really wants to make a great first impression and meet or beat that first quota.

Watch for “A Sales Manager Walks Into a Company…” Part 2

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About Author

A 30-year veteran of the computer industry, Nikolaus has founded and run several software companies. He and his company uptime iTechnology are the developers of World-Check, a risk intelligence platform eventually sold to Thomson Reuters for $520 million. He is currently the founder and CEO of Pipeliner Sales, Inc., developer and publisher of Pipeliner CRM, the first CRM application aimed squarely at actually empowering salespeople.Also a prolific writer, Nikolaus has authored over 100 ebooks, articles and white papers addressing the subjects of sales management, leadership and sales itself.

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