Advice from Sales Leaders

To continuously improve and grow in our chosen profession as sales leaders we:  listen to webinars, read books, follow other sales and business leaders on social media, attend training classes, join professional organizations and talk to industry and professional peers.  

Along the way, there's always that one piece of advice that stays with us. This year, I asked these six accomplished sales leaders to tell me about the best sales management advice they've ever received. Here were their responses.


"Sales leaders serve both customers and your sales team. Sales leaders must make every effort to stay as close as possible to the front line, facing and meeting with customers as well as the sales team. Sales leaders must constantly view the environment they are creating and the culture they are fostering from both the customers position and the sales person's view point. It is a delicate and ongoing balancing act. Bottom line... always be listening."

 

Frank Costanzo
SVP Sales and Business Development, Caliper
Objective, accurate employee assessment instruments.

 

"It's all about sales results. But if you just focus on sales results, you might not get there. Know what causes sales, what causes that order to happen. If I can understand that, then I can measure, monitor, and coach to raise the expectation of that behavior, in turn getting the sales result."

 

Ken Pfrommer
VP of Sales, Kenseal Construction Products, A Division of A.H. Harris
Innovative solutions in waterproofing, glass and glazing, restoration, and building envelope.

 

"Assuming you are aligned in your goals and objectives, whenever possible, have a collaborative relationship with your rep by working with them as opposed to dictating and mandating."

 

Mike Waldron
VP of Sales, Xactly Corporation
Cloud-based incentive compensation solutions for employee and sales performance management.

 

"You don't have all the answers. Always be seeking the advice of others. When possible incorporate the advice of others into your work, especially advice from the people actually doing the work. People never disagree with their own words."

 

Brian Donovan
North America Sales Trainer, HomeAway
Vacation rentals available to travelers through our online marketplace.

 

"One of my earliest mentors when I was taking on my first management role told me something that has always stuck with me. I know it's a pretty common saying but at the time I had never heard it.  He told me to, 'Always be a duck. Calm on the surface even when padding a million miles per hour under the water.'"

 

Christopher Rack
Chief Revenue Officer, PureB2B
Lead generation and data provider that connects marketers and buyers

 

"It is essential to listen to your salespeople and understand that each person is different. You need to manage each person according to their specific needs and personality in order to communicate your expectations effectively."

 

Matt Beirne
National Sales Manager, GIE Media, Inc.
Marketing and communications business-to-business media.

 


A big thank you to Frank, Ken, Mike, Brian, Christopher and Matt for giving my question serious thought and sharing your advice with my readers. I appreciate it very much.

Have a wonderful holiday season!

The Lengthy Demo

A client writes "When a prospect expresses interest in my company's product, we encourage them to sign up for our hour-long demo. Many balk at this, saying they don't have that kind of time. They ask if we have a shorter one. We don't. It's a frustrating situation for management and the salespeople.

"We spent a lot of money and resources developing this demo. With potential customers well informed about our product when they contact us, I assumed they would be ready for this level of detail. What are we doing wrong?"
 
Long demos, multi-page white papers, and emails with six different attachments. Buyers I know complain about this frequently. It's a problem.

A Big Disconnect

We all know the buying cycle has changed. Customers spend time educating themselves about a product or service, then contact the vendor. They have moved through part of the sales cycle before speaking with a salesperson. Except that part of the way differs from all of the way.  Companies misunderstand this and inundate prospects with information.  

Differentiate Between Interested and Interested

When customers express some amount of interest in a product, reps often optimistically misinterpret it. One person's "some interest" differs from another's - regardless of how much time they've spent researching the product online. Salespeople need to determine the customer's actual level of interest in and knowledge about the product before proceeding. Questions should include:

  • How did you find out about us?
  • Tell me about your needs in this area.
  • How do you handle this issue currently?
  • How is that working out?
  • Have you looked at our website / blog / LinkedIn page?
  • What was of particular interest to you?

Inquiries like this help the salesperson distinguish between prospects who:

  • remain uncertain as to whether or not they absolutely need the product
  • know they need / want the product but are shopping around
  • have almost made their mind up about which product they would choose (yours)

Appropriate Next Step

Companies must create and make available to reps: webinars, presentations, product demos and marketing information of varying lengths and types appropriate to the customer's level of interest.  

As reps get better at asking questions and listening to the answers, they'll start to more clearly understand each situation and which one works best in that particular situation.

Keep it Brief

Instead of offering all prospects an hour long demo, create a 10 - 15 minute presentation. Almost everyone has that kind of time. Customers communicating enthusiasm for the product will likely either agree to see the presentation right then and there - or schedule a time to take a look.  

Reps offering a short demo make no hard and fast assumptions about a prospect's interest level, respect their schedule, and provide appropriate "next level" information.  This paves the way for another sales interaction.

Final Thoughts - The Hour Long Demo

If a customer conveys a genuine interest in the product, backs this up with facts or figures from their online search, has a recommendation from a colleague or assures the rep your product is far and away their number one choice, you could potentially interest them in an hour-long demo. But if they balk at this time commitment, you could irritate or scare them off. Where do you go from there?

Few prospects watch an hour-long demo spontaneously or by themselves. Most want to schedule it at a time that works for them and ask several other employees to participate in the process (a good sign). It should be reserved only for those prospects at the appropriate place in the sales cycle and worth everyone's time investment - yours and theirs.

Majoring in Sales

Between 13 and 23 million people have sales jobs in the United States. For many years, none of the 2000+ four year public and private colleges in this country offered sales as a major. Curious as to why, I began to look into the matter. 

According to Dr. Terry Loe, Ph.D., professor at Kennesaw State University and one of the founders of the National Collegiate Sales Competition (NCSC), "This was because sales was seen as more of a vocation than a profession by the academic community. Published research is the currency to help colleges develop a curriculum. While research began as early as the 1940's, there's been more of a concentrated effort over the last 50 years."

"Attitudes began to change with the greater availability of formalized research. In the mid-eighties, Baylor University started a sales center, then Northern Illinois University followed suit a few years later."

Dr. Loe says, "Today, approximately 150 colleges and universities have some kind of a sales curriculum and 45 have a dedicated sales center. When people see it taught at the university level, it builds credibility for the profession."

To learn more, I spoke to Robert Nadeau, a Professor at Plymouth State University, and the founder and Director of the University's Professional Sales Program.  

What is your own sales / sales management background?

As a kid, I had a knack for fundraisers - UNICEF, Dollars for Scholars, Boy Scouts - but I didn't know what it was. Post-college, I was a management trainee for McDonald's and then went to work for Liberty Mutual for 25 years.  As the Regional Operations Manager for Liberty Mutual, I oversaw five operations managers who led 36 front-line sales and service managers who in turn supervised over 500 employees.  

How did you first find out about colleges with professional sales programs?

While at Liberty Mutual, I researched different area colleges to affiliate with to hire sales reps. At the time, the closest school with any kind of professional sales program was UConn. Liberty Mutual became a corporate sponsor and the results were phenomenal.  

We hired 8 - 10 interns per year and offered 4 or 5 a full time job upon graduation.

What was your role in Plymouth States' Professional Sales Program?

I was starting to formulate a second career game plan, thinking down the road I'll do this (teaching). So I started adjuncting one night a week - teaching a sales management class - and loved it. I approached the dean about creating a sales program and had his full support.  We went through the process of creating a formalized program.

What advantages do students coming out of a program like Plymouth State's have?

When students receive a degree in professional sales, it sets them apart from many of the other graduates and job applicants. With 120 hours of classroom time, that equates to 3 weeks or more of professional training. This doesn't even include homework assignments and special projects they complete.

Our program helps them discover incredible opportunities.  I have 8 - 10 speakers come in each semester - one was an executive from a medical company. A student, minoring in biology, was all excited about this company. She could sell and work for an organization whose product interested her. It was a connection to a job she didn't even know existed prior to this.

Most importantly, many are offered jobs before graduation.

What are the concerns of today's sales program graduates?

The students ask, "Can I really do this?"  They wonder about their ability to sell away from academia. If they do poorly on a school assignment, they don't get an A. They know the real world consequences are different.

What should employers know about Millennials?  What do they need?  What are they looking for in a job or career?

Millennials represent 30% of the workforce today and that number will climb as more baby boomers retire. I want to debunk a myth:  they aren't lazy and they do not have a poor work ethic. But they do need to be properly guided and motivated. Most are independent thinkers who need to understand more of the "why."

On the personal side, they have a real concern with work life balance. Millennials want to make a difference and give back through civic activities. They need their voices to be heard.

What do employers tell you they need from the graduates?

This generation struggles with communication skills.  Employers ask, "Can you please teach them how to make a phone call?" In my class we work on the basics:  having a conversation, making eye contact, and networking.  My students make out-going sales calls to develop leads for corporate sponsors. I teach them the proper way to shake some one's hand - the old fashioned stuff.

Learn more about the National Collegiate Sales Competition as well as Plymouth State University's Professional Sales Program.

Acting on Assessment Results

A reader writes, "Earlier this year, I had my reps take a sales assessment. I reviewed the results with each of them, finding the information provided to be accurate and eye-opening. The problem - I haven't done anything with or about the assessments since. What do you recommend?"

This happens often. Sales leaders go through the assessment with the rep and then neglect to re-visit this powerful, career enhancing document.

Look At It Again

Sales leaders taking a second look at the reps' assessments tell me they get even more good information the second time around. They don't have the pressure of telling the rep some things they might not want to hear. They've also had time to consider the results, which they see validated when they monitor or accompany reps on calls.

Most conclude the assessment captured the salesperson's strengths and challenges very accurately.

Responses Vary

Salespeople have different reactions to the information provided, especially if they've never taken a sales assessment before.

  • Some focus only on the areas needing improvement and ignore any positives. They require some time to process the critiques and take a more balanced view of the results.
  • Others have no idea what their areas of strength are.  They just get out there every day and sell. Having the test point out and validate their talents serves as great motivation.  
  • Ambitious reps see it as a vehicle for increasing their income. If they can address a few of the weaknesses, they can earn more money.

Though rare, sometimes reps shut down. They consider the information nonsense and want little to do with discussing the results.  

Most reps, after thinking it over, see the comments and critiques as valid.  

Timing

Prior to the next regularly scheduled monthly or quarterly one-on-one meeting with the rep, tell them you want to discuss their assessment again. Ask them to review the document before the two of you talk.

Start the conversation by asking them open-ended questions like:

  • Now that you've had some time to consider the results, what are your thoughts?
  • What surprised you the most?
  • Have you changed anything about your sales approach based on some of the comments?
  • What findings did you disagree with?

Let them talk. Let a little silence fall while they process their thoughts. Resist jumping in or arguing with any conclusion they've come to.  

Moving Forward

Together, look at the suggested areas of improvement and discuss only one or two specifically. Continue to ask questions such as:

  • Have you become more aware of this since we first looked at the assessment?
  • How do you think it affects your sales performance?

Create a plan for reading a book on the topic, participating in targeted on-line training, and observing other reps who excel in this area. Attach dates, goals and outcomes. When working together, discuss the particular issue right after a sales call or appointment.

Tools

Many companies provide guides or workbooks to accompany the assessments. If available, I recommend purchasing them for each rep. These documents use the same terminology as the assessment and help to focus coaching sessions.

Casual Check-ins

Look for other opportunities, besides one-on-one meetings, to coach reps on areas for improvement. Email or pick up your cell phone frequently. Say to the rep, "I saw you called on LHS Associates this morning. How did it go? Were you able to try the response we came up with to the configuration objection?"

These calls remind salespeople that you want to see them succeed. It also reinforces the new behaviors the two of you are working so hard to make part of their regular routine.

Final Thoughts

Assessments aren't a one-and-done event. As a sales leader you want to turn it into a working document that you refer to throughout the rep's tenure with your organization.

Keeping a Star Rep

A reader writes, "Recently, one of my best sales reps expressed interest in becoming a sales manager. While I think he has the qualities to succeed as a leader, I have no plans to create a sales management position. I supervise the sales staff and plan to do so until I retire or sell the company - both events are many years away. An excellent rep, I would like him to remain with the company for as long as possible.  How do I handle this situation?"

Support him in every way possible.  

Education as a Benefit

Companies of all sizes offer full or partial tuition reimbursement programs for a reason. They know those who learn and grow make better employees. People capitalizing on these programs tend to have longer tenures with their organizations.

Offer to pay for all or part of a sales management training program. Be clear about the maximum the company will spend and any other conditions attached - like achievement of a minimum grade.

Provide Some Experience

Put this rep in charge of a project. It doesn't necessarily need to involve direct management of others. You might be considering changing CRM vendors, starting an inside sales group, purchasing new lead tracking software, or improving communications between marketing and sales.

See if he has any interest in creating or heading up a committee to begin looking into any one of these initiatives.

Act as a Mentor

Share your management know-how and wisdom. Agree to have lunch with this rep once a month to discuss your experiences supervising people. Talk about what you find challenging and what you enjoy. Recommend books or tapes that have positively influenced your career.

Always keep in mind, this person still works for you, and use good judgment in considering what subjects get covered.  Speak in general terms. Never talk about current employees specifically. When discussing an experience with a past employee, don't name names.  

Make Introductions

Ask professional contacts currently managing employees if they would be willing to meet the salesperson for coffee to discuss their experiences. Hearing from people outside of the company helps provide a fuller perspective.

Why Do Any of This?

Those interested in pursuing a management position eventually find a way. Sometimes reps leave a job where they're perfectly happy to accept a sales position with a company offering management opportunities.

If this salesperson starts down that path, you now manage a distracted job-hunter as opposed to a focused sales representative. Instead, embrace and encourage their ambition. Grateful for the opportunity to learn and grow, they'll likely remain productive and on the job for some time to come.

The Flip Side

Most sales reps at some point in their career consider the possibility of becoming a sales manager. When you support the rep as they take a course and speak to other managers, they may come to the realization they either don't want or aren't ready to manage others. It happens.

While it looks glamorous from the outside, anyone managing people knows it to be anything but.

Final Thoughts

If this rep remains serious about pursuing a management position, and you have none, he will eventually go elsewhere. It's inevitable.  Having been supported and encouraged by you, he'll likely leave on very good terms, express gratitude for your help, and remain a great business contact. He may be in a position to do you a good turn at some future point.

Frustrations with the Mediocre Rep

A reader writes, "Eight years ago I hired a rep that has been a mediocre producer from day one. She hits her sales goals - but always just by 1 - 2 percent. A pleasant enough person, she spends an inordinate amount of time in my office, asking for help closing deals and discussing company policy. I'm beginning to feel a sense of diminishing returns for her staying with the company."

Ah, the average rep. Sales managers all over the world, in every industry, spend countless hours coaching, listening to, and trying to motivate this rep. They want desperately to figure out how get them to the next level. 

The Conundrum

Most average reps possess some sales skills, represent the company well, and get along with their co-workers. They rarely have really bad months or quarters. When other reps sometimes struggle, their steady production occasionally saves the day.

Conversely, as other salespeople realize 30 to 40% gains - or higher - this rep comes in right at quota. They demand a lot of attention from management, struggling with the same issues again and again.

Rep Profile

Average salespeople have one thing in common - abdicating responsibility. They take their issue and email it to you.  Start placing accountability back where it belongs - with them.

Assess the Rep

If you've never done so before, have them take a sales assessment. Their scores, usually on the low but acceptable side, show they can sell but that the role doesn't come naturally. They need to work harder than most of their peers to achieve the same results. 

Discuss the findings with them. Next, ask them to draft a plan for working on any problem areas identified by the assessment. Have them select a book to read on the topic.  Discuss one chapter each week, during your one-on-ones.  Assign homework.

Change up the Interactions

Mediocre reps have a talent for steering the conversation off course and off subject. Even seasoned managers get caught off guard. Grab the steering wheel back.

Prior to all one-on-one meetings, send out an agenda. Start off with the book discussion and a review of their assignments. Next, discuss their sales performance against quota, and minimum performance standards like prospecting, calls, and presentations. Schedule the meeting for a certain amount of time and end it promptly.

When they call or come into your office for help, push back.  Say things like:

  • "We've discussed addressing that objection on several occasions. How have I advised you to respond?"
  • "That's company policy. As part of this sales team you need to follow the rule. Can you do that?"

Impromptu Visits

When having yet another time-draining conversation you know won't go anywhere, tell them "I have ten minutes right now, or all the time you need after five."

Enough said. We both know they won't be back at 5:05pm.

Review the Numbers

Show the reps the group numbers: 

  Quota Actual Difference %
Julie $2,100,000 $2,675,000 $575,000 127%
Connor $2,000,300 $2,800,000 $799,700 140%
Ann $2,073,000 $2,099,000 $26,000 101%
Nate $2,200,000 $2,100,000 ($100,000) 95%
Zachary $2,195,000 $2,544,000 $349,000 116%
Total $10,568,300 $12,218,000 $1,649,700 116%

Ask fair but thought-provoking questions like:

  • "Why do you think you consistently finish in the middle?"
  • "Zach started two years after you. He's at 116%. Why do you think that is?"
  • "Do you want to get out of the middle of the pack?  How do you intend to do that?"

Weigh the Costs

This rep achieves quota but comes in 15% below the group average. That's costing the company at least $300,000 annually. Your competitors gain ground in her territory. Provided she has all the same tools at her disposal, yet continues to lag behind the rest of the group, it could be time to consider probation for failing to achieve the group average.

Final Thoughts

Most average performers stay that way throughout their career. Each sales leader must decide whether to terminate their employment and train a new rep or stick with the status quo.

No matter which side you come down on, change the relationship. Set different expectations. Minimize your interactions with them. Don't allow them to monopolize your time. Allocate the majority of your management efforts to high-performing and up-and-coming reps. 

Organizing Motivating and Productive Sales Kickoffs

A reader writes, "For the last several years our company held annual sales meetings at our home office. This year, the budget was approved for an offsite meeting. We've selected the location. Do you have any tips for making our first destination sales meeting a big success?"

To answer your thoughtful question, I turn to veteran conference planner Shelley Griffin, president of the Griffin Conference Group (GCG), a full service meeting planning company. Her insightful tips include:

Define the Objectives

Before you do anything else, think about why this meeting is being held. What results are you looking for? Some objectives for the meeting might include:

  • Improving product knowledge
  • Sharing ideas on handling prospects' objections
  • Developing a plan to shorten the sales cycle
  • Building energy for the coming year

Ask yourself this: what needs to happen for everyone to feel the meeting was a good use of time and money?

Don't Forget the Reps

Solicit your sales team's input as you develop the meeting agenda. Via email or a survey, ask them what they would like incorporated into the gathering. This gives you valuable information about what your sales force considers important. Make the sales team feel this meeting is worth the time away from selling.

Include Other Employees

Invite some non-sales employees from the home office to attend. Having the sales reps and home office staff meet has real benefits. People work better with folks they know.  Give them some face time together.  

When a key goal is to get the sales team and the home office to interact, don't seat them on opposite sides of the room or put them on different teams.

Acknowledge Great Performance

Everyone loves to be recognized for their accomplishments.  This is especially true for sales professionals. Acknowledge superior performances at the meeting. Applause feels wonderful. Recognize the top sellers at the largest gathering. Make a large sign with their picture and "Top Sales Person of the Quarter." Unveil it at the meeting.  Display it in the home office until the next recipient is named.

Build the Agenda

How long should the meeting be? One day? Two days?  Your meeting objectives will help you to determine how much time is needed. Don't add more to the agenda just to stretch out the day. Participants rarely think that a meeting is too short.

Passive vs. Active

As you develop the agenda try to alternate time spent passively listening, say to the president's or VP of Sales' presentation, with time spent more interactively.

  • Break into small groups to brainstorm ways to handle objections
  • Ask one or more of your star performers to share some of their best practices
  • Stage a mock sales call with the prospect from hell and a sales executive; humor is great  
  • Organize team-building activities that allow people to get to know each other better

Manage Electronics and Other Interruptions

If your meeting is worth having, it is worth having everyone's complete attention. This is hard to accomplish with attendees checking their phones and working on their laptops. Your sales force will indicate a need to be responsive to their clients with statements like, "There is a big contract about to be signed." Potential solutions to this include: 

  • Build time into the agenda for participants to get back to clients
  • Let reps dealing with emergencies leave meetings quietly for a brief period of time

Evaluate Your Results

Did this meeting meet your expectations? Does the sales force feel the same way? The only way to know is to ask.  Create a survey. Limit it to 3-5 questions. Have attendees fill it out on-site. Potential questions to consider include:

  • Overall what grade would you give this Sales Meeting?  A-F
  • What aspect was most valuable or useful to you?
  • What aspect was the least helpful?
  • Should this be done next year?
  • Any other comments?

Be sure to build in some time for informal socializing. Consider having a reception to kick off or conclude the meeting.

Aligning Sales and Marketing

A reader writes, "In December, I accepted a Director of Sales position with a new company. Right away, I noticed a lack of integration and teamwork between my department (sales) and marketing. I want to address this as quickly as possible without making enemies early in my tenure. Do you have any suggestions?"

To answer your excellent question, I turned to Carole Mahoney, principal of Unbound Growth. Unbound Growth was founded on the idea that all business activity needs to be centered on the buyer and their perception of their problem. Unbound Growth works with business owners and entrepreneurial salespeople to align their mindsets and behaviors to their ideal buyer.

Carole, when you work with a company what do you typically see in the relationships between sales and marketing?

"I've been on both sides of the aisle, from working in marketing departments to running my own marketing agency to being a salesperson myself and now coaching entrepreneurial salespeople. The blame game is still alive and well. When revenue is up, both sides want to take credit. When revenue is down, both sides want to point fingers and say "Your leads suck" or "You don't follow up."

"To some extent, both are right, but it can only be corrected when ego is set aside to address the problems. Conflict occurs when sales and marketing leaders allow the blame game to happen.  Everyone loses sight of what matters the most, and that is the success of the customer."

What are the trends nationwide?

A 2011 Aberdeen Group study reported that highly aligned organizations achieved an average of 32% year-over-year revenue growth. Unaligned organizations saw a 7% decrease in revenue. Interestingly, a study from Forrester noted that just 8% of companies say they have tight alignment between sales and marketing.

People sometimes reject the data, saying, "Of course we're aligned. How else could we function?"

I respond with, "If the report is true, you are in the minority."

To determine the level of alignment between sales and marketing, Carole recommends answering the questions below.

Customer Profiles

  • Have the two departments built the customer profiles together?
  • Do you both know and agree on:
    • who your best customers are
    • how they buy
    • which problems you help them solve
    • how the results impact them

Speaking the Same Language

  • What reports does each department run?
  • Are those reports shared?
  • Do you run them at the same frequency?
  • Do you respect each other's interpretation of the data?

Buyer Behavior

  • Is there agreement on the stages of the sales cycle?
  • Does each stage have a name?
  • Is there jargon either one of you doesn't understand?
  • What is the buyer behavior happening at each stage?

Leads

  • What constitutes a good lead?
  • What is the corresponding marketing and sales behavior with the lead?
  • Are you tying those behavior benchmarks to the same outcomes?
  • Do you agree on how many leads are needed and where they should be coming from?

Social Media

  • Do both departments engage on social media?
  • Is this left exclusively to marketing?
  • How many sales people have social media profiles?
  • Does the content
    • focus on the buyer?
    • offer educational insights?
    • explain the buyer's problem and options to solve it?
    • stay current with industry trends?

Getting Started

Carole recommends beginning the alignment process by suggesting weekly interdepartmental meetings. Team up and tackle the questions above a section at a time.

After answering the questions (and any others you think of), continue to meet weekly to share new information. Begin the process of writing a combined sales and marketing plan for the coming weeks and months.

With your team, schedule monthly roundtables. Share with the reps what you have learned and where you are with your marketing integration goals. Allow them to share their feedback and ask questions openly.

Learn from Last Year Before Moving Forward

A client writes, "With the final numbers in for 2015, the sales staff I manage made the company sales goal by 102%. The whole team had to grind it out, closing several last minute deals to just surpass quota. Everyone's exhausted - me included. Two of the reps finished under quota (one at 94% and the other at 88%). Both tried hard. Do I let this go or pursue a conversation with each of them?"

Bleary eyed from a difficult Q4, a lot of sales leaders say to themselves, "We hit the goal. Let's start the New Year with a clean slate." Leaving the situation unaddressed with the two underperforming reps sets you up for potentially struggling through another difficult Q4 in 2016.

First Things First

Now that the dust has settled, meet with each rep. Review the numbers. 

  Goal Actual Difference %
Rep 1 $1,000,000 $940,000 ($60,000) 94%
Rep 2 $1,000,000 $880,000 ($120,000) 88%

They didn't just miss quota, they missed it by $60,000 and $120,000 respectively. Hearing and seeing the numbers underscores the seriousness of the situation.

Get More Granular

Show how the shortfall specifically affected revenue results monthly and quarterly.

  Quota Shortfall Quarterly Shortfall
Monthly Shortfall
Rep 1 $60,000 $15,000 $5,000
Rep 2 $120,000 $30,000 $10,000

Use Relatable Examples

Connect the quota shortfall to sales actions.  If $8500 represents a mid-size deal and $13,000 a larger deal, show the reps the number of sales they needed to close to achieve their goal.

  Quota Shortfall In $8,500 Deals
In $13,000 Deals
Rep 1 $60,000 7.1 4.6
Rep 2 $120,000 14.1 9.2

Some salespeople find it easier to understand the situation this way.

Distinguish Between the Two

Rep #1 came within 6% of quota.  

Rep#2 fell short by quite a bit: 12%.

As the sales leader, ask yourself:

  • How long has this rep been with the company?
  • What is their history of achieving quota?
  • What kind of help/coaching would be helpful?
  • Do they have a good chance of succeeding?

Determine whether one (or both) merit the effort you'll have to put in to ensure they achieve quota regularly.

Review the Whole Year

With four quarters worth of numbers to look at, you now have the ability to see what you might not have seen before.

Examples:

  • Rep #1 ran 10 - 15% behind at least 2 months out of every quarter  
  • Rep #2 had a disastrous Q3, achieving less than 50% of goal

Do you understand why? Try to diagnose the situation.  

Create a Plan

Work with each rep individually.  For example, based on your diagnosis perhaps:

  • For Rep #1, achieving minimum productivity standards (cold calls, appointments, proposals) aren't enough. He needs to increase his activity by at least 20% to meet his number consistently.
  • Rep #2 must have a fuller pipeline of closable deals going into Q3. This means more prospecting activity on her part in the beginning of the year.

Set the Stage

While Reps #1 and #2 finished under quota, the rest of the sales team achieved their numbers. It is doable. Both reps must agree to address their weak points. Make clear that a repeat performance of 2015 could result in disciplinary action.  

Invest

Focus your coaching time with each rep where they need help. Have them work with salespeople on the team who are strong in the areas they struggle with. If budget allows, provide some outside training.

Observe and Prepare

Watch and see if they take the matter seriously and act appropriately. Track their numbers closely.

The minute you mention the possibility of disciplinary action to some reps, they start job hunting immediately. Contact potential replacements. Understand who's available in the marketplace. Meet them for lunch or coffee.  

If the current reps turn things around, great. If not, you'll be ready to hire replacements as quickly as possible.

Final Thoughts

Avoid another draining, exhausting Q4. Start the New Year with a solid understanding of who didn't help achieve quota and why. Take corrective action early in the year.

Ideas from Sales Leaders

While I've benefited from excellent formal training, much of the sales management knowledge I've acquired throughout my career has come through interacting with and learning from my peers. With that in mind, I'd like to share what sales leaders in different areas of the country and in different industries have learned this year.  

It’s so important to invest in people, believe in their ability and coach them to maximize their potential. We spend so much time building processes, analyzing pricing, testing products, creating comp plans, and balancing territories. While those things are important you need to balance the investment and remember its people you should be investing in.
— Johanna Rivard, Executive Vice President, Pure B2B, Lead generation and data provider that connects marketers and buyers.
In 2015 we began to shift our sales approach to understanding our category better than anyone by bringing hard data and a strategic category thinking to the table. While so many in our business tend to sell against just product benefits, we approached it holistically by defining the roles of each sub segment, brand and product. In addition we’ve added value to the entire category by developing and introducing at shelf merchandising elements to disrupt the consumer, create awareness and better define our products.

”This approach has helped us to gain additional distribution and position ourselves as the category expert. We’ll continue to invest in the data and analysis required to keep ourselves more relevant that our competitors. We’ll also continue to develop new and disruptive ways to educate our consumer and make their shopping experience more experiential. We know that if we partner with our customer to grow their entire business ours grows also.
— Kevin Waller, Vice President of Sales, Kurgo. Pet adventure experts.
This year I rewrote the definitions associated with the percentages to close applied to each opportunity in the sales forecast. It gives me more confidence in predicting our forecast, allows for better communication with the salespeople and more reliable reports to senior management.
— Oriana Derose, Vice President of Sales, NRS. A compliance service company developing solutions for the financial services industry.
In 2015 the company introduced a large number of new items. To make their sales calls easier, I worked hard to make reps more independent through better access to electronic data resources that relates to them and their customers.
— Bob Clemence, Vice President of Sales, Hyde Tools. Provider of hand tools for jobs of many kinds.
Our inside sales team is comprised of Development Reps and Inside Sales Representatives selling a complex business application. I want to place less of an emphasis on blasting through the sales cycle and more of an emphasis on competitive differentiation and a solution selling orientation.
— Chris Murphy, Director of Sales, Act-On. Software-as-a-service, cloud-based marketing automation solution.

Thanks to Johanna, Kevin, Oriana, Bob, and Chris for taking time out of your busy schedules to share your thoughts.  Many other sales leaders will read this and consider what they've learned and goals they might set for themselves in 2016.

Have a wonderful holiday season!

Investing in the Sales Team

A reader writes, "When I approach my direct supervisor with ideas for improving my group's sales performance, he listens for less than 30 seconds, and then rejects the idea with a wave of his hand. He makes comments like, "That's not a good idea," or "I don't think that will work." We then move on to what he wants to discuss. How can I break this routine we seem to be in?"

At one point or another, most of us have reported to a boss who rejected most / all new ideas. It's demoralizing.

Change Tactics

Approach him in a different way. Put together a two to three page document outlining your idea, establishing your goals, and backing it up with supporting points from an independent source (wherever possible).

The Document

Take your time with this project. Break it into manageable pieces. Begin by writing a paragraph or two describing your idea.  

Establish Goals

Suppose you want the five reps you manage (one "A" performer, three "B" performers and one on written warning) to convert more product demos to proposals. If you offered presentation training, you estimate the "A" and "B" reps would increase their numbers of proposals and sales as follows.

"A" Rep

  Monthly Sales Activity Increase Percent Increase New Monthly Sales Activity
Demos 15 -   15
Proposals 5 3 60% 8
Sales 3 1 33% 4

"B" Rep

  Monthly Sales Activity Increase Percent Increase New Monthly Sales Activity
Demos 10 -   10
Proposals 3 2 66% 5
Sales 2 1 50% 3

Looking at the average selling price for each member of the sales group, there is the potential to increase sales across the group $334,800 annually.

  Additional Annual Sales Volume Average Sale Additional Annual Revenue
"A" Rep 12 $8,500 $102,000
"B" Rep 12 $6,600 $79,200
"B" Rep 12 $6,500 $78,000
"B" Rep 12 $6,300 $75,600
TOTAL 48   $334,800

Deduct the cost of training to determine the gross revenue gain. Provide conservative and estimates. People take the proposal more seriously when you do.

Independent Source

Spend an hour or two at a public or business library or online. Work with the reference librarian to search for an article or study to augment your recommendation.  

If one of my clients has difficulties with turnover I might find a reputable study about sales reps who receive ongoing training and development enjoying longer tenures with their employer. 

Approaching the Boss

Present the completed the report to your boss at the end of a one-on-one meeting. Very calmly say something like, "I have an idea and put some thoughts together. I'd value your opinion on it. Maybe we can talk about it in a week or so, when you're ready?"

Refrain from emailing or texting to follow-up. Let them come to you. They will.

Assuming the Worst

I've advised many sales leaders to take this route to introduce or re-start the conversation about a previously rejected idea. Most assure me, "He'll just say 'No' to this, too. Why put in all the effort?"

After trusting me and giving it a try, all have expressed surprise when their boss follows-up with them, typically in less than a week!

Why it Works

When you take the time to put your thoughts in writing and back up your points with facts and figures, a supervisor knows you're serious.  

By giving them time to consider your idea, you've told them you can handle a discussion on the topic. This changes things.

Compromise

The sales reps may need targeted training on making presentations and your boss may feel they don't spend enough time making prospecting calls. Negotiate. If the reps improve the number of minutes spent on the phone by 20%, would your boss revisit the idea of presentation training?

Final Thoughts

Whether you want to replace an antiquated CRM system or create an inside sales group, take the time to put your thoughts in writing. Sales leaders trying this find that, win or lose, it changed their relationship with their bosses.  

Though their ideas weren't always given a green light, they reported an increase in mutual respect. Going forward, they engaged in more positive discussions of potential ideas.  You have everything to gain by approaching the problem this way.

Is Your Sales Rep Moonlighting?

A reader writes, "My company hired a sales representative for a territory far from headquarters. Shortly thereafter, I started to get the uneasy feeling she had two jobs. Sometimes, she missed our weekly staff conference calls. Other times, she was unreachable during certain hours of the day, or days of the week. She was achieving her sales goals, but not by much.

"A few weeks ago, she resigned. I would like to hire a rep for that territory again.  How do I protect against an employee holding a second job?"

Reps like this are salaried employees with your company. They should be singularly focused on your customers as well as developing extensive product knowledge over time. 

Technology allows most every company to place reps in territories all over the world. With this ability comes risk, such as not knowing where they are, or what they're doing with all of their time. Sometimes, these reps have another job.

David Sawyer, an expert with over 35 years in the private security industry and President of Safer Places, Inc., a background screening firm, offers the following advice:

Employment Contracts

Act preemptively. Your employment contract should clearly prohibit sales representatives from working a second job in sales.

Background Check

Require a background check as part of the hiring process. The release form most new hires sign gives permission for this check as long as they remain an employee. (This varies state-by-state.)  

Credit Reports

Ask your background screening company to run a credit report. Often, employers are listed near the top of this document.

Database Search

Many background screening firms outsource their employment verification to companies such as The Work Number (www.theworknumber.com). A search of this database may show title and dates of employment. If the dates are current, you'll know they have a second job.  

The IRS

This agency is an excellent source for verifying salary and employers. However, they require a special release form to be signed for each search. Include this in your initial background check. Then, consider making it a policy to run an annual background check and include the IRS search every year.

Private Investigators

"I list this last," says David, "as it is the most expensive option. Investigators charge by the hour. If you're acting on a hunch, it could take quite a while keeping your employee under surveillance before you'll become satisfied that your hunch may be unfounded."

Final Thoughts

Clients with remote sales forces often worry about the sales reps having two jobs. I suggest adding specifics to the employment contract including:

  • Starting / ending times of the workday
  • Availability to be reached during the workday
  • Dates / times of staff meetings
  • Dates / times of quarterly or annual offsite sales meetings
  • Lead times for taking vacation / personal days

Most remote reps have considerable respect for their employers and work hard at their jobs. Only a small number "work the system." Don't let those few inhibit you from hiring a remote rep. Just make sure you have the safety net in place to help if you suspect the rep isn't on the up and up.

Share Team Expertise to Boost Product Sales

My company offers five different products. Three account for 75% of sales revenue. To achieve their goals, the reps all sell different combinations of the products.  Most sell almost none of at least one - but the one they bypass differs from rep to rep. How do I go about achieving greater consistency in product sales throughout the staff?

Perplexed managers wonder why some reps rarely discuss certain products with decision makers. Suggestions for dealing with this issue include:

Do the Research

Take a look at the numbers. Determine exactly which rep sells how much of each product. Get ready for a few surprises. Identify the top one or two and the bottom one or two salespeople for all products.

Think about potential reasons for the differences. Does your Florida rep sell fewer of an item more suitable for colder climates? Do some products fit better with certain industries?  

Start With One Product

Look for the most underserved product. That might include one with:

  • a higher than average profit margin
  • fewer competitors
  • a growing market segment

Start there.

Select the Reps

At the next staff meeting, ask the two reps selling the most of this product to give their presentation to the group. Record it for future use.  

Have these reps talk about:

  • how they introduce the topic
  • typical questions that get asked
  • the most common objections

Most peer-led presentations generate a lot of interest and questions from the other salespeople.

Often, an average rep on the sales staff sells the most of a product neglected by the better producers. I've seen this time and time again. I don't know why it happens, but take advantage of it. Give the mid-level producer who's a superstar with this product a chance to shine. Ask them to give one of the presentations.

Involve the Experts

At another staff meeting, ask the product manager to give a presentation and answer questions. But first listen to their presentation one time, just the two of you. Take note of information that's too complicated or technical. Request that they keep their presentation sales-friendly.  

Maintain Momentum

Several weeks later, ask the same two reps to give their product presentations again. The other salespeople will get even more out of hearing the material the second time around.

At subsequent meetings ask another one or two reps to present to the group. Select two more for the next staff meeting. Continuously reinforce the process.

Incent, Incent, Incent

After a month or so of this immersion, work with the product manager to create a quiz. Warn the reps in advance. Hand it out at a staff meeting.  Offer a prize for the highest score. You'll learn which reps are really paying attention.   

Create a sales contest. Make it easy to win. You want reps moving more of this product.  Offer a group and an individual prize. Ask the two reps showing the most improvement during this process to serve as team captains.

Product Quotas

Many companies attempt to solve this problem by assigning each product a separate quota. Generally, reps ignore the quota, hitting their goals by selling the combination of products they feel comfortable with.  If they achieve or exceed their overall sales goal, most managers look the other way.

I believe in separate quotas for products. But put those quotas in place after several months of dedicated training and practice. Integrating a product into a salesperson's "bag" takes time and consistent reinforcement.    

Don't Overdo

Sales leaders with this dilemma sometimes go on a rampage. They deluge the sales staff with PDF fact sheets, competitive information, and presentations from marketing or product management.  

Actions like these overwhelm the salespeople.  Often, they end up right where they started: selling the products they were most comfortable with from the beginning.  Give the reps the time to learn the product and incorporate it into their sales presentations.

What to Do When a Rep Makes a Big Mistake

A client asks, "One of my better reps made a significant mistake with a major account.  She told me what happened and admitted it was her fault. Before this, no problems existed with the customer. I called two executives she deals with regularly and visited them in person. Promises were made, apologies accepted. We retained their business.  

"I always enjoyed a collegial, respectful business relationship with this rep. Since the incident, we have polite but awkward interactions. She seems upset.  Did I handle this situation correctly?"

You did what comes naturally - jumped in to save the day.  From her point of view, you showed little faith in her ability to right the wrong. Worse, you probably diminished her standing with this account.

In terms of client relations and her career development, consider handling things a little differently next time.

Acknowledge Her Candor

Whenever a rep approaches you about a potential screw-up, start with, "I appreciate you coming to me directly. Take a deep breath. Start from the beginning. Tell me what happened."

This acknowledges the rep has done the right thing by bringing the situation to your attention. It leads to a more productive conversation.

Hear the Rep Out

Just listen. Don't interrupt. Resist jumping in with suggestions or criticisms. Ask questions only to gain clarity.

Getting the facts gives you a clearer picture of the issue. Take a moment to gather your thoughts on how to proceed.

Collaborate

The company has the final say on client matters. But the rep handles this account. For their professional growth and future relationship with this client, make them part of the solution.  

Solicit their suggestions for fixing the problem. Formulate a plan together.

Call in Tandem

Depending on the severity of the situation, a face-to-face visit could be necessary or, a phone call or Skype might be sufficient. Either way, you need to be present during the conversation. Have the rep set-up the meeting.  

Prior to the meeting, tell the rep that they lead the discussion, offer solutions, and issue apologies where appropriate. When questions or comments get directed towards you, let the rep know you'll be turning the conversation back their way.  

Say to the rep, "I'll make a comment like, 'That's a fair question. Julie and I discussed this issue. She'll talk about the potential solution.'"

Julie takes it from there. If she stumbles or the call begins to go badly, you step in only when absolutely necessary. Redirect towards her as soon as possible.

Leadership

Company leaders in this situation worry about how they'll come across if they let the rep steer the meeting. Many feel the customer will perceive them as:

  • Unaware of the details
  • Abdicating responsibility
  • Not taking the problem seriously

Your presence in the meeting speaks volumes. You're listening, taking notes, participating where appropriate - and most of all - supporting a salesperson you hired and entrusted with this account. You're not running away from anything.

Debrief

Post-meeting, talk about what went on. Let the rep speak first.  Make your first comments positive. Be candid about areas needing some improvement. Help with any internal follow-up necessary to fix this problem.

Mentoring Employees

Leaders recognize, acknowledge, and develop talent. Any rep tasked with addressing and fixing a problem experiences a real learning moment. You earn their respect and loyalty.  Likely, they'll work harder for you and the organization going forward.

These rules apply when the company makes a mistake, not just the rep. If an order gets messed up, the rep should work to make it right, so as to maintain their customer relationship.

Vetting an Internal Candidate for the Sales VP Role

Last month a reader inquired about potentially promoting their current sales manager to VP of Sales. They wondered about the risks involved.

Together with my colleague Stan Davis of Standish Executive Search, I provided information about the difference between the two jobs to help them make the decision including:

  • Sales Managers - have direct supervisory responsibilities such as problem solving, running meetings and disciplinary issues.
  • Vice Presidents of Sales - take part in the leadership of the company through influencing people, enacting change, and developing and deploying talent.

Determining a sales manager's readiness and suitability for the VP role requires planning and asking impactful questions - of both the candidate and yourself.

Don't Hand Them the Job

Forget about your sales manager's tenure with the company. Disregard successes in their current role. These factors qualify them for consideration. Interview this employee for the job. Handle the process the same as if you were hiring from the outside. Hold multiple interviews over a period of weeks.

Think it Over

Prior to starting the dialogue with an internal candidate ask yourself these questions:

  • How will I structure the interview process?
  • What questions will I ask?
  • Will I have them take an assessment to determine their appropriateness for the role?
  • What questions will I ask the reps they currently manage?
  • What questions will I ask other executives in the company?
  • Which combination of factors will I use to make the final decision?
  • How will I handle the situation if I realize they aren't right for the job?
  • What will I do if they accept the job and it doesn't work out?

Answer the questions. Plan ahead. Doing so will increase your confidence level in the selection process.

Consider Other Applicants

Speak to outside candidates - especially if this role represents a new position for the company. It always helps to have multiple applicants to compare and contrast.

Bring in candidates currently in the role of VP of Sales that you know through industry or professional contacts. Speak with a recruiter to learn about other qualified individuals.  

How do outside candidates respond to your questions? Do their responses differ greatly from those of the internal candidate? If so, how? As outsiders, how might their perspective differ? Do they make up for lack of familiarity with your business with a deep understanding of the role?

If you know you need a VP of Sales and you conclude the internal candidate isn't quite ready or qualified, you have other contenders to consider.

Interview Questions

Determining a candidate's fit for the VP position involves asking the right questions. What's appropriate for this level position? Stan Davis suggests questions like these:  

  • If you could structure this job any way, how would you structure it?
  • How do you get the best and the most from people?  Please give some examples of how that's worked in the past.
  • When people fell short of the potential you expected, what did you do to turn that around? Where you couldn't turn it around, what might have made a difference?
  • If the company was launching a new product, what would you do operationally to ensure the success of that product?
  • Was there a time when you created a plan and then put it into place? What was the outcome?
  • Have you ever mentored and developed a promising employee? How did you go about that?
  • If a salesperson really messed up with a valued customer, what course of action would you take to rectify that situation?

Stan adds, "Sales managers are accustomed to keeping score through dollar volume, pieces and parts, and profitability. These questions help determine their ability to evolve from that mindset to one of leadership."

Decision Time

Whether you offer the position to an internal or external candidate, ask yourself:

  • What sort of training / coaching / professional development will I offer them?
  • What goals will I set for their first 90 days?

Final Thoughts

Hiring internal candidates can be tempting.  It sometimes represents the easier choice.  Other employees see you promote from within.  After close inspection, though, the in-house applicant might be underqualified or not quite ready.  Take the time needed to make the right decision for the employee and the company.

Explainer: Role of Sales Manager vs Sales VP

A reader writes, "I'm considering promoting my current sales manager to VP of sales. In the past, you've written newsletters about the risks of promoting a top salesperson to sales manager.  Are there risks in offering the VP job to a top performing sales manager? If so, what are they?"

Kudos to you for giving this potential promotion serious thought. So many times business leaders neglect to think it through. 

The two jobs differ. Just like transitioning from salesperson to sales manager alters what an individual does on a daily basis, the promotion requires the new VP to leave some aspects of their old job behind. They assume many new responsibilities.

To get his perspective, I spoke to Stan Davis of Standish Executive Search, who has placed many senior executives over his 11 years in the executive search business, and who previously served as a corporate resources executive and in-house organizational development leader for over 30 years.

Function versus Leadership

"A sales manager has direct supervisory responsibilities - problem solving, running meetings, disciplinary issues," Stan says. "But a VP of Sales takes part in the leadership of the company - influencing people, enacting change, developing and deploying talent."

Responsibilities

Sales managers manage to the sales plan by accompanying reps on calls, tracking the rep's progress and holding them accountable for achieving quota.   

Stan adds, "Vice Presidents of Sales no longer plan just for themselves and the sales team. The sales plan is a component of the company plan.  They participate in planning for the whole organization now, and monitor the progress of sales through the sales managers."

Planning

Sales VP's, along with others on the executive team, work 12 - 18 months into the future on company-wide initiatives. They don't sell the product directly to customers anymore.  When considering someone for a VP role, Stan asks himself, "Can they build relationships with others to make sure the product works for the company financially, technically, and operationally?"

Compensation

Salespeople typically receive a base salary and commission or bonus based on their individual performance. Sales managers most often get paid with base salary and commission or bonus commensurate with their group's performance. Sales VPs usually get compensated on overall company performance.  

Who Does Each Role Serve?

Sales reps call on customers. Sales managers serve the salespeople. Stan says, "Vice Presidents of Sales align themselves more directly with the shareholders, concerning themselves with earnings." 

Think Before You Begin

Many companies have a VP of Sales by title but not by actions. Sometimes this occurs because they think they should have one. On occasion companies fear looking small or unsophisticated if they lack someone carrying that title on their website. What does your organization really need?

Sales Manager
VP of Sales

Develop and implement company's sales plan
Responsible for quota attainment for a region or segment
Responsible for revenue production for the company
Hire and train new salespeople
Deploy sales force and sales managers as needed to achieve company plan
Check and manage daily / weekly sales activity and results by each rep
Monitor regional or segment activity and results by teams or sales units
Monitor CRM reporting / accuracy in support of VP and others
C- and Board- level reporting on revenue production
Coach / motivate reps
Coach managers / motivate managers and reps
Strategize with reps
Strategize on key accounts with managers and reps
Reassign / outplace underperforming reps
Reassign / outplace underperforming managers
Visit customers frequently
Visit customers occasionally

Final Thoughts

Hiring from within has its benefits. The candidate knows the company culture, customers, products and services. Other employees see promotions as real possibilities. Take the time needed to ensure you make the right decision for the employee and the company.


This article outlines the process a leader goes through when thinking about promoting a candidate from within. Next month I will write the questions leaders should ask before hiring for this position.

Sales Tips for Driving Business Valuation

A reader writes, "I'm in my late 40's and the owner of a small business - with no plans to sell for at least 10 years.  When I do sell, I don't want to say, 'I wished I'd known (fill in the blank) 10 years ago. If I had, my business would be worth a lot more today.' When it comes to sales, what advice can you offer to business owners wanting to get the maximum value when they do sell?"

For a knowledgeable answer to your thought-provoking question, I turned to business broker Chris Bond, Area Director for Murphy Business & Financial Corp.

Chris says, "As a business broker, I sometimes have the unenviable task of breaking bad news to my small business owner clients, namely that the company they've worked so hard on (and in) isn't worth as much as they had hoped."

You Are a Salesperson

"There are several things an owner can do," Chris says, "but first off, accept that you're a salesperson."

He goes on to explain this means you may want to have a sales metric by which you measure the success of any given day, week, and/or month. Did you book an appointment for a new opportunity? Did you contact five latent clients with an unexpected thank you for past orders?  Perhaps you did something nice for someone knowing that a referral for you could result at any moment? As we all know, it's the little things we do that tend to add up to a lot of business.

"Which is more important," Chris asks, "avoiding the disappointment of hearing 'no' from a sales prospect or running the risk of delaying retirement for years? An owner who wants to eventually sell the business is wise to work on proactively selling his or her goods every day.  Those who don't do this run the risk of saying they coulda / woulda / shoulda boosted their profitable revenue while they had the time and energy to do so... and then miss the opportunity to enjoy their retirement while healthy."

Involve all Staff Members

All that said, be sure it's not just you doing these healthy selling behaviors.  You'll benefit by having your whole staff understand that there are sales opportunities all around if they have alertness to that fact. Your office manager can ask a caller if there's any other help needed; your service tech can keep an eye out for cross-selling opportunities; your driver can ask for referrals to neighbors who could very well be new customers.

Build a Sales Team

It's ideal if you actually build a day-to-day sales staff, as hard as that can be to execute. Business buyers are keen to understand how likely the sales effort will survive your sale of and transition out of the business, so having a productive sales team goes a long way toward allaying concerns that you are the business.

Watch the Percentages

One drag on business value occurs when the company is beholden to one or two major accounts. If you step outside your day-to-day role and think like the potential buyer of your own business, strongly consider the risk profile of the customer mix. If any one account represents more than 20 - 25% of the revenue pie, it's likely to hurt the perceived value of the business. Ideally, no one client will make up more than 10% of the mix; if this isn't your reality it may be time to set a goal to capture enough new business in the coming months to improve the look and feel of your revenue stream.

Final Thoughts

Sticky, dependable top-line revenues are of course only one factor for a business that will likely be acquired.  Other factors are historical profits; the supplier mix; the state of the economy in markets served; the management team and its likelihood to stay on post-transaction; and competition, among other major factors. But if there is but one thing you can do today, try a positive change you can make to enhance revenue, with an eye on always trending upward.  You - and your eventual buyer of the business - will be glad you did.

5 Signs Your Compensation Plan Needs Revamping

During this time of year, many company / sales leaders consider whether or not to make any changes to the existing compensation plan.  It's an important decision that could impact sales reps' efforts and sales revenue for the coming year.  

In reviewing the way sales reps at your organization get paid, ask yourself if any of these scenarios describe your organization. Might it be time to look at some potential adjustments to the compensation plan?

Few New Accounts

Rather than prospecting for new business, the reps call only on their current accounts, preferring to increase business within those clients. Why shouldn't they? The comp plan pays the same rate of commission on new and renewal business.  

Issue a separate quota and commission for brand new business. Following the "pay for the behavior you'd like to see" school of thought, commission new business at a higher rate. New business will always be more difficult to find and close. Companies grow through a steady flow of new accounts. 

Sales Reps Don't Reach the Top Commission Tier

The company pays 3% on monthly sales $0 to $50,000, 5% on sales $50,001 to $100,000 and 7% on sales above $100,000. No rep has ever sold $100,000. The average rep sells $72,000 a month: $28,000 less than the 7% tier.  

Offer a top tier that's challenging to hit. That's great. If several months go by and no rep reaches that tier - that's OK too. But when no rep ever hits that number, the top tier demotivates the sales staff. Reps look at the goal as unattainable. You might need to hire new reps or set more realistic goals. Whatever the case, this comp plan doesn't drive sales to $100,000+.  

Ignoring the Superstar

Reverse the situation. The company pays 3% on monthly sales $0 to $50,000, 5% on sales $50,001 to $100,000. There is no tier above $100,000. Most reps sell between $85,000 and $95,000 against a goal of $80,000. The superstar of the group routinely sells $110,000 - $130,000.  They receive the same 5% on the additional $10,000 - $30,000.  

Honor and motivate the high-achieving salesperson.  Create a third tier for them. Watching one rep hit that tier proves to others in the group that it can be done, and inspires them to work smarter.

Too Comfortable with Base Salary

During the hiring process, a candidate negotiated a much higher base salary than you wanted to pay.  Motivated to recruit them, you agreed to it.   Eight months later they haven't sold much, and seem content to earn just their base salary. 

Offer a higher training base salary - this helps new reps financially as they build a pipeline. Once the training period ends, reps should be earning more commission or bonus than base salary. This is sales.  They shouldn't be satisfied with just a salary.  If you're in this situation, it's time to get tough and renegotiate their compensation plan.

Reps Don't Understand the Plan

The old adage "a compensation plan should be simple enough to be written on the back of a napkin or explained during a 10 floor elevator ride" still applies. Check in with your reps before the end of the year. Ask them to explain the comp plan to you. If the majority struggle to do so with all or certain parts of it, they find the plan demotivating - count on it. Look for ways to make it more straightforward.

Great compensation plans stretch and motivate the sales force.  Make sure your company has that type of plan in 2015.

If one or more of these describe your situation, call or  email me. I'd be happy to discuss the situation with you.

5 Simple Steps to Timely Followups

Following up in a timely fashion is key to the sales process.  For some helpful tips, I turned to Mitzi Weinman, president of TimeFinder.  Mitzi writes:

I remember working with a client, the president of a manufacturing company.  I was coaching him on his personal productivity and on decluttering his office.  At the time, he was looking for a new accounting firm.

As we cleared the clutter, he threw away a proposal from a firm that wanted his business. I asked why. He responded that he had met with one of the firm's representatives, but had never received the additional information that he had requested. He wondered, "If they treat me that way as a prospect, how will they treat me as a client?"

His point was on target.  A phone call or email can make the difference in getting a sale or not.  Following up has to be part of the sale process. For example, one of my clients who worked for a marketing firm would meet with prospective clients regularly.  He explained that when he would return to the office, he did not have time to do the follow-on work from his meetings.  I asked him how often he had to get information back to a prospect after he met with them.  His answer was, "Always."    

Because following up with prospects was predictable, he had to plan for it.

What are successful strategies for following up?

  1. Anticipate the need to follow up and block out time before the meeting to work on the follow up.
  2. Try to estimate how long the follow ups will take to prepare and deliver, based on the type of work required, sophistication of the client, etc.
  3. As soon as you indicate to someone that you will get back to them, mark the date you committed to in your calendar, planner, etc.  Know what you have already planned on your calendar so you can be realistic in setting expectations.
  4. If you have a team, let other members of your team know about your meeting(s) and set expectations on what they may also need to work on.  Find out about their impending deadlines.
  5. Don't put yourself in a position where you are apologizing for not following through.  This negatively impacts your client or prospects perception of your ability to get things done on their behalf.

Following up gives you credibility. You demonstrate that you care and that you deliver.  When you say that you will get back to someone, do so - even if it is to say that you don't have the information yet, but that you are working on it. Clients, prospects and associates don't want to hear that you're busy as an excuse for missing deadlines.

Anticipate, plan ahead, block out time and do what you say you will do.  When you do what you say you're going to do, as promised, it positions you and your company to stand out from the others.

Mitzi Weinman, founder of TimeFinder, helps people develop good habits and techniques to reduce stress which can result from procrastinating, feeling disorganized and overwhelmed, and rushing to get things done, at work and/or at home.  Mitzi's clients include: New Balance, Reebok, Boston University School of Medicine, Boston Symphony Orchestra, WGBH, Lojack, Grant Thornton, Dana Farber Cancer Institute, Weston and Sampson Engineers, Pearson Education and Marriott University.  Mitzi is the author of "It's About Time -- Transforming Chaos into Calm, A to Z," soon to be available.