This is Not Just Another LinkedIn Idea for Salespeople

A reader asks, "Over the last year, I've invested time and money into LinkedIn for my sales staff.  I've hired a professional photographer for head shots, as well as a consultant to help with company and staff profiles.  Any good tips on how to use LinkedIn to increase sales?"

LinkedIn offers many ways for salespeople to increase the size of their prospect list or gather helpful information about a potential new customer.  Let me share one that I think goes underutilized.

New Job

LinkedIn notifies subscribers about their contacts' work anniversaries, birthdays, endorsements, awards and professional accomplishments -- all great information to read up on before getting in touch with someone.   
In my experience the notifications about my contacts accepting positions with new employers has proven to be the most valuable.  I'll tell you why.

Access

They pick up the phone.  I don't know how many times I've called and asked for a recently hired employee, and been told the following:

• "Their voicemail isn't connected yet; let me try to find them for you."
• "I'm not sure what their extension is, oh wait, I just saw them walk by, hang on a minute please."
• "They are in today but I don't know where they are.  Let me take and old fashioned hand-written message for you and I'll make sure they get it."

When someone starts a new job, fellow co-workers who might normally screen their calls put the calls through.  They don't know their new co-worker all that well, and will want to steer clear of a potential mistake by doing so.  

Listening

When the recently hired contact does accept the call, they often pay attention to what you have to say.  They might not recognize your name at first.  Few of us know all of our connections on LinkedIn.  They lack familiarity with all of the top accounts and customers.  You might be one and they have little interest in offending you.  New employees at any level try to avoid gaffes early in their tenure. 

New Opportunities

In their last position, they lobbied to purchase certain products or services only to be turned down.  You never know what your contact might have negotiated before starting the new job. Perhaps they insisted on a certain product or service as a contingency of employment. A door previously closed to a salesperson could be wide open now.

Overwhelmed vs. Busy

Recently hired employees feel inundated by all the new people, products, customers, and software programs.  They probably aren't even 100% sure how to operate the coffee maker.   We've all been through it and it's stressful. Though they'll go to great pains not to show it -- they might not actually be all that busy just yet.

They aren't yet copied on all relevant emails, don't know about every meeting they should attend, or have a set schedule yet for one-on-ones with all direct reports. Gaps occur in their calendar. While they acclimate to the new job, they have a few minutes to talk.

Big Numbers

Not too long ago, I received a message from LinkedIn letting me know that 12% of my connections had recently started new jobs.  Twelve percent?  Astounding.  On that list was someone I had wanted to reach out to for quite some time.  We worked together once before.  The job they held for several years afterward wasn't in my field.  In their new position, they could potentially use my services again.  

If only to congratulate them and catch up, connect with those in your LinkedIn network who've accepted new positions.  At the very least, they'll be glad to hear a friendly voice.  Who knows what might come from the conversation?
 

How and When to Pay Commission

A reader asks, "My company leases land from property owners for alternative uses. Some sales take only one or two months to close, while others take much longer.  Once the deal is signed, my company has to find the financing to re-purpose the property.  On average, securing the financing takes one to two months. We plan to base commission on the dollar amount of the construction project. Given the lag time between closed deals and financing, do you have any recommendations on structuring the compensation plan?"

While this question deals with one company's specific dilemma, similar situations occur in all sales organizations.  For instance a client might sign a multi-year deal and either not pay the entire contract up front or stop payment after one year.  Similarly, a client could return some or all of a large order.

Avoid Distraction

Your sales staff needs the single-mindedness to concentrate on meeting a property owner, uncovering a potential land lease, presenting the opportunity, generating a proposal, and closing the deal. Concern about whether or not the deal receives financing - which neither they nor the property owners have responsibility for or control over - is a distraction. Little good happens when the salesforce loses focus.

Potential Solutions

Solving that problem lies in recognizing and rewarding closed sales before financing gets approved. Frank Armenio, CMA, CFM and partner at B2B CFO suggests the following:

"Given the time lag between closed deals and financing, I would pay a percentage (25% - 50%) of the commission on the deal closing and the remainder when the financing is complete. The deal is not done until the financing is obtained. Further, if the financing falls through the first 25% - 50% needs to be charged back since I believe that would void the deal.

"Experience has shown me that sales reps normally go with the highest up front dollars. Therefore, re-payment on the back-end could take place far down the road."

Options

Frank's plan allows the sales rep to collect some commission up front. In that way your company rewards and recognizes a closed sale immediately, in a manner unconnected to the financing. I support that completely.

Consider Frank's idea. Collaborate and consult with other executives at your company to determine what percentages they deem appropriate. 

What happens when you have paid a certain percentage of the deal up front, financing is not approved, and the rep has a chargeback? I recommend dividing the amount into thirds and deducting it from their paycheck over a three month period.  Allow for flexibility with the starting date of the pay back.

Loss of Financing

If the financing does fall through, where does this leave the rep? You never want them to feel that all their hard work was for nothing, or to hesitate when closing the next deal.  
When a salesperson closes an otherwise sound deal in good faith, offer a "signing bonus" of some sort - either a flat fee or a small percentage of the deal.  Reps would not be responsible for paying this amount back if financing fell through.

Define Terms

To minimize the chances of any deal being turned down for financing, make sure the reps know what constitutes a "good deal."  What should they be looking out for?  Discuss red flags. Neither you nor the reps want to chase deals that fall apart.

Risk and Reward

The profession of sales involves risk taking. Top-producing salespeople are well paid; one reason for that is that no one in your organization has the ability to guarantee any sale.  Keep reps focused by offering a comp plan that acknowledges the time delay between a closed sale and a completed deal, and that rewards the salesperson's effort to go for the close.

Take a Sales Book to the Beach for Some New Ideas

Salesforces find themselves playing catch-up and / or struggling to integrate technology into their current sales practices.  Should any tried and true systems or routines from the pre-social media days be preserved? Which might be considered obsolete or potentially damaging to a sales organization wanting to continue to thrive in this new era?  Is any particular technology an absolute must?

The books below offer company presidents and sales executives advice and tips for assimilating all the various apps, software and social media into their existing sales methodology. 

"Agile Selling: Get Up to Speed Quickly in Today's Ever-Changing Sales World" by Jill Konrath

Sales professionals understand the Internet changed buyer behavior.  If buyers want information, they go online and they're at least 50% of the way through the decision-making process when they call a potential vendor.  Sales reps need to know what to do about it.  Konrath, author of SNAP Selling and Selling to Big Companies, details what the modern buyer wants: an understanding of their business challenges, value at every interaction, and information they need the way they want to see it - quickly.  In addition, she gives reps the specifics for dealing with today's buyer, and how to get up to speed more quickly.  

"Sales 2.0: Improve Business Results Using Innovative Sales Practices and Technology" by Anneke Seley and Brent Holloway

Despite the explosion of online products and changing customer buying habits, the sales profession still lacks an innovative set of sales practices that work in the new reality. The high-tech revolution hasn't led to a revolution in sales strategies. Seley and Holloway use Sales 2.0 as an umbrella term to describe best practices for predictable, measurable selling that result in increased business.  The authors discuss inside sales and the web as a strategic entry point for Sales 2.0, interview companies currently practicing 2.0, and offer real-world suggestions for getting started.  

"The Challenger Sale" by Matthew Dixon and Brent Adamson

Identifying salespeople as one of five types: hard worker, challenger, relationship builder, lone wolf and reactive problem solver, the author's extensive research champions the challenger as best suited to modern, complex, large scale business to business sales.  Rejecting the idea that salespeople build relationships and that sales follow, leading-edge decision makers and buyers value innovative and creative reps who tailor their message to a customer's specific needs.  A good relationship between seller and buyer develops as a result of this type of service.  Filled with case studies, interview tips and a coaching guide, this book helps companies identify and train reps to develop a challenger mind set.  

"Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers" by Robert Scobel and Shel Israel

While some books lay out a blueprint for putting together a social media program, Scobel and Israel focus on blogging.  The authors view traditional, old fashioned PR and marketing departments, with their focus on "talking at" people, as obsolete.  Blogs represent "two-way" marketing by allowing companies to interact directly with their customers. They maintain companies wanting to survive and thrive must adapt and integrate blogging into their marketing plan.  Today's customer insists on interacting directly with employees working for the companies from whom they purchase goods and services.  Chapters 10 and 11 entitled:  Doing it Wrong and Doing it Right offer specifics on a successful blogging program.

5 Simple Steps to Timely Followups

Following up in a timely fashion is key to the sales process.  For some helpful tips, I turned to Mitzi Weinman, president of TimeFinder.  Mitzi writes:

I remember working with a client, the president of a manufacturing company.  I was coaching him on his personal productivity and on decluttering his office.  At the time, he was looking for a new accounting firm.

As we cleared the clutter, he threw away a proposal from a firm that wanted his business. I asked why. He responded that he had met with one of the firm's representatives, but had never received the additional information that he had requested. He wondered, "If they treat me that way as a prospect, how will they treat me as a client?"

His point was on target.  A phone call or email can make the difference in getting a sale or not.  Following up has to be part of the sale process. For example, one of my clients who worked for a marketing firm would meet with prospective clients regularly.  He explained that when he would return to the office, he did not have time to do the follow-on work from his meetings.  I asked him how often he had to get information back to a prospect after he met with them.  His answer was, "Always."    

Because following up with prospects was predictable, he had to plan for it.

What are successful strategies for following up?

1. Anticipate the need to follow up and block out time before the meeting to work on the follow up.
2. Try to estimate how long the follow ups will take to prepare and deliver, based on the type of work required, sophistication of the client, etc.
3. As soon as you indicate to someone that you will get back to them, mark the date you committed to in your calendar, planner, etc.  Know what you have already planned on your calendar so you can be realistic in setting expectations.
4. If you have a team, let other members of your team know about your meeting(s) and set expectations on what they may also need to work on.  Find out about their impending deadlines.
5. Don't put yourself in a position where you are apologizing for not following through.  This negatively impacts your client or prospects perception of your ability to get things done on their behalf.

Following up gives you credibility. You demonstrate that you care and that you deliver.  When you say that you will get back to someone, do so - even if it is to say that you don't have the information yet, but that you are working on it. Clients, prospects and associates don't want to hear that you're busy as an excuse for missing deadlines.

Anticipate, plan ahead, block out time and do what you say you will do.  When you do what you say you're going to do, as promised, it positions you and your company to stand out from the others.

Mitzi Weinman, founder of TimeFinder, helps people develop good habits and techniques to reduce stress which can result from procrastinating, feeling disorganized and overwhelmed, and rushing to get things done, at work and/or at home.  Mitzi's clients include: New Balance, Reebok, Boston University School of Medicine, Boston Symphony Orchestra, WGBH, Lojack, Grant Thornton, Dana Farber Cancer Institute, Weston and Sampson Engineers, Pearson Education and Marriott University.  Mitzi is the author of "It's About Time -- Transforming Chaos into Calm, A to Z," soon to be available.

Sales Reps with Closing Issues

A reader asks, "One of my reps excels at uncovering new deals and filling the top end of the pipeline. But once he's sent a proposal to a prospective client he waits for them to respond rather than being proactive.  Coaching and working closely with him on high-value deals works well until one of us is out or traveling. Then we fall out of sync and lose momentum on his late-stage deals.  I have considered pulling deals away from him and moving them to a solid closer as a split. How can a seasoned sales professional who is exceptional at prospecting and developing new deals be so bad at advancing late-stage deals to close?"

You are far from alone.  My clients continuously tell me their various reps:

• get through to decision makers with ease, then stall at the product demonstration phase
• present the product very well then put together a poorly written and priced proposal
• close effectively when they have a deal to close

What do you do?  Place them on formal written warning?  Turn late-stage deals over to other reps?  Terminate their employment?  Let's look at the possibilities.

Scope of the Problem

Review closed and lost sales for the past few years.  What number and percentage did you assist with?  When working on his own, how many and what percentage did he lose / close? Tally the sales revenue for the different scenarios.  Come to some solid conclusions about the seriousness of the issue.

Invest

You've come this far, devoting tremendous time and energy trying to help him close deals.  See it through.  Meet with him to discuss the problem as you see it.  Go over the sales numbers.  Listen to his thoughts and ideas. Remind him of the many skills he possesses to succeed in sales.  Offer your full support. Discuss next steps.

Have him take a sales assessment. Look at the whys and hows of his closing issues.  If the budget allows, arrange for targeted training or coaching specifically around closing.  Otherwise, ask the rep to select a book on closing.  The two of you should read it together and discuss.  

Coaching versus Enabling

You've worked with him to close many deals and he still cannot close on his own.  He either isn't listening or has become dependent on you.   As a manager, you need to make some changes as well.

When discussing potential deals, get him to tell you what he plans to say and do.  If he hesitates say something like, "This seems similar to the Smith Company sale from last year. What were the president's objections? How did you finalize that deal?"

Start pulling back.  Before accompanying him on sales calls, remind him that you are there to support him.  He must close the deal.  Resist the urge to jump in and close it yourself.

What Next?

Should training and/or coaching fail to turn his performance around, you have two alternatives to consider.

Alternative #1

You could create a position for this rep that focuses primarily on identifying and working opportunities to an agreed point in the sales cycle. This approach requires you have another rep or reps take those deals from that point forward and get them closed.

Taking this path would require assessing the strengths of your other salespeople, altering the sales process to manage the hand-offs (both for this salesperson and others), and adjusting quotas and compensation to accommodate the changing workload for the entire staff.

You'll need to review the consequences of making the change either with a trusted adviser (if you're the boss) or with the boss (if you're not) before moving forward with the plan.  Be sure it's worth all the trouble. The rep in question might quit, or the hybrid position may not work for the other salespeople.

Alternative #2

The second alternative involves putting the salesperson on a performance improvement plan as a prelude to moving him out of the organization. Tell him that to continue to have the title and privileges of a salesperson, he must meet or surpass sales quotas consistently and take potential deals from a cold call through to close. Failure to do so in a time period you specify will result in his being terminated.

Whether you choose the first or the second alternative depends on how good they are at everything but closing, and how much you want to navigate around their weakness. Contrary to popular myths, sales managers should not close sales for reps, save the occasional high-level, particularly complex deal.  The stress involved in "carrying" this rep makes him dependent on you and leaves you depleted for your other reps and responsibilities. 

Put the Ball in Their Court - Sales Interview Techniques

In light of March madness, it seems appropriate to think about your job interview techniques in terms of effective offensive and defensive moves. Best way to start? Put the ball in the job applicant's court.  This month's guest author, Attorney Helene Horn Figman, is an employment law attorney who provides legal counsel to small and mid-sized businesses. She writes:

Start with the job description. Present a copy to the applicant and have one in front of you. Go through the description, discussing the requirements of the position. During this review, ask open ended questions, allowing the prospective employee to share information about his or her work style as it relates to the job functions. Using the job description ensures that you are asking all applicants the same questions and having each prospective employee review the functions of the open position. Do not ask personal questions; questions should all directly relate to the requirements of the job.

You can, for example, point to the hours set forth in the description and ask if the individual can work those hours. You can also state a requirement, such as, "Our sales managers often hold team meetings on Thursdays at 4:30 p.m. and that is a requirement of this job." However, there are questions that will clearly get you in "foul trouble," such as whether someone has childcare issues in the afternoon or has difficulty getting up in the morning (which might indicate a health issue). You can ask, "In previous jobs, do you find that you called upon your customers in the afternoon? Were morning appointments more successful for you? In what way?"  List this advice under playing good defense against discrimination claims.

On the other hand, don't be afraid to play a little offense either. For example, if you only ask questions with a yes or no answer it is not going to be very useful. If you ask a question like, "Did you meet your sales goals at your last position?" most candidates will say yes. Okay. Yes, he met his goals. But what did you really learn? In the alternative, ask him about the types of sales goals that were in effect at his two most recent employers. Then follow with a three-point shot: ask whether those goals were related to company numbers, individual sales or team efforts. Then engage the applicant in a discussion as to whether he or she would have revised the calculation of those goals and what suggestions he would have in making the goals tied to his own sales, and why.

In this age of neutral references, it is unlikely that you will learn much from your "scouting report," i.e., an applicant's references from prior employers. You will receive a confirmation of the title of the position held, the duration of employment, and sometimes the salary. The applicant is usually under some confidentiality or proprietary agreement and cannot discuss specifics of accounts and sales. However, you can ask the applicant if she has any e-mails or letters from her former supervisor praising her for exceeding her last year's sales goals. Just make sure that ALL other information (names of accounts; amount of commission, etc.) is redacted to avoid any issue of impropriety (more foul territory).

Be creative and know the rules. Play the interview game like a winner and you may end up with another star on your team.

Lecture Less, Help More

Busy company leaders often lecture, pressure, or intimidate salespeople as a way to get them to achieve quota. They say things like, "I'm baffled by the fact that we don't do more business with software companies.  There are a million of them just in this area. You'll face consequences if you don't bring in a couple of those companies this year.  I'm very serious about this."

For 2014, set a goal to become more of a helping / coaching manager than a lecturing / intimidating manager.  Partner with the sales representatives as you ask them to improve their performance in a given area. Work with them to accomplish sales goals.

As an example, let's look at an exchange between president (manager) and salesperson regarding cold calling:

Lecturing / Intimidating

"You've got to cold call.  You lost accounts in your territory last year and had no new business to replace that sales revenue.  I want to see a lot of new business this year and I mean it.  I can't afford to keep you on the team if you can't open new accounts."

Helping / Coaching

"This last year, you lost 10 customers in your territory - one large, three medium-sized and six smaller accounts.  Unfortunately, with little prospecting activity, you had no new business to replace those clients. This situation is serious. Companies lose market share and go into decline when salespeople don't bring in new accounts."

Ask Questions

• How do you go about cold calling currently?
• What percentage of your time is spent cold calling?
• How do you determine who to call?
• What about cold calling makes you feel uncomfortable?
• How can I help you?

Lay Out a Plan

"It seems like you did very little prospecting this year.  I think Barbara does the best job of cold calling at our company.  I've spoken to her about this and I'd like you to work with her for at least two days this month. Sit with her and listen to her calls. Accompany her when she meets with or makes a presentation to a new prospect.  Ask her about what you observe. In addition, please research books on cold calling.  Pick out a few that look good to you."

Remain Involved

"Let's meet again in two weeks.  By that time you'll have worked with Barbara at least once and have a list of cold calling books for us to discuss.  When we talk, I'd like the two of us to work together to assemble a list of prospects as well as set cold calling and new business revenue goals for 2014."

Rep's Reaction

Presidents and owners worry that reps won't take them seriously if they don't make a speech, yell, shake their fist, coerce or browbeat them.  Remember, the reps have grown accustomed to the dramatics.  By handling the discussion as more of a mentor / coach, you demonstrate how serious you are.  You do that through asking questions, listening, making suggestions, giving your time and showing support. 

When you use this new style, reps pay more not less attention. Rest assured, the salesperson gets the message. To stay with the organization they must prospect for and close new business - end of story.

When leaders manager by "getting tough" then waiting to see if the rep improves their performance, they tend to let reps remain with the company longer.  Ironically, most leaders discover when they've invested some time in a rep and things don't work out, they find it easier to put them on warning and eventually terminate them.

Going Forward

If this rep works hard and starts bringing in new business, you might want to send them to an advanced training course on prospecting.  You could set up a special contest that rewards their cold calling efforts.  Many possibilities exist, provided they put in the effort.  Meet with them regularly and hold them accountable to their goals. Compliment them on improvements they make.

You have a right to expect certain things from a rep (increasing business within existing accounts, opening up new vertical markets, selling the entire product line, and yes - opening new accounts).  Think about the salesperson you're most upset or disappointed with. Before you give up (or blow up) ask questions, offer assistance - be on their side.  See how it works out. 

My Blog

Earlier this year, I launched a blog to complement the longer articles I write in Sales Management Tips.  Check it out from the blog link on my website.

The Accidental Sales Manager Guide to Hiring

Available on my website, "The Accidental Sales Manager Guide to Hiring" summarizes the pre-hire process recommended in "The Accidental Sales Manager."

Site Visits - Making the Most of Them

A reader writes, "Whenever possible, I advise my sales reps to ask any new prospect they're calling on for a tour of their facilities.  They tell me they would like a tour but feel unsure about the right time to make that request.  What are your thoughts?"

Sales representatives should always ask for a tour of the facilities.  It adds to their overall knowledge of the company they hope to do business with.  Timing does matter, though.

Visiting Prospects

When the sale moves beyond the discovery phase and a potential new customer shows a reasonably strong interest in your company's product or service, that's the right time to inquire.  Suggest the reps say something like, "When it's convenient, would you mind asking someone to give me a tour of the assembly warehouse?"  (The rep should be specific enough in their request to show they've done their homework.)

Most decision-makers welcome the chance to conduct the tour themselves.  If they're too busy, appointing someone else never seems to be a problem.  The better you know their business, the more you will be able to help them. Seeing a manufacturing floor, a laboratory, or a warehouse provides the rep with new and interesting information to consider before putting a presentation together or submitting a proposal. 

Be Engaged  

Reps should resist the urge to treat the tour as a pleasant walk-through that kills a little time.  High performing salespeople take notes, ask questions, and when safe and permissible, take part in the process.  If you get introduced to other employees, ask how long they've been with the company and doing this particular job. 

Anyone working at a machine or assembling a part appreciates a chance to talk about what they do all day long.  You never know what they might say that might give you an idea for a current or future presentation.

Look for Opportunities to Learn

During the tour, most hosts let their guard down at some point.  I remember a president saying to me one time, "See that machine over there?  That was my job.  It helped put me through college."  Another admitted that when he's really stressed out, he comes onto the floor and helps sort the returns.

Others might talk about expansion plans or moving a particular machine from one area to another.  Regardless of what they say, it's usually great information to have.

Revisits

If some time has passed since a rep toured the facility of a long time client, encourage or remind them to suggest another.  Typically their contact at the company will say, "Not much has changed, but OK."  Once the tour starts, it usually turns out that quite a bit has changed. 

During the expedition, the rep might ask, "The last time I was here, wasn't this area empty?" The customer might say, "Well yes ... has it been that long?  We moved our laser machines over here.  Now over to the left, you might not know about this either."  At that point the tour is off and running, with the sales rep jotting down all kinds of new information. 

Handling Remote Locations

Many reps make sales calls to an administrative office with a manufacturing facility in another state - or even overseas.  Each manager has to make the decision as to whether a trip to this facility makes economic sense.  If the expense seems reasonable and the company could or does do substantial business with your organization, I highly recommend having the rep make the trip.

When the expense proves too great (at least in the short term), have the reps inquire about some type of virtual tour.  Perhaps they could Skype with a few of the key employees at the facility.  Though it won't take the place of an in person visit, the rep's efforts will get noticed and they'll learn a great deal.

Security Concerns

A lot of companies, especially larger ones, have security confidentiality concerns.  As a salesperson, you may never make it past a conference room - let alone be taken on a tour.  Some organizations ask visitors to sign non-disclosure agreements before entering the building.  It never hurts to ask for a tour, but company's individual security policies need to be respected.

Play Back What You Heard / Saw

Salespeople can and should do their best to incorporate things they've learned from their visit to better serve the customer.  Though they won't use all of what they learn in any one presentation or proposal, having a thorough knowledge of what a customer does and how they do it will help close more deals and build stronger business relationships. 

Learn More about Your Sales Candidates

A reader writes, "Many of my fellow business owners ask sales candidates to take a pre-employment assessment at some point during the interview process. My research indicates these tools range in price from $90 to $300 per assessment. If I assess 5 candidates, I'm spending $450 to $1500 dollars. How do I justify this expenditure?"

The time and money involved in hiring a salesperson seems daunting. Add to that the cost of a high-quality assessment and the expenses continue to increase. Let's look at the cost of a bad hire who stays with your organization for one year. Does money spent up front on assessments make sense?

The ROI

This is a no-brainer as far as I'm concerned. You can look at it a couple of different ways.

First, let's say you pay reps $150,000 per year in salary, commission, bonus, and benefits. And in that first year you pay 20% to a recruiter for sourcing a candidate for you. That's $180,000 first-year expense for you. The $1,500 assessment cost represents less than 1% of the costs of that salesperson for their first year, and greatly reduces your business risk in hiring them.

Here's another way to look at it. Let's say that your salesperson's quota for their first year is $1.5 million. If they perform at 100% of plan, that's all well and good. But let's say you hire someone who has one area of weakness that's readily diagnosed by an assessment but undetectable by you. The cost of the assessments, $1,500 / $1,500,000 represents 0.1% of the salesperson's annual quota. Put another way, if the assessment identifies only a single area that will help a salesperson close just 0.1% more business against their quota, the assessment pays for itself. And in my experience the issues typically found are much more significant than that.

The Diagnostic Benefit

Let's take an example of a new hire. Out of the gate, the new salesperson starts off strong, easily setting up meetings with decision makers. She keeps good records, uses your CRM system as well as or better than any tenured rep, with up-to-date notes and reports done correctly and turned in on time.

Mid-way through the year, you realize she struggles with getting decision-makers to agree to second meetings or product demonstrations. This translates into lighter sales forecast and not very many closed sales. Though the rep regularly calls on her current accounts, she loses business to the competition.

Assessment Results

A reliable assessment might have told you this candidate excelled at setting up appointments. Once in front of decision-makers, however, she shies away from asking strong questions. This rep tried to move the sale along on the strength of her personality instead of relying on a strong methodology.

That same inability to ask questions hurts her with current customers as well. She isn't able to uncover new opportunities -- leaving room for the competition to make inroads.

Surprising Benefit

Managers often have a fixed idea of who they'd like to hire for an open position. Seeing assessment results occasionally causes them to change their mind. The manager in this scenario wanted to (and did) hire a traditional salesperson. But he'd long been considering hiring a business development rep as well -- someone who would speak to and set appointments with decision-makers for other outside salespeople.

Since he'd never come across a qualified candidate, he stopped pursuing that approach. But based on an assessment, although he might have passed on this rep for the territory position, he might have had some interest in them for the business development position instead.

That scenario would be a win for both parties. The manager offers this candidate a position she's more suited for, and he unexpectedly fills a position.  

The Wrong Hire

When a sales hire doesn't work out, your company loses ground with current customers and cedes brand new deals to the competition. Compared to the real costs of an underperforming salesperson, a reputable assessment is a drop in the bucket.

Salesperson's Wardrobe Issues

A reader writes, "One of my outside sales representatives dresses in a manner that makes me uncomfortable. He practices good hygiene but suits are baggy, shirt sleeves are a little too long, and his pants bunch up around his shoes. When I've broached the subject a few times, he reacts defensively. He feels that customers buy integrity and honesty, not fancy clothes. I have no complaint about the overall good service he offers his customers. He isn't my top performing rep, however, and I think his attire costs him sales. How do I get through to him?"

This sensitive and tricky topic comes up frequently in my discussions with clients.  For some helpful tips I turn to Annie Kip, a Style Consultant for J. Hilburn Men's Clothier
(anniekip@jhilburnpartner.com).  "As much as we might like to ignore it," she says, "appearances do matter.  Your sales force serves as the public face of your company and should accurately reflect your business and its brand.  One of the easiest ways to convey authority, credibility, and value is through professional clothing and a polished appearance."

Seek to Understand

Kip recommends addressing the problem of your sales rep's appearance with some of the same tactics you might use to sell to a reluctant client.  "Ask questions about his resistance to wear what he calls 'fancy clothes.'  Clarify how he defines that term and his thoughts about spending money on clothing. Segue into discussing the impact personal presentation has on one's ability to connect with customers."

Talk Compensation

Put some numbers together.  If the rep in question started paying attention to his work wardrobe, how much more do you think he could reasonably earn?  Take an educated guess.  You aren't being held to an exact number.  Say it's $7,000 the first year and $10,000 the next. Helping your sales rep see how dressing well benefits him financially helps motivate him to improve his overall look.

Collaborate

"Rather than criticizing, you might share your experience with seeing the difference that dressing professionally has made in your own career," adds Kip.  "Tip him off that the local discount store just got a shipment of Italian cotton dress shirts. Offer an interesting statistic such the fact that the human brain processes visual information 30 times faster than verbal information. Mention the name of your tailor."  

Overwhelming Details

Your rep may not understand what he needs to do to clean up his look.  Especially if he isn't a standard "off-the-rack" size, finding clothing that fits and feels comfortable might prove difficult. "Does he know," she asks "that sleeves should extend no more than an one-half inch beyond his suit coat sleeves or that trousers should be hemmed to reach the top of the back heel of a dress shoe? These details matter. Once your sales rep is in the tailor's shop," says Annie, "the tailor will most certainly offer suggestions about other adjustments he can make to help his clothing fit better."

Dressing Professionally Not Expensively

"Expensive brand names intimidate a lot of people," offers Kip, "they think a big investment is the only way to get a polished look. This is not the case.  A professional wardrobe of clothing can be acquired on any budget and expanded over time. Sales reps can build many different looks mixing a few shirts and ties with one well-tailored, good-quality suit."  

Win-Win

Some executives Annie has worked with generate awareness and create a team focus on professional dressing by running sales incentives rewarding the top performer with a new, custom-made shirt, suit, belt, and tie.  The winner receives positive feedback from colleagues and begins to feel the sense of pride that comes with wearing a polished look.  "Structure the competition creatively," she stresses, "so the reps needing it the most will get the intended benefit of the incentive.  This helps remove barriers to dressing more professionally and encourages a sales culture that places value on a polished personal appearance."

Conclusion

"Though what someone wears is a very personal matter, his appearance impacts your business.  So help this rep reach his potential by understanding his reluctance and offering information and guidance -- just as you would help a customer come around to seeing how much they could benefit from buying your product," says Kip.

Annie and I know from experience that top salespeople ensure that everything about their appearance and manner communicates attention to detail, inspires confidence, and creates a personal connection with buyers.  Your sales rep should be dressed at least as well as his customers. His appearance makes a lasting statement long before he makes an impression with his presentation.

Minor Quota Misses Result in Big Frustration

A reader asks, "One of my sales representatives often misses quota by just a bit - 5% or less. No advice I've given them so far has seemed to work. They're frustrated and I am too. I'm not sure how to help them. Any suggestions?

So close - just not close enough. This all too common problem leaves many of my clients perplexed and confused. Because they almost always achieve their revenue target, clients tend to advise the rep in vague terms such as, "Be at your first call a little earlier in the day" or "make 5 or 10 extra dial outs."

Though well intentioned, those managing sales reps need to drill deeper and look for particular problem(s) such as:

• not spending enough time prospecting
• selling a lot of one product and very little of another
• calling on favorite customers too often and other customers not often enough

Prospecting

A client of mine hired a rep for a sales position that involved 85% prospecting. In their previous position this salesperson spent only 25% of their day cold calling. Visits to current accounts took up the majority of their sales day.

Sales reports and conversations with the rep revealed they were really only spending 40 - 50% of their day prospecting - an increase to be sure, but not enough to succeed in their current position.

The sales representative and my client worked out a plan to gradually increase the number of daily prospecting calls over the next three months. In addition, the rep enrolled in a refresher course on cold calling skills.

Selling the Entire Line

On average, sales reps #1 and #2 achieve their revenue goal by selling 70% of Product A and 30% of Product B. Rep #3, always struggling to make quota, sells 84% of Product A and 16% of Product B.

Presented with this information my client took action. She showed Rep #3 both his numbers and those of the other two. Rep #3 met with and accompanied #1 and #2 on calls to specifically observe them presenting both products. Additional in-house product training has been scheduled.

Rep #3 understands he needs to increase sales of Product B by at least 15%.   He and his manager set a goal of improving sales of Product B by 3 or 4% a month for the next 4 months. With specific and reasonable targets set, the rep feels optimistic about his ability to reach those goals.

Inconsistent Customer Visits

Another client of mine manages a sales rep who "practically lives with" her top 15 accounts. She anticipates their needs, solves any problems, and personally delivered a part they needed the next day. Delivering that part, however, took the entire day (the client being several hours away). Not an emergency, the regular driver could have handled it.

After reviewing the reps "top" 15 accounts, we discovered those accounts were her 15 favorite. She treated several of the top revenue producing accounts as an afterthought. In adding up the revenue for the rep's top 15 accounts, my client and I calculated an overall decrease of 5% YTD.

Discussions with her revealed that she felt uncomfortable with - and discouraged about - the lack of progress with some of the top accounts. She and my client worked out a call schedule that has her spending most of her time with her major accounts and the right amount of time with her mid-level clients. My client will also accompany her on calls to clients where she isn't comfortable, to help her make some progress.

Take the Time

When a rep "just misses" quota regularly, don't reluctantly accept the situation. Avoid labels like a "disappointment," "underachiever," or "mediocre hire." Put some effort into discovering what the problem(s) might be. Review their numbers. Drill down a bit. Compare their performances with other reps. Consider their strengths and liabilities.

Managers need to isolate issues, ask questions, use examples, offer guidance, set goals, and hold reps accountable to improve the situation.   But above all else, when you speak with them, be specific about where the problems lie and what changes need to be made going forward.

A More Inclusive Interview Process

A reader asks, "As company president, I have always conducted any interviews and made the decisions when hiring sales reps. I would like to change this and involve other employees in the interview process. How do I go about it?"

Everyone wins when employees participate in the selection of a new hire.   The candidate meets more people within the organization, coming away with a better sense of the overall culture. You benefit from listening to the opinions of others before making a final decision. Employees feel their views count and have greater buy-in for the candidate you select.

The Best of Intentions

Though well meaning, many presidents or sales managers begin including other employees in the selection process by saying, "Oh, by the way, I'm interviewing a candidate for our open sales position this morning. Would you like to talk with this person for a few minutes after I'm done speaking with them?" Others drop a prospective hire off at an employee's cubicle unannounced. A company president told me about spontaneously introducing a candidate to an employee playing solitaire on their computer. Another mentioned leaving a salesperson to chat with a staff member. When she came back the two were enthusiastically discussing their favorite restaurants.
 
These situations lead to awkward, unprepared conversations between the parties. Executives leave themselves open to this type of occurrence when no pre-planning takes place.

Consider the Participants

Include only those who would interact with the new sales rep on a regular basis. If hired, your new salesperson can meet and chat with other employees during orientation. Unless we're talking about a very small company, having a job applicant meet every one in the organization is tiring, confusing, and a time waster.
 
I recommend the potential hire meet with four people at most. If you've never included other employees in the interview process before, start with just one or two.   See how it goes.

Discuss Beforehand

At least a week before the candidate comes in to meet with you, get together with the selected staff members. Let them know you'd like to include them in the interview process. Ask them what questions they would like to ask of sales candidates.   Talk about what you would like to learn from their conversations with the applicants. Let a discussion take place. Be open to suggestions on improving the overall hiring process.
 
Leverage each employee's strengths. Have the Director of Customer Service inquire about post-sales account management or the Director of Marketing ask about lead follow-up.
 
At the close of the meeting, ask each person to submit a list of questions to you. Look them over and get together again to finalize the lists. Candidates for any position resent having to answer the same questions over and over again. Make sure that each staff member makes different inquiries.

Present an Organized Front

The day before the candidate arrives, tell them who they'll be meeting with. Give them a chance to do some research on LinkedIn. They might prepare some questions of their own.
 
Email the salesperson's resume and interview time slots to the group.   Stop by after the last interview and bring the candidate back to your office. Answer any last questions. Escort them to the reception area and make your goodbyes. They will be impressed by and appreciate all of these courtesies.

Follow-up

Don't let too much time elapse. At some point during that day or the very next, convene the interview group. Share thoughts, opinions, and observations about the salesperson. You should go last. Once all of the applicants have been met with, rank them by order of group preference.  
 
Not everyone will be in agreement, but the opinions and insights will prove valuable. You'll feel more confident when you extend an offer to a candidate.

Candidates' Impressions

Many presidents or managers wait until the second interview to have a candidate meet with other employees. If the initial interview does not go particularly well, they won't be wasting valuable time on an unsuitable candidate. I agree with this.
 
Just as you assess applicants for your open position, they evaluate you and your organization at the same time.   By allowing different people to participate in the interview process, the candidate sees a company with a professional, thorough, organized, and inclusive approach to hiring. Top performing sales reps want to work for a company embodying those qualities.

I've Read the Resume. Now What?

Since the economic downturn, I haven't hired any new salespeople. I'm finally able to, and am currently reviewing resumes. Many candidates show a strong work history through 2009 or 2010. After that, they jump from job to job - 6 months here, 9 months there. Should I consider them? How do I find out whether their work history is related to the recession or a poor job performance on their part?

Looking at resumes typically takes up part of my day - every day. I have seen exactly what you describe for several years now. I'll share some of my thoughts on the subject:

Consider the Work History

If you look at their pre-2009 work history, does this candidate fit your organization? How long did they work for each employer from the beginning of their career through 2009? What were their sales accomplishments during the given time periods? If your overall impression, less 2010 to 2013, is favorable, consider them for your open position.

Look at their Industry

In every difficult economic period some industries trend downward while others fare better. Many real estate agents and mortgage brokers sought employment elsewhere. So did those employed by the auto industry and its suppliers.

If an industry experienced permanent downsizing, a potential candidate simply may not be able to work in that field again. Job hopping might have resulted from their trying to find the right new fit.

Did They Take a Logical Next Step?

Lately, I've been looking at resumes from salespeople selling large equipment and tools to the construction industry. After they were laid off, many of these applicants started working at "big box" home supply stores as an interim step.

It makes sense to me - using their expertise in another capacity until the economy improves. How could I hold that against them?

Ask Them for Specifics

Have them explain what happened with the sales position that ended in (for example) 2009. Ask about the three jobs they've held in rapid succession. What happened that caused them to leave so many jobs in a row? What did they learn? If they had to do it all over again, what might they have done differently?

Emotional or Mature Approach?

It's alright for a candidate to acknowledge that this has been an upsetting and frustrating time for them. As human beings they have a right to their feelings. But when discussing the matter, do they become emotional - maybe lash out or blame others - or are they able to articulate what happened in a mature, objective manner? Look for a candidate with some perspective. Use the discussion as a gauge of their resiliency.

If Yours is a New Industry to Them

Does coming to work for your organization, even if they're still in sales, represent a career change? If so, they need to make the connection for you. Why does this position make sense for them? How does it compare with their previous job(s)? Do similarities exist (length of the sales cycle, end user, seasonal buying habits)?    

Do they see any potential difficulties? How quickly do they think they'll be able to get up to speed? How will they go about doing so on their own time? Look for thoughtful, realistic answers.

Your Due Diligence

Jump on LinkedIn and learn more about this candidate and their previous employers. Call your networking contacts and ask for introductions to executives or business owners in the industry this candidate worked in. Learn directly from them how the economic downturn affected their industry.

When checking references, insist on speaking with former managers.

Get in Out of the Rain

Share your concerns about the possibility of their accepting a position with your organization, waiting until the economy improves, and then going back to a job within their previous industry. See how they respond.

A serious applicant should mention a genuine interest in your products and services. They should talk about the effort they'll put in to learning their new job and their reluctance to leave all that behind. It could be they feel that their former industry is just too volatile and they don't want to risk it again - ever.

Though no guarantee exists, their answer should help you make a decision about taking that risk.

Sales Skills Transfer

Salespeople with good solid sales skills transfer their talents to other industries all the time. If you follow a thorough process when interviewing these candidates, you may find yourself hiring a motivated sales rep who you might not have met otherwise.

Salesperson Hits and Misses

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

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

Run the Numbers

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

Get Visual

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

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

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

Reactions

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

Your Side of the Story

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

Wait a Few Months

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

Take Proactive Measures

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

Changing Your Behavior

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

Conclusion

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

Visualizing Changes in Your Top 20 Accounts

In 2013 I want to coach and guide my reps to focus on the top customers in their territories. I know I can create a list and discuss each account with them. What else could I do that might have a greater impact on how they interact with these very valuable customers throughout the year?

If the top 10 or 20 accounts in a salesperson's territory are below quota as a group, achieving their overall sales revenue goal becomes difficult if not impossible. These elite customers typically represent more revenue than all their other smaller accounts combined.

Helping your reps create game plans for these accounts will increase the chances of their meeting and exceeding their sales quotas for the year.

Steven Schottenfeld, a colleague and data analyst at TraceTech Solutions suggests this simple but effective exercise.

Create a list of the Top 10 or 20 customers in each rep's territory. Then follow his instructions below:

1. Generate "List 1" - the Top 10 customer list for the year that precedes the last full fiscal year.
2. Generate "List 2" - the Top 10 customer list for the last full fiscal year.
3. Place them side-by-side, as shown in Table A.  
4. Cross out any customer in List 1 that isn't in List 2.  These are former "great" customers who fell out of the Top 10 in the last fiscal year.
5. Circle any customer in List 2 that isn't in List 1.  These are "fast-rising", high-value new customers.
6. Draw a line from the remaining List 1 clients to the corresponding List 2 clients.  These customers are still in the top 10 but may have moved up or down in the ranking.
7. The results for the example are shown in Table B. 

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Table A

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Table B

Now examine the two lists. Interesting, sobering, or surprising might include some of the words that come to mind. What changes a year brings!

A quick comparison shows, for instance, that Clark Construction dropped from number two to number eight with a loss of over $150,000 (-77%) while SBS moved from number ten to number three with an increase of almost $150,000 in revenue (+729%). Quality Construction remained stable at number four. Overall, the top 10 Accounts were off by 8% from 2010.

With this type of information the conversation moves from the general, "be sure and spend the majority of your time in the field with the Top 10 Accounts, especially Clark Construction. That account was disastrous last year" to the specific, "Let's look closely at Clark Construction -- order by order, product by product, month by month. After we have a better understanding of what happened, set up a meeting for the two of us to meet with the president. Following that meeting, we'll devise a strategic plan for the year and meet with her again."

Objective data allows you to give the rep specific guidance on a top account and help them increase their earnings.

Thanks so much Steve, for this great suggestion.

Improving Bad Emails

A reader writes, "One of my better sales reps often sends out emails loaded with misspelled words, grammatical errors and too many attachments. Whenever I see one he's sent out I'm embarrassed. Short of short of editing every email, how can I fix this problem?"

Sloppy emails reflect badly on your company. Salespeople need to view using any means of communication that identifies your organization (from electronic to old fashioned letterhead) as a privilege not a right. They must send out business appropriate correspondence always.

Carelessness vs. Lack of Skills

You know this employee. Presumably you've seen other written work of his. Has too much texting or tweeting caused him to become careless or does he have weak writing skills in general?

Carelessness

Select one or two of his particularly egregious emails and read them together. Hear his thoughts on them. If he makes excuses, remind him these two don't represent the only badly written emails of his that you've come across.

Ask him a question like, "If a salesperson was asking you to spend $63,000 of your company's money, what would you think if you received an email like this from them?"

Get a dialogue going. Discuss the importance of accurate business correspondence. Underscore the need to be much more careful when writing and sending emails - and that you'll be monitoring the situation.

Lack of Skills

If his shoddy emails represent generally poor writing skills, say something like, "I've been noticing a problem with any written work that's required of you." See what he says. Be patient. The conversation might be awkward.

When the rep in question performs well otherwise, it might be time to invest in some training. Sign him up for a course in business writing or ask him to read a book such as:

• "Email A Write it Well Guide" by Janis Fisher Chan
• "Strategic Business Letters and Email" by Sheryl Lindsell Roberts
• "The Encyclopedia of Business Letters, Faxes, and Emails" by Robert W. Bly and Regina Anne Kelly

Discuss his progress periodically and keep an eye on any correspondence with customers.  

Templates

Savvy sales organizations create templates to fit all different kinds of letter writing occasions like introductory and follow-up emails. Talk to those at your company with strong writing skills. Put some of their better correspondence into files for all to use.

Insist, at least for a period of time, that new sales reps as well as those reps with problematic writing issues stick verbatim to the templates as written.

Attachments

Eager to get prospects excited about their product or service, sales representatives sometimes attach multiple files neither asked for by the customer nor necessary to move the sale forward. Ironically, this overzealousness may annoy or push the prospect away.

For introductory emails especially, if reps attach a file at all, it should be very general, with no mention of pricing. It's too premature in the sales process for that discussion.

Going forward, any attachments should be requested by the customer or mutually agreed to by the rep and the customer.

Email and other electronic means of communication have increased the speed and efficiency of correspondence between sales reps and their customers to a degree not thought possible, even 20 years ago. With this advantage comes a responsibility for sales managers and salespeople alike to safeguard against mistakes, abuse and over use of technology.

Managing Changes in Client Circumstances

A reader writes, "Recently, I sponsored a sales contest for my reps. To win a gift certificate at their favorite store, a rep's top 15 accounts needed to finish10% ahead this quarter versus last. All but one rep enthusiastically embraced the contest. This individual claimed that several of his top 15 accounts from last quarter should no longer be in the top 15 for this quarter.  I want to be reasonable. Under what circumstances should certain accounts be switched for others?"

What a great contest! Most rep's top accounts do fluctuate. Number three switches places with number five and so on. Reps and companies in all industries experience this. These changes affect sales contests, forecasts, and commission pay-outs.

In certain instances you as the manager should give serious thought to moving an account out of their top group. Issues could include the following.

Client Who Has Lost a Contract

Sometimes your company's customers lose contracts or large clients of their own. An event like this impacts their bottom line dramatically, resulting in downsizing or significantly reduced hours for employees. This leaves even the most effective sales representative unable to recoup the lost revenue.

Customer Credit Issues

Accounts get put on credit hold due to concerns with outstanding balances. Many remain in this status for more than 90 days. Reps bear little or no responsibility for their client's cash flow issues and shouldn't be penalized as a result.

Client Discontinues Use of Your Product

Permanent changes to a client's business model may result in a client no longer using a product you sell to them. Working with the rep on price negotiation or other adjustments won't help. It's not a matter of their buying a cheaper or generic version. The client will no longer be buying this product at all. The rep cannot sell them anything else from the product line.

Seasonal Variations in an Account

Due to the nature of an account's business,they might buy a lot in one or two quarters of the year and little or no product in other quarters. No amount of effort on the part of the rep would or could change this.

In all four of these scenarios, a rep may not be able to recoup the lost bookings from these accounts in the next few quarters or years - or possibly ever. Fairness dictates that you consider removing these accounts from the rep's top roster and then replacing them with the next account down the list.

Replacing the Revenue

Removing a company from the rep's top account list or allowing them to alter a forecast might, but does not necessarily mean, they are off the hook for the revenue generated by these accounts.

Depending on the severity of the drop in sales from an account, the rep might be expected to make that number up through one or a combination of accounts. This requires a team effort between a manager, the sales reps, and other departments like marketing. Reps need to feel supported as they strategize.

The Sales Contest

Back to your original question, let's say the rep's sales for Q1 totaled $2,100,000, making $2,310,000 their Q2 goal for the contest. If the account that replaces the problematic one brings in $50,000 less in revenue per quarter, you need to be the judge as to whether or not you hold the rep to the full $2,310,000 or come up with some number in between.

Other Situations

Some reps will work a territory where certain customers have been hard hit by an economic downturn. Others will experience a buyer or decision maker with whom they had an excellent relationship leave a company. Companies changing the direction of their business prove problematic for reps.

These situations make the position of sales a challenging one, but do not necessarily mean removing the account for the purposes of a sales contest or allowing the rep to alter their sales forecasts. It means they need to work harder and smarter.

Always keep in mind that sales contests keep reps focused through the tough days in sales. Try to make a decision that honors both the company goals and helps the reps overall motivation.

Saying "Goodbye" to Unresponsive Prospects

A reader writes, "One of my better salespeople continues to contact prospects long after they've stopped returning her calls and emails. The whole exercise demotivates her and impacts her sales. I think she should move on at a certain point. What should I encourage her to do?"

Give her kudos for persistence. Discuss the futility of continuously calling a prospect who may no longer be interested. Offer her options for closing the lead out in a professional manner.

Types of Prospects

Salespeople identify likely buyers through leads, sites like LinkedIn, research, networking, and other means. Next, they begin the process of introducing themselves by phone or email. At this point the prospect does one of three things: 

• Tells the rep they are not interested
• Doesn't respond to voice or emails
• Expresses preliminary interest

No Interest

When prospects express a lack of interest, reps either stop contacting them or agree to call in a few months time when things may have changed. It depends on the discussion between the two parties.

When a prospect fails to return any calls or emails from the salesperson, the rep must decide how often and how long they want to keep trying. Some reps, especially those selling a big ticket item with a long sales cycle may continue to contact a prospect for years.

Some Interest

Interested prospects might agree to an initial meeting, a webinar, or a product demonstration. Enthusiasm for some peaks after the product demo; for others it continues straight through to asking for a proposal.

No matter which phase they reach in the sales cycle, some prospects drop off the radar at some point without explanation. Phone calls and emails suddenly go unreturned. This type of prospect and this situation typically cause the most confusion and anxiety for a sales rep.

Reality Check

When weeks or months have passed with the prospect making no effort to communicate with the salesperson at all, encourage them to stop trying - at least for a period of time. Advise them to use an email or voice mail like the one below to acknowledge the situation:

"After having made several attempts to contact you, I am going to assume that purchasing XYZ Software is not on the top of your priority list right now. In the event that you would like to look at the software again for an upcoming project, please contact us. I enjoyed getting to know you and your team. Thank you for your interest and we hope to hear from you soon."

A positive, upbeat, sincere message like this gives the sales rep equal business stature to the prospect and leaves the door open for potential future discussions.

Rep Resistance

"No way," shrieks the rep, "They were really interested. Let me keep them on the forecast. They'll come around."

Help the rep see that this sale is no longer viable. It's stalled, off the rails, going nowhere. Use whatever words work for the situation. Let them know that being disappointed is OK, but continuing to expend their energy on a dead end is not. They need to refocus and concentrate on other leads with potential.

Surprise Call

After hearing the goodbye message some, though not all, customers pick up the phone or send an email. Many outright apologize and offer an explanation for the lapse in communication.
This doesn't always mean the prospects remain interested. Some choose to stay with their current solution, while others may have signed with a competitor. Some might have gotten sidetracked with other projects and ask the rep to call in a few months time. Others still may be navigating a complex maze of internal politics or approvals moving the project forward.

Even when a potential client doesn't bother to contact them at all, the rep gets a sense of closure. They feel better about themselves, the company, and selling in general.

Final Thoughts

No rep or manager enjoys the thought of leaving a "goodbye for now" message. It signifies the potential end of a once promising sale. Strong sales reps have emotional maturity. Letting go represents a part of the sales process. Help them to spend their valuable time elsewhere: identifying new leads, nurturing their pipeline, and finalizing closeable business.

(Re)designing Tiered Compensation Plans

A reader writes, "My company's sales compensation plan has three commission tiers. Not once since the plan has been in place has a rep ever hit the highest tier. They told me they wanted to earn more money and seemed excited about the plan at first. I thought reps were supposed to be money motivated. What happened?"

Tiered compensation plans offer layered payment structures. Salespeople earn a larger percentage of commission or bonus as their sales increase.  

As an example:

Sales Revenue	Commission Percentage
$0-$375,000	4%
$375,001 - $500,000	6%
$500,001+	7%

Tiered plans challenge mid-level producers to sell more and reward superstars for superior performances.

Painful truth

Though tough for business owners to hear, offering a lucrative commission plan does not guarantee success. If no salesperson ever hits the top tier, it demotivates the sales staff.

Worse yet, when an unsuccessful comp plan of any type remains in place for a period of time, the salespeople make jokes about it. I know this from experience as both a salesperson and a sales manager.

History

Typically, flawed tiered compensation plans get put in place for three reasons:

• Growth targets
• Extrapolating from a unique customer
• Extrapolating from a unique salesperson

Growth targets

Let's say a business owner decides to grow their company 50% over two years. With little thought to rep workload, sales territories, lead generation, or past performance, they increase the sales quota to match. At the same time, they offer a more generous compensation package.

The owner thinks, "Sales people are money motivated, right? No problem. Sure it will work." But the owner quickly grows frustrated with the lack of stellar results and so do the reps.

Extrapolating from a unique customer

Several years ago, a salesperson closed a large deal - maybe the largest sale the company had seen to date. The business owner wants more sales of that size closed on a regular basis. Who could blame her? It happened once, right?

Before thinking about how and why this particular sale occurred in the first place, the business owner alters the compensation plan to encourage larger deals and waits for them to start rolling in.

Extrapolating from a unique salesperson

At one time that rare breed, the superstar, was in your employ. During their "era" they blew their quota away. They resigned - you guessed it - in a disagreement about money. Vowing never to let another rep leave because they felt they weren't earning enough, you put a higher commission tier in place.

However, none of the current staff has as much talent as the superstar.   Not one has ever come close to the superstar's revenue production. Everyone feels discouraged.

Don't delay

Never stay with a compensation plan that simply isn't working on any level. Take corrective action as follows.

Review the numbers

Analyze the current staff's performance over the last few years. Calculate the monthly / quarterly averages for both the individual reps and the group. Identify the top and bottom performing reps.

Let the numbers guide you toward a more realistic top tier for a new compensation plan. Suggestion: At least 25% of your reps should achieve the top tier each year.

Talk with the reps

Always, always, always... ask the reps what motivates them. What would they like to see in the plan? What has kept them from selling more? Most business owners express surprise at the realistic advice they receive from their staff.

Staffing

Sales staffs need the right combination of talent, motivation, and skills to succeed with any compensation plan. Those skills must be a strong match for the sales cycle of the particular product the salespeople represent.

Do you have the right people and products in place so the sales staff can take advantage of a high performance comp plan?

The right idea

You created the tiered plan to motivate your staff. The success of your business depends upon it. That's the right thing to do. Revisit the existing comp plan. Change the tiers to adequately reflect the performance of your current sales staff for now.

After a period of time, begin to make any changes necessary to upgrade the overall performance of the entire sales organization.

One final note

Many of my first-time clients, upon inspection, have one or more of their salespeople on salary-only compensation plans. While this type of compensation is typical for lots of jobs, it isn't typical for sales.

A lot of business owners persuade themselves (or are persuaded) that commissions "just aren't appropriate" for their business. You don't know how many times I've heard this. Many of these same business owners eventually put in commission plans that resulted in increased sales and a more satisfied staff.

If this resonates with you and you want to reconsider your sales compensation, call or email me.

Planning for the Upcoming Year

A reader writes, "This year I'd like to set goals that motivate my salespeople. In the past, when I've tried to do this, I end up doing most of the talking and telling them what I'd like to see them achieve. They don't participate much. How do I create a partnership between myself and the reps?"

Whether someone aspires to watch less television or start working out more consistently, everyone -- salespeople and non-salespeople alike -- more enthusiastically embraces goals they set for themselves. As you establish the 2012 goals for your sales reps, don't forget to ask them what they would like to accomplish.  

Come Prepared

Asking a salesperson what they'd like to accomplish without any warning may catch them off guard. Though well intentioned, their responses to your question may be vague or unrealistic.

Setting a goal carries with it the possibility of being held accountable for achieving it. Knowing this, reps might be conservative about what they say or agree to.

Avoid this by giving them some advance warning. Ask them to come prepared with a list of goals they'd like to accomplish. Don't criticize or agree to any of the objectives. Just start a discussion. Set a time to meet again.

Specific and Measurable

Once you understand what they'd like to accomplish, work together to come up with specific and measurable goals that benefit them and the company.

In the chart below note the differences between the pairs of stated sales objectives: 

Vague	Specific
Do more business with my largest accounts.	Increase overall sales revenue by 5% with my top ten accounts.
Grow the number of accounts that carry Product X and Product Y.	Add two accounts per quarter that carry both Product X and Product Y.
Schedule more meetings with decision makers running companies that could use our product / service.	Complete one meeting per month with a decision maker running a company in my target market.

Team Involvement

For salespeople, achieving goals requires working with other employees. For instance, a rep wanting to convincing companies to carry both products X and Y needs solid product and competitive knowledge. Your company's product development group or support group could offer assistance in this area.

Share the sales goals with staff in other departments. Be specific about how they can help out. Ask for their support when necessary.

Do the Math

When setting goals, both parties sometimes lose sight of the main benefit - additional revenue for the company and more commission for the salesperson. If two accounts per quarter do agree to carry both Product X and Y, how large might the initial order(s) be? What about subsequent orders? How much revenue/commission might that mean over the course of the year?

Work with the sales rep to calculate the dollar amounts. Determine how far above quota they might finish. Ask them how much their bonus check would increase over last year. The possibility of a substantial boost in income keeps reps focused.

Eyes on the Prize

Estimate what achievement of the rep's goal might mean to the company in terms of sales revenue. Take a percentage and put it towards bonuses for the other staff members directly involved. With skin in the game, these employees will work harder than ever to assist the rep in reaching their goal.

Reward Effort

Don't wait until year-end to celebrate achievement of an objective. Provide prizes to acknowledge milestones along the way. If the sales rep convinces three prospects to carry both Product A and Product B in Q1 instead of two, take the rep and others who assisted out for lunch. When a rep meets with one new decision maker every month for six months in a row, they leave early on Friday to get a head start on spending a gift certificate at the local mall.

Keep everyone interested and motivated to achieve the objective through out the entire year.

Win / Win

Reps understand that as part of the job, managers set targeted goals. They probably won't agree with or be enthusiastic about every single one. But supporting them in a sales initiative of their choosing pays an unexpected dividend. When a rep sees you working hard to help them achieve an objective they set for themselves, they'll be more motivated to achieve the goals you set as well.

Book of the Month

Since writing my book, I've met several other Entrepreneur Press authors. In the coming months I'll be introducing their books to my newsletter readers. 

As managers and business leaders, we know we should be creating a positive work environnment. In the hectic rush to meet deadlines and service customers, we often lose site of that goal. Dr Joey Faucette, author of Work Positive in a Negative World, provides business owners, leaders, and middle managers with actionable advice on creating a work positive environment.  "Show up within your business," he advises.

Read Dr. Joey's excellent book and begin to reflect a positive attitude throughout your organization -- no matter how large or small.

The Accidental Sales Manager Guide to Hiring

Available here, "The Accidental Sales Manager Guide to Hiring" summarizes the pre-hire process recommended in "The Accidental Sales Manager."