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Understanding the Sales Force
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I am often asked which of the various services we provide to companies can be done in-house, by the executive team. Fair question. Answer: All of them. So why would companies use us or others with our expertise? Answer: Because when they try to do it in-house they aren't able to get most of it right: - Sales Force Evaluation - this simply isn't possible to do in-house:
- Not Objective
- Performance data is not representative of ability
- Sales Management doesn't have proper diagnostic tools
- Sales Management doesn't usually identify the right questions to be answered
- No data to compare findings to
- Severely limited by what they don't know
- Don't know what to look at to find answers
- No way to determine if their findings are accurate
- Sales Process - try as they might, home-grown sales processes get most of the important elements, sequences and timing wrong.
- Sales Metrics - they come closer on this one but eventually identify measurables that don't drive revenue and those they do settle on tend to be lagging rather than the desired forward looking indicators.
- Sales Pipeline - this should be simple but most companies can't simplify it and have it work all at the same time.
- Sales Management - since we're battling the Ignorance Factor, sales managment coaching, accountability, motivation, leadership and recruiting don't improve from a home-grown initiative because they simply don't know what they don't know!
- Sales Strategies - this tends to be biased by their industry. It sounds like, "well in our industry we have to..." or, "in our industry we can't..."
- Sales Development, Coaching and Training - as a rule, training is not a sales management competency and sales managers lack most of the skills to do this effectively.
So is it done in-house? Yes. Can it be done in-house? Yes. Can doing it in-house work? That all depends on what you define "work" as. You can certainly eliminate a cost. But does the money saved pay-off? Suppose you have a $15 million company and you're looking at investing $75,000 in 2010 to improve sales effectiveness and you do it in-house. You saved $75K and you had a measurable one-time return of about 2% that you could attribute to your efforts, most of that from the fact that you did something as opposed to nothing. Net gain $300,000. Now let's suppose you invested $75,000 and had an expert help in all of the forementioned areas. History says that your return would probably be close to $2 million and because of the resulting optimization, it is sustainable. The real question with all of this comparison is why aren't sales managers more capable of doing the type of work I described above? The answer is that they shouldn't be expected to! It's no different than this: You go to a doctor for 40 years and then someone says they need someone to fill the doctor role at their company. You think to yourself, "Well, I've been going to doctors for 40 years, I know what they do, I understand that stuff now, I could probably pull that off." The same is true of people who become sales managers. They think, "I've been selling for 10 years, I know what they do, I understand that stuff now, I could probably pull that off." And what they lack in sales management knowledge, understanding, skills, competencies, experiences, exposures, systems, processes, strategies and tactics is just like what patients lack in physician training. The skills required to do this quickly, efficiently and effectively, with a lasting impact, aren't the same skills that salespeople acquire selling or that sales managers acquire managing. It's a related but different skill set and it's unfair to expect your sales managers and Sales VP's to be fluent in it.
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My guest on this week's episode of Meet the Sales Experts was Phil Harris, Worldwide VP of Sales for Akibia. We covered many areas of Sales Leadership that fall under the direction of someone in Phil's role including cultural issues, competition among sales managers, and getting an entire sales force to change. I chose to discuss the balance sales leaders must have between sharing, mandating and asking. Sounds simple. MANDATING - this sounds easy. The key to mandating is what, when and how to mandate. It's important to start with WHEN. You mandate when your sales managers or salespeople aren't doing what you have ASKED them to do. You mandate WHATever it is that they aren't doing voluntarily. And HOW you mandate is to use my four step hierarchy of sales coaching and accountability to change salespeople's behavior and my 10 Rules for Getting Salespeople to Follow the Sales Process. These days, one of the most common sales leadership issues is CRM compliance - getting the salespeople to maintain current account/opportunity information.
SHARING - this sounds even simpler! The key to sharing - your expertise, coaching, stories, ideas, suggestions, experiences, wisdom, thoughts, feelings or wishes - with your sales managers and salespeople is to have a strong relationship built on trust, respect and credibility before your sharing will have the desired impact. Sharing must also be unconditional. It's OK to share because you want to help. It's not OK to share because you think you'll get something back in return. It's great when you do get something back but you simply cannot share with those expectations. ASKING - This should be the default for all things Sales Leadership. Always ask - nicely, respectfully, and clearly - and get feedback on how they will go about doing what you asked, when you can expect completion, and what you can do to help. Asking can take multiple forms - from simple questions (would you please?), to challenges (can you handle it?), to loss of faith (I'm not sure you can do this). Sales Managers can use the same balance with their salespeople and salespeople can use the same balance with their prospects, customers and clients. Mandating to customers? Sure. At some point in the process you probably assign some kind of homework (Can you send me this? Can you find me that?) When they don't do it after you've nicely asked, you simply mandate (John, I won't be able to meet the time line if you don't provide me with that list of names and email addresses today). Since this sounds so simple and doable, why do so many in sales management have so much difficulty with this balance?
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I've written extensively about sales coaching before. Yesterday, a fairly typical day, I coached 4 different sales experts and 2 clients on how to more effectively coach salespeople and sales managers. I have noticed that most sales managers believe that they're fairly good at coaching when, in reality, most of them are very ineffective at it. Why? First, let's look at what's required for effective coaching. Some of it is tangible and measurable while some isn't. Effective Sales Coaching requires: - great listening skills
- great questioning skills
- no Need for Approval
- that the sales coach not be Too Trusting
- no assuming
- a strong grasp of the sales process
- common sense sales strategy
- large mastery of appropriate sales tactics
- debriefing skills
- role-playing skills
- confidence
These skills are all interdependent so even if a manager possesses many of these skills, lacking even one or two would still render their coaching ineffective at best. For example, what if a sales manager owned the entire list except for role-playing skills? She would never be able to demonstrate the best practice required. If she owned the entire list except the company did not have a formal sales process (OMG's data reveals that 91% of companies lack a formal sales process) it would be difficult for her to put the scenario into the proper context of time (when it should happen) and space (where it should happen). If she owned the entire list except mastery of sales tactics it would be very difficult for her to discuss how it should happen. If she owned the entire list except for debriefing skills, it would be very challenging for her to identify the underlying problem behind the issue at hand. In my experience, most sales managers lack MOST of the skills on my list. The second part of the coaching equation is frequency. Salespeople need to be coached daily! Most sales managers only provide coaching as needed. The third part of the equation is consistency. The coaching process should be the same each time you coach a salesperson. You want your salespeople to be comfortable with this process! The fourth part of the equation is the credibility factor. Salespeople must trust you, respect you and have a good relationship with you. If any of that is missing you'll have a much more difficult time getting salespeople to have faith that your coaching is on the mark. Finally, the last part of the equation is accountability - sales managers must hold salespeople accountable for implementing the lessons learned in each coaching session.
How effectively are you at coaching your salespeople?
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Our priest was sharing his frustration over parishioners who took shortcuts and left church early. At a parish he was assigned to earlier in his career, parishioners received the host and exited via the side door without returning to their seats for the remainder of the service. He wondered how many of them had simply developed a bad habit and challenged them by saying, "The next time you find yourself leaving early, ask yourself, 'why am I doing this?'" A lady approached him after the service and felt terrible about all of this. She said that she had been leaving early to tend to her sick husband. The Priest said that this didn't apply to her, she was already making a sacrifice by attending, and she should care for her husband. She paused and finally said, "but he passed away three years ago!" This story got me wondering about the widespread misuse of the sales process. There are certain steps that must be executed at specific times to assure a successful outcome. However, undisciplined salespeople are often tempted to skip steps when prospects ask for prices, quotes, proposals, demos, references, and presentations much earlier than the process allows for. Once in a while these salespeople get lucky and get the business. And then they start skipping the steps they've been trained to follow because, after all, they are more comfortable and confident at presenting, proposing, quoting and demoing, than they are with listening, questioning, probing and identifying compelling reasons to buy. Like the lady with the sick husband, they take steps that aren't necessary or desirable, simply out of habit. Sales Management's number one priority is to assure that their salespeople don't fall into old habits, take shortcuts, get lazy, or avoid steps in the sales process where they aren't as skilled or comfortable. Once your customized, optimized, integrated sales process is in place and introduced, my top 10 rules for all things sales process, strategy and tactics are: - this isn't voluntary
- no exceptions
- live it and breath it
- hold them accountable to it
- coach to it daily
- reinforce it
- point out what happens when they skip steps
- show them what happens when they execute
- non compliance has consequences
- practice daily
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Tags: sales recruiting, sales assessment, salespeople, sales management, topgrading, money motivated salespeople, verne harnish, sales candidates, sales turnover, sales experience, neil rackham
Yesterday, I began a discussion about sales longevity or, if you prefer, turnover. What are the factors that lead to turnover and how much of that can be predicted? Start with yesterday's article on How Long Will a Salesperson Stick? Get ready for a discussion that is backed by data - more Science of Sales Force Management stuff! Speaking of science, my guest on this week's episode of Meet the Sales Experts, Lee Levitt, had a lot to say about Pipeline Coverage and Shape, metrics and 5 powerful tips for Sales Force Effectiveness. Click here to listen to the show.
Salesperson Longevity - What Did We Find? I mined the data and it wasn't easy! Some of the factors I expected to see just didn't materialize. For example, I assumed that money motivation would make a difference. Wrong. Not even a tiny difference. A money motivated salesperson is not even 1% more likely to stick than one who isn't motivated by money. I assumed that salespeople who were paid mostly on salary might tend to stick around longer than their colleagues who were paid mostly by commission. Wrong. I thought that there was a chance that stronger salespeople stuck around longer than weaker salespeople. Wrong again. So what did I learn? Here are the Top Five Factors to Predict Sales Turnover / Longevity
The most important factor in predicting sales longevity is --- EXPERIENCE! Salespeople with at least 5 years of sales experience are far more likely to stick than those without 5 years of experience. Factor #2 has little to do with the salesperson but everything to do with Sales Longevity. It's how closely sales management will manage the salesperson. Salespeople who were not closely managed simply didn't stick around as long. I had to draw a conclusion relative to whether the turnover was voluntary or involuntary. I concluded that salespeople who were more or less ignored and also under performing likely reached a point where the company gave up and terminated them. I also concluded that salespeople who performed but were ignored probably left on their own. But whether or not you agree with my conclusions, don't miss the bigger point. Closely managing your salespeople leads to sales longevity in your company. Factor #3 is the compensation plan. Salespeople who are compensated mostly by commission are more likely to stick than salespeople who are compensated mostly by salary. Why? Salaried salespeople and those with limited bonus opportunities, reach a point where they need more money. Does this contradict the money motivation finding? No. This is need versus want. They'll leave when they need more money. Money motivated salespeople simply want more money and sell more to earn it. Factor #4 is a reverse factor finding. Huh? Objective Management Group (OMG) has a powerful finding called the Figure it Out Factor or FIOF. It's a score that accurately predicts how quickly a new salesperson will ramp up in their new positions. A score of greater than 75 identifies candidates in this group. Well, these same salespeople, the ones who will ramp up more quickly, are LESS likely to stick! Yes, they'll have an immediate impact, but they will tend to not have sales longevity in your company. Salespeople with low FIOF scores are the ones who are most likely to stick. Slow starters, big finishers! Factor #5 is another reverse factor finding. OMG has another score called Sales Quotient (SQ) which allows companies to rank their hirable candidates. Strong salespeople have SQ's over 135 and the elite have scores over 145. But these real strong salespeople - A Players - aren't the ones who are most likely to stick. Rather, salespeople with SQ's between 110 and 130 - B Players - have the greatest sales longevity. Summary:The good news is that there are five specific factors that allow us to predict sales longevity. The bad news is that these factors are inconsistent with the factors that allow us to identify and predict who the top performers will be. So it raises a new question. Should you be striving to hire A Players - those with high Sales Quotient and Ramp up Scores or should you be hiring for Sales Longevity - B Players who will stick around longer? Verne Harnish, the Growth Guy, and I had this very discussion over email this morning. He said, "small companies can do both". He said that "entrepreneurial firms should go after experience - we don't have time to ramp up someone - let the big companies train!" He also said that "companies should go for A players with more than 5 years of experience", something that both Neil Rackham (SPIN Selling and Rethinking the Sales Force) and Brad and Geoff Smart, (Topgrading) have been saying right along. However, our data shows that only 16% of the A players with experience stick for more than two years. And that brings us back to the original question. What do you think - A's or Longevity? Should the answer be a direct relation to the length of your sales cycle? Should you go for longevity when you have a long sales cycle and for A's when you have a short sales cycle? We're interested in what you have to say!
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 Dave Kurlan and OMG were featured on World Business Review, hosted by General Norman Schwarzkopf. Click above to view this 3 minute segment.
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 Click here to learn more about the huge benefits that you'll get from evaluating your sales force. When we look at your people, strategies, systems and processes you'll be able to see what was previously hidden from view. Our sales force evaluation process determines what you must change in order to achieve the organic growth you want.
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