Supervising an Inside Sales Rep

I have some experience managing field salespeople. I decided to hire an inside salesperson and want this new candidate to succeed, but have never supervised a telesales rep before. Do you have any thoughts on working with them effectively?

Both field and phone reps speak with customers, make presentations and close sales. Just as you would for an outside sales staff, set minimum standards, provide coaching, sponsor sales contests and review the rep's performances on a regular basis.

The jobs do vary in certain respects, though. You're smart to realize you may need a different set of management skills at certain points.

Consider the following.

Duties and Responsibilities

Write a job description. Does this new rep call on existing accounts only or will some cold calling be involved? What percentage of their quota is new vs. renewal business?

Do they have a geographic or vertical territory? Are their accounts below a certain dollar amount? Do they assist the field reps in any way?

The more specific the job description, the more focused the new rep will be right from the beginning.

Conflicts with the Field Staff

Field salespeople will express concern about potentially losing accounts, territory, or income. Share the inside rep's job description with them. If losses will occur, explain why. Modify quotas if necessary.

Inside sales reps often call on customers in remote geographic areas or those with lower sales volume. Remind outside reps that telesales reps may free them up to cover their territory more effectively and spend increased time with their larger accounts.

Dealing with potential clashes before their first day on the job eases the inside rep's relationship with their new co-workers.

Drop by to Chat

Making phone call after phone call, even though it involves interaction with customers, can be intense and isolating - especially if they're the only person at the company doing a particular job.

Drop by and chat with them throughout the day. Make the conversation casual. Avoid any coaching or criticism of their performance. Just check in and break up their day a little bit. They will appreciate the support.

Set up a Schedule

To avoid a fragmented day, work with the new rep to devise a schedule. For instance, if they have cold call responsibilities you might agree that they will make those particular calls between 8:30am and 10:00am and 4:00pm and 5:00pm. Pick an appropriate period of time for other types of activities like follow-up calls and presentations.

Yes, interruptions and emergencies will interfere with their schedule from time to time. Establishing a routine will minimize distractions and increase their productivity.

Off the Phone -- Out of the Office

Telesales reps need variety to avoid burn-out. Arrange for them to visit their accounts in person or accompany the outside or service reps on customer visits every so often.

Sign them up for off-site training several times a year. Being introduced to new ideas and talking with reps at other companies boosts their morale and improves their sales skills.

After any outside activity you'll see an increase in their energy level and productivity for weeks.

Respect their Time

Barring an emergency, you wouldn't ask your outside reps to "come back to headquarters immediately" or demand that they call you in the middle of a client meeting. The same goes for the inside salesperson.

Just because they might sit just a few feet from your office doesn't mean you should interrupt them for frequent impromptu meetings. These actions encourage them to abandon the call schedule the two of you worked out in the beginning of their tenure. Where possible, arrange a time to speak where they might have a natural break in the day.

Most companies find the inside sales rep allows an economical expansion of their sales force with a corresponding increase in sales revenue. Many talented sales reps prefer selling over the phone to the hassle of traveling a territory. Simple, common sense adjustments to your management style make for a happy and productive inside sales representative.

Diagnose Selling Challenges Using Pipeline Report

When I look at my rep's pipeline reports I see that ... most prospects drop off after the product demonstration ... the reps send out a lot of proposals but few lead to closed deals ... the reps speak to a lot of decision makers but few agree to schedule a sales presentation.

Once my clients create and regularly read a pipeline report, the volume of insightful and actionable information provided surprises them. Unfortunately, some of what they learn disappoints them as well.

The Pipeline Report

By definition a pipeline report consists of all of the prospects being actively pursued by a sales representative, and separates them by their appropriate phase in the sales cycle. This information allows a manager to keep track of the total number of prospects the salesperson is working with at any given time.

The Sales Funnel

Ideally, a pipeline report should look like a funnel, with a larger number of prospects at the top and a smaller number of closeable deals at the bottom. Organizations need to understand how many prospects they need at each stage of the pipeline (with some percentage of prospects dropping off along the way) to be able to close enough deals to achieve quota.

Too Many / Too Few

At most companies however, pipelines do not resemble funnels but rather gluts and shortages -- too many prospects in some stages and a lack of prospects in others. Though frustrating, these lopsided funnels show salespeople as individuals who both excel in some areas and need help in others.

Instead of a one-size-fits-all approach, this data enables managers to direct coaching and training efforts where they're most needed.

Typical Pipeline

Every product or service has a sales cycle. In general the steps include:

Introduction or prospecting call
Conversation with decision maker
Appointment
Product demonstration or sales presentation
Proposal
Closed Sale

Speaking with Decision Makers

If sales representatives experience difficulty getting through to or having a conversation with a decision maker they may:

• Know little or nothing about the company prior to the call
• Lack an introduction tailored to the specific prospect
• Be unable to provide a relatable example of a potential customer benefit
• To keep them on the phone, salespeople need to specifically explain why their product will benefit the decision maker.

Moving the Sale Along

Some reps find reaching and talking to decision makers relatively easy. They may struggle with moving a prospect from discussing a product or service to convincing them to take action in the form of a product demo or a proposal. These sales reps might be:

• Assuming a level of interest that isn't there yet
• Asking for the product demo or proposal too quickly
• Failing to understand the prospects needs and concerns
• Pushing features and benefits of no interest to the prospect

Product demos or proposals require a level of commitment. Most decision makers avoid going in that direction unless they are serious about a potential future purchase. They value their time.

Solving the Problem

Address the clogged pipeline situation initially by looking at your sales staff. Determine who excels at introducing themselves or conducting product demonstrations. Find out how they do what they do. As a starting point, share their best practices with the rest of the sales staff.

Ask reps struggling with those same sales skills to do some research on sites like Amazon. Have them look for books / tapes / workbooks that address the specific areas they need assistance in. At least skim the books they choose. Start a discussion about any revelations / new ideas they're discovering as they read. Begin to think about what further training / coaching they may need going forward.

The good news about a clogged pipeline report is that it can be unclogged. Sales reps need the right skills and support to enable as many of their prospects as possible to move from one phase to the next. Once the report begins to look like a funnel, revenues and productivity will increase.

Competing with an Incumbent

A reader writes, "Recently, one of my best sales reps lost a deal we thought was a sure thing. She knew who we were competing against, and was told that our company was the first choice among all of them. After delivering the bad news, the decision maker informed her that he had decided to stay with the current provider. How could we have seen this coming?"

What was the decision maker thinking, right? During meetings, he complained incessantly about the existing solution! He met with vendors, sat in on product demos, read your proposals and negotiated on price. Why would he expend all that time and effort just to stay with the same provider?

Faulty Assumptions

Even top-notch salespeople sometimes confuse a decision makers venting about the shortcomings of a current provider with a firm decision to stop doing business with them. These reps know their product / service might not get selected, but they feel certain a new vendor will get the nod.

In the process, reps forget the biggest potential obstacle to successfully closing a sale - a customer choosing to stay with the product or service they already have -- the status quo. Despite all the complaining, it is almost always easier for a company to stay with the current vendor.

Understand the Status Quo

To avoid this disaster, when interviewing potential clients reps need to include questions that uncover what they like about their current solution such as:

• Tell me about your existing system.
• How did you go about choosing it?
• What set it apart from all the others?
• What is your business relationship with that company like today?
• What do you like about the system?
• What about it still meets your needs?
• If you had it to do over again, would you still select this product / company?  

These inquiries lead to an understanding of the prospects overall feelings about the product or service and the provider. Reps come away with solid information on how their company stacks up against and compares to what the customer uses today.

Leave the Key Question until Last

Those reps serious about closing sales will not be shy asking the most critical question of all:

What are the chances that you will stay with the product / service / solution that you already have?

They listen carefully to the decision maker's response. Any hint that the present provider will be considered along with all other vendors poses a giant red flag. Taking the business away may prove difficult.

Only the bravest, most money-motivated reps will make this inquiry. Why? Time is money and they're wasting it with a prospect that isn't ready to move on from their current vendor. The best reps want to extricate themselves from an unproductive situation and meet other, potentially stronger prospects.

The Incumbent has a Built-in Advantage

The current provider enjoys a built-in advantage over any competitor. They have a relationship with their client (your prospect) and will fight hard to maintain it. Having the client take their business elsewhere could mean losing revenue from service contracts or supplies.

Complaints that you've listened to from the decision maker have undoubtedly been heard many times over by the current provider too. No doubt they're busy trying to address those concerns. Subtly or not, they're reminding the customer at every turn about the expense and pain of switching companies altogether.

Sales reps that focus exclusively on the competition do only part of their job. Equal time should be devoted to learning about what the decision maker already uses. By including the status quo in customer discussions, they get a far more realistic picture of their ability to close the deal.

Know What Your Sales Reps Say on the Phone

A reader writes, "One day I called my company's Sales department and pretended to be a prospect.  (I'm the company president.)  The rep taking my call sounded so disinterested. I was astonished. She did little to engage me, asking only a few perfunctory questions. I requested some information and gave her my friend's email address. My friend told me she never received anything. I get madder and madder the more I think about this. What do I do?"

Inspect what you expect. Never is that more applicable than being aware of how sales reps conduct themselves on the phone with potential new customers.

All Reps

Before doing anything, get a feel for how the entire sales staff handles inbound customer inquiries. Do they all seem bored? Are some better than others at relating to the caller and moving the conversation forward? Do they send the requested information?

As for the rep in question, ask a friend or colleague to call them at least two more times. Try to determine whether they were having an off day or always treat potential new customers this way.

Procedures

Many organizations invest significant resources in generating inbound leads, so your sales staff should deal with incoming calls professionally and effectively. To support that effort, the Sales department should put a procedure in place for speaking with, sending information to, and following up with potential customers.
This should include a mandatory:

• List of qualifying questions such as "How did you hear about our company?" or "What prompted your interest in that particular product?"
• Methodology for logging the call and their action (for example, sending information or a sample)
• Time-frame in which to follow-up with the caller

Do you have the ability to listen to the calls your reps take /  make? Does anyone in your organization audit the sales staff's efforts in this area? When? How often? This is a regular practice in retail, where "secret shoppers" assess how they are treated.

Solving the Problem

If a formal procedure existed previously and has fallen by the wayside, make sure it becomes common practice again. Review it with all the reps. Spend extra time with any recently hired salespeople.

When no process exists, meet with the reps and discuss the situation. Without naming names, tell them about your experience when you called in. Open up a dialogue about best practices for dealing with potential customers calling in to the company. Come up with a list of useful questions to ask. Determine a procedure for sending information and following-up. Track progress.

A Great Idea

My friend and colleague Chris Mullins, The Phone Sales Doctor, suggests letting sales staff members place mystery calls to one another. She says, "Let them experience first hand how other reps handle calls. This will get them involved in the process and keep sales top of mind."

Chris adds, "Record your reps phone calls on an ongoing basis. Make no secret of what you're doing. Tell your team you're recording calls to help them improve their book of business as well as to confirm customer needs and wants. Always be sure to check the laws for recording calls in your state."

The Offending Rep

After investigating this situation further, you may find that your reps generally handle incoming prospect calls well and follow company sales procedures. The problem occurs with this particular sales rep.

Speak to her candidly about what you and others have experienced. She'll likely hotly deny any charges, so come armed with the facts. Provide dates and times. Mention sales information that was never received. Tell her that she must follow the stated sales procedures going forward.

Mishandling the incoming calls of potential paying customers costs your company money. Most reps would be only too happy to receive such calls, viewing them as potential closable sales. After a period of time, if this salesperson won't rise to the occasion, consider whether or not she should be part of your organization going forward.

VP Title Problematic as the Organization Grows

A reader asks, "Several years ago, I hired our company's first and only salesperson. Early on, I involved him in decisions affecting sales, causing him to request a title change to Vice President of Sales.  He thought it would more accurately describe his role and increase his stature with clients. Having struggled to find a good salesperson, I reluctantly agreed.  I didn't want him to resign.

"Recently, I hired 2 additional salespeople, one of whom outperforms the 'VP' by a big margin.  The 'VP' has no managerial authority over the two new reps but sometimes acts as though he does.  This strains the relationship between the three of them. This individual really does not have the experience or presence to hold this title. What should I do about this situation?"

Companies, especially small ones, grow and change.  Your dilemma speaks to the importance of assigning titles that accurately reflect an employee's experience and role within your organization. 

The VP of Sales Role

Individuals with this title have typically had a successful career in sales and sales management before taking on the VP of Sales role.

Responsibilities usually include working with the CEO, setting company-wide objectives and strategy, determining department budgets, coordinating objectives with other departments, managing sales managers and directors of sales, overseeing customer account management, managing the sales forecast, designing and developing sales training, understanding industry trends, and making high-level presentations to customers.

Those without this broad and deep experience aren't likely to have credibility or succeed in the position.

Inflated Title Causes a Credibility Problem

When someone's title doesn't match their experience, employees may be skeptical.  Managers in other departments might think, "C'mon, this guy VP of Sales? Seriously?"

If your VP of Sales calls on customers in a day-to-day sales capacity, they may question his role.  People have a certain image of a VP of Sales.  If the rep doesn't live up to that ideal, customers will take your company less seriously.

Have a Conversation

Discuss the situation with the rep. Count on it being awkward. Begin the conversation by reminding the salesperson of the size of the company when he first started. Review the many changes that have taken place since.  Acknowledge your appreciation of his contributions in the early days of the company.

Let him know that as the make-up of the entire organization has changed, you feel his title no longer matches his job.  Remind him that he is part of a sales team now, instead of the sole sales contributor.  Listen to what he has to say.

Sales Rep's Likely Response

"Is this a demotion?  How will this look?," he'll likely ask.  Assure him that this is not a demotion but a realignment in response to company growth.  His territory and salary will remain unchanged. No company-wide announcement will be made.  Other than ordering business cards with his new title, no other changes are planned.  Strategize with him about what to say if customers comment on his change of title; most will not even notice.

Undoubtedly, he'll ask for a new title like Senior Director of Sales or Major Account Sales Rep. This negotiation is a test of your leadership.  Don't get talked into another title that may not be appropriate down the line.  If you want him to use the same title as the other sales representatives, say so.

Right the Wrong

This situation began innocently enough. Because this salesperson had more contact than anyone in the company with prospects, decision makers, and end-users, you asked their opinion on everything from strategic sales decisions to content for brochures. Who better to ask?
No doubt, they enjoyed the involvement in critical sales matters and wanted their contributions acknowledged.

In reality, your VP of Sales has solid but not superstar sales skills and shows little managerial potential. By allowing him to retain this title you'll lose credibility with your employees.  Outstanding salespeople may leave, thinking there's no potential for advancement.  Customers may question the sophistication of your company. 

You need to make a move. Take care of this problem. It won't improve over time.  Going forward, resist the urge to bestow lofty titles on individuals, no matter how hard working, who don't have the experience to live up to them.

Putting Sales Reps on Probation - Part II

In last month's column, I outlined five reactions salespeople have when they are put on probation for failure to achieve quota.  I described those behaviors as "I Dare You," "Waiting for the Ax to Fall," "Surprise Resignation," "Committed to Improvement," and "The Holding Pattern."

No matter which attitude your salesperson assumes, the following suggestions will help you get through this challenging process.

Warning Letter

After making the decision to put a rep on probation, spell out the terms in writing.  Specifics should include:

• Length of probation period
• Minimum sales revenue expectations
• Non-revenue related goals
• Required reporting / meetings

Have a place at the end of the letter for their signature and yours.  Both of you should sign it after the terms of probation have been discussed and you've answered any questions they might have. As with any important document, consult your attorney beforehand.

Passive or Aggressive

After they've been formally placed on probation, reps fall into two broad behavioral categories: passive or aggressive.  Passive reps feel they'll be terminated regardless and let the probation process take its course.  Aggressive reps fight back by trying hard to save their job or acting hostilely or belligerently towards their manager. 

In my own experience, I find that categorizing their behavior one way or the other allows me to deal with the rep more consistently day to day.   

Managing the Rumor Mill

As a sales manager, I give the rep in question advice on how to deal with gossip.  After we sign the letter I say something like, "Two other people know you're on probation, the Vice President of Sales and the HR Director. If you confide in other staff members everyone will eventually know, probably within hours.  I advise you to keep this to yourself."

Some choose to disclose the information to a peer, others do not.  By making this statement, I help them decide for themselves.

Mandatory Appointments

Those wishing to save their jobs will choose to meet with you frequently.  Most will avoid any interaction with you.  Regardless, hold a formal meeting with reps on probation at least once a week.  If they're remote, speak over the phone. Review their productivity and provide any coaching and support they need. 

The letter of warning should indicate that these conferences aren't optional. Schedule the dates and times right after signing it.

Staff Meetings

Most reps on warning stop actively participating in sales staff meetings.  They attend but don't speak up much, if at all.  Others act combatively, taking you on in front of the group. Either way, their peers take notice.

Discuss their behavior.  Encourage the withdrawn rep to participate occasionally. Set limits with the one acting out. Especially if they want to keep their probation quiet, remind them it's in their best interest to behave as normally as possible.

Casual Conversation

Though awkward and difficult, make sure to informally chat with the rep on probation once in a while.  This is especially important if they come into the office most days. Ask questions like "I know you like baseball, were you able to watch the play-off game?" or "That was some rainstorm this weekend, wasn't it?"

Most will answer briefly but politely.  All will appreciate the fact you made the effort, even if they don't show it.

No matter how justified, it's almost as uncomfortable putting someone on probation as it is being on probation.  For managers, the first time through is the most difficult.  Always choose the higher ground when dealing with the rep and remember you're making the right move for your company

Putting Sales Reps on Probation

In the past, I let sales reps who weren't achieving quota remain with the company until they quit or I fired them. For the first time, I'll be putting an underperforming sales rep on warning.  I'm apprehensive about how he'll act around the office in the days and weeks after I give him the news.  What should I expect?  

Once a sales rep has been put on probation, warning, or a PIP (performance improvement plan), their behavior can only be described as interesting.  I can't predict how your rep will conduct himself.  I can review the patterns I typically see.

Surprise Resignation

Get ready. A week or two after you put him on warning, the rep may resign.   "Why did I bother to go to the time and effort of putting them on warning?" you might ask yourself.

In this case the sales rep knew he wasn't performing up to expectations.  Most likely, he'd been job hunting for a while.  Being put on probation was the catalyst for him to move things along.  Salespeople in this situation may take a job they don't really want to avoid being terminated.  It happens.

Your efforts were not in vain.  The time you invested in the warning process resulted in a quick and relatively painless exit on the part of an underperforming employee.  Look forward. Put your energies into hiring a new sales representative.

Committed to Improvement

In the early weeks of being placed on probation, these salespeople jump into action. If they're supposed to make 25 prospecting calls a day, they'll make 30.  Instead of the required 10 product demonstrations, they'll conduct 12.

These reps realize they value their job. Upset about letting their production slip, they refocus and work hard to prove themselves.  Managers find it very rewarding when salespeople make a real effort to get off of probation.  After all, they hired the rep with the idea that they would be successful. 

The Holding Pattern

Other reps will display the same sort of newfound dedication as "Committed" and put up strong sales numbers -- initially.  However their effort is only about staying employed until they can find a new job.

Observing this rep in action, you may optimistically say to yourself, "I guess being put on warning was what they needed all along. This may work out."

Don't be fooled. This rep's rise to the occasion is temporary. 

Waiting for the Ax to Fall

Some salespeople accept the inevitable almost right after you put them on warning. They'll never reach their sales goals and they know it.

Their energy level quickly deteriorates. Lunch hours get longer and longer.  They call in sick frequently, and take unused vacation or personal days.  Most distance themselves from their manager and peers.  It's a slow, awkward crawl to the finish line.

I Dare You

Perhaps you've threatened him with probation before.  Have you ever started the process and then quietly backed off with out following through? 

Whatever the case may be, probation doesn't phase this rep.  He makes no changes to his behavior at all. He's waiting you out.  Aware that he's not the most talented salesperson, he knows you could do better.  But you could do a a lot worse too. 

Confident you don't have the nerve to fire him, it's business as usual until you get back to normal.

Moving Forward

Forget about how you may or may not have handled underperforming reps in the past.  Put that behind you.  Commit to this process.  Go into it knowing that not following through on probation is worse than doing nothing.  It shows the salespeople that they can push you around.  Placing below-quota reps on probation is the right thing to do for you, your business, and the rest of the sales staff.

In next month's column I will offer tips on navigating the management of and interaction with a rep on probation or warning.

Fostering Customer Contact

I require my sales reps to contact their largest accounts on a monthly basis at minimum. Though they're good about it, periodically I hear complaints about the policy. They are hesitant to be seen as pests - calling just to call. What's the solution?

Conscientious sales reps know that regular communication with their accounts - especially the larger ones - is key. All want to avoid the "just touching base" call or visit that reps and clients alike dread.

Revisit the requirements

Call frequency plans should be reviewed and adjusted from time to time. Is the current plan realistic? Is it consistent with the client's buying cycles? Are you asking the reps to contact the accounts too often? Discuss the situation with the reps. Get their input. Perhaps a revision is in order.

Define "contact"

Do you and the reps define a customer contact differently? Have you set achievable goals for each conversation, or do the reps feel pressured to "always be selling?" If they don't sell, are they forced to explain themselves? Talk about and come up with a mutually acceptable description of the term.

Broaden your view

Take a tip from high-performing sales reps. They will tell you that contact with a customer can take many forms.

Top reps know each client personally. They know who likes fishing and who enjoys attending rock concerts. They learn as much about each client's business as possible, not just the department(s) using your product.

If a business book addresses an issue a customer struggles with, they send a copy. If they see something insightful about a client's closest competitor, they forward it. If a client is passionate about fishing, they might even send an article on the latest fishing hideaway.

With good reason, top reps consider gestures like these to be "contacts" with their accounts. A follow-up call about a great place to go fishing allows for a relaxed conversation. Business discussions evolve more spontaneously.

Have something to offer

Many companies provide valuable information or services for their clients. Some send out a survey every few years and publish the results. Some host conferences or seminars. Others might allow trainers or knowledgeable sales reps to speak at a client's staff or annual sales meeting.

All of these gestures represent opportunities for the sales rep to "contact" a customer. If you don't already, begin to offer something of value that your reps can send or invite clients to.

Tune in

Highly effective sales reps get to know their clients slowly over a period of time. Careful listeners, most take meticulous notes and pick up on little things the client says. To the best of their ability, they make getting to know the client as painless and unobtrusive as possible.

Counsel your salespeople not to bombard the clients with questions like, "What do you do in your free time?" or "Have your read the new book on social networking?" These overtures might come across as pushy or too much too soon.

Take it easy

Barraging clients with unsolicited emails or reading suggestions will quickly become more annoying than "just touching base" calls. Unless a client specifies otherwise, forwarding information of interest twice a year should be sufficient.

Any books and articles sent should be tasteful. I tell sales reps, "If you're worried that a link might offend some one -- it probably will. Don't send it."

Putting call plans in place so sales reps contact their accounts on a consistent basis makes good business sense. Just make sure to revisit the frequency requirements from time to time. Encourage reps to be creative when it comes to getting in touch with their clients. As an organization, provide opportunities for them to do so.

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 Them the Money!

Last month, my newsletter covered ideas and tips to help hiring managers determine a candidate's level of money motivation. I wrote about the difference between a candidate who seems interested in earning a lot of money versus one with a history of and a plan for making as much money as possible.

This month, I want to carry that discussion one step further. Many company presidents, business owners and entrepreneurs tell me that they want to hire "money-motivated" salespeople. I know they are sincere. During the interview process, however, many are unprepared for the questions that a money-motivated candidate will ask of them.

Money Questions a Candidate May Ask 

Some of the questions that might be asked are as follows:

• Is the compensation plan capped?
• Is there a limit to how much I can make in a calendar year?
• Do you offer quarterly or annual bonuses on top of the commission?
• How much does your top salesperson earn?
• How many quarters / years in a row have they made that much money?
• How often do your sales reps max out on the comp plan?
• What does the average performer earn annually?
• How many sales contests do you sponsor per year?
• Is there a sales contest going on right now?
• Do you have a President's Club?

Know Your Compensation Plan 

In reading through the list above, you're coming to understand the types of questions money-motivated candidates ask. You're also getting an idea of the subjects that interest them and the direction they will steer the interview in when it's their turn to talk. 

Come to the interview prepared with all types of facts and figures that relate to your compensation plan. Be ready to discuss interesting data about the plan that they may not even ask about. If it relates to money, they will pay attention.

Keeping the Candidate Interested 

No one can predict and prepare for every single question a candidate might have. They may ask one or two questions that you cannot answer on the spot. That's not a problem. If you promise to get back to them in a reasonable period of time, it probably won't influence them one way or the other. 

If you cannot or will not answer several money based questions in a row, they will begin to lose interest. The same will be true if you act embarrassed or seem hesitant to discuss the financial realities of your compensation plan. Organize your data and offer straightforward answers to their inquiries.

The Realities of Money-Motivated Candidates 

If a money-motivated candidate suspects that your organization cannot offer the type of income they are used to earning, they will pursue other opportunities. If by chance they do come to work for you and realize they cannot make the amount of money they envisioned, they will quickly leave. They know they are talented and will want to work for an organization that can pay them what they are worth. 

To avoid either scenario, create and present an achievement-based comp plan that will entice a money-motivated candidate. Be completely upfront about the earning potential and be willing to negotiate certain parts of the plan to accommodate them. It will pay off in terms of increased sales revenue for your organization.

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.

Better Job Applicants through Better Job Postings (part 2)

Last month I focused on the skill set section of the job advertisement. The newsletter underscored the importance of mentioning the specific sales skills needed to succeed in your organization. Next, I would like to look at the responsibilities and requirements sections. 

When writing job advertisements, most of my clients accurately describe their company, the benefits package, and the process for applying for the open position. Often they find it difficult to clarify the responsibilities and requirements. Others omit those two areas altogether.

Responsibilities 

A responsibility involves a duty or an obligation. In addition to the selling responsibilities discussed in my last newsletter, regular responsibilities accompanying the sales position you are advertising for might include:

• Sales software usage
• Meeting attendance
• Weekly / monthly / quarterly sales reporting
• Continuing sales training

Ask yourself some of the following questions:

• What type of information do you ask the sales representative to enter into the sales software system?
• How often do you meet with the entire sales staff and the individual sales representatives?
• What do they need to bring / provide at these meetings?
• Do they generate any of their own sales reports?
• If so, which type and when are they due?
• Do you provide sales training on a regular basis?
• Is it on or offsite / daytime or evening?

The answers to these and other questions you come up with will assist you in tackling the responsibility section of the job advertisement.

Requirements

A requirement differs from a responsibility in that it is a necessity or a deal breaker. Some requirements might include:

• College degree
• Industry experience
• Certification
• Organization membership

Ask yourself:

• Is a college degree truly a necessity?
• Does prior industry experience help a sales rep be more successful?
• What type of certification is mandatory in your industry?
• Do salespeople realize any benefits from joining certain organizations?

Some people throw in requirements (like a college degree) to weed people out. Make sure the prerequisite is absolutely essential. If not, it can chase good candidates away. 

The job advertisement allows companies to be specific about what they really want. You may, for instance, ask your sales representatives to turn in a bi-monthly sales forecast. In your estimation, it's a critical component of the job. If the candidate you are interviewing has never been asked to turn in a sales forecast, that could cause problems once they begin working for you. 

You may choose to hire them anyway. In every other way they may be a great fit for your open sales position. If you do make them a job offer, you'll know before they start that you need to work closely with them on their first few sales forecasts. That's valuable information to have. You'll begin your working relationship with them on a stronger footing.

Better Job Applicants through Better Job Postings

Money motivated...... Prior industry experience...... Calling on C-level executives...... Ability to close...... Strong presentation skills...... Outgoing...... 

These are some of the popular words and phrases I often see in job advertisements or want ads. They aren't so much bad as they are vague. None of the words really describe the particular job being advertised. 

Last month, my newsletter focused on how a well-crafted job description improves the overall hiring process. In this issue, I will discuss the next step - writing a strong job posting.

Typical Job Posting 

Job advertisements are typically built around 6 sections: 

• Company description
• Responsibilities
• Skill sets
• Previous industry experience
• Benefits
• Contact information

Let's take a look at skill sets specifically. It's the section of the job advertisement where clients most often struggle.

Understand Skill Sets 

Competence, aptitude, and proficiency come to mind when I think of successful salespeople. But competence in which areas? An aptitude for what? The specifics sometimes get missed when writing the job advertisement. 

To determine the skill set necessary to succeed at your particular organization, ask yourself questions like:

• How do you present or demonstrate your product or service to clients?
• What technology (if any) is used?
• How long is the presentation?
• How many people typically watch the presentation?
• What are their most common objections?
• Is the final decision made by group consensus or by one decision maker?

Additional questions you could ask might include the average dollar amount of the sale or the length of a sales cycle. As you start to give thought to the questions above and others that you come up with, the true skill set needed by your new hire will begin to emerge.

Specifics are Important 

All sales positions call for the ability to close. Salespeople must be able to ask for the business. But closing can differ depending on the product and the sales cycle.

For example, companies with a shorter cycle need a sales representative who can accurately assess buying signs and ask directly for the sale without hesitation. A salesperson like this might find a long sales cycle tedious and without enough immediate gratification. 

A lengthier sales cycle requires a salesperson with strong consensus-building skills. They must be able to work within a customer's buying process and know when everything is in order before they attempt to close. They may be more strategic and might not gain as much satisfaction from a shorter sales cycle. 

Being specific about your company's sales cycle in the advertisement will increase the chances that the right type of closer will apply for the position from the beginning.

Working with Recruiters 

Some of my clients work directly with recruiters. They rarely place ads on the web. That's fine. In order to work effectively with a recruiter, however, the hiring company needs to provide precise details about the qualifications necessary for their open position. In doing so, they will make it far easier for a recruiter to present appropriate candidates.

Fewer but Better Applicants 

When I craft and then post a more detailed job advertisement for my clients, many are disappointed to receive fewer resumes than they're accustomed to. As they quickly scan the resumes, though, most are surprised at what a good match most applicants are for their open position. They also discover that the interview process is much more efficient and productive. They aren't wasting their time talking to candidates without the right background to do the job. 

Make an effort to write a job advertisement for the salesperson you really want. Specifics never scare truly qualified people away. Candidates that do apply will be more interested in the job, not less. They know what they have to offer and want to work for a company looking for that type of sales representative.

Vary Reports to Unearth Trends (Part 2)

Last month I answered a question from a manager who found reviewing the same sales reports over and over again boring, and who thought the salespeople felt the same way. I agreed that reports can feel monotonous sometimes, and suggested that the manager introduce a few new and interesting ones. My suggestions focused on product and industry reporting. This month I would like to focus on time and territory management.

Quality sales reports capture events that take place over a period of time and use the data to tell a story. That's why it's critical to switch the information around and tell the story from a different perspective now and again.

Closed Sales

Using a closed sales report from the previous year, divide those companies who purchased a product or service from your organization into 4 groups: referrals, leads, repeat business and prospecting (or whatever categories apply at your company). If salespeople are expected to close between 3 and 5 sales per month, the report for a year might look something like this:

Rep	Referrals	Leads	Repeat Business	Prospecting	Total
Rep A	20	12	9	7	48
Rep B	5	4	13	14	36
Rep C	18	6	34	2	60

As a manager, you might not have a problem with any of the results, given the various reps' territories and strengths. On the other hand, you might have some questions or concerns. Is Rep B asking enough of his current accounts for referrals? If several of Rep C's accounts stop doing business with her for any reason, will she be able to make up the difference through prospecting? Does Rep A have a strong enough relationship with his current accounts? 

The same report can be run using lost sales instead of closed sales. Discovering which category accounts for the most lost sales should make for an interesting discussion.

Territory Coverage 

Theoretically, salespeople should spend 80% of their time on the accounts that bring in 80% of their business. Is that true in your organization? How does such a thing get measured? Find out which accounts bring in the majority of the sales revenue in a reps' territory. Next, run a report showing how many in-person visits, phone calls or CRM notes appear for a given month or quarter.

J. Jones Q1	% of Business	Sales Calls	CRM Notes	Phone Calls
Account A	36	3	8	6
Account B	29	1	15	21
Account C	15	2	10	13

Joe Jones sees Account A once a month and Account C every 6 weeks. A CRM report indicates that some type of notation is made every other week on average for Account C. Account C (15% of business) receives more phone calls than Account A (36% of business). Interestingly, Account B (29% of business) was seen only once during the quarter but received more phone calls than Accounts A and C combined. 

Account B may have told Joe Jones not to call more than once a quarter. They might prefer frequent phone contact instead. Account A may feel that Joe Jones visits often enough and calls an appropriate number of times. Account C may be having a customer service issue and wishes Joe Jones would come to see them in person to try and solve the problem rather than always calling. As a manager, you really can't be sure until the data is in front of both you and the rep, and a dialogue takes place. 

These "out of the box" reports need to be read with a totally open mind. The information contained within them can alert sales reps and managers alike to troublesome problems or patterns. The reports can shake people out of their doldrums. We all get into ruts. The idea is to discuss the findings with the sales representative and use the reports as a reference point for praise (if called for) or improvement (if necessary). When reports promote a lot of discussion, boredom goes by the wayside and insights result.

Vary Reports to Unearth Trends

A reader writes, "A few years ago I started using Salesforce.com to create sales reports, which I review with my sales representatives one-on-one and at staff meetings. These reports have significantly increased my effectiveness as a manager and improved the rep's productivity. Lately, I feel bored as I go over the reports and I think the salespeople feel the same way. Should I create new reports?"

This can happen. No matter how effective the sales reports, going over the same information in the same way for a period of time can start to feel stale and uninteresting. Don't give up on your standard reports, though. Anyone managing salespeople needs to have a suite of reports that they review consistently (productivity, sales forecast, etc.). These reports keep the reps focused and accountable and keep you informed. What you can do is mix things up once in a while. Create some new and inventive reports to keep everyone interested and challenged.

Sales by Product

If your company sells many different products, run a report for each sales representative showing them how much they sell of each product. The information always surprises reps and managers alike. Sure, the salespeople might know what their 1 or 2 top-selling products are, but if you dig a little deeper there is a great deal to be learned. 

The first time I ran a report like this for a sales staff, I wasn't sure how they would react. I handed it out and I don't think anyone looked up or spoke for a good 5 minutes. They were completely intrigued with the information. When they finally began speaking I heard a lot of "No way!" "I sell more of this than that!" "I thought that was my #1 seller, not this." Every single one of them took away something from that report that made them a more effective salesperson.

Sales by Product by Rep 

Next, create a report that compares each rep's sales of a particular product to the other sales representatives on staff. Analyze the report to spot trends and inconsistencies.

Product #1
	Rep A	Rep B	Rep C	Rep D
Units	43	20	50	40

In this report, reps A, C, and D sell a similar amount of Product #1. But what's going on with Rep B? Her sales of product #1are far behind those of the other salespeople. Why? Is there no market for Product #1 in her territory? Is her product knowledge weak? What is Rep C doing that puts him at the top of the chart? How is that different from what Rep B is doing? Start a dialogue and find out.

Sales by Industry

If your organization sells just one or two products to several different industries, run a report that shows how many sales each salesperson has made by industry.

Sales to Hotels
	Rep A	Rep B	Rep C	Rep D
Units	20	40	85	8

This chart tells a different story. Rep C has sales in the Hotel industry that are double those of her nearest co-worker. Are there more hotels in her territory? Does she have better industry contacts? Is it just luck? A more compelling value statement? As a sales manager I would want to know what Rep C rep was doing so that the information could be shared with the entire sales staff. 

Sales by Product or Sales by Industry reports highlight top-performing sales reps. They can also expose weaknesses in the sales organization. More than anything else, though, these reports promote discussion and debate, which can lead to the sharing of best practices and additional sales training. By creating and reviewing these new reports with your staff, the "same old same old" feeling you were experiencing will be a thing of the past. 

In this newsletter I have focused on Product and Industry reports. In next month's issue, I will discuss creating new and different reports that focus on the sales representative's time and territory management.

Realigning Territories (Part 2)

In last month's column I gave a business owner advice on telling a long-time salesperson that they were going to hire a few new sales representatives. Now that the salesperson has been told about the new hires - and is willing to go along with the plan for the moment - here are some recommendations to work as a team to divide up the territory.

Discuss income first 

Assure the salesperson that your decision to hire a few more salespeople has nothing to do with their total compensation (salary and commission) and that they will not take a cut in pay. Let them know that you have some ideas to help them increase, not decrease their income and that you'd like to focus on that. 

When salespeople have a large territory with several plum accounts in it, they tend to spend a great deal of time on farming (account maintenance) as opposed to hunting (new account development). Let the salesperson know that you understand that prospecting was difficult with the geography they had to cover, and that with a smaller territory they will be able to do more prospecting. They might not perceive this as a plus, so you could, for instance, offer to pay a higher commission or bonus for any brand new business that they bring in. 

There are other opportunities for additional income as well. Perhaps you can continue to pay the current salesperson commission on some of their old accounts for an interim period. It is sometimes easier to pay a double-commission during transitions than having a hard cut-off. Now that you will be managing a sales staff you can create a group bonus that rewards the whole team for hitting their goals - both monetary and non-monetary. This can be a great morale booster.

Territory division 

Let your salesperson make the initial attempt to divide the territory in a way that they deem fair. They may surprise you with what they are willing to give up, or they may disappoint you with what they insist on keeping - but either way let them go first. Listen to their reasons for doing it the way they did it. Keep an open mind. You might try the old "I cut, you choose" approach - as in the way kids divide a piece of cake. That way they will think the most fairly about dividing the territory. 

After you consider what they have proposed, start to negotiate. Ask questions like, "Can you see what I'm saying from the perspective of a new hire? or "What would you do if you were me?" or "How would that jibe with my desire to grow the company?" Appeal to their general business intelligence and sense of fairness.

Bring up a hypothetical 

If the discussions are going reasonably well but there are a few things they insist upon, you have to decide how important it is for you to retain them as an employee. If they are unreasonable about a few things, you may have to play hardball. Ask them something like, "If you do walk out tomorrow, what are the odds that you will be able to find an employer who lets retain all of your current accounts and gives you no territorial restrictions whatsoever?" Let them think about the long odds on that one.

Be candid 

This is not an annual review, so their strengths and weaknesses should not be discussed in depth. But be up front about any areas that you need them to focus on. Let them know, for example, if you need them to step up their new business activity or if there are certain geographical areas you want them to focus on. If it has been a long time since they've done any appreciable cold calling, offer to evaluate them and get them some training. Above all, assure them that if your business grows, they will benefit as well. This will reinforce how committed you are to both their career and your company's growth. 

There are other things to consider. The decision to hire additional sales staff needs to be communicated to the entire company as it will be a change for all employees, a transition period needs to be defined, and the whole process needs to be monitored so that the current salesperson does not take advantage of the new sales representatives or continually try to renegotiate terms. I will write about these topics in greater detail in subsequent newsletters.

Are you in the position of having to downsize your sales staff? Is who to keep and who to let go a more difficult dilemma than you thought it would be? A salesforce evaluation can provide you with the kind of information you are looking for to make an informed and unbiased decision. Contact me if you would like to discuss your specific situation.

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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.

Realigning Territories

A client asks "In my business, there is one salesperson that's been with the company for years. They have a very large sales territory and call on the biggest accounts within it. To grow my business, I need to hire several more salespeople. This will mean giving at least one of them a part of this person's territory and a few of the good accounts that go with it. My fear is that if I make any changes to their territory my salesperson will quit and all of their account knowledge will go with them, or they will go to work for a competitor and convince some of the accounts to follow them to the new company. In either case, if they do leave and the new salespeople don't work out, my business will suffer.

When faced with this dilemma, most business owners that I work with picture a full scale disaster. Though I understand that it's scary to shake up the status quo, when I try and convince them that the worst case scenario usually doesn't occur, they are skeptical. In this issue of my e-newsletter I will make recommendations for discussing the upcoming territory changes with your current sales representative. In the November issue I will talk about working with them to bring those changes about. 

There are some steps that all managers in this situation can take to retain the original sales representative while adding to the sales staff.

Talk to peers 

Many small business owners have faced this situation. Have lunch with a few and ask them about it. Did they hire additional salespeople? How did that work out? Did the original salesperson quit? What were the ramifications? Would they do it again? What would they do differently? What does their current sales staff look like now? Is the first sales representative still there? The answers may vary greatly from owner to owner, but I guarantee you will come away with some good advice and a much more balanced picture of what you may or may not be facing.

Do your homework 

Make certain that you know enough about the territory to comfortably state that there is enough potential business there for an additional sales representative or two. Come to the initial meeting with solid data on the number of businesses in the area and territory coverage recommendations. If the current salesperson is generating $1 million in the territory, they should be solidly convinced that a second salesperson can bring it to twice that.

Have a business meeting 

Your main goal here is to grow your business, not take anything away from your salesperson, and it's important not to lose sight of that. Meet with them and discuss your ideas for growth. Take the time to talk about the big picture; don't focus exclusively on the need to hire another salesperson or two. Let them draw a few of their own conclusions about the need to increase the sales force.

Ask questions 

After discussing the situation for a while be straightforward and say to them, "In order to realize the growth rate I'm looking for, I may need to hire another salesperson or two. What are your thoughts on that?" If they are initially negative about this idea, don't panic. They are worried about loss of income, loss of territory, and perhaps concerned about having to work a little harder. Let them expand on their thoughts a little bit. Ask questions.

Don't dodge the issue 

If they come out and say something like, "If you give the new person any part of my territory..." or "If any of my major accounts are taken away..." or "If I don't have total say-so over how everything is divided up..." "... I will quit," stay calm. Acknowledge that you know they can quit but that you value their talent and your business relationship. Stress that what you would really like to do is work as a team to figure out a plan for bringing additional salespeople on board. Would they be amenable to that? 

Now that you have told the salesperson about your plans to increase the sales staff and that you want them to remain with the company, you need to start incorporating them into the planning process. Next month I will talk about partnering with the salesperson to make this venture a successful one.

Are you in the position of having to downsize your sales staff? Is who to keep and who to let go a more difficult dilemma than you thought it would be? An overall staff sales evaluation can provide you with the kind of information you are looking for to make an informed and unbiased decision. Contact me if you need help.

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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.

Communicating Price Increases to Customers

A client asks "I am the President of a top-of-the-line stationery and paper goods company. Over the years, we have had to raise our prices to adjust for inflation and remain profitable. With the devaluation of the dollar as well as the increased cost of raw materials and fuel, we are in the uncomfortable position of having to issue unprecedented price increases. Using materials of lesser quality is not an option because our company's reputation is based on selling the very best. My salespeople are nervous about how this price increase might affect the size of the orders their customers place, and whether or not customers will consider vendors that carry a more economical line of paper goods."

Most all of my clients are facing this dilemma from both perspectives - as customers and as business owners. Their own suppliers are increasing prices or including surcharges, and at the same time they have to raise prices on their own products and services. It is unpleasant for everyone.

Review the Facts with Your Sales Team

If your current price increases are more significant than any you have issued in the past, you will have to first explain the situation to your own sales representatives. If, for instance, the cost of one type of raw material in particular has skyrocketed, and is the main culprit behind the price increase, educate your staff. Rehearse what you will say about the price increases until you feel comfortable, and then review the facts in a straightforward, non-apologetic, positive manner. They will appreciate your candor. All of your sales representatives go grocery shopping and fill up their cars at the gas station. They understand what's happening.

Draft a Letter to Customers

Work with sales and marketing to draft a letter that will go out to all of your customers explaining the price increases. You may want to come up with several different versions of the letter for different sizes or types of customers. Letters to your very best clients should be customized and personalized. However, none of these letters should go out until you, and eventually your sales representatives, have spoken directly with your customers about the situation.

Call the Top Accounts

As President, you should take it upon yourself to call or visit your organization's best clients, regardless of which salesperson handles the account, and tell them about the price increase personally. Let the salespeople know you are doing this, and involve them where necessary. When meeting with your valued clients, answer their questions directly and honestly. If these are some of your best customers, they are probably astute business people themselves, will understand what you are going through, and will respect you for telling them directly. By taking it upon yourself, you also help to show that you take the matter seriously, and that you are willing to take some of the heat off of the salespeople.

During the customer meetings, promise to confirm the price increases in a letter and make sure to follow-up on that commitment.

Use Initial Feedback to Guide the Conversations of Your Salespeople

Once you have made a few of these phone calls or visits, meet with the salespeople and talk with them about how the conversations went. Be honest about the customer's reactions to the situation, and go over the various questions they asked and objections they may have brought up. Then, tell them to call or visit all of their own customers and have a direct conversation about the upcoming price increase, just as you did with the top customers. It should be made clear that leaving voicemails or sending e-mails are not options.

Let your sales team know that your door is open if they want to discuss a particular account with you. You should meet with the sales representatives once they have made their first two or three calls to talk about the conversations, and review their progress to make sure that they are contacting all their accounts (not just the ones they feel most comfortable with). Get together with them regularly so that you fully understand what they are dealing with and so that they feel your support.

In order to remain in business not just through this recent economic cycle but for many years to come, most companies will have to take a hard look at their cost of doing business. Many will have to raise their prices accordingly. The sales department will no doubt feel the Impact of this situation as they interact with customers. Help them through this with a company-wide effort involving an effective plan, frequent communication, and teamwork.

Selling Against an Incumbent Vendor

A client asks "My company sells a product that competes with a well- known brand name product from Company X, a much larger organization. The statistics on the cost savings realized by using our product as opposed to Company X's are inarguable, our product performance is strong, and our post-sale customer service is excellent. Despite the facts, we have a frustratingly low close rate with prospects whose contract with Company X is expiring. What is going on?"

A lot of different things could be going on here such as upfront versus long-range cost savings or the prestige and track record of Company X versus a lesser-known organization. I am going to focus on one in particular: the hidden costs and difficulties of switching vendors.

Many sales representatives spend a great deal of time discussing features and benefits as well as the cost savings of their particular product or service with prospects - and they should. What they sometimes do not do, however, is put the facts and percentages aside at some point and ask the decision maker what the true feelings are within the organization about switching vendors - irrespective of anything else. Sometimes having the less expensive product gives salespeople a false sense of security.

During the interview process with the decision maker they should be asking such questions as:

• How long have you used Company X?
• How do the users generally feel about Company X?
• What product were you using prior to them?
• Was it a difficult transition?
• What would be involved in switching from their product to ours?
• Would there be any costs associated with changing?
• Who would oversee the change?
• Who in your organization will not be in favor of changing vendors?
• Do you know what their reasons are?
• Would anyone feel they are putting their job at risk by switching from Company X?
• Who will be in favor of switching?
• Why do they feel this way?
• What are the odds that you will stay with your current vendor?

Convincing sales representatives to insert these kinds of questions into their interview process with the prospective client can be one tough sell. Most salespeople are terrified to ask questions like these. The answers they get take them out of their comfort zone: discussing features, benefits, and cost savings.

Those salespeople who do ask these types of questions will tell you that they are crucial to helping establish themselves as a partner with the decision maker. If they don't get a prospect to speak candidly about their current provider, they may lose the sale and never know why.

When a salesperson proves that they are not afraid to ask awkward or straightforward questions, they typically earn the respect of a prospect. The prospect, if they are the true decision maker, typically shows their respect by answering the questions in a straightforward manner. The salesperson's ability to bring all the facts to the forefront increases, not decreases, their chances of success.

Motivating Using Sales Contests

It's April and if you haven't sponsored a sales contest yet this year, you are missing a real opportunity to focus your sales staff and have some fun at the same time.

Sales Contests vs. Commissions or Bonuses 

Salespeople expect to be paid commissions or bonuses if they achieve quota. It comes with the territory and is one of the attractions of the profession. Cash can be almost an intangible. Sales contests, especially those that offer tangible rewards, help a salesperson stretch and reach for a goal that they might have thought unattainable. 

Examples of great tangible prizes include gift certificates to favorite:

• Stores
• Restaurants
• Amusement Parks

They could also include tickets to:

• Sporting Events
• Concerts
• Museums
• Movies

Other ideas can include a dish filled with the winner's favorite candy, a trophy that they get to keep until the next contest, or a coveted parking space. 

All of the above work for salespeople no matter their lifestyle. Offer several choices because the crucial element here is to let them decide which of these things they might like.

Dollars vs. Progress 

Salespeople often put in a great deal of hard work with a particular prospect before they ever get a chance to make the sale. Sometimes convincing a potential client to meet with them or have a discussion over the phone is a true achievement that many salespeople feel goes unrecognized. The sales contest does not always have to be about closed sales. Mix it up a little bit. An example of a non-revenue focused contest might be to offer a prize for a 10% increase in a month in the number of:

• Product Demonstrations
• Webinars
• Prospecting Calls
• Face-to-face Meetings

Top Producers vs. Everyone Else 

Sometimes well-meaning Presidents or Sales Managers create contests that only a handful of superstars can win. Once the rest of the staff catches on to this, they ignore the contest and continue with their daily work. Make certain that any contest you create encourages everyone on the sales staff to improve their own performance. 

Sales contests like these should be held at least once a quarter, be tailored to the individual participants, have a relatively low dollar value ($150 or less), have clear rules, and be brief (3 months maximum). A motivated sales staff that feels recognized for the tough job they have makes the creation of these contests well worth the effort.

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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.