Top 10 Rules for Getting Salespeople to Follow Your Sales Process

Posted by Dave Kurlan on Mon, Mar 08, 2010 @ 08:57 AM

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:

1. this isn't voluntary
2. no exceptions
3. live it and breath it
4. hold them accountable to it
   
5. coach to it daily 
6. reinforce it
7. point out what happens when they skip steps
8. show them what happens when they execute
9. non compliance has consequences
10. practice daily
    

Article has 2 comments. Click To Read/Write Comments

---

The Top 5 Factors to Predict Sales Turnover

Posted by Dave Kurlan on Fri, Mar 05, 2010 @ 04:27 AM

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!

Article has 10 comments. Click To Read/Write Comments

---

Salesperson ROI - How Long Must They Stick to Pay Off? - Part 1

Posted by Dave Kurlan on Thu, Mar 04, 2010 @ 08:03 AM

Is there a connection between sales success and tenure?  Is it really a given that a successful salesperson will stick around longer than an unsuccessful salesperson?

There are other factors, like the compensation program.  Will an unsuccessful salesperson who is compensated mostly by salary stick around longer than a similarly unsuccessful salesperson who is compensated mostly by commission?

Does their role factor in?  Will an unsuccessful account manager hang around longer than an unsuccessful hunter?

How about sales management?  Will an unsuccessful salesperson who is either closely managed or pressured to perform, hang around longer than a similar salesperson who is not closely managed and not pressured to perform? 

Let's say you have a 12 month sales cycle and an 8 month learning curve.  Essentially, it will take nearly 2 years to get your new salesperson producing consistently.  In that 2 years, maybe you'll pay out close to $150,000 in subsidies. 

Using your average margin, how much revenue must be gemerated to offset that subsidy?

How much revenue much be generated to produce a satisfactory ROI?

How long must the salesperson stick around in order to produce that ROI?

If we can predict longevity, does that help you determine whether you will realize a ROI with a sales candidate? 

Objective Management Group has the raw data and plan to mine it to provide answers to these questions.  Look for my findings in the next several days in Part 2 of this installment. [UPDATE - Click here for the Top 5 Factors That Predict Sales Longevity]

In the mean time, what do you think? Can you identify any other possible variables?  

 

Article has 0 comments. Click To Read/Write Comments

---

Great Sales Opportunities That Don't Close

Posted by Dave Kurlan on Tue, Mar 02, 2010 @ 07:26 AM

If getting opportunities into the pipeline is the most universal sales challenge, then getting opportunities closed comes in a close second. I'm talking about prospects who aren't ready to say, "yes" but are still "very interested".  These calls pose problems for salespeople for several reasons:

• Prospects go into hiding and don't take or return calls - from their prospective, the prospects don't need the salesperson right now because they already have the pricing, solution and terms.  Therefore, since they haven't made a decision, they have no reason to speak with the salesperson, have nothing to tell the salesperson, and as a result, simply don't take or return the calls. 
  
• Salespeople go into desperation mode -  As their inability to reach this "very interested" prospect continues, they don't want to ignore a "good" prospect and don't want someone else to land the business either.  So they abandon common sense strategies and tactics, and call repeatedly without compelling reasons to speak.
  
• Salespeople usually don't know why the prospect is hiding - even though it's usually for the same reasons each time, salespeople don't seem to learn from experience and understand that either they aren't getting the business, the prospect hasn't come up with the money, the prospect hasn't decided who to buy from, it hasn't yet been approved, or there isn't enough urgency to buy it now. While each of these reasons are different, they can all be lumped into the same category - nothing has changed since the last conversation.  In other scenarios, the prospects decided not to buy or they bought from someone else.  In other words, it's a "no" and the prospect can't justify the time or isn't comfortable letting the salesperson know.

Two questions that must be answered are:

• what can salespeople do to prevent this from happening? This is a very preventable outcome, although you would never think so judging by how prevalent this problem is.  There are several reasons why this happens:
• the salesperson did not identify any or enough compelling reasons for the prospect to buy, and buy from the salesperson.  As a result, there wasn't enough urgency for the prospect to take action now - a guaranteed delay.
• the salesperson was not thorough enough qualifying the opportunity so there were surprises relative to timing, availability of money, decision making, competition and communication left unresolved at closing time.
• the salesperson presented a solution, provided pricing, and/or developed a proposal prematurely, arriving at the end of the sales cycle alone - without the prospect. 
• the salesperson was uncomfortable asking tough questions about incumbents, competitors and money leaving a gap in his/her understanding of where he/she stands.
• the salesperson didn't recognize the stalls and put-offs at closing time and gladly accepted the duties of following up because the prospect was "very interested".
• the salesperson recognized the stalls and put-offs but wasn't comfortable pushing back and challenging the prospect because he/she didn't want to damage the relationship.
• the salesperson understands the prospect's need to think it over because he/she would do the exact same thing in that scenario.
• dozens more possibilities but this is an article, not a book!
• What can salespeople do after this has happened to them - again - and what shouldn't they do? 
• they simply must learn from their mistakes.  There is no excuse for this to happen more than once.
• they must identify from the partial list above, why this happens and how to solve that particular issue. HINT - The solutions are in Baseline Selling.
• Ask for help.  The salesperson must know how to effectively reengage this prospect.  There must be a compelling reason for the prospect to return to the conversation and it isn't to let the salesperson know if they've made a decision yet! Compelling reasons to reengage take the form of new information, new questions, changes and challenges.
  
• don't offer incentives to get them to buy now.  If they will purchase because of an incentive, they would have purchased without the incentive and they'll jump to the next competitor that offers a nice incentive to switch.
• don't get upper management involved.  Use them to get a difficult opportunity closed, not just to get someone back to the table.

What would you add to this discussion?

Article has 5 comments. Click To Read/Write Comments

---

How to Get Salespeople to Stop Resisting Change

Posted by Dave Kurlan on Mon, Mar 01, 2010 @ 08:13 AM

I was listening to MLB Home Plate on XM Radio this morning.  Spring Training has begun and their station is buzzing with baseball news.  One story was about the many former stars that come to spring training sites to help the young players on their former teams.  Think about it for a minute.  Professional baseball players - those who have already made it - getting coached, mentored and tutored by all-time greats like Sandy Koufax, Carl Yazstrzemski, Darryl Strawberry, Bobby Grich, Yogi Berra, Goose Gossage, Ron Guidry, Reggie Jackson, Tino Martinez, Graig Nettles, Mickey Rivers, Luis Tiant, Willie Mays, Johnny Bench, Robin Yount, Rickey Henderson, Bob Gibson, Lou Brock, Phil Niekro, Ferguson Jenkins, Will Clark, Dale Murphy, George Brett, and Frank White. 

If these young ball players are anything like most young salespeople, they'll pretend to listen, ignore much of the advice, act like know-it-alls and fail to take advantage of a unique opportunity to bring their game to the next level.  But we know differently.  Most ball players, who understand the rich history of baseball, are thrilled to get some one-on-one time with these legends and will soak it in and take whatever they can get.

The resistance isn't limited to young salespeople.  Veteran salespeople, especially those who have struggled to achieve and over achieve, are just as resistant.  It truly amazes me when someone who isn't a star, and never has been, resists the help that is made available to them.  Perhaps the history of sales development isn't as rich as the history of baseball.  We don't have nearly as many stars as in baseball and since we don't have our own versions of ESPN, FOX Sports, MLB Network and local sports anchors covering us, it may not be obvious who the real stars of sales development are.

Speaking of stars, another one of my articles, The Top 3 Powerful Excuses for Maintaining Mediocrity, has been nominated for Article of the Month.  Please vote for it.  This article continues below the vote button...

 

...Some Professional Sales Development Experts are adept at overcoming resistance.  But sales managers not so much.  Salespeople may resist:

• your coaching
• being held accountable
• being closely managed
• using CRM applications
• following the standardized company sales process
• prospecting
• thoroughly qualifying
• asking rather than telling and presenting
  
• selling rather than taking orders
  
• following company policies
• following account and market strategies
• reporting
• training and development

So what can you do about resistance?  For starters, don't accept it.  I'm not suggesting that you should fight with your salespeople.  Im suggesting that you shouldn't give up.  Have ongoing discussions with resistant salespeople about:

• why they are resisting
• why it's important for them to listen and adapt
• how it might affect their success, goals and income
• consequences of failing to change.  

Refer to this article I wrote about changing behavior in salespeople. It has the four steps that you can use to cause change.

Article has 0 comments. Click To Read/Write Comments

---