Aug 272017
 

In Sales and sales management circles few would argue that compensation, a major component of which is income, is trivial or a minor issue. Modern management theories tell us that not only happy workers stay longer, but also they are more productive. We know that pay is often top of mind for employees, but other factors also chart well. When one is not caught in the vice of low or unsatisfactory pay, one is enjoying his or her work and is therefore engaged, committed and sees a future.

In the book The Code of The Extraordinary Mind the author speaks to Richard Branson about the secret to the billionaire’s serial success. Branson tells the author the secret is to have a vision, hire great people to execute it and then get out of their way. Notice, he didn’t say pay them 30%, or whatever, in commissions.

Imagine now for a moment all this evidence, wisdom, research and information out there and next to none of it is applied to the profession of sales by the responsible management and the companies at which they work. The whole thing is on autopilot, has been for years and clichés abound. The conventional wisdom hangs like an albatross around the neck of management and human resources. In the well-argued book Drive author Daniel Pink makes an evidence-based case for not paying salespeople commission and SPIF when creativity is required.

Is any company taking heed of the applicable information? All indications point to the answer being ‘no.’ This website has long argued that people management has to be personalized for the individual and one size does not fit all. Why are so many sales departments and companies struggling, and why does anyone need extra pushing and shoving, if salespeople uniformly respond to extra commission and variable incentive? The answer is that salespeople do not and like any other profession and group individuals respond differently and have different motivations. We even wrote about motivation for salespeople as a function of their cultural background on this site in November, 2016.

Why then are companies not overhauling how they compensate their employees in general and sales department in particular and instead prolapse to the same old? We know now that as a matter of random statistics a portion of the sales team likely responds better to and is more responsive to things other than being paid on commission. How about looking at 100% salary entitlement? There is also this, which likely lead to companies taking action like this.  In addition to the above arguments, there must be a reckoning that today’s customers are better informed and sales is becoming more of a team sport. A successful sales team is not only comprised of different people (inside, outside, technical, post-sales consultancy..), but also requires adapting to customers’ buying process, which is an outward outlook and not necessarily satisfied by internal necessities.

ventilation pipe (flexibility)

Photo Credit: Bilderjet

Instead could individuals be motivated and double their efforts for:

  • Peer and employee recognition
  • Additional time off
  • Health, or other, club membership
  • A gift card for the salesperson’s significant other
  • Paid learning opportunity or mentorship
  • Paid-for recreational classes such as cooking, climbing or arts and crafts,
  • Job promotion (with a caveat)

Keep a higher emphasis on variable compensation for those who are actually and demonstrably motivated by it and remove the yoke from those who just do not care for it and either do not perform better given the scheme or do so only marginally.

There is no doubt that driving sales and winning deals is the raison d’etre of any sales organization. The question we should be asking is what actually drives performance versus what we have always accepted drives performance.

Indeed, sales management must measure all that leads to a sales win (could be customer engagements, presentations, customer meetings, marketing response rates, etc.) and develop a compensation plan based on low and upside potential calculations, team alignment, composition and of course how all of this is being measured, but understand that the drive to create the components of success is propelled by different means among individuals.

 

*Things That Need To Go Away: We Do It That Way Because It Is Always Done That Way

 

Individual

Photo Credit: Geralt

 

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Jul 032017
 

American business channel CNBC has an article on the state of vacation days taken and untaken in the United States and the picture is not pretty. The article quotes a study by a “coalition” that advocates for taking time off and using one’s vacation days.

A quick detour and a couple of remarks should come first. Firstly, the article is timely. Summer is primetime for vacation days. Many people take time off to enjoy the weather and travel, children are off and parents coordinate with that. Over in Europe many citizens enjoy vacations allowances ranging from four to eight weeks. This article’s publisher being CNBC is also quite interesting. CNBC is a pro-business and corporate outlet. It is not one to advocate for employee and workers’ rights. Finally, Project: Time Off has its own agenda. The study, on which the article is based, seems to have followed a scientific methodology, but it is always prudent to read these studies in the context of its provider.

Photo Credit: Atlas Green

On to the study and it demonstrates that taking one’s vacation days are advantageous for those seeking to obtain a promotion or a raise at work. It coins the term “work martyrs”. The studies are US-based, but it would not be a surprise if the results apply to the rest of a world that is fast becoming increasingly industrialized. Quoting the article, “people who use their vacation days are more likely to get a promotion or a raise.” The study demonstrates two things:

  • Only 23 percent of those who forfeited their days were promoted in the last year, compared to 27 percent of “non-forfeiters.”
  • The study also found that 78 percent of forfeiters received a raise or a bonus in the past three years, compared to 84 percent of those who did use all of their paid time off.

The numbers are close with respectively four and six percent difference between the samples, but even if the percentages were identical it would be illustrative that people taking their vacations are not harming their prospects at work. The study asserts that folk who take their vacations are recharged, more creative, ironically harder workers, etc. For salespeople it is good to remember that the top indicator of success is working hard. Finally, remember those vacationing Europeans? There have been multiple studies over the years that they are more productive than Americans, Canadians and everybody else.

*Things That Need To Go Away: karoshi

woman by the water

Photo Credit: Danka Peter

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Apr 272017
 

Dan of Sales Talent Agency shared a report, which is worth reading for sales and sales management professionals. Sales Talent Agency is a recruitment agency and, as such, is obviously self-interested and the report is part of the company’s marketing collateral. With that said, the report is the result of a survey of 4,860 sales professionals from a range of experiences, industries and regions which makes it useful. What is more – importantly for Canadian readers – it is Canada-focused, which makes the report valuable to those north of North America given the scarcity of Canada-only research.

salary guide Canada

There is a host of interesting information in the report.

  • How much sales professionals make given their years of experience,
  • Job titles are rather meaningless (and so Sales Talent Agency has gone further and asked whether folks manage anyone or not) as many directors and vice-presidents do not nowadays,
  • There is information regarding what salespeople want (which matches previous reporting on this website),
  • There is information on job stability,
  • 70% of respondents felt their targets are achievable,
  • Et cetra.

How much sales folk get paid is important to salespersons, sales managers and compensation and human resource management. Compensation, however, is one of the many levers of motivation and partnership and the report touches on that as well.

The Sales Talent Agency Sales Salary Guide Is Here.

Do you see yourself in the report?

STA Salary Guide

 

*Things That Need To Go Away: large discrepancy in what companies pay salespeople of the same experience in base salary based on how recently someone entered the organization’s workforce. Internal promotions receiving 4% raise per year, while new employee arriving 20% ahead is illogical.

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Dec 132016
 

Who here has not received an offer of employment with a strict deadline of 24 or 48 hours for the candidate to accept? On the other side of the table, how many employers or recruiters reading this have added a clause to their offer insisting the candidate accept within a day or two or else…

The reason for such clauses and conditions seems straightforward.

  • Employers need to know where they stand as they have a need to hire for backfill or expansion.
  • Employers and recruiters have a requisition to fill, which they would like to close as soon as possible in order to move on to the next task.
  • Recruiters work on contingency and would like to get paid.
  • Assigning a deadline to a candidate and offer pushes the candidate to accept thus taking him or her off the market.

Please Stop.

Very tight deadlines are signs of a woefully unprepared employer at best and a red flag against the employing firm at worst. Long-term relationship demand respect from the start and sensitivity towards the other party and not to mention reality.

As a team manager I had a candidate join another group’s team only to leave a week into the job for a position at a credit card company. She obviously preferred the alternative she eventually chose, but had accepted this job under the gun and fearing losing either. Such scenarios are actually quite common.

While these concerns all have some merit they are one-sided, dated and not in line with modern times and, by implication, counterproductive. Why are they working against candidates and employers? Employers derive no benefit from enforcing a clause, which either recruits an employee who may join holding a grudge or feeling pushed or could quit in 3 weeks anyway if he or she were interviewing elsewhere. Fact of the matter is that employers and employees have to see employment as a collaboration where both parties profit and are working towards a common goal. There is no place in the modern workplace for a company that feels superior to the needs of its employees or for an employee who feels above the ‘law.’ If a company gives itself the right to interview multiple candidates and assess them based on its elected criteria, then the employee has the right to interview multiple employers, take time to assess the offer, discuss it with an employment lawyer, consult friends, family or mentors and be comfortable.

While it is reasonable to have deadlines and ask for specific time-lines putting a gun on someone’s head cannot have a happy ending. What does work instead is respectful communication between the parties including an explanation from both sides on with what they are working.

The invitation for candidates, employees and employers to come together benefit from frankness and be supportive of each other should be regardless of the economic climate. Being patient is not helpful to immediate needs perhaps, but will pay dividends in the long-term. Whether it is boom or bust times should not matter. Genuine respect is the way to go and one of the keys to a productive relationship. It also saves everyone time and probably money too.

 

*Things That Need To Go Away: “You have 24 hours to accept our job offer or it’s on to the next candidate.”

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Nov 272016
 

There have been a couple of articles in these pages in the past regarding how sales managers need to understand the individuals on their respective sales teams in order to deliver personalized motivation and incentives. This concept resonates with me as a person who has risen through the sales ranks and also as a people manager who has seen the results in action. Articles have appeared here and here because it is something often on my mind. The book Drive partly dedicates itself to the same exploration.

Getting this process 100% right and reaching perfection is like finding the pink unicorn, but the more one applies oneself into this process the better it gets.

With that said, here is an article that is original and well worth reading for those managing diverse salespersons. Written by academics and authors Christian Homburg and Sebastian Hohenberg of the University Of Mannheim in Germany this research piece addresses sales management, training and human resource departments and discusses motivation and incentive planning within different cultural environments, which is applicable at multicultural sales settings or for sales managers in matrixed and multinational organizations.

Bottom-line again: different people need different approaches and a one-size-fits-all approach is lazy and less productive.

Image from Sebastian Hohenberg and Christian Homburg (2016) Motivating Sales Reps for Innovation Selling in Different Cultures.

Image from Sebastian Hohenberg and Christian Homburg (2016) Motivating Sales Reps for Innovation Selling in Different Cultures.

Image from Sebastian Hohenberg and Christian Homburg (2016) Motivating Sales Reps for Innovation Selling in Different Cultures.

Image from Sebastian Hohenberg and Christian Homburg (2016) Motivating Sales Reps for Innovation Selling in Different Cultures.

*Things That Need To Go Away: “That Is How Our Incentives Have Always Worked And That Is How They Will Keep Working…”

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Nov 252016
 

Forecast accuracy is a touchy subject at most companies and among most sales leaders.

Most sales professionals have the same attitude towards forecasting as a cat does towards a swim in the sea or a diner has towards a rat in his soup. Being held down to a commitment is a part of it. Spending valuable time in a CRM, or would-be, system that outwardly does not provide value to a salesperson’s bottom-line is the major anathema to salespeople. This is difficult argument to overcome because the manner in which CRM/spreadsheets/forecasting tools are (mis)used at companies leaves a lot of room for criticism of the kind. However, when done correctly systematic forecasting is useful not to mention mandatory.

sqkjxvlue3q-cedric-servay

Photo Credit: Cedric Servay

The stock method of forecasting at companies is:

  • Tally the total amount of forecast dollars available. This is typically done for the Quarter and, by extension, for the year, although a company like Salesforce, for example, forecasts monthly.
  • Review which percentage of forecast dollars in similar previous timeframes ended up as sales wins. For example, if 25% of the forecast amount from previous year’s same quarter ended up being a completed transaction then the same ratio should be applied again. Note the opportunity to explore ways to improve the ratio.
  • A thorough review should be applied on top of the above pattern to special deals in the pipeline. That is, if there is a particularly big deal in the pipeline or a especially large miss is occurring in the forecast timeframe then those have to be distinctly taken into account. These one-time ‘events’ need to be taken into consideration exceptionally as they are exceptional to the pattern. Sales managers need to have a bracket for what makes this deal ‘special’ within the context of the company’s average deal size.
Photo Credit Modestas Urbonas

Photo Credit Modestas Urbonas

Special ‘events’ or deals which need added consideration include:

  • Special deals in the pipeline (as described above)
  • Extraordinary misses in the pipeline (as described above)
  • A special scrutiny of the Top 10 of the biggest deals being forecast
  • A special scrutiny of the deals in pipe for the Top 10 biggest existing customers for the territory
  • A special scrutiny of the deals in pipe for the Top 10 biggest customers by company size for the territory
  • Deals which are considered won already although are not officially booked yet.

 

With the process outlined there are several undertakings that would complement the above and should be mandatory.

  1. Everyone needs to be trained on the system and shown how the calculations are rolled up. One should not assume everyone knows, or can figure out, how to use Excel/Google docs/CRM/methodology of choice. Speaking the same language is a must if the company is to work in lockstep. Define and explain your stages, nomenclature and its prerequisites and, if using a tool like Microsoft Dynamics, Salesforce.com, Sage CRM, Maximizer, etc., use the out-of-the-box templates and definitions as much as possible. Forecasts need to be a lot more science and a lot less art.
  2. Consistency wins. For the sake of credibility and not sending a message of pointlessness stick with the regimen and enforce it for the medium-term. It will become a matter of lost authority if the company asks for a work and time commitment with forecasting and does not follow through. The sales team needs to routinize the updating of the system.
  3. The process and time spent on the above need to be justified and explained. Having a clear sales forecast enables sales managers to report accurately and be accountable to the company, but also it must be a tool in identifying where and whom requires assistance. That is the personal aspect of forecast accuracy and it is very important. Forecasting is ultimately ironic if it does not help sellers sell to buyers and does not identify buying patterns and cycles. Please read that last sentence again. The macro picture is one of a company which knows, understands and addresses its pipeline and can make better decisions towards its own fiscal health, which helps everybody within the ship.
  4. Think about incentives to motivate the sales team to adopt and maintain the routine. How about 5% of the sales team’s variable depending on forecast thoroughness and maintenance?
  5. It also needs mentioning that companies should automate this process as much as possible. Given how it is a mostly inward looking process and is not adding direct value to customers liberating sales teams’ time to spend more time on customers is a bright idea.

 

And here is the most important thought in all of this to emphasize: the above must not come at the expense of team morale and a customer-focused sales process. Salespersons and sales managers cannot get lost focusing on the above at the expense what is more important: working with customers.

Photo Credit: Greg Rakozy

Photo Credit: Greg Rakozy

*Things That Need To Go Away: New Forecasting Process Or Tools That Are Here Today; Gone Tomorrow

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Sep 072016
 

You read it correctly. The title is not a typo.

In an article that was sent to my inbox this week the author reports that it is ten times more effective to train your sales managers as opposed to your frontline sales people. The article, which seems to be based on a slightly older talk by Neil Rackham the author of the famous SPIN selling books and program for an organization called the Sales Management Association, also cites a study with the same organization. The study surveyed 161 companies about their sales budget and found that those, which allocated more than 50% of their training budget to sales managers saw the greatest increase in sales and hence the most return on investment. The degree of return increases the more of the training budget is directed at the management team.

This assumes sales managers are concentrating on being teachers and given time and mandate to transfer their knowledge onto the frontline.

Naturally, the study does not suggest or target a complete abandonment of training for salespersons. For instance, sales will still be trained upon hire and be introduced to new products or versions. Importantly, the coaching will be administered by sales management. However, if one chooses to give this premise credence, one could justify its veracity by remembering that the concept of leverage applies here as it does to maintaining a partner or reseller channel for example. After all, companies maintain a reseller channel in order to scale in a way that they could not on their own. A sales manager works with multiple salespersons at the same time. More importantly, and again if you believe this study and I always recommend examining every piece of data meticulously, the proof is in the pudding i.e. the facts speak for themselves.

It would be useful now to get some feedback or thoughts from those affected – sales people and sales managers – and from sales trainers here. The implications are important as the sales budget and companies’ revenue depend on it.

Do you agree that a more effective training budget is better deployed on sales managers than on the frontline? It is certainly novel and food for thought.

manager-training

*Things That Need To Go Away: Obligatory Sales Training With No Follow-up Or Carry-Through

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Aug 082016
 

We know that Fear And Pain Avoidance sells.

We also learnt that Insulting And Boring Sell (well… maybe).

What about confusing? Does that sell? According to a study from the University Of Arkansas confusing targets via a “Disrupt-Then-Reframe” technique also sells. The research shows that keeping the technique’s order intact and the components intact are crucial.

The technique suggests confusing or ‘disrupting’ the buyer’s thought process and while they are trying to figure things out make a strong statement, which is to your benefit that claims it is all simple and easy to purchase. This goes against the traditional advice that should a customer be asking questions or not understanding the best way for a seller to go is to clarify things. This technique suggests doing the opposite of allowing the customer to figure things out.

According to the study, the rate of purchase of cards from a seller went from 35% to 65% when the salesperson announced the price of cards as “300 pennies” then went on to explain that it means “$3” before stating that “it’s a bargain.” This study also shows that resistance from those who are on the fence is not overcome through additional incentives, but through the DTR technique which disrupts the resistance when customer has purposefully been distracted.

*Things That Need To Go Away: Clever Sales Techniques That Sell Unneeded Wares

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Jul 022016
 

An earlier article addressed job interview questions and what to do from the perspective of an applicant.

Here we consider the interviewer and the hiring company’s perspective. If you have not read it review this article first. It speaks to the imperative of having a process and judging candidates against it.

As mentioned in those posts, asking the right questions during an interview, having a method that is followed and designed with the company’s needs in mind helps make the most fundamental decision to any company’s survival, growth and sustainability a more scientifically pertinent one. There is no more an important decision that a company makes than who to hire.

Unfortunately, too many people short-change or neglect processes and either ‘wing’ the interview, colour it with multiple biases or both. Things are so bad that an article notes how, for certain hiring decisions, machines are better than humans. This speaks to either a lack of process or the introduction – or better put: not suppressing – of personal and institutional biases.

interviewing

 

So what makes hiring more effective, more aligned to goals and speeds up the process for both?

To start, and as part of the suggested systemic interview process, here is a list of questions one should consider asking and situations one wants the applicant to shine in:

Q: Tell me about your previous (‘relevant job description’) success.

A: Does the answer align with what it takes where you work? Are there actual examples culled from the interviewee’s past included in the answer?

Q: Tell me about an occasion of (‘relevant job description’) failure.

A: Does the answer take responsibility, show analysis and a modicum of learning from the candidates past mistakes. Is there an actual situation where the candidate admits to failure and offers a description of the resolution?

Q: Describe a good day.

A: The ideal candidate will give a thoughtful response to how he or she works. There is not a wrong or right answer here. There is, however, a star or two for the candidate who has process, introspection and logic and displays alignment with what you believe leads to success in the job at hand.

Q: Why you?

A: Can the person articulate a convincing reason why he or she has applied and why you should accept the person’s application.

Q: Do you have questions for me?

A: Any good candidate has legitimate and considerate questions. These differ from canned questions that are irrelevant to the particular job or are so clichéd that they obviously stem from a ‘how to interview’ article.

All questions and answers should be situational unless the interviewer specifically is asking for a ’yes’ or ‘no’ answer. Moving away from hypotheticals and into the realm of experience elevates the discussion.

Crucially interviewers must remove their biases, which includes the error of judging a book by the cover or the resume. A person’s appearance, their resume’s content, gender, age and race are not always indicative of their qualification one way or the other. Be aware of one’s personal biases and leash them as best as possible. Doing so would lend itself to the validity of the hiring/interview process. Ask good questions, listen carefully and impartially to assess the responses and you have done yourself, your company and the job seeker a favour.

past-future

 

 

*Things That Need To go Away: Haphazard Interview Questions Made Up On The Fly

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Apr 242016
 

How would you answer were one to ask you what is a hallmark of good branding? How would you respond were someone to ask you to cite an example of a successful internal organization?

Customer First Organization

The thought came to me when I realized that during the last fifteen or so years I have read about so many Cisco reorganizations that fact became fiction became legend which, in turn, became one melding into another. This is not meant to be an exercise in being an armchair expert, but the number of public, as well as less publicized, reorgs at the networking giant are widely known. Why mention Cisco? The changes are examples for inward looking organizational structures.
The most recent organizational structure has the company divided into the following divisions:

• Networking
• Security
• IOT & Applications
• Cloud Services & Platforms

One notes that the business is organized according to internal imperatives (development, engineering, marketing and fiefdoms probably) and not according to customer needs. It would indeed be the scarce customer, which would have a group or department dedicated to Cloud Services, which would be distinct and separate from IOT. The same applies to any other combination of Cisco’s four groups.
This is not a knock against Cisco, which certainly makes competitive products, or even an article about the Silicon Valley mainstay. It is about what the successful companies of the future should give thought to.
So, let us take a look at the quintessential success story of the day, namely Apple. What is Apple known for? It certainly is not divisions for computers, phones, mp3 players and operating systems. Apple is known for, wait for it, simplicity, elegance and functionality. These are things customers care for, garners their attention and for which they certainly pay extra. Moreover, all its products are sold under one roof. The Tiffany & Co. company is known for style and luxury. Customers are not expected to deal with a salesperson for earrings, another for gemstones and another for third party products. In fact, the salesperson-slash-concierge personally takes the shopper from corner to corner and ensures a seamless transition. Again, the experience is designed to be oriented towards what the customer would like and enjoy. Contrast that with HP where customers would have had to speak to different persons for printers, laptops, servers and so forth. It is no secret that HP’s star had been diminishing and the company recently threw in the towel by chopping itself into two. Ironically, the move may be a harbinger of focus and good things for the remaining parties, although past experiences do not bode well (does anyone remember Palm and 3Com, to pick a HP-related example)?

Capture

The Brand Pivot To Culture

We are here to hear an argument for creating a uniform culture that is focused on customers, for customers and based on employees winning when customers win. By definition, such a culture negates fiefdoms, internal divisions, competition and trains and rewards employees to deliver on the brand promise, but there is a catch. The brand promise too has to be focused on the customer

• Here is a brand focused on the customer: See Your Business In Our Software – Oracle (where I used to work)
• Here is another: Grow Your Company With Our Solutions – Fictional company
• Here is the reverse and one that is misguided in that it is inwardly focused: The Largest Distributor Of Cola

You see, customers do not care that you are the largest distributor of anything and least of all a certain brand. In contrast, companies do care what you can do for them. It should be about them.

Walking The Talk Of Culture

More critically, and this is actually important, there should be a supporting structure behind the outward and customer-oriented brand. Everything should be designed to support the outwardly focused branding. Aside from deliberate hiring, structure and the functional day-to-day work the company must absolutely insist on employees behaving as such. Companies must align pay, bonus and promotions accordingly. What is the sum total of the design just enumerated? Culture. A culture, which is the enabling structure for a successful company.
This would be a real shock to the system for companies, which foster internal competition, tolerate nepotism and turfs and reward managers who are in it for themselves and their egos.
However, if there is one thing you take away from this article it is this most important concept. The key is that the organizational culture will conform, follow and match what the leadership puts in place for the group. It is not about instilling the culture per se; it is about creating and moderating the enabling structures and guidance that points to the correct orientation. The analogy is that of children and their parents. Parents can say whatever they wish and could instruct their children as much as they want, but unless the walk matches the rhetoric the organization will never follow.

*Things That Need To Go Away: Arrogant Corporate Culture

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