Measuring Sales Performance in a Down Economy

In a perfect world, sales professionals would be evaluated on their ability to achieve quotas and generate revenues. But such clear-cut metrics don’t work in today’s economy, when even A Players can only stand by and watch helplessly as their numbers plummet.

The reality is that companies are scaling back purchases, including products and services that were once considered recession-proof. To punish top talent for failing to grow sales in an economy where no one is buying will ultimately backfire when individuals seek employment with a competitor who understands that there is more to selling than closing every deal—especially in a bad economy.

Financial goals are important, but they cannot be the sole determinant of performance in down times. Other criteria such as net activity levels, attitude and motivation are equally important, as they demonstrate an individual’s efforts to keep the company visible in the marketplace.

Are your sales professionals showing up every day with a positive outlook? Are they aggressive and proactive at identifying new prospects? Are they doing what it takes to close sales in a bad economy by working harder to build out their prospect pipelines to achieve the volume necessary to generate returns?

Indeed, even if their numbers have slipped, top sales professionals with a deep understanding of the company’s products and services remain the best weapons in this economy. The key is to arm them with the information and tools they need to succeed.

“Candidates with good business acumen are at an advantage since they can discuss the financial perspective with respect to the business benefits their customers and clients will receive from their products,” notes Dave Stein, CEO of ES Research Group, which analyzes and advises companies on sales training and performance. “With that being said, it’s so important for a sales leader to understand the skills and traits of any candidates. For example, someone with all the skills but a relatively pessimistic perspective isn’t going to do well now.”

Stein recommends psychometric and predictive testing to better-understand a sales professional’s perspective and personality traits to ensure they are suited to thrive in a down economy. But he also points out that success is not solely dependent upon abilities. Rather, it is “the responsibility of the company to make sure their products, services, value articulation, marketing, customer service, references, etc. are all in place. Some of that has to be rebuilt for positioning in this economy.”

In other words, rather than punishing the sales team for missing unrealistic quotas, companies should focus on motivation and training to give them the tools they need to be more effective.

While ES Research specializes in providing companies with the tools and strategies they need to keep sales teams motivated and effective, others such as The Brooks Group offer training programs specifically for selling in down economies.

Investing in these services and refocusing the criteria by which sales performance is measured are solid strategies to ensure that a company has the sales team it needs to survive the economic downturn and position itself to thrive once it turns around.

The Sales Person’s One-Word Job Description

“Everyone is searching for answers on how to sell in a down economy. Many feel that the sales game has changed, but in reality the economic challenge has forced sales people to improve their skills and refine their approach.” According to Lee Salz, President of Sales Architects, “While you may be looking for answers on how to sell in a miserable economy, the solution is right under your nose.” http://salesgravy.com/SalesDodo/?p=36

One GREAT Way to Make a Quantum LEAP in Sales Performance…

Do you want to make a quantum leap in sales performance? Lance Cooper, President of SalesManage Solutions, discusses in his article how to increase sales performance for high-activity sales teams (with a sales cycle less than ninety days) beyond past results: http://www.ezinearticles.com/?One-GREAT-Way-to-Make-a-Quantum-LEAP-in-Sales-Performance&id=1914962

“What would have to change for your sales team to spend more time in front of the right prospective customers? Answer this question and then go and make things better.” Lance.

Panic and the Rise of Micro Management – Killing Sales From Within

Paul McCord, president of McCord Training, is hearing “more and more frustration from both salespeople and sales leaders as the slow economy increases the panic on the part of senior management. Sales are slowing dramatically, profits are down or have completely evaporated, and the pressure is increasing on all levels to produce, produce, produce.”

 After reading Jill Konrath’s glowing recommendation of Pauls’ article discussing  “unintended consequences that are happening due to micro-management, and the sharing of strategies that work in today’s business climate,” I felt that the Sales Journal community would benefit from this information as well. View the entire article at: http://sellingtobigcompanies.blogs.com/selling/2009/03/panic-and-the-rise-of-micro-management-killing-sales-from-within.html

‘How I Got My Job Through Twitter’

Are you making the most of your social media opportunities? There are so many new ways to network with people now.  It is important to research which medium works best for you, and then use it responsibly and advantageously. Kevin Smith shares his story about finding a job on twitter: http://www.mpdailyfix.com/2009/03/guest_post_how_i_got_my_job_th.html/?adref=NmiM339

Follow Naviga on Twitter to find sales jobs: http://twitter.com/Naviga

Do you seal the deal with a hug?

Have you ever hugged a prospect or client? If so, did it help close the deal?

I ask because I came across a recent blog post discussing the pros and cons of hugging in business relationships, and how to determine when or if it’s appropriate.

At first I thought it was a joke, because I would never consider hugging a prospect or client. But as I read the post and subsequent comments more closely, it became clear that, for some people, this is a real dilemma – particularly when the line between business and friendship becomes blurred.

Maybe I’m just not touchy feely enough, or I keep too strict a separation between business and personal, but I’ve never found myself in a sales situation where I worried that a handshake was too impersonal. Nor have I ever had a client swoop in to hug me, no matter how long we’d been doing business together. I just can’t imagine being in that situation.

So I asked my LinkedIn friends for their opinion: Is there room in the sales process for hugging? Turns out, they’re just as conflicted on the subject as me!

Some, even those who admit that they are not generally gregarious say they have found themselves hugging clients.

“It’s not all the time and it’s only if the client initiates the hug,” wrote one gentleman. “But I don’t think there’s anything wrong with it. I guess it would depend, too, on the industry. But whether you’re happy about closing a deal or finding a job, why stifle that happiness?”

Another, however, said she has never hugged anyone in a business environment, adding that “if someone tried to hug me I’d, well, get totally freaked out. I even try to keep smiling to a minimum because it has happened that male business partners have gotten the wrong idea, so hugging is doubtless out of the question.”

We also received some very sage advice from one man who says he has hugged business contacts regularly in Africa in the Middle East, but never in Western Europe or North America where business is less personal. He also says he’s never hugged a member of the opposite sex in any country to avoid a harassment suit and a slap from his wife.

Finally, he writes that while he never has himself, “some of my friends in Scandinavia and Eastern Europe have negotiated deals naked in a sauna. Definitely no hugging allowed in this situation.”

I have to agree with him on that one.  Where do you stand on the great hugging debate?

Sales Hiring in this Economy; Perspective from a CEO of a North American Sales and Marketing Recruiting Firm.

Dave Stein, CEO and Founder of ES Research Group, Inc., and author of How Winners Sell, interviewed Kathleen Steffey, CEO and Founder of Naviga, for an interesting piece about the sales challenge of having the wrong people in sales jobs during these strained economic times.

As ESR continues to assess our clients’ sales challenges, we maintain that having the wrong people in the sales jobs is, in many cases, the biggest inhibitor to the success of a training intervention.  My interview with Todd Harris of PI Worldwide highlighted one of the tools available for sales leaders to get an objective assessment of candidates as well as existing sales personnel.I’m far from done with this subject.  I wanted to get another perspective, so here are some questions I posed to Kathleen Steffey, CEO of sales recruitment firm Naviga Recruiting & Executive Search, based in Tampa.  Kathleen also writes the SalesJournal blog.

Dave Stein: As CEO of a national sales and marketing recruitment firm, share with me what changes you’ve seen in your business in the past three months.

Kathleen Steffey: In the last three months I’ve seen growth and expansion with my existing customer base and a decline in “new” customer contracts. Because of this trend, my business has made a shift to heavily focus on existing customer penetration and customer management. We’ve created new programs to capitalize on our existing customer base-viral marketing campaigns, referral programs, aggressive business development penetration (all inside our existing customer base). I am also focusing heavily on recruiting performance to make sure we are executing on every single piece of business we receive to maximize revenue. Customers are behaving in a very smart way and show a thorough decision making process when it comes to candidates. They are taking every aspect of the hiring process much more serious as every penny counts these days. Because my business is steadily growing, we are currently looking for additional recruiters. Our recruiter candidate pipeline is the best I’ve seen in years, in terms of quality. I am taking advantage of the down market to select only the best and brightest to join my team in the next month.

DS: I’m curious about high-performing sales reps. Do you see them looking for new opportunities or are they sticking with the companies for which they are currently working?

KS: The volume of candidate flow has increased dramatically.  Many, many “A” player sales reps have been laid off and/or are looking for a new opportunities due to the instability of their current employer. I personally know many sales executives who have contacted me to express that they are looking for a new opportunity.  They are coming out of the woodwork right now.

DS: What about sales managers? Any new trends there? Are your clients hiring?

KS: I have seen a trend of customers that have a strong focus on evaluating overall team sales performance and linking it back to poor sales leadership. A handful of my customers are deciding to really clean shop and terminate low performing sales reps and terminate non-influential sales leaders. We have many confidential searches going on that support this scenario.

DS: What advice might you give to a sales rep or manager who is currently employed?  Stick where they are or look around for a better opportunity?

KS: If someone is employed with an organization that is reacting well to this current economy-shifting, changing, creating, enhancing, looking at different verticals to penetrate, etc, then you have a proactive organization that is adjusting to the current state and shows promise. I say stick it out and keep at it… Penetrate your prospects harder than ever and make sure you’re creating value, providing solid industry insight and serving them well.. better than you ever have.

I can’t comment on whether or not someone should stay with their organization.. it completely depends on the state of the business, industry, product, etc. I do know that two of the hottest industries that are doing well right now are healthcare and energy, in the event people need focus on where to look.

DS: I know your firm does about 20% retained and 80% contingency work. What advice can you give a hiring authority as to which way to go?

KS: While both options offer our customers the same level of attention and quality, I would have to suggest that going retained always wins. A retained relationship brings focus, commitment and efficiency to the customer/vendor partnership and displays strong value in filling the position with Naviga. At the very least, a retained relationship removes other variables that the hiring manager would normally have to deal with if working contingency-job advertisements, other recruiters, internal responses to postings, etc. A retained relationship allows Naviga to streamline the recruiting process and save valuable time for our customers.

DS: How is your firm helping companies hire the right candidates?  As you know, ESR’s research identifies this as a big, big problem.

KS: First and foremost we get to know our customers. I view this as a critical piece in quality recruiting and making an appropriate match. We understand the make-up of the organization—revenues, employees, top leadership style, product/service focus, market differentiation, strengths/weaknesses, etc. Next we get to the critical part of the engagement and this is where we reveal the sales culture/environment. We understand the sales team, territories, product price, sales cycle, ramp up, top performer profiles, sales leadership and how the team is led, CRM/reporting requirements, candidate profile, etc.  We’ve found that there is a significant correlation with how the team is led and the performance of the overall team. We take this discovery serious to determine if our candidates will be in an environment where they can be successful.

I am a strong advocate of this statement, “The best predictor of future performance is past performance”.. I train and coach my team to measure the quality of the candidates by their past performance and to relate the sales environment associated with those successes to the current position we are looking to fill. I am also a strong advocate of looking at W2’s, understanding the past compensation programs, looking at industry, product/services, average sales cycle and deal price and evaluate whether or not there is a sales environment/culture match.

Because Naviga specializes in sales recruitment, our evaluation process is very specialized and “sales centric.” We have a standardized evaluation process that every recruiter uses and it’s based on the position we are recruiting; for an example-it can vary based on hunter, farmer, or leadership positions. We use a standard list of eight (8) key sales dimensions when we interview candidates. We ask questions around selling skills, sales knowledge, intellectual ability, personal, interpersonal, motivation, tenure and compensation. Our internal evaluation process is a hybrid of Greg Alexander’s Top Grading for Sales approach, which is adjusted for our business model/customer needs.