We wanted to form a picture of what challenges sales managers experience due to the current crisis initiated by the global Covid-19 outbreak. Therefore, the past week we have performed a quick interview study with 30 members of the sales management network ProSales Network. During 15 minute interviews the respondents were asked how the crisis affects them, what their managerial challenges are, and what needs they experience in this situation. Some of the results are reported in this article.
New Sales is Struck Hard and Unevenly
Overall, the respondents in our study experience a heavy strike towards their new sales activities and results. Some manage to continue dialogues that have been started before the crisis, and close deals that were planned beforehand. But for most of the respondents, the past weeks have implied that a lot of new meetings and decisions either have been postponed or cancelled.
However, the effect differs between industries. For some industries there is still demand, sometimes even increasing.
For example, companies in industries like e-commerce and collection may both stand to benefit from this situation. Other industries, like accomodation and food services, have gone to an almost complete halt.
"E-retailers' volumes are going up which is good for us"
- supplier of payment solutions
Many of the respondents are also targeting a mix of different industries. An additional challenge is therefore that they experience varying effects in different customer segments. Whereas some customer segments have gone completely quiet, others scream for products and services.
Sales Managers are Reallocating Sales Resources to Segments with Potential
A few managers have implemented short-time work, but most sales organizations in the study remain intact as of today. However, sales managers are trying hard to reallocate their sales resources to better fit the new situation. One aspect of that is trying to identify customers and customer segments that still have demand and purchasing power, and quickly move sales resources to work with these segments instead.
For those sales managers that experience falling revenues all over the line and not requiring all new sales resources, some reallocate sales resources to other tasks, such as sales planning, operations, or working with existing customers.
...and Focusing Existing Customers
A majority of our respondents express that their biggest concern right now is to protect existing revenue and make sure that existing customers are satisfied, since it is so hard to close new deals. Sales and Customer success functions are working to contact existing customers, assess their situation and make sure that they stay informed and satisfied with existing sales and deliveries. Some are also reallocating their new sales to work with up-selling on existing accounts.
They are Struggling with Leading at a Distance
At the same time as the market is dropping, sales managers have to struggle with the sudden change in ways of working. There has been a shift to almost 100% distance communication, between managers and sales reps, as well as between the reps and their customers. You’d think that technology would be the main concern, but rather few respondents complain about their technological solutions, and seem to work well with Microsoft Teams, Zoom and other tools.
However, what is more of a challenge is to build trust online, which becomes a big problem in new sales. In general, they experience that distance communication works better with existing customers, that they have met face to face before.
They also experience that it is hard to find a structure to lead at distance. For example, finding an efficient structure for team meetings online, as well as managing performance at a distance.
...and Fighting to Maintain Drive and Motivation in the Sales Force
Finally, sales managers are having a hard time keeping their sales reps active and motivated. There are several reasons for this. One is, of course, that falling sales results and a very tough market makes life tougher than usual for most sales reps. But it is no longer just about getting a lot of negative answers from potential customers. In many cases the market activity is so low that the sales force is left idle. When they have too little to do, or are reallocated to new tasks, existing performance measures are missing. This puts managers in a tough situation, not knowing how their sales force performs. It is also a big challenge to keep the sales force motivated when the environment and the future in general looks dark.
When will Focus Shift from Operations and Tactics to Strategy?
In summary, the respondents seem to tackle the crisis well, given the circumstances. They try to reallocate their focus towards existing customers and customer segments, meanwhile struggling with managing the sales organization at a distance, and maintaining a motivated and active sales force. The focus is operational and tactical, which is natural. From previous studies, we know that sales managers are among the most operatively oriented managerial positions in the organization.
However, we have also pointed to the importance of thinking strategically in a crisis situation, and start planning for the day when the economy slowly starts running again. Currently, there are few attempts to build capability for the future. For example, there is some interest in developing the competence of the sales force in the coming months, but none of our respondents think that the time is right. Soon, though, focus has to shift from crisis management to strategic sales management. What sales managers are doing today will determine their performance in the future.
Ph.D. Markus Ejenäs, ProSales Institute