Dave Kurlan's Blog - The Authority on Sales Force Excellence

The Sales Force with Over Achievers That Don't

Posted by Dave Kurlan on Wed, Mar 25, 2009 @ 22:03 PM

Huh?

That's right. Today I heard about a CEO who told one of my colleagues that all of his salespeople over achieve. In the same phone conversation he mentioned that sales are down 20%. Can you imagine where sales would be if his salespeople under achieved?

I think that many CEO's are in a time warp.

Despite the struggles of their sales force in this economy, they still view the sales force as they remember them when times were good.

The problem with this is that even the good times did not accurately define these salespeople. Salespeople who succeed when times are good but struggle when times get tough are not over achievers. They are mediocre salespeople who simply don't get in their own way. Over achievers find ways to succeed in all conditions, good and bad.

I think that many CEO's are in denial.

Despite the struggles of their sales force, they continue to look at the pipeline and say to themselves, we'll be okay as soon as these deals close. But the deals aren't closing and with each passing day companies are less okay then they were the day before.

I think that many CEO's are scared shitless (the only truly accurate word I could type there).

Because of the struggles of their sales force, they look at the numbers, down 90%, down 75%, down 50%, down 25% and wonder how they can turn it around. It can be turned around but they have to be proactive, not reactive. They have to be aggressive, not passive. They have to work on the right end of the problem - revenue - not just costs.

Truth is, our data shows that only 6% of all salespeople over achieve. And another 20% can become over achievers. Who do you want on your sales force and what are you willing to do to develop them or recruit them?

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Topics: Dave Kurlan, sales hiring, assessments, selling, Management, Sales Force, leadership, over achievement, declining sales, improve sales, assessment, sales candidates, over achieve, Under achievers, hiring salespeople, mediocrity, overachievers, sales increase, Performance, Economy, sales assessments, declining revenue

Sales Performance - We're Not a Commodity, We're Different

Posted by Dave Kurlan on Tue, Apr 24, 2007 @ 13:04 PM

My grandfather sold cars during World War II and until he passed away in 1968. At one point he even owned an Edsel Dealership, which said more about his confidence in his selling ability than it did about his ability to make a good business decision. If you're wondering, the selling gene skipped a generation and a half because my dad was an optometrist and I was an acute introvert for the first half of my life.

During the war, it wasn't very difficult to sell cars because cars weren't being manufactured while steel was being used for the war. Sellers could get just about any price they asked because demand far exceeded supply. After the war, car manufacturers went back to the business of building cars, supplies exceeded demand, and it required salesmanship to sell someone a car.

Your salespeople may face some of the same challenges today, not because of supply and demand, but because of the competition created by the global economy. There may be many more choices than ever before, with most offerings looking very similar if not altogether the same.

Differentiation is the name of the game or your salespeople risk being commoditized by their prospects. Discussions about pricing, whether to justify the price, defend the price, examine the value-added or explain the pricing strategy all serve to further make you look like your competitors.

The great differentiator is what I call compelling reasons to buy. Compelling reasons are the things that will motivate people to buy, buy from you, and buy now. You must work with your salespeople to identify the compelling reasons that cause the people in your market to buy. Make sure you differentiate those compelling reasons from features of the product or service, and the benefits of ownership. I wrote this Baseline Selling Tip to explain.

In order to uncover and develop compelling reasons, your salespeople must have exceptional listening and questioning skills. I wrote this post in January 2006, called Beyond Listening Skills to explain exceptional listening and questioning skills.

If you want to better differentiate your company from the competition, work on this exercise with your salespeople every week:

Compelling Reasons -

What are They?
How do we Uncover Them?
How effectively do They motivate your prospects to buy?
How effectively do They motivate your prospects to buy from you alone?
How effectively do your solutions address those Compelling Reasons?
How well do those Reasons justify your selling price?
When should you present your price in the context of the Compelling Reasons?

Features and Benefits -

How do they provide peace of mind?
How do they make prospects comfortable?
How do features and benefits make their decision to buy a good one?

Compelling Reasons create urgency and justify your price. Features and Benefits make people feel good about spending all that money with you.

© Copyright 2007 Objective Management Group, Inc.

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Topics: selling, Performance

Competitive Prices - Why Do Prospects Bring Them Up?

Posted by Dave Kurlan on Mon, Apr 16, 2007 @ 23:04 PM

A group of salespeople in today's training revealed that their biggest challenge is dealing with prospects who tell them that they saw something similar for a lot less money. When asked how they handle it, they unanimously said that they justify (read defend) their price. They failed to realize was how weak their position is and that the prospects don't really care. They also weren't aware that they were assuming that that prospects bring this up is to get a better deal. But prospects could be bringing this up just to "let you know..." or because they are confused, or because they want you to know they've been looking around, or because they don't know how your product or service is different. They could even be attempting to help you!

Why does this happen? Weaknesses impact how salespeople will respond and in situations like these their Non Supportive Buy Cycles and Self Limiting Record Collections are usually to blame.

When you coach your salespeople, make sure you take these weaknesses into consideration because simply telling them what to say usually won't change anything.

A better way to handle this scenario would be to say, "Oh, I saw that too. Do you have any idea why the price is so different?" This forces the prospect to provide the reasons why - their reasons - good reasons - instead of the salesperson's.

©Copyright 2007 Objective Management Group, Inc.

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Topics: coaching, selling, Performance

What Lousy Salespeople Do

Posted by Dave Kurlan on Mon, Apr 02, 2007 @ 22:04 PM

One of your weakest salespeople, struggling for the better part of his first year, finally closes a sale. Not only that, it's to a huge, global, well-known company. That's the good news. The bad news is that he way undersold them. He should have sold them a needs and budget appropriate service for about $60,000 but instead, he sold them the least expensive version of that service for $5,000.

Do you get excited that he finally broke through and sold something to a highly leveragable account? Or do you become even more frustrated knowing that he failed to hold his ground and didn't sell them what they really needed, caving in to sell them what they wanted. I know. He's supposed to sell them what they want. But he's also supposed to get them to want what they truly need.

If you're his manager, what do you do? Can you guess which weaknesses he has? Come on now. Those who have been reading this for two years should be able to name at least three weaknesses that are absolutely ruling this guy. What are they?

© Copyright 2007 Objective Management Group, Inc.

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Topics: selling, Performance

My Sales Manager Has Fallen and I Can't Get Up

Posted by Dave Kurlan on Wed, Mar 28, 2007 @ 23:03 PM

Today I spoke to a group of CEO's at the Cornell Club in New York City. I'd like to thank Susan Villamena and Bob Heiss of S & R Associates for hosting the event.

Tonight I received an email from one of the attendees who was asking for help . He wrote that he (CEO) had a sales manager who was extremely ineffective at managing salespeople, but was a very effective salesperson. He went on to say that the manager was so ineffective, he is now managing only one of the salespeople and the others are being managed by members of the Executive Team. He said there is a four-year contract in place where the manager gets an override and he can't afford to hire a new sales manager unless he terminates a salesperson. Talk about being between a rock and a hard place!

This is also a good example of how companies accept mediocrity. Let's do the math again. Suppose the sales manager is earning an $80,000 base and overrides of another $50,000 for a total compensation of $130,000. This for basically doing a lousy job of managing one salesperson. Let's suppose that we could leave the override in place and put this guy back in sales since that's what he does best. His compensation reverts back to sales compensation so that only the override is eating a hole in our wallet.

Next, we hire a talented sales manager who takes over managing all of the salespeople, freeing the executive team up. The new manager gets a base plus override too, but only on incremental sales.

How much must sales increase per salesperson to cover the extra $50,000? Since the new override is on incremental sales only, the margin goes right to the bottom line. Using a worst case scenario and assuming a margin of only 15%, my guess is that sales only need to increase by about $350K or just $6,000 per month, per rep.

Lessons: Never let an employee hold your growth hostage. Never sign anyone who has yet to prove themselves in a role to a long-term contract. Your employment agreements should specify that employees are employees at will. Stamp out mediocrity, surround your salespeople with great sales management talent and grow the company.

©Copyright 2007 Objective Management Group, Inc.

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Topics: Performance

Sales Best Practices - Not

Posted by Dave Kurlan on Sat, Mar 24, 2007 @ 07:03 AM

DePaul University recently published their study of Sales Organization Practices. The survey is comprehensive and representative of more than 300 companies in many, varied industries. It can hardly be called and rightly isn't called "Best Practices"; just practices. The survey shows that a very large percentage of the companies surveyed are not performing some important functions effectively. While 55% relied heavily on sales or marketing to generate revenue, the problems sited in the survey include:

• lack of processes or effective practices for selecting and hiring salespeople;
• outdated compensation programs;
• tied heavily to clunky, under utilized in-house CRM;
• not providing enough selling skills training and development

Of most interest to me were the following findings:

• only 22% utilize talent identification
• most of that group uses personality-based criteria
• only 19% match talent to job

It amazes me that, with all the information available to companies, they still ignore hiring best practices, including the four areas in which OMG can help: optimization of the pool of candidates, candidate qualification, candidate selection and on-boarding and development. It is very clear to all of us with expertise in sales force development, that companies have little clue, exercise little discipline, and have even less patience in these areas.

For example, we have found that companies in Financial Services who turnover upwards of 80-90% of their new salespeople, can't seem to understand that hiring 3 good people who will stay and produce is far more effective than hiring the first ten who agree to work on straight commission and then fail inside of 6 months. I've done the math before but let's take another look.

Company A hires the first 10 people who agree to work for them and pay a total of $150,000 ($30K annually) for 6 months to people who produce little, if anything, before turning over.

Company B hires 3 quality people who are paid a total of $150,000 ($100K annually) for 6 months and produce measurable revenue and stay on to become productive.

Why can't the companies in high turnover businesses see this? The tools are available to accomplish this but since these concepts are not driven from the top down, managers, accustomed to being compensated by body count rather than average sales per rep, panic and revert back to old, ineffective methods.

It doesn't take a rocket scientist to see the difference between company A and B. And it doesn't take a rocket scientist to implement the process either. But it does take more than a 60 day commitment to the new process. When it's been broken for a decade it doesn't get fixed in a calendar quarter.

© Copyright 2007 Objective Management Group, Inc.

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Topics: recruiting, assessment, Performance

Salespeople Who Can't Perform Under Pressure

Posted by Dave Kurlan on Wed, Mar 21, 2007 @ 21:03 PM

I coach some very high profile sales executives and sales trainers. There is one I have been working with for about two months. I challenged him to raise his goal from $600,000 to $1,000,000 in revenue . After determining the kind of company that represented his sweet spot, I helped him determine that he needed to close only 2 companies per month and only required 2 quality appointments per week to assure success. TWO PER WEEK! He thanked me profusely for making it so simple. I spent a little more time helping him understand who to target and how to get introduced into those accounts.

Three weeks later, during our next coaching session, he was overwhelmed with pressure. He couldn't handle it and wanted to bail out of the coaching. That's fine with me - it gives me one more much needed hour per month. But I had an obligation to help him and couldn't let him bail that easily. We talked it through and I identified a character flaw - he reacted badly to the word "accomplish" and rebeled, became overwhelmed and negative whenever anyone asked him to do something. I'm good, but not that good! I suggested therapy. I figured that I already did half the work and a therapist could do the rest and just fix it.

Today, not even two weeks later, he called and was even more overwhelmed than last time. He said he was comfortable with his previous goal, was making enough money, didn't perform well under pressure, and wanted to simply call when he needed help. OK. No problem. I did what I could and can't do anymore. All I could think about was TWO appointments per week. What was he doing with the other 4 days that made him feel so much pressure?

This particular guy has his own business. He doesn't work for me. In his industry, his current revenue would be medicore at best. But what if one of your salespeople was comfortable doing half of what you needed him to do? What if one of your salespeople reacted badly to increased expectations? What if he couldn't work under pressure? What would you do? Would you:

a. let him keep doing what he's doing
b. give him an ultimatum
c. terminate him
d. put him on an exit plan
e. something else

Leave a comment and tell us what you would do and why!

© Copyright 2007 Objective Management Group, Inc.

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Topics: Motivation, Performance

Seth Godin on Good vs. Great Salespeople

Posted by Dave Kurlan on Wed, Mar 14, 2007 @ 07:03 AM

Seth Godin got it right again today. It's not unusual for me to disagree with his posts on the subject of salespeople and sales forces but today I agree with his rant about salespeople who are good vs. salespeople who are great. You'll find it very consistent with 9 of my most recent 12 posts about over achieving vs. under achieving. His best comment, "Fire half your salesforce."

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Topics: recruiting, Motivation, Performance

Salespeople - The Difference Between Over Achievers and Under Achievers

Posted by Dave Kurlan on Thu, Mar 08, 2007 @ 23:03 PM

I often post about overachieving and posted a comprehensive article on over achieving a few weeks back. I've also written about under achieving and, for the first time, want to draw some comparisons between over and under achieving.

Underachievers make excuses for why they didn't get enough appointments while over achievers not only book more appointments than they need, but make sure that they're top quality appointments too.

Under achievers turn quality appointments into think-it-overs and maybes while over achievers close their closable opportunities.

Over achievers can't wait to update their pipelines, turn in their reports, and mentor others while under achievers need to be hounded to do even the most simple of these tasks because they're embarrassed about their performance.

You can depend on over achievers to hit their numbers month in and month out while you never know what you can expect from underachievers.

Over achievers have larger average sales, higher margins, better account retention, cleaner receivables and stronger relationships with their customers and clients. Underachievers give price breaks, sell smaller accounts and orders, don't sell people what they really need, have deals fall through and cancel and think they have strong relationships with their customers and clients.

Over achievers set stretch goals and reach them while under achievers set safe goals and fail to reach them.

Over achievers allow you to feel confident and content, you must scramble to keep up with them but it's good scrambling. Under achievers stress you out, tend to be high maintenance and don't provide a return on your investment of emotions and time.

I also posted recently about sales frauds. Perhaps this explanation will help you identify the real producers from the sales frauds, the over achievers from the under achievers.

© Copyright 2007 Objective Management Group, Inc.

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Topics: coaching, accountability, Motivation, Performance, Featured

Salespeople - Can Their Work Ethic Be as Good as BB King's?

Posted by Dave Kurlan on Mon, Mar 05, 2007 @ 11:03 AM

The man was working on a Sunday, at night. He has bad knees, a bad back and diabetes. He's 81 years old and was just released from the hospital after suffering from the flu virus that's been going around. Yet despite his age and health problems, it was so obvious that he still loves what he does for a living. He works with such a passion, one that you just don't see much of anymore. He is energetic, funny, appreciative, sweet, quick, sharp, wise, and philosophical. And he still puts forth tremendous effort when he works which is why he is still at the top of his game. His skills have not eroded one bit. He is the King of the Blues.

Most of your salespeople are at least fifteen years younger than BB King. Can you say the same things about them? One of my complaints about salespeople is that even though they may be employees of their companies, many of them fail to see that they really have their own businesses. As such, they should possess the same work ethic as successful entrepreneurs but sadly, most of them don't. What kind of work ethic does a successful entrepreneur have? See exhibit1 - King of the Blues.

What can you do if your salespeople are 9 to 5ers? Not much. But you can motivate them to be more productive during those eight hours. Verne Harnish, the Growth Guy, talks about successful companies getting 3x output for 2x pay. Start demanding 3x revenue and hold your 9 to 5ers accountable.

The sold-out crowd at the Opera House in Boston showed their appreciation for the King of Blues all night long. He played and talked for more than two-hours without a break and still plays 100 dates per year. And did I say the man can still play better than ever?

My wife and I were treated to a meet and greet after the show where he signed my guitar. He was most gracious and was happy to talk about that which he loved more than anything else - work.