An early warning system for sales managers

The first working morning of the month. The boss opens the laptop and looks at the sales result: the last sale left the warehouse before midnight, the invoices went in on the final day, and the plan was still missed. The third month in a row. This year's plan was ambitious, production and purchasing were set up around it, and now the only thing visible for certain is the gap between the “plan” column and the “actual” column. Why it turned out this way will become clear at the periodic performance review at the earliest, a few weeks from now.

I have already written about a CRM that keeps an eye on client contact for the whole sales team. That article describes a salesperson's everyday work: contacts, tasks, quotes. This one sits a level higher. It is about what the person responsible for the sales plan sees of the sales team's work, how quickly they learn about everything and what each week of delay costs.

Why after-the-fact sales analysis fails

The first problem: information arrives too late. Between a mistake in sales activity and the moment someone calls that mistake by its name, weeks pass, sometimes months. Throughout that time the company bears the full costs: raw material, transport, production capacity set up for a plan that is failing to materialise. A new salesperson in an export market can collect praise for ideas and activity for a whole year before it becomes clear that their efforts have not produced orders. Nobody along the way caught the mistakes they were making, so nobody could correct them. Parting ways ends the cooperation, but the year of costs has already happened.

The second problem: plans are built from stories. When the budget is drawn up, salespeople paint a picture of opportunities and promises. Hard data is missing, so the plan grows beyond what the team and the market can realistically deliver. Then every month the company looks at the gap between plan and actual, and frustration builds on both sides: the board cannot close the budget, and salespeople chase figures that are out of reach. An inflated plan drags production along with it. Some products sit in the warehouse because they were supposed to sell and did not, while the items that actually have orders are in short supply, because capacity went elsewhere. A client will not always wait two months for goods. Sometimes they simply buy from a competitor.

The third problem: reporting eats into selling. Salespeople fill in spreadsheets and reports that nobody reads carefully, and before the periodic performance review they spend several days preparing to defend them instead of visiting clients. The best salesperson on the team delivers results, but nobody can say what exactly they do differently, so their effectiveness remains their private property. At the end of this spiral come departures: people lose motivation and leave of their own accord, or the company parts ways with them, and along with the person goes a market built over a year or two and relationships that a newcomer will not rebuild in a quarter.

A solution in three parts

Part one: sales work records itself. After a meeting the salesperson records a voice note on their phone, and that is the end of their reporting. The mechanism transcribes the recording, summarises it and saves it against the right client: there was a meeting, this was agreed, this is the next step. Resistance to the system disappears, because the salesperson's workload loses a duty instead of gaining one. And the database starts to build a complete, up-to-date picture of the whole team's activity, written in the salespeople's own words, with no spreadsheets.

Part two: signals in place of reports. From such a database the system prepares an on-demand summary for the person in charge: which clients show activity that points to an upcoming order, which key customers have been silent for weeks, which salesperson has lost the rhythm of contacts and visits. A conversation with a salesperson stops being a run through a hundred clients one by one. It covers the ten where something important is happening, and the three where something should be happening and there is silence. A mistake in sales activity comes to light within days, at a point when correcting it still makes sense and can still save the result.

These signals are easiest to read as simple colour-coded alerts, the same as in the CRM described earlier: green means all is well, orange means something is off and needs checking, red means things are going badly and action is needed. The manager starts with a view of the sales teams. A green team is working well and can be left alone, an orange one needs checking, and a red one needs attention straight away. Opening a team shows the alerts of every sales rep, so it is immediately clear which rep needs attention to improve their work. Each rep is responsible for their own markets, regions, lines of business and clients, so a warning alert next to their name is also a signal that sales in a specific market, with a specific client or in a specific region are about to fall, before the drop shows up in the results.

Part three: plans and production based on data. A solid picture of the past can be built straight away, with no waiting for the database to fill up with new notes. Today's system capabilities make it possible to reach into sources the company already has, such as the sales system and invoices, the salespeople's Excel files, notes and correspondence, and to assemble from them historical knowledge of activities and their results. Such a history shows how much the team can genuinely deliver in a given market, so the plan for the next period is ambitious and achievable at the same time, and a salesperson knows that with good work they will reach it and that going beyond it earns the bonus they have been waiting for. It also becomes clear how the work of the most effective salesperson differs from the rest, so their way of working can be passed on to the team through internal training instead of being left to chance. The same forecast feeds the production plan and raw material purchasing: the company produces what sells, and the warehouse stops filling up with products from an inflated plan.

What this means for the business owner

Do the sums on your own numbers for three items. The first: the cost of a quarter's delay in information, meaning production set up for a plan that missed the mark, slow-moving stock and the capital frozen in it. The second: the cost of parting ways with a salesperson who spent a year or two building a market, plus the cost of bringing a successor up to speed from scratch. The third: the value of the days each salesperson spends preparing for performance reviews. The mechanism described above works on all three at once: information about a problem arrives as it happens, people get plans they can actually reach, and meetings become short and to the point, because the conversation covers only matters that affect the result.

Where to start

Start with a simple test. Choose three key clients and check when the last contact with them took place and what was agreed. If the answer requires a phone call to a salesperson, knowledge of the market lives in people's heads, and that is the first gap to close. Then measure two things: how much time passes from the end of the month to the conversation about the reasons behind the result, and how many hours a month the sales team spends on reporting. These three answers describe the current state precisely enough to serve as the basis for a simple application that records the team's work without spreadsheets and gives the person in charge signals while a response can still change something.

If you would like to see what such a mechanism would look like in your sales team, write to me or book a meeting.

I describe more mechanisms of this kind in the Knowledge section.