Can you imagine building the can’t miss product, then developing the A+ presentation, booking the big conference room, and inviting the top clients… then showing up in flip-flops and shorts? Of course not! This would be a horrible start to an otherwise perfect presentation. Amazingly, this simple fact is often lost within many otherwise successful organizations. Too often a company spends millions of dollars on product development, manufacturing, operations and fancy marketing brochures, but pays little attention to the only customer facing unit in their business, the sales team. Companies, big and small, fall into the same trap of merely going out and finding type-A personalities, dropping product samples in their hands, and saying, “Go Sell.” Predictably, sales often fall well below expectations. By neglecting to focus on the planning, organization and process of sales, before focusing on the “Act” of selling, your sales force will be misdirected, unknowledgeable and motivated by numerous personal goals. In other words, flip-flops and shorts.
To ensure your sales force keeps their performance aligned with your company’s goals, utilize the basic sales organization fundamentals outlined below. However, keep in mind that none of these systems will work if not built on a foundation of strong leadership. Your sales force often represents your only face to face contact with clients, so sales management must passionately protect the company’s image by ensuring quality and professionalism within the sales team. Strong sales leadership must provide confidence, education, clear direction, and promote teamwork. Most importantly, sales leadership must build a culture of measuring success by achievement of clearly defined goals.
Training
When developing a training program for a sales team, consider separating the training into two disciplines and building an individual strategy around each. The first category, product training, obviously covers the features and benefits of the products and/or services offered by the company, but it also teaches the salesperson the history, mission, major goals, and core competencies of the company. Product training should strive to clarify the cost concerns and pricing strategy of the company so that when a sales representative is negotiating with a potential customer, they are empowered to make a sound business proposal.
The second training category, sales process training, is designed to improve skill as they relate to prospecting, pipeline management, presentations and negotiation. Sales process training should also work to improve post sale and long-term account management skills. In addition, don’t hesitate to include direction on how the company would like customers to view your company culture. Should the sales force be buttoned-up in a suit and a tie? Or is the company going for a younger hip feel where a jacket and tie may not match the product line? Finally, clearly define ethical obligations with your sales force. What should and should not be discussed with clients, what is allowed when entertaining a customer, and what is appropriate to say about your competition.
If this training is to be given by someone other than the sales manager, like a sales trainer or sales training organization, it should be reviewed by management prior to rolling it out to the sales force. A sales team's confidence will be damaged if sales management has to contradict the very sales training they asked their sales team to attend.
Sales training should be ongoing. New products are introduced, competition changes, and new trends develop in the industry. Continued education keeps your sales force motivated and connected to the company. Often, the simple act of bringing in an outside trainer to speak on various topics like negotiation will result in a bump in sales. Finally, sales management must use client visits with sales reps to ensure the team is using the concepts taught during the sessions.
Defining Expectations
Too frequently the failure of an employee can be directly attributed to management's failure to communicate the expectations of the position. Hiring a salesperson and instructing them to "just go sell our product" is not enough. The success of an employee starts with a clear definition of their goals and expectations. This information is best delivered in a written job description given to the representative on their first day. Issues covered might include:
- Top line revenue quota
- Bottom line margin requirements
- Product line specifics
- Number of appointments per week
- Client expenses allowed
- Types of accounts to target
- Rules for selling in other reps territories
In addition to numerical goals, it's also important to conduct a one-on-one session with each individual representative and agree on a territory or client sales plan. During that conversation the representative has the opportunity to give their thoughts on how they would like to work their territory. Allowing the representative to provide input into the development of their territory plan allows the sales manager to get more commitment from the rep on the plan. Once you have agreed on the plan and goals, ask the representative to put it in writing so you both have a document that you can reference in order set priorities and check progress. Working with a salesperson early on to develop a territory sales plan helps to give the salesperson a head start and gives the sales manager confidence that the salesperson is not wasting time on non-productive activities. Territory sales plans are also useful when providing performance feedback. After all, the salesperson did help to create the performance standards so they should buy into an appraisal based on those standards.
MeasurementSimple fact: The results you get are based on what you measure. Furthermore, if those measurements are posted on a wall or emailed to the staff on a regular basis, they become even more powerful. This may seem obvious, but many times an organization will neglect this practice. For example, if a company adds a new version of “product X” to their current product lineup, and then simply tells the sales force, "This product is really important to our success, please go sell it", it's not likely the whole sales force will immediately embrace the new product and change their current focus from old products. However, if that same company posted a large total board on the wall detailing each representative's activity toward the sale of “product X” (and management consistently speaks about the numbers posted on that board) the results would be noticeably better.
When defining measurements, also be careful in what you measure. If you simply ask a sales team to "Go make one-million dollars of sales this quarter,” you might end up with a sales force that in fact generated one million dollars of sales, but at a one percent loss after operating cost. It is best to clearly define the meaning of your measurements. In this case, it might be better to ask for one-million dollars of sales at a 15% margin.
In short, clearly defined measurements that are written and regularly distributed to the staff drive better performance. It’s only human to care more about a number if your name is attached to that number on a report for all to see.
Activity Management
When focusing a team's efforts on the goal of generating sales, the use of a weekly reporting package is helpful. Examples of reports to consider: an appointment and contact log, a sales funnel report, a top five account progress summary. These reports serve a dual purpose of allowing the sales manager to understand the team’s progress towards sales goals, and they allow the sales representatives to gain a better understanding of their own efforts and needed adjustments.
Activity reporting is a vital piece of any sales manger's plan. Simply giving your team a quota and waiting for the end of the month results is extremely risky. Under that methodology, sales management only has 12 opportunities per year to make adjustments to a salesperson's efforts. However, by using a weekly reporting package sales management has 52 opportunities to adjust the efforts of the team.
By using a weekly reporting package, coupled with a clear definition of the expectations and objectives, it becomes much easier to offer performance-related feedback and give formal reviews. The consistent flow of information expressed in these reports allows the sales manager to gain a head start in knowing where to provide feedback during one-on-one meetings or field ride-alongs with the representative.
Keep in mind that if your product sales cycle is not something that changes everyday, or for whatever reason a daily reporting package is inappropriate, it’s still your responsibility to have a weekly discussion with the salesperson on the measurable statistics or processes that indicate achievement toward goals. You are not being a business manager if your only indication of your team’s success is their month end sales total and commission checks.
Compensation Plans
Compensation plans are the primary control mechanism of a sales force. If managed correctly, a change in your sales compensation plan can make an immediate impact on revenue and profit. However, a poorly designed compensation plan can spell disaster. Too often, management will stand in front of their sales staff and demand increased margin, but use a commission plan that pays only on the total number of units sold regardless of margin. Salespeople will always adjust their selling strategy to the compensation plan. Therefore, you must work diligently to ensure your compensation plan matches the goals of the company. And if company strategies change, so must your comp plan.
When designing a compensation plan, plans based on two or three components work best. For example, 65% based on margin and 35% based on total revenue. This type of plan ensures the team is focused on selling profitable business. It also makes the point that top line revenue is still important for shareholder perception and cash flow purposes.
In addition, a well rounded compensation plan should have a bonus criterion that encourages the salesperson to continue aggressive selling even if they have hit their quota before the sales period has ended. Be careful though, bonuses can be another area where a poorly designed compensation plan can fail. A bonus should be paid for performance above and beyond quota. Unfortunately, many poorly designed plans pay a bonus for average performance or “at-quota” performance. Under these types of plans it is not uncommon for 90% of the sales team to reach bonus level on a monthly basis. If this occurs, the sales representatives soon begin to perceive the bonus as a normal part of the compensation plan. This defeats the purpose of the bonus and may even destroy the cost/profit structure of the plan.
Use smaller monthly bonuses as a way to fine-tune the sales team’s efforts. For example, a $200 monthly quality service bonus can be used to reward or penalize sales representatives for the accuracy of their paperwork, number of customer complaints, and following company procedure. In addition, bonuses or spiffs are also a useful way to pay a premium on new product launches or the reduction of overstocked inventory.
Finally, plans must be thoughtfully inspected to ensure they do not reward a salesperson for any activity that does not help the company generate profit. Such as, holding or sandbagging sales until the next sales period, not making a sale because it will cost a sales rep a bonus of some sort, or neglecting current customers in favor of signing new business.
Non-Monetary Motivation
A chief goal of leading a sales team is to provide motivation. Below are a few ideas I have found to be strong motivators, but keep in mind it’s important to recognize that no training, system, or award can replace the ongoing positive relationship between a sales manager and the salesperson. The simple act of offering support and encouragement should never be underestimated or neglected. To foster creativity and persistence, a sales team must know that their leadership understands they are going to make mistakes or lose a sale, but if they continue to look for solutions they will not be chastised.
- Selling can be tough on the ego, so sales representatives like to feel as if they have comrades who are in the battle with them. This is especially true for outside sales representatives who are located in distant territories. To give the sales team a feeling of unity, I have found that it is helpful to facilitate the sharing of success stories between the team members. When a salesperson shares their success story with the rest of the team, they promote confidence that things are going well and the product they are selling is a desirable one. These success stories also encourage idea and strategy sharing sessions between team members about how to sell certain products or negotiate with difficult clients. Starting the weekly team meeting or conference call with individual success stories is a great motivational start to the week.
- Daily or weekly progress reports detailing each representative's sales and activities can also serve as a great motivator. Successful salespeople appreciate seeing how their progress ranks among their peers. They also use this information to gauge if they are working at an acceptable pace.
- Top sales representative awards are also a proven source of motivation. It’s always refreshing to see your top performers push extra hard at the end of the month for the extra recognition. Winning the honor of top performer in your group of peers, even if the award is non monetary, is always a strong motivator of sales professionals.
- Awards voted on by fellow team members are an outstanding way to encourage teamwork. Often one team member will go above and beyond to help fellow sales reps with a difficult customer or training issue. Being recognized by your peers for this behavior is a powerful motivator. I’ve found that these types of awards are better as non-monetary, such as certificates, plaques, or medals. This way they can be displayed at the employee’s desk or office.
Field Intelligence
An important principle to instill in your sales teams is the understanding that they are the main source of information about the company's customers. They must buy into the idea that gathering and documenting customer information is a primary job responsibility. Information gathered from the field allows the organization to improve on products or processes, understand what the competition is doing, develop new products, understand who/why is buying from the company, and much more. To ensure that proper customer information is captured, you should work to develop either customer information sheets to be kept in a territory binder, or develop a customer information database accessed on the representative’s laptop, tablet, or smartphone. Having this customer information documented has another important benefit; if the salesperson leaves the company, all of his account knowledge remains. Being able to pass along this information makes it much easier for new representatives to quicsly re-establish the relationships. Recruiting
Keeping a sales department staffed is always a challenge. My philosophy here is simple: You will most often have an opening in your sales department, therefore, you must always recruit. Because of a mix of performance standards, performance based pay, and the individualistic personality type of salespeople, keeping a sales force 100% staffed for extended periods of time is tough. Furthermore, a bad salesperson might actually be hurting the company's reputation, so it’s best to continually look to replace your poor-performers quickly (assuming you have given them adequate time and assistance to improve).
There will be situations where a short time frame forces you to go through traditional recruiting channels such as headhunters and job boards, however, for on-going recruiting look to your sales team. Insist that your sales team is constantly on the lookout for new sales talent. Who better to understand the qualifications needed in a new sales rep than the people who are currently doing the job? To push involvement in this activity, develop an employee referral program that pays a referral award when a current sales representative recruits a new hire. This type of program usually proves less expensive than many professional recruiting agencies, and often generates a higher quality recruit.
Sales Leadership Tips
Your people are your company's strongest asset, never hesitate to treat them that way.
The best products or processes will fail without the right people.
Do not expect your team to succeed if you do not clearly define goals and expectations.
The results you get are based on what you measure. Make sure your reporting matches your goals.
What you measure improves. What you measure and communicate for all to see improves more.
If your sales team does not clearly understand the advantages of doing business with your company, how can you expect your customers to?
Focus your team on issues that are within their control to fix or improve on.
Do not be afraid to make changes to long-standing procedures or strategies. Business is fluid, you should be too.
