Building Sales Skills with No Budget

A client asks, "My sales staff would benefit from some sales training, but I absolutely do not have the money in my budget this year. Can you suggest some ideas for building sales skills without having to spend much money?"

Sales training should be an ongoing activity, no matter what your budget is. Developing a sales force that wants to constantly learn and improve will result in many benefits to your company. Here are some inexpensive ideas that you can implement right away.

Books

I have long been of the opinion that sales professionals should regularly read books about different aspects of sales. Together with your sales staff, select and read a book on sales each quarter; alternating between your sales staff selecting the book and you selecting one will allow everyone to cover topics they deem important. The books do not need to be long or complex. Books that are available on tape or CD have the added advantage that salespeople can listen to them while on the road. If there is an area in which you feel your staff could use some additional training, start with a book that focuses on that topic. Stephan Schiffman has written an excellent series of targeted books on various aspects of the sales cycle. Set up a time each week to discuss part of the selected book, allowing each member of your sales staff to lead at least one of the discussions.

Magazines

Subscribe to one of the better known sales magazines, such as Sales and Marketing Management (www.salesandmarketing.com) or Selling Power (www.sellingpower.com). Circulate each issue through the sales force (order multiple subscriptions if necessary), marking the articles that you would like the sales staff to pay particular attention to. Ask one or two sales representatives to comment on the articles at a staff meeting and talk about how the information they read caused them to make changes in their sales methodology. Encourage discussion.

Newsletters

Select an email newsletter or two about sales that best matches your own sales / business philosophy, and sign the sales force up to receive it. Some are free and others will charge. While books and magazines provide in-depth looks at various topics, newsletters provide tips, techniques, and reminders on an ongoing basis. Art Sobczak's TelE-Sales Hot Tips of the Week (www.businessbyphone.com) is one that I would recommend, and both of the magazines cited above offer newsletters.

Whether you choose books, a magazine, an email newsletter, or some combination, you are setting a tone for your sales staff. Some of the reading assignments will introduce new ideas to the salespeople; others may remind them of effective techniques they used to incorporate into their sales calls but have stopped using for one reason or another. They may disagree with some of what they read. That's fine. No matter what, you are promoting regular sales education and it will pay off for your company. Finally, when you put together your budget for next year, it wouldn't be a bad idea to set aside some money for a more formal training program.

Is Salesperson Devoting Too Much Time to a Few Customers?

A client asks, "One of my sales representatives spends an inordinate amount of time with their two biggest accounts. They will often personally deliver small items, a task typically handled by the U.S. Mail. These accounts are valuable to our company and I'm not aware of any major problems, but I worry that the sales representative is there too much and might be neglecting their other customers. How should I handle this situation?"

Just being aware of this is good management and you are right to be concerned. The salesperson you mention is acting like a "mother hen" with these accounts, and usually this does not yield high sales productivity.

Do Your Homework

Resist the urge to jump in and insist that they stop this behavior. Do a little detective work by reviewing their call reports for the last six months to look for trends. How many calls are they making per day / per week / per month? Which accounts are not being called on? Which products / services do they sell most often? Which do they rarely sell? How many of their accounts are up for the year and how many are down?

Schedule a Review of Accounts

Next, plan a one-on-one account review session with the salesperson. While a sales forecast review examines those accounts that have a high probability of buying in the next business quarter, a review of accounts examines each and every account in detail to determine if their potential is being maximized. In this particular case I would recommend starting with your salesperson's smallest accounts first and working your way toward the larger accounts, thereby focusing on the salesperson's entire territory rather than on the superstar accounts. Do not let the salesperson gloss over the accounts at the bottom of the list. Ask probing questions such as "Why is this account visited / called only twice per year?" "Why does this account buy only one of our products?" Set a goal to discuss each account for a minimum length of time. Depending on the number of accounts, this type of meeting can be lengthy, so the discussion can be spread out over several meetings.

Meet and Greet

If you haven't done so in a while, accompany the salesperson on some sales calls. Make sure the calls include the two accounts in question. Observe the salesperson as they interact with their customers. Where do you think they are strong? Where might they need some help? Discuss the calls afterwards. Solicit their opinion on how they went.

Discuss the Accounts in Question

After you have invested the time to find out how things really stand in your salesperson's territory, you can ask the hard questions about the accounts in question. Your first-hand knowledge of the situation will increase the chances that the sales representative will be more forthcoming. Share your observations and concerns with them. It may be that they didn't realize they were spending a disproportionate amount of time with those accounts, or they might have thought that you wanted them to be this devoted. Perhaps they made a mistake with the account and were overcompensating by being there all the time. Maybe they are concerned about competition in the marketplace. Possibly they are coasting on the commission from these two accounts. It could be that they are suffering from boredom or burn-out.

Whatever the issue or issues turn out to be, assume that they probably had the best of intentions. Work with them to uncover the problems, and then develop potential solutions. Keep working with them regularly to ensure that all of their customers are being called on and that all of their accounts are achieving their full potential.

Is Prior Sales Success Relevant? Be Objective

A client asks, "As a newly hired Vice President of Sales, my first responsibility is to hire three new salespeople. After the first round of interviews, I asked them all to take a sales assessment test. Among the candidates was a former co-worker that I was excited about hiring. They did not perform well on the test at all. How could this be? They were a strong producer at my former company. What should I do?"

It can be an awkward, unwelcome surprise when a highly-regarded colleague does not perform well on an assessment. As more and more companies use these tools as part of their hiring process, situations like this will occur more frequently. When confronted with a circumstance like this, there are several factors to consider.

Test First

The next time that you need to hire a salesperson, test all of the candidates before you interview them. Use what you have learned from their assessments as a basis for determining who to bring in, and in developing your interview questions. By following this path, you will not be surprised when you discover that a candidate that you met and liked is not a strong prospect for your open position.

Quota, Quota, Quota

In this situation, however, you administered the test in the middle of the process. In the case of your former colleague, you have to be ready to ask tough questions to gauge the difference between your experience with them and what the assessment results are telling you.

Thoroughly go over their performance against quota with them. Ask questions such as "How many of your accounts did you inherit when you joined the company?" "By how much did you grow each account?" "Exactly how many accounts were brought in through your cold calling efforts alone?" "What was the total revenue of that effort?" "How many accounts did you lose?" Questions like these will help you determine whether or not they are more oriented toward account management (working with existing customers) or landing new business.

Why Are They Leaving?

If they are as strong a performer as you believe they are, investigate why they are switching positions. Is it possible that their performance has slipped? Could a manager be on to the fact that they are not as strong as they appeared to be? Did a recent territorial realignment cause them to lose some of their best accounts? Might they be concerned about having to prospect to make up the business?

One Hit Wonder

Occasionally, a salesperson is in the right place at the right time. This could mean selling a hot product in good economic times, taking over a very strong territory, or lucking into a few new accounts. Maybe their manager did much of the heavy lifting. What looks like selling may just be order taking. When the economy softens or a few accounts go out of business in this salesperson's territory, their production really suffers and they do not have the skills necessary to sell through the difficult times. They are never again able to achieve what they did in that singular situation.

Lastly, remember that you just started in your new position and your first few decisions are going to be scrutinized carefully. By supporting the hiring of this candidate based on a past association, and in spite of the poor results from the assessment, you are taking an even greater risk. If they fail, it will reflect poorly on you. Is that a situation you want to find yourself in?

Addressing Disruptive Behavior

A client asks, "One of my company's top-producing sales representatives can be very sarcastic. Though sometimes entertaining, this behavior can be unpleasant during staff or one-on-one meetings. I would like to improve this situation. Any suggestions?"

The good news is that this individual is good at selling. Like many salespeople, they are probably verbally quick and have a good sense of humor. The bad news is that there is a dark side to the wittiness that manifests itself - surprise - verbally. This situation is not uncommon and it is manageable. But it will take time, patience and consistency on your part before it is under control.

First, hold a meeting with the sales representative to discuss this situation only. Do not mix it in with a review of their monthly sales forecast, for instance. Tell them what you have observed and experienced and how it affects you and others. Appeal to their competitive side. Let them know that customers might find their sarcastic demeanor unpleasant and that it may well affect them financially. They will deny this, but it will get their attention.

Ask them why they are sarcastic at times. Hear them out. Is it possible that they are upset about an issue within the company? Do they have trouble being direct when they are angry? Are they trying to prove that they can do whatever they want because they are a top producer? Promise to look into issues that may be bothering them. But stress that no matter what problems occur in the future, sarcasm is not the way to deal with them. Tell them that people will be more receptive to hearing what they have to say if they communicate more pleasantly.

Next, have a strategy in place. If they are being sarcastic during a one-on-one meeting with you, calmly end it. Say something like, "Let's meet again tomorrow when you are in a better frame of mind." Do not let them bully or apologize their way into letting the meeting continue. Stand your ground. If they exhibit this unwanted behavior in a staff meeting, discuss it with them immediately afterwards.

Schedule meetings on a regular basis to discuss the situation. Talk about setbacks. Bring up specific situations in which you have noticed their old behaviors coming out. Most importantly, "catch" them communicating in a more straightforward style as often as you can and praise them for it.

Remember, if you have lived with this conduct for a quite a while it will take some time to make the situation manageable. Don't expect perfection. There may always be the occasional sarcastic comment; it's part of their personality. But with consistency and patience, progress can be made. Good salespeople are hard to find and this one sounds like they are worth putting effort into.

Announcing Quota and Compensation Plan Changes

A client asks, "I have set my salespeople's goals and created a new compensation plan for 2005, but there are some significant changes to both and I am concerned about the reaction from the sales staff. How should I handle this situation?"

Issuing sales quotas and unveiling a new compensation plan is tricky. You say you are concerned, which implies that you think your salespeople will not universally regard the new plan as positive.

I will assume that you have a sensible and fair new plan with sound business reasons behind it. Typically, reactions by salespeople may reflect concerns that they may make less money or that they may have to work harder. Some individuals may have to sell more of a product they don't particularly enjoy selling. Others may look for loopholes thinking "the company" is purposefully trying to under-compensate them. Given all this, the best approach is to roll out the new plan in a way that gives the salespeople time to think about it before reacting.

Present the New Plan to the Team

At the end of a regular sales staff meeting, hand out the new sales goals and compensation plan. Ask the group to save any questions they may have for the moment. Present the more important changes and discuss why you made them. Be positive in your presentation, but don't oversell the plan.

After you finish, tell the sales representatives that you understand they have questions, but that you would like them to study the plan first. Ask them to sign up for individual meetings with you that will take place in a few days. Assure them that after you have met with everyone, there will be another group meeting.

Some sales representatives will try and ask questions right then and there, while others will insist they need to meet with you immediately. Don't be intimidated. Stick with your plan.

Hold Individual Meetings

There will be a lot of talk amongst the sales representatives before the individual meetings begin. That's OK. During the individual meetings, take careful notes about their various issues with or questions about the plan. Look for patterns. Think about and make adjustments where necessary.

Meet Again As a Group

At the second meeting, discuss what was brought up in the individual meetings and publicly thank those who may have pointed out an error or persuaded you to make a change. If unpopular parts of the plan remain (and there always will be some), explain why you will not be changing them. Answer any and all questions that come up.

This approach may seem overly structured. But think about it this way: the sales representatives owe you the courtesy of looking at the new plan thoroughly before criticizing it or demanding that changes be made. By meeting with everyone individually, you will get feedback from all the sales representatives, not just the most vocal ones. In the end, this will lead to more buy-in for the new plan, which is ultimately what you want.

Salesperson Manages Accounts but Doesn't Sell

A client asks, "About a year ago I hired a sales representative. Their rapport with customers is excellent and they manage their accounts satisfactorily, but they do little in the way of account development or prospecting. What should I do with this individual? Are my expectations unreasonable?"

You are not being unreasonable. You are observing some strong pro-customer traits in this individual which you would like to capitalize on. But you hired them to sell, and you're asking yourself, "Are they a salesperson or a customer service representative?" To answer this question, first take a look at the problem from the company perspective.

• Job Title / Job Description: When this individual was hired, were the job title and description accurate reflections of your goals for the position? Did you hire to the job description?
• Productivity Standards: Do you have standards and does this individual understand what percentage of their time should be spent on prospecting, outbound calling and sales presentations?
• Incentive Plan: Does your compensation plan reward the behavior that you want, namely account development and prospecting? Is the plan too comfortable, allowing them to be financially satisfied without earning the commissions associated with achieving the goals?
• Accountability: Do you hold meetings at least monthly with individual sales representatives to review their sales numbers and hold them accountable for their performance against plan?

Now let’s take a look at the problem from the perspective of the sales representative. The first thing you should do is have a discussion with this employee. Position what you have to say as a factual observation ("I have noticed that your sales numbers over the last few months have been…") rather than as criticism. Be specific. Ask a lot of questions, such as:

• Do they understand the requirements of the position?
• Could it be that they lack the necessary skills to sell?
• Are these skills that they want to develop through coaching or training?
• Do they enjoy the prestige of being a sales representative but not the pressure?

A good discussion should bring some of this out in the open, and together you can develop a plan to improve the situation.

If over a reasonable period of time they are not performing at least at or above the group average, it’s time to make a decision. If you need an additional customer service representative and they are willing to accept the position and the change in compensation, offer it to them. If this is not what they want, they need to be placed on warning and potentially terminated.

Allowing an individual hired for a sales position to create their own "hybrid" job is rarely a good idea. They must be held accountable to the same standards as anyone else on your sales staff. Despite their winning ways with customers, an underperformer who is tolerated will bring down the morale of your sales organization and undermine your authority as a manager.

Effective Sales Reporting is Essential

A client asks, "I manage a sales force of six, but don't have a good grasp on what they are doing on a daily and weekly basis. What kind of information should I ask them for? How often should it be turned in? What should I do with it?"

Running a sales organization without effective reporting is like driving with your eyes closed: you won't get where you want to go. The three reports that are essential to any well-run sales organization, no matter what the size, are the daily call report, the productivity report, and the sales forecast.

The Daily Call Report

The daily call report tells you how and how often your sales representatives are calling on the accounts in their assigned territory. The specific data asked for in this report varies by company and industry but most commonly includes what companies the salespeople called on, who they spoke with, whether the calls were in person or by phone, what they talked about, what the next action steps will be and when the next scheduled calls are.

Daily call reports should be turned in (or run, depending on your level of automation), on a daily basis and read carefully at least every other day. Reviewing them every few weeks does not allow you to verify information in the report on a timely basis.

The Productivity Report

The purpose of the productivity report is to keep you informed about the level of activity taking place within the sales organization and to make sure that each salesperson is meeting or exceeding the productivity standards you have established. The data often includes the number of outbound calls, conversations, voice mails, customer meetings, and sales presentations. The report should compare actual results against the benchmarks you have established for each activity.

Productivity reports should be turned in (or run) and reviewed on a weekly basis. Many managers compare the activities on the productivity report to both the phone bill and the daily call report to verify what is being reported.

The Sales Forecast

The sales forecast has multiple purposes including helping to estimate revenue, determining what opportunities need executive attention, and paving the way for post-sale product or service delivery. The accuracy of a sales forecast strongly affects the entire organization and is therefore the most important report generated. This document generally contains prospect names, sales opportunity sizes, indications of where the sales opportunities are in the sales cycle, and what the customers are buying. It is the sales representative's best estimate of which sales will close during the next 30, 60, or 90 days and, in most companies, is due at the beginning of each month with occasional revisions due mid-month if the need arises.

Each sales representative must clearly understand what criteria a potential account must meet before they are allowed to put it on the forecast, otherwise the data will be meaningless. Once an account has been placed on the sales forecast, it must not be removed without the salesperson having discussed it in detail with their manager.

Reviewing these reports is time consuming. But keep on top of them. If the sales staff suspects that you don't review the reports, they will make a token effort at writing them and you will start to lose touch with the sales organization. Remember the old adage "inspect what you expect." By setting goals and letting your salespeople know you are committed to tracking progress toward them, you will vastly increase the performance and predictability of your business.

Improving Hiring Decisions by Using Sales Tests

A client asks, "I've been hearing a lot about sales assessment tests. Do they really work? How do I choose one?"

Depending on your needs, assessment tests can be used as part of your hiring process and/or as part of assessing your sales team. This month I will focus on using tests in the hiring process. In a subsequent newsletter I will talk about using them as a diagnostic tool.

Tests do work. There are numerous scientific surveys that demonstrate the value of testing (e.g. for finding strong contributors, identifying strengths and weaknesses, and improving retention rate) and it puts one more tool in your hiring toolbox. A bad hire has a lasting impact which can be particularly damaging at a smaller company. Testing can help mitigate your hiring risk. So the decision should not be about whether to test, but about which test is right for your sales organization. Briefly, there are several types of tests:

• Personality: Assesses an individual’s character traits, and provides insights into how they might fit in with your company’s culture.
• Intelligence: Evaluates an individual’s reasoning, memory, comprehension and numerical abilities.
• Aptitude: Shows skills an individual has learned and is capable of performing.
• Executional: Examines whether or not an individual has learned certain skills and whether they will execute those skills when they need to.

Handle the search for a sales test just like you would handle the search for a good house painter: ask your peers and sales executives in your network if they use sales assessment tests and if they were satisfied with the results. Call the various companies they suggest, and talk to them about validity, delivery, and price. Ask to see a sample test and a list of companies that they currently do business with.

When reviewing the tests, be sure to consider only commercially reputable EEOC-compliant assessments supported by a substantial body of historical and statistically validated data. Make sure that they allow you to “benchmark” so that test results can be compared to your ideal candidate. For salespeople execution is critical, so executional tests deserve most of your attention.

Testing is only one part of the hiring process. Writing an accurate job description, crafting insightful interview questions, meeting with candidates several times, and conducting thorough reference checks are all equally critical to helping you identify and hire the right candidates for your company.

Sales Training or Sales Coaching?

A client asks, “I would like to schedule some sales training for my sales staff. Which is better – group training or individual coaching?"

Both choices are beneficial, but your group's results will vary depending on the experience and needs of your sales team.

Sales training frequently involves the teaching of a sales methodology, emphasizing a common terminology, a defined sales process and templated sales tools. Role-play to reinforce lessons is usually included. For a large sales organization the materials can be customized to a company’s needs; for a small sales organization customization is not always practical. Sales training can be the best choice for your sales organization when:

• All of the sales representatives have tenure of at least one year
• Booster training (1 – 2 times annually) has been budgeted for the sales staff
• Underperforming sales representatives have been terminated
• The entire sales staff is at or above quota

The last two points, while counterintuitive, are backed up by several studies. In "Is Sales Training a Waste?" (Gallup Management Journal, May 2002), Benson Smith and Tony Rutigliano write, “From our observations, we’ve concluded that the individuals who benefit most from training are those who already excel at their job. As performance levels rise, so do the benefits we see from training. And as performance levels go down, the positive impact of training diminishes.”

In sales coaching, a coach works one-on-one with each sales representative to identify areas within the sales cycle that are career-limiting weaknesses, and develops and executes individualized plans to address them. A coach can be the best choice for your sales organization when:

• The sales staff is of varied talent and tenure
• All of the sales representatives could use help in one particular area
• Individual sales representatives could use help in different areas
• Management would like a sales representative of questionable talent observed and evaluated by a neutral third party
• The superstar on the staff is hitting a plateau

In their article Smith and Rutigliano write, “The best salespeople gained the most from training... but most training programs are not designed around the needs of the best performers. Best performers need individual coaching that is built around their talents and strengths.”

Evaluating when to train and when to coach involves candidly assessing the composition and performance of your sales staff. The right investment should pay for itself quickly in increased revenue, and build greater employee loyalty for your company.

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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.

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.

Boosting Summer Sales

A client asks, “How do I motivate my staff during the slower summer season?"

Some sales managers and sales representatives regard low sales production during the summer as unavoidable. Others see it as a more challenging, but not impossible, time of the year to make sales. Those who fare well during the summer months do so by having a plan in place long before the hot weather arrives.

Do Your Homework

To create an effective summer sales plan for your staff, do a little homework first. Ask yourself the following:

• "What were the average monthly sales for June, July and August of last year?"
• "Of those three months, which had the lowest sales?"
• "How do sales during those months compare with average monthly sales during the year?"
• "Which customers bought during the summer?"
• "What did they typically buy?"
• "Which customers did not buy?"
• "Which products/services did not sell well during that time period?"

Set Goals and Share Your Findings

If your research tells you that sales in the summer are indeed significantly below the monthly average for the rest of the year, ask yourself what an acceptable level might be. Depending on what you find out about customer’s buying habits during this season, think about setting goals to increase sales for certain products and services as well. Whatever your research tells you, be sure and share this valuable information with your salespeople. They may not always know exactly why their sales are off during this time period and some of your findings could really help them.

Reward Extra Effort

Once you have determined what the increased sales goals for the summer will be, create a contest that rewards the salespeople for their extra efforts. Remember that not all rewards need to be monetary. With New England’s short summer season, your staff might value a little extra time off or some flexibility in their schedule. Find out what would motivate them and try your best to design a reward around it.

Don’t forget to find out when your sales staff is planning to take their vacations and post that information on a master calendar. Encourage them to find out when their customers will be taking vacations as well. That way they can more effectively manage the sales process during the summer months.

Start planning for summer now. It will pay off big dividends.

Involving Sales Staff in the Hiring Process

A client asks, “I am considering hiring another sales representative. What criteria should I use to make this decision? What do I do if I decide to proceed?"

In last month’s column I wrote about making the decision to hire an additional salesperson. Should you decide to do so, telling your current sales team is the next step. Below are some thoughts on making this process as smooth as possible.

Telling the Group

Making the announcement that you have decided to hire an additional sales representative can elicit mixed emotions from your current sales staff. Concerns ranging from territory and income reduction to fears about the new person showing every one up are common. The best way to mitigate fears and concerns is to position your decision around what’s best for the health of the business, using facts and numbers to back your decision up where necessary.

Present the Plan

If you are asking salespeople to give up part of their current territory, show them the new territorial alignment plan before you begin bringing candidates in for interviews. If they object strongly to a particular territorial decision, hear them out. They may have thought of something you hadn’t. When it comes to territory realignment, most sales representatives will try to do a little wheeling and dealing. If what they propose is fair, try to accommodate them. If you cannot, explain why. The final decision is yours.

Involve Them in the Hiring Process

Before you begin the interview process, let your sales staff know that you would value their input. Ask them questions such as:

• “What characteristics do you think a sales representative needs to be successful at our company?"
• "What do you know now that you wished you had known before you took the job?”
• “What was the most helpful part of orientation?”
• “What is your favorite part of the job?”
• “What is the most challenging part?”
• “What questions would you ask a prospective candidate during the interview process?”

Make sure that each salesperson has a chance to speak with the final candidates during the interview process and ask them for their opinion afterwards. When you make your final choice, tell them specifically why you selected that person and how their input helped.

Though it’s always an adjustment to accommodate a new sales representative, your current staff will appreciate being involved in the process, which will make for a smoother transition for everyone.

Should I Expand My Salesforce?

A client asks, “I am considering hiring another sales representative. What criteria should I use to make this decision? What do I do if I decide to proceed?"

Determining whether or not to hire an additional sales representative is a critical business decision and involves research and thought in several key areas.

Ask the Right Questions

Before you contact a recruiter or place an ad on Monster.com, ask yourself the following questions:

• Is my current sales staff able to contact all of the prospective customers in their geographic or vertical territory?
• Are they maximizing the amount of business from current clients?
• Does my company’s financial situation allow me to comfortably afford a new sales representative?
• How much sales revenue can I expect the new hire to produce in the first year?
• How much potential sales revenue am I losing by not hiring an additional sales person?
• Will hiring a new sales representative impact the earnings of my current staff?
• Will I be able to scale my company’s product or service delivery to accommodate the additional business a new sales representative will bring in?

Plan a New Territory

If the answers to the questions above lead you to decide that it is in your company’s best interest to hire an additional sales representative, you need to assign them a territory. It is important to do this before proceeding with hiring so that you know where you’re going to hire the new salesperson and what you want them to do. Ask yourself this set of questions before you start to source any candidates:

• Does my current sales staff have territories that are too large or too small?
• Are there geographic or vertical territories that aren’t being covered at all?
• Do my sales representatives spend too much of their time in cars or on planes getting to customers?
• Do my sales representatives have enough time to cold call to identify new customers?
• Do they have enough time to service existing customers?
• Are my top ten customers getting the attention they need?
• Are the rest of my customers getting the attention they need?
• How many industries do I really sell into?
• Which industries account for the majority of sales?
• Is this an opportunity to break into vertical territories?

Based on the answers to these questions and others you think relevant, develop a plan to assign the new sales representative an as-yet-uncovered territory or to adjust existing territories. Either way, you are now ready to start the hiring process.

Next month I will discuss involving your current sales staff in the search for a new sales representative.

Entering New Markets

A client asks, “There is an untapped market that I think would be a great fit for my company’s products. During meetings with the sales staff, I have encouraged them to prospect into this market. They make a few calls but stop trying after a while. How do I convince them that there is a real opportunity here?"

Assess the Market

Prior to asking the sales force to make outbound calls into a new market, do the research needed to determine the size and needs of that new market and estimate how many additional customers you would gain by selling to a conservative fraction of its customers. Determine whether or not your product needs adaptation or a different pricing structure.

Conduct Market Research Calls

Determine who will probably make the final purchasing decision and make a dozen or so calls to those decision makers yourself. The calls should be “fact finding” rather than sales oriented. Consider creating a brief questionnaire to guide your discussion. Included should be some inquiries about your product area and the possibility of their considering such a purchase in the next several years.

Create a Sales Plan

Using the data you have gathered, create a sales plan within your overall strategic plan for this new market, then make a presentation to your sales force. Talk about the ground work you have done and how much additional commission could be earned by the sales representatives if they successfully tap into the market. Make a convincing case. Sales representatives need to be sold too.

Set and Reward Achievable Goals

Set separate and reasonable goals for the number of outbound calls and product presentations the sales representatives should complete in the new market. Goals that are poorly communicated or set too high discourage a sales force. Reinforce and reward the goals attained. For instance, present each sales representative with a gift certificate once they have their product presentations goal.

Hold De-briefing Sessions

Don’t take the “I gave you all the information you need to be successful, now go sell” approach after the initial meeting. Make a point of discussing the sales reps’ progress in the new market on a weekly basis for at least three months. Encourage them to talk about any challenges they are facing and offer to help in any way you can. If, despite your best efforts, some of the targets you set are proving too difficult, re-set them with input from the sales people.

Making that extra effort for the sales representatives will go along way towards entering a new market successfully.

Strengthening Relationships with Customers

A client asks, “In last month’s newsletter you mentioned that Field Sales Representatives benefit from face-to-face contact with their customers. I have an Inside Sales staff and want to help them build the same relationships with customers that outside reps enjoy. How do I go about doing this?”

Developing customer relationships is more challenging for Inside Sales Representatives (ISR’s) because they don’t have the advantage of seeing their customers in person on a regular basis like Field Sales Representatives do. Here are some tips to help them forge strong relationships with customers:

• Schedule occasional in-person visits so that they can meet their key accounts.
• Require that they call the key customers in their territory a certain number of times per calendar quarter.
• Print their photo on their business cards.
• Post general biographical information along with their picture on your company website.
• Send a newsletter or tip sheet out to customers on a regular basis featuring some content from the ISR.
• Send out personalized holiday and “thank you for your order” cards from the ISR

The following suggestions might help to lessen the isolation ISR’s can sometimes feel and increase the scope of their network:

• Sponsor their membership fee in an organization that serves your particular industry.
• Provide off-site sales training on a regular basis.
• Send them to occasional tradeshows in your industry and/or use them to staff your show booth.

By implementing some of the suggestions above, you are helping the ISR move away from being seen as an order taker or a voice on the other end of the phone. You are giving them the tools to form multi-dimensional relationships with their customers, and this will lead to an increase in sales revenue.

Inside or Out?

A client asks, “I am hiring my first salesperson. How do I determine whether they should be an inside or outside sales representative?”

Outside or Field Sales Representatives (FSR’s) are a good choice for lower volume, higher price products or services ($100K or more) with longer sales cycles (90 days or more). A company with a concentration of customers in one geographic area may benefit from the FSR’s personal contact with those customers. However, having an FSR on the payroll is expensive and a challenge to manage unless they are based at the corporate headquarters.

Inside Sales Representatives (ISR’s) can be an appropriate choice for higher volume, lower price transactions ($100K or less) with shorter sales cycles (90 days or less). An ISR can cover an extensive territory and reach more than 100 prospects a week, costs much less than an FSR, and oversight is convenient because they are typically located at corporate headquarters.

For a business building a sales force from the ground up, I recommend starting out with an ISR whenever possible. They can build a customer base more quickly and economically than an FSR, and have easier access to staff members when they need assistance to get sales closed. For an FSR, it takes phone calls and/or e-mails back to headquarters to enlist help.

Many of my clients, concerned that their product or service can’t be sold successfully over the phone, are surprised to find that the ISR model is very effective for them. When they decide to increase the size of their sales staff, they choose to hire several additional ISR’s. Other clients, who want to add an FSR to their staff because they feel they need face-to face contact with some of their larger clients, find that starting out with an ISR made the hiring and managing of an FSR a little bit easier.

Aligning Quota with Business Goals

A client asks, “As we start the New Year, I know the quotas I want to set for my salespeople. What I don’t know is how to motivate my sales force to help me achieve some of my other business goals for the year. What can I do?”

The key to achieving your business goals is to tie those goals directly to your salespeople’s quotas where possible.

Let’s say a salesperson’s annual quota is set at $1.2 million and you have five major products or services in your line. If your salesperson can achieve their quota selling any combination of the five products or services, they will probably concentrate on the one or two that are the easiest to sell to your client base. It’s what’s referred to as selling the “low hanging fruit” and may do little to help you attain your overall business goals.

If, however, you assign a subset of the $1.2 million dollars to each product, the sales quota can be in greater alignment with your business goals. Quota is typically not assigned evenly across the products because prices, profitability, and demand are usually different for each one. As an example, quota could be allocated as follows:

Product	Quota
A	$500,000
B	$200,000
C	$50,000
D	$300,000
E	$150,000
Total	$1,200,000

Structuring the compensation plan this way allows for greater flexibility. If product E is the most difficult to sell but is also the most profitable, you can offer a higher commission on it. The more generous commission structure will provide the motivation the sales force needs!!

A compensation plan of this type needs to be fully explained to your salespeople. Prepare a formal presentation to discuss why you assigned each product the numbers that you did, and how achievement of the goals will contribute to the company’s success. Let them know that you will provide additional product and sales training to ensure they are as successful as they can be. Encourage questions. Create a fun sales contest to get things jump started.

By structuring your quotas in this manner, you are using the compensation plan to help you communicate and achieve company goals.

Best wishes for the New Year!

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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.

Assessing the Self-Motivation of a Salesperson

A client asks, “During an interview, how can I determine whether or not a prospective sales representative is self-motivated, competitive, or hungry?”

Job interviews are challenging because both you and the candidate are trying to present yourselves in the best light possible. This gets further exacerbated when the interviewer makes a common mistake and asks the candidate leading questions.

One way to avoid this problem is to use behavioral questions. These questions will usually take the form of “Describe a time when….” or similar phrasing. Asking, “Can you tell me about a time when you created a sales contest just for yourself?” will give you a lot more information than a leading question such as “Are you self-motivated?” The former question allows them to both tell a story and actually demonstrate their level of self-motivation or competitiveness. The latter question tips them off to the reply you want.

A genuinely self-motivated salesperson understands the importance of frequently setting up both large and small rewards for themselves on an ongoing basis. If a candidate mentions buying a gourmet dessert for their family every Friday if they speak to a certain number of decision makers each week, you know they understand the importance of setting smaller goals. If a candidate mentions buying tickets to a theatre production or sporting event if they open a new account or close a particularly big sale, you know they understand the importance of setting larger goals as well. Salespeople like these are actively engaging in this process.

Good follow-up questions to ask are “Who have you told about these contests?” or “How often do you bring home a gourmet dessert for your family?” Listen for candid and open answers.

Behavioral questions such as these will help you to see beyond the candidates “best manners” and enable you to more accurately determine whether or not they are a driven salesperson.

Maintaining Sales Momentum

A client asks: “In these more challenging economic times the number of formal pricing proposals that my salespeople generate for prospects has decreased significantly. Now, after seeing our product demo, prospects tell the sales representatives that they are very interested, but not ready for a proposal. When the sales representatives follow-up with them on an agreed upon date, they are still interested but not ready to move forward. How can we increase the number of clients willing to accept the proposals that will ultimately lead to closed sales?”

You are off to a good start in two ways. First, you are not pressuring your sales staff to aggressively turn out pricing proposals for prospects that aren’t yet ready to receive them. Secondly, you have identified the specific place in the sales cycle where sales are stalling. What you need to do now is analyze the message the sales organization is presenting to the prospect prior to the product demonstration.

Talk to your customers

Interview those customers who have purchased software from you very recently, in spite of the economic conditions. Why did they decide to purchase your software? Did they forego other purchases in favor of your product? Why? What else were they considering buying? What made them decide that your product was a priority? How has your product helped them improve their bottom line?

Review your sales and marketing materials

Were your company’s marketing materials (paper and electronic) designed in more robust times? When were they last updated? If it has been awhile, re-do them so that all sales presentations and marketing literature are focusing on the benefits just mentioned by your most current customers.

Ask for the objections up front

If the sale is stalling after the product demonstration, improve the sales dialogue that takes place before, by asking better pre-demo questions such as: If they like what they see during the demonstration, what will the next step be? What large purchases are they planning to make this year? Is a software program like yours a top priority? Who at the company is in favor of a software program like yours? Who would likely lobby for other purchases? What other factors could put the purchase on hold?

These three exercises will help the sales representatives put together a sales presentation that works with the current economic conditions and makes a more compelling case for the prospect to buy your product in the near future.