Add an Extra Month to Your Q4 by Preplanning

When writing the August newsletter, I'm always tempted to veer toward a subject on the lighter side. Everyone's on vacation anyway, right, or busy with back to school shopping or taking kids to college?

More than the end of summer, August is a gateway month. We need it to get ready for what I've always referred to as "extended Q4" - September - October - November - December - a critical period for most sales organizations. Plan for extended Q4 now, so you enter September in a state of readiness.

Falling Short

Any salesperson behind in quota needs to know this to the dollar so they enter the fall with no illusions. After reviewing the numbers, your first question to them should be, "How are you planning on making up the short fall and achieving your goal?"

For example, a rep with a goal of $1,020,000 for the year ($85,000 per month) should be at $680,000 at the end of August to be at 100% of quota. If they've reached only $600,000 in revenue (88% of quota), their new four month goal stands at $105,000 per month or $420,000 for the year.

Together, take a detailed look at each rep's pipeline and sales forecast. Given the status of each, have them draft a plan for the next four months. Meet with them regularly. Show your support. Hold them accountable.

Ahead of Plan

Most of us consider reps ahead of quota going into "extended Q4" a high-class problem. There are two potential pitfalls: the rep coasting for the rest of the year or getting complacent and potentially missing goal.

Tell the over-achieving rep exactly where they stand versus quota. Surprisingly, even superstars sometimes don't know their precise percentage over goal. Let's say their eight month total stands at $730,000 (107% of goal) versus their goal of $680,000.

Say, "I've been reviewing your sales forecast and pipeline. I think you could reach 115% for the year. What are your thoughts on that? What would motivate you to reach that number?" Remind them of any accelerators that will pay out for any sales they make over quota. Work together on a plan.

Don't Stop There

For each rep on staff, regardless of their performance to date, consider the following:

• Review the comp plan, pointing out earning potential at 100%, 105%, and beyond. Focus on upside earnings for reaching each of those targets. Three quarters of the way through the year, reps sometimes forget the details of the comp plan.

• Create an individually designed extended Q4 sales contest for each rep. Target specific strengths, accounts, and motivators. Enlist their participation in designing it. No contest should be exactly like another.

• Sponsor a morning, afternoon, or day of training. If the budget allows, bring someone in from the outside. Concentrate on a particular skill. Reps should role play and share best practices. ALL salespeople need booster training and a chance to revisit the basics. This shows the company commitment to the group and boosts morale.

Set Yourself up For Success

Allocate your coaching, as well as deal and sales forecast review time, so that the majority of it gets spent with reps capable of exceeding quota by a solid margin.

Share with your direct supervisor and / or upper management what you want to achieve. Be specific. Show up with charts, graphs and plans. Let them know you need to dedicate as much time as possible to meeting with reps, coaching, accompanying them on or monitoring calls. Any unnecessary activities detract from your goal of helping the group exceed quota.

That's your job, right?

How to Build on Successful Months

A reader writes, "The reps in the group I manage started off strong in January. With the exception of one salesperson, they exceeded their monthly quota. February looks to be as good or better. I've never seen the reps so pumped up. How do I keep the momentum going and the enthusiasm high?"

Congrats on such a strong start to the year.

Timing

January revenue numbers sometimes mislead. Reps occasionally hold orders from one year to the next to ensure starting off the year off strong. Sometimes reps just run out of runway of end-of-year deals. Other times reps experience a rush of business as companies have new budgets.

February usually brings a reality check. The New Year enthusiasm has abated a little bit. Reps begin more of the "day to day" grind of selling.

Monthly Reviews

In March, when meeting to discuss their February performance, you might typically say, "You sold $94,050 against a quota of $83,500 which put you at 112% of quota. Great work."

Of course, this conversation has to take place. Salespeople need to know how they did. But it speaks to the reps past performance. The books have been closed on February. You need to look forward.

Future-Based Discussions

With February complete, look at the averages for the two months. Say, "In January and February your total sales were $183,670 against your goal of $167,000 for those two months combined. You are 9%, almost 10% over quota for the two month period."

From there, move the discussion to March and beyond. Say, "If you sustain this rate of 109%, you'll bring in $1,092,180 against your quota of $1,002,000 for 2019."

The conversation now focuses on: potential, opportunity, the time ahead.

Needs

Tell the rep you want to see them attain this goal. Then ask:

• To what do you attribute your success to so far?

• What do you need to keep this going?

• How can I help you?

• Has anything been getting in your way?

• What could potentially slow your momentum down?

Pay close attention to their responses. Use this information to customize upcoming coaching sessions with reps.

Sales Incentives

When you asked what they needed to do to keep the momentum going, one rep might have said, "I have to increase my conversion rate from proposals to sales." Another could say, "I have to continue to prospect. I can't let down on that or I won't have as strong a finish to the year."

Based on what you've learned, create individualized, short-duration sales incentives for each salesperson. Keep the dollar amount between $100 and $250 based on your budget.

Stretch it Out

Yes, as a sales leader you'd be pleased if a rep achieved 109% of quota. But what if the she could do a bit better? Would 115% be possible? Why not?

Tell her a stretch goal for a quota of $1,002,000, would be $1,152,300 (115%). Then ask another round of questions:

• What do we need to do to make that happen?

• Which current clients could help make that number a reality?

• What new prospects could do business with us in 2019?

Move the reps away from thinking about 109% as the end all and be all, to considering 115% as an absolutely attainable goal. People do more of what they already do well.

Final Thoughts

Most of us start the New Year off with high hopes and better diets. As sales leaders, sometimes you have to let the year develop and take shape a little bit before knowing how to proceed. Take a cue from the reps. Let them guide you on how best to provide the needed guidance, support, coaching and motivation for the coming year.

Salesperson Hits and Misses

One of my sales reps exceeds quota by more than 50% one month, misses it by at least 30% the next, and then turns in an average performance for several months in a row.  The performance of the other reps is much more regular. At the end of the year he either just makes or just misses his annual sales number.  The unpredictability has begun to wear on everyone.

Frustrating.  One month he's a superstar and the next month he doesn't even make quota. If it's been going on for quite some time, it needs to be addressed.

Run the Numbers

Divide his annual performance by 12 to determine a monthly average.  How far above / below the group average is it?  Compare his forecasts to actual sales. How far off are the two figures?  Go back several years.  Do any seasonal highs or lows occur that don't seem to affect the other reps adversely?  Does he prospect and meet with decision makers regularly or is he inconsistent there as well?

Get Visual

Instead of bombarding the rep with row after row of numbers, use pie charts or bar graphs to illustrate your points.  Presenting the sales data in this way allows you tell a simpler, more dramatic story.

A sales manager once presented me with a graph showing my best sales day.  It was Wednesday - almost without exception.  It made a big impression on me and I began thinking about my behavior on the other days.  What did I do differently on Wednesdays?  Could I bring more of whatever I was doing to the other days of the week?

The rep in question might react similarly.  Give him a few days to look at the reports, then meet again.

Reactions

Make it a two-way discussion. Share a few of your "light bulb" moments.  Say something like, "Were you as surprised as I was by your performance every January?"  Listen to any observations.  Work together to come up with approaches to the problem.

Your Side of the Story

If he says, "Hey, it's sales.  As long as I make my year-end number, does it really matter?"  Assure him it very much does.  Discuss the need to count on him consistently.  Point out the difficulty of defending missed sales forecasts to owners or board members several months in a row.  Talk about the cash flow problems caused by up and down months.  Mention the effect of unpredictable sales on group morale.

Wait a Few Months

Your rep has demonstrated the ability to meet and exceed quota.  Once the two of you put an action plan in place, see what happens.  With his inconsistencies and the impact it has on others pointed out, his sales performance might start evening out.

Take Proactive Measures

After a particularly strong month, discuss the results with him.  How many sales did he close?  How did he do it?  What can he do to ensure he has another solid performance this month?
If sales are down for the month, alert him as soon as you can.  Ask him about steps he can take. Letting him know you're watching before the month continues to spiral downward will cause him to pay closer attention.

Changing Your Behavior

Even if this salesperson improves, high and low months might always be part of his style.  With respect to forecasting, if his forecasts are as inconsistent as his monthly sales, then you need to change your behavior, too.  When rolling his forecast and those of other reps together to create your forecast, do your best to understand the status of each of his deals in order to assess for yourself the likelihood they will close.  After asking some key questions you might choose to remove one of his forecast deals from your forecast. 

Conclusion

An erratic sales performance undermines a sales manager's ability to turn in an accurate group sales forecast.  Keeping him on staff sanctions this inconsistent behavior.  The other reps take notice.  Pointing out the issue, making him part of the solution and staying on top of the situation goes a long way toward improving it. 

10 High Impact Suggestions for 2011

Most executives begin the New Year with high energy and a renewed sense of purpose. When it comes to sales, though, they often don't know specifically what they want to accomplish during this critical period. Here are 10 high-impact, easy-to-implement, budget-friendly suggestions for helping your sales staff get off to a great start.

Vary the staff meeting 

Invite employees from different departments to sit in on a sales meeting. Give the reps input on the agenda. Rotate responsibility for leading the meeting amongst them. Discuss reports in a different order or introduce a new one. Alter the sales staff meeting in some way to keep things interesting for everyone.

Rerun the list of the top 20 accounts in each salesperson's territory 

Economic conditions have changed how much your clients buy from you. Some sales reps may devote a disproportionate amount of time and attention to accounts with diminished purchasing power. Others may not know the ranking of their account roster. Run a report of top accounts and review it with them.

Buy at least one motivational poster for the sales area 

Use the Internet or sales magazines to research motivational posters. Select 3 or 4 that you feel would inspire your salesperson or sales staff. Ask them to vote for their favorite. Order one and hang it up on the wall. You will catch them looking at it from time to time.

Change the look of the dashboard for the sales software system 

If the reps have looked at the same pie charts and bar graphs for several years- change them up a bit. Do the reps frequently request information that isn't displayed? Is there a product you'd like to remind them to sell? Is there something you're always looking up, or a report you regularly run before a staff meeting? If so, that's a good starting point for giving the dashboard a new look.

Create a new report for the sales staff 

Looking at data helps salespeople plan for the year ahead or devise a strategy for individual accounts. It allows them to spot trends and generate new ideas. Run a list of clients buying Product A but not Product B. Break your customer list down by industry. Think about what sort of facts or figures would help the reps sell more and provide them with that information.

Read one book on sales management 

Invest in your staff and in yourself. Amazon lists the top-selling sales management books on their website. Look for a book that fits your business. Read the customer reviews to see which one might best help you. Make a deal with yourself to select and read a book by the end of Q1

Buy one new book on sales techniques for the sales staff 

All salespeople need to review the basics and should enjoy being introduced to a new way of looking at the sales process. Go to Amazon and look at the top-selling sales books for 2010. Many excellent books were written this year. Suggest a few to your staff and let them pick the one they'd most like to read as a group.

Let the whole sales staff know about the one sales skill they all excel at as a group 

I always ask my new clients which sales skill their entire staff is particularly good at. The answer comes easily to most of them. When I ask them if their staff knows this they usually say "No." Don't keep this information a secret. If they all ask strong qualifying questions or give high-quality product demos - let them know about it.

Start the year off with a fun and motivating sales contest 

Think about past sales contests that have been popular with your reps. Consider where they like to shop or have lunch. Does each one have a particular hobby or interest? Use this information to create a sales contest. Announce it as close to the first week of January as possible.

Think of one accomplishment for each salesperson - and compliment them on it 

Praising salespeople does not always have to involve a major sale - or even be about a closed sale for that matter. Say something like, "Joe in customer service tells me that you return his calls quickly and help him get matters resolved for the client. Good job." Look for any reason to recognize your sales reps. The effort won't go unnoticed.

Show Me the Money!

I've been reading your latest articles on improving the hiring process. Could you write about money motivation? During the interview, sales candidates always assure me that they want to make a lot of money - as much as the comp plan will allow, if not more. With some salespeople, after they've been on the job for a few months, I don't see the drive and ambition that they spoke about before I hired them. They seem to be satisfied making less money than they originally claimed they wanted to earn. How do I determine someone's level of money motivation?

Determining a candidate's level of money motivation trips up a lot of hiring managers during the interview process. The reason often can be traced back to discussing the candidate's interest in making a lot of money, but not requiring them to prove a history of high earnings.

What It Is / Is Not 

Money motivation isn't a skill. No certification for it exists. It's a trait, inner drive, or behavior. A person heavily influenced by money holds earning power and what it can buy in high esteem. 

A sales manager, boss, or mentor can add direction or discipline to someone's desire to earn a lot of money. But no manager is able to force someone to be more money motivated.

The Interview Process 

When discussing the job opportunity with a candidate, presidents or sales managers will show them the compensation plan, often pointing out the top earning potential. The candidate frequently expresses a lot of enthusiasm with regard to earning that kind of income. The president or sales manager takes this to mean that they are driven and know how to make that kind of money. 

Many disappointing months later, some presidents may discover that their eager candidate had no real game plan to achieve a substantial annual income.

Telling vs. Demonstrating 

Money-motivated people have a history of earning more than their peers. Often their drive appears at a very young age. To determine how inspired someone is to earn a high income, try asking these types of questions during the interview process:

• Tell me about your very first job.
• How old were you?
• What did you do with your earnings?
• What has your income been for the last several years?
• How satisfied are you with that?

Their answers will help you see whether or not they have a history of acting on the desire to earn a lot of money.

Having a Game Plan 

Most people who are driven to earn a lot of money don't put all of it in the bank. They have plans for a lot of it. Specific plans. Ask questions such as:

• If you achieve the highest bonus level in our comp plan, what would you spend the money on
• What's the next major purchase you would like to make?

Cash-driven individuals have a list ready. It could include: a boat, a vacation, a car, or a re-landscaped yard. Many love gadgets and will spiritedly mention buying the latest version of an iPhone or the equivalent. Yes, these individuals have kids to put through school and mortgages to pay. But money-motivated candidates are likely to talk enthusiastically about the types of purchases that are more fun to make.

Providing Proof 

Though many presidents balk at this, asking the candidate to show you their W-2's or pay stubs for the last several years will provide proof. The genuinely dollar-driven candidates will produce the documentation needed. They won't work for much less than they are currently making and need to make certain that your company can provide the income they insist upon. 

Ambitious, money-motivated individuals are not shy when talking about money and earning potential. Most have a precise figure in mind when it comes to their annual income. They understand what it will take to bring in that amount. Make sure that they explain their plan to you during the interview process. You should be in agreement with them that the plan is realistic and achievable. At that point, you'll know that you're interviewing a money-motivated individual.

Competition Displaces Top Rep

A client asks, "For many years, I had only two salespeople on my sales staff. One of them significantly outperformed the other and was treated like a superstar. Recently I have doubled the size of the sales staff and one of the new hires is outperforming all three of the others. I am beginning to have some real trouble with my former star. Their productivity has dropped and, quite frankly, they are often surly with others during the work day. I do not want them to leave. What can I do?"

This often happens in small sales organizations and it can be a very uncomfortable situation for all concerned. You are right to want to address the issue, both to keep your long-time employee and to retain your newest employee as well. If some of the surliness is directed their way, they may decide to take their talents elsewhere; there will probably be no shortage of bidders.

Face the facts

It may be that your entire sales team, including the former superstar, has been underperforming for a long time and you just didn't realize it until the new hire came along. Your former star may have been the top performer in a below average sales staff.

Review the numbers

Take a look at the former superstar's productivity numbers. Are they making the number of calls that they used to? How many prospecting calls are they making? How many new accounts have they opened up recently? Have they been coasting in recent years or were they still working hard? Has their territory been realigned or did they lose any accounts to the new sales representative? Could any of these situations have impacted their performance?

Hold a meeting

Review the findings with your sales representative. If organizational changes have made it virtually impossible for them to reach their former sales goals, at least for the short-term, acknowledge this and take steps to correct it. Perhaps a temporary quota reduction or a territory expansion is in order.

If you can clearly see that the arrival of the new sales representatives has had little impact on their ability to surpass quota, tell them so. Let the numbers back you up. Perhaps they had stopped prospecting some time ago or had grown complacent with established accounts. Work with them to create a plan that enables them to step up their sales production.

Address their attitude

When the sales productivity part of the meeting is concluded, bring up the issue of their behavior. Using specific examples, talk about the detrimental impact their negative attitude has had on the organization; tell them it must stop immediately.

Consider a change in title

Is there a special way to recognize their contribution to your organization? Could they have acquired tremendous product knowledge over the years? Have they put together some amazing presentations? Did they write much of the content for your website? If so, think about enhancing their title to something like Senior Sales Representative or Product Specialist. This would acknowledge how much you value them and would give them some of the special attention they undoubtedly miss.

Though it may surprise you, your former star might be concerned about their future with your company, especially given their loss of prestige to your new superstar. A one-on-one meeting may help them to talk about their concerns and give you a chance to assure them that they are still a valued member of your organization.

Counteracting a Summer Shortfall

A client asks, "This summer almost my entire sales staff requested vacation time in August. Normally, I try to stagger their time off but this year they needed to attend events like weddings and family reunions with inflexible dates. Because of this, August will be our worst sales month in years. How do I make up for this shortfall without having the staff feel as if I am penalizing them?"

Though situations like this often occur in the summer, there are many other times during the year when members of your sales staff all need time off during the same period. It can be deadly for sales revenue. Here are some tips for dealing with a skeletal sales crew and the resulting slow sales month.

Look at the Shortfall

Find out exactly how much revenue was lost during August. Were your expectations reasonable in the first place? Remember, customers take vacations too, and decision-making processes often stall as a result. Take a look at each individual and how August affected their sales. You'll probably notice that some salespeople are more impacted than others. In some cases, it might not have made much of a difference; with others there may be quite a shortfall.

Schedule Individual Meetings

Regardless of what transpired over the summer, the early fall is a great time to meet with salespeople and get them back on track. Discuss the August sales revenue directly, but don't be overly gloomy or intense about the situation, leaving the sales staff feeling guilty about taking vacation that was due them. Say something like, "Boy was it quiet around here in August. We didn't set any sales records!" Then discuss their overall sales performance and begin strategizing for the fall.

Hold a Group Meeting

After you have met with everyone individually, schedule a staff meeting and talk about the overall group numbers. Discuss year-to-date figures, take a look at both the strong and weaker months, and then talk about August specifically and objectively. Again, avoid being overly negative because it can backfire on you by making your staff feel that the year is already lost and there is no way to salvage it. Brainstorm as a group to come up with suggestions on how to increase revenue.

Pizza

For an inside sales force that calls into different time zones, offer to buy pizza for dinner once a week if they will put in a few extra hours calling their West Coast clients. For a field sales force, offer to do the same if they will stay late one day a week to try and catch some hard to reach decision makers at their desks. Sales representatives who alter their typical calling hours on occasion are often surprised to see that the effort yields some unexpected sales revenue.

Remember the Little Things

Put up posters that chart the progress being made. Make sure and "catch" everyone on the staff contributing to the success of the sales effort and acknowledge them in group e-mails and voicemails. Keep movie tickets or gift certificates on hand to surprise the sales representatives who make a big sale or speak with a hard to reach buyer.

Being short-staffed is every sales manager's nightmare and it happens to all of us despite our best efforts. The important thing is to remain calm and strategize your way out of the slow sales. Your staff will remember that you let them take an important vacation, even though it was inconvenient for the company, and that you led them to a successful sales year despite the summer slowdown.

Motivating a Superstar

A client asks, “We are almost halfway through our fiscal year and the superstar on my sales staff will easily reach her quota by October. How do I keep her motivated through November and December? How much should I increase her quota for next year?"

It’s great that you have such a motivated producer on your staff and that you are asking this question now rather than in November. Some companies include accelerators (multipliers that reward above quota performances) as part of their compensation plan. If your plan is light on incentives after a sales representative reaches quota, here are some things to try.

Set a Mini-quota

Set a mini-quota for the last two months of the fiscal year. Then structure a two month bonus plan that is similar to, but more generous than, your current compensation plan. Remember, your sales representative is producing over and above for you, so do the same for them.

Mix Things Up

Superstars get into a comfort zone just like every one else, so use this special window of time wisely. Is there is a market segment that you would like to do more business in? If so, you could stipulate that for the purposes of the two-month bonus plan, 10% of the sales or at least two accounts must be new customers from that specific market segment.

Telling the Superstar

Timing is everything when it comes to telling your superstar about this contest. Announce it too soon and they may hold back orders. Wait too long and they may have already become demotivated. Meet with them in early October and tell them that as soon as they achieve their annual goal, the new program will begin. They will be motivated to get all outstanding business in as soon as possible to get started on the new incentive.

Telling Your Sales Staff

The other sales representatives will hear about this program sooner or later. So when they ask about it - and they will - tell them that if they achieve their annual goal before the end of November, you will gladly design a special incentive for them in December.

Raising Quota

If your superstar blew through their quota, they may be concerned about their annual goal being increased dramatically for the coming year. Be candid when you discuss this subject with them. Maybe you did set the bar a little low this time. Or maybe you set their quota accurately and market conditions changed rapidly. Whatever the situation is, try and give them a realistic picture of what next year will look like for them and give valid reasons as to why. In addition, consider building accelerators for above-quota achievement into next year’s commission plan.

Recognizing that your superstar salesperson needs some extra motivation and designing a compensation plan with their needs in mind will pay big dividends for both of you and the company too. Everyone is a winner.

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Though my clients come from many different industries, the challenges they face are similar. In "Sales Management Tips," I regularly answer questions that have been posed to me by my clients. I hope the answers will help you to solve some of the sales dilemmas you face in your own sales organizations. If you would like to ask a question, please contact me. The identity and affiliation of those submitting questions will be kept confidential.

Maintaining Year-End Momentum

A client asks, “How do I keep sales steady during the holidays? Is a slowdown inevitable? Many of my salespeople start losing focus around this time of year and I’m not sure what to do about it.”

Keeping a sales force motivated and challenged during the holidays can be problematic. But here’s some good news: for some salespeople it’s the last month they have to max out on an annual or quarterly bonus, and for others a productive December can be the deciding factor on whether or not they make their year-end number. Here are some suggestions for making the holiday season as productive as possible.

Get the facts

Find out what sales revenue for your company was from December 1st through December 31st of last year. Is revenue up or down compared to the other months of the year? Are sales trending up or down compared to Decembers for the last few years?

Do the research

Which type of customers did / did not buy during previous holiday seasons? What did they buy / not buy? What were the top selling items / services?

Brainstorm

With these facts in hand, gather the sales staff together and come up with a plan. Since the easiest sales to close will be those that were started earlier in the year, offer incentives to those customers that buy before the new year. Consider calling those customers that said "no" to your product offerings in past quarters. They might have unspent money in their year end budget and the right offer could change their mind.

Have a sales contest

Create a short-term group sales contest with very achievable goals such as a 5% increase in sales for the month of December. Offer movie tickets or gift certificates to local area businesses as prizes.

Meet with sales people individually

This holiday contest is meant to keep everyone motivated and should run in parallel with year-end goals. Make sure that each sales person understands what they need to sell to achieve their annual or quarterly quotas and help them devise a personalized plan to get there.

Get real

Shortly after Thanksgiving, salespeople may start to complain about prospects being harder to reach, having little time for sales presentations and needing approvals from executives who are out of the office. While prospects are more elusive during this time period, virtually no one takes the entire month of December off. For most people it’s business as usual with some added year-end duties. Remind them that increasing the number of outbound calls or presentations they make, combined with presenting a compelling case about the product or service they are selling is the only solution.