When The Sales Team’s Objectives Outweigh the Organization’s Objectives

This weeks post is from Navigas partner Astron Solutions, courtesy of, Michael Maciekowich, National Director. Astron Solutions is a New York-based consulting firm dedicated to the delivery of human resource consulting services and supportive technology. They work nationwide to develop and implement human resource programs that support the strategic direction of organizations through the creation of a positive employee relations environment.

An age-old battle exists between organization needs and the desire of salespeople to enhance their earnings. Many salespeople, understandably, will take the road of least resistance in an effort to enhance their personal wealth. Unless there is a close Return on Investment (ROI) to the organization between sales goals and individual compensation, however, the process becomes a one-sided event. Case in point? When an organization is interested in margin and profitability, and the salesperson is focused on commissions based purely on sales volume.

In a recent client interaction this discrepancy became quite evident. The client had established a sales commission program based completely on total sales volume of all products sold, even though each product had different assigned profit margins. Initially, the organization attempted to address this issue by adding a special “high margin” bonus awarded at the end of the year to the salesperson who had sold the highest volume of high margin products. However, because the commission structure emphasized total volume over margin, the program had little impact.

In addition to this issue, the organization was providing a market competitive base pay, targeting the 50th percentile of the market average, regardless of each salesperson’s actual sales activity. There was no accounting for the base pay in any “cost of sales” calculation. In essence, the salesperson not only was paid competitive base pay from day one, but also given an opportunity to make an extraordinary amount in commission. Upon further analysis, the sales force’s compensation was averaging the 90th percentile of the relevant total cash compensation market.

The issues of commission structure and competitive base pay could no longer continue when the recent downturn in the economy arrived. This organization’s cost of sales, when salaries and commissions were included, was well above any competitor’s. Thus, the organization’s overall profitability had dropped dramatically.

How to address this untenable situation? The answer was to take a step back and re-examine the entire program and the current operating philosophy and strategy. Care had to be taken not to make too many dramatic changes, for fear of losing some key sales professionals who were “mission critical’ to the organization. But something had to be done.

The Astron team and our client’s sales leadership jointly addressed the issue through the following steps:

1. Conducting both a detailed audit of the overall cost of sales, including salaries and commissions, and an employee by employee cost of sales audit, to better understand individual profitability.

2. Making the decision to maintain competitive base pay rates at the 50th percentile of the market. However, it was further decided to link total sales volume to the value of base pay. In essence, the organization used its current program (commission on total volume) to offset the cost of base pay. Until the base pay had been offset on a quarterly basis, there was no movement until the next round of commission.

3. Realigning the commission structures. Once the base pay was offset the individual salesperson moved into the next round of commission, which was based on a matrix of volume and margin. Specific commission percentages were tied to various levels of volume and margin combinations. The organization opted for this alignment to be sure the salesperson was properly incented to focus on high margin products, while still having competitive total earnings if he / she focused on low margin products.

This process and the resulting changes afforded the organization a dramatic reduction in the cost of sales, and at the same time a dramatic increase in profitability. None of the designated “mission critical” salespeople left the organization. There was turnover among low volume producers, however, in that these individuals could not meet the base pay offset. While the change was at first scary for management and employees alike, the program quickly became a “win-win” success story.

 

Gen Y wave approaching shores of b-to-b sales

Original Post: By Matthew Schwartz, Editor, Follow the Lead Blog

In the not-too-distant future, b-to-b sales reps may have to say goodbye to the telephone if they want to build relationships and drive lead-gen revenue. That’s one conclusion you can draw from recent research on how Gen Y (people born between those 1980 and the early 2000s) is starting to impact the b-to-b sales process.

The research (hat tip to targetmarketing.com), includes a survey of 300 managers, up to age 35, that was conducted last year by Chicago-based marketing agency Colman Brohan Davis and research firm E-RM. The results indicated a  ”propensity for social and interactive communications,” the agency reported.  Some of the media that Millennials say are most important in research in a business setting including talking with others (84%); employing search engines (84%); e-mail (83%) and browsing Web sites (79%).

Four traditional media channels achieved a reported usage penetration of more than 50%: talking with others, print, business directories and TV, the report said. “So, while the impact of the Internet is strong and widespread, traditional media cannot be eliminated from an integrated marketing strategy.”

Adam Needles, director of field marketing and b-to-b marketing evangelist at Silverpop, told Colman Brohan Davis:  ”Somewhere around age 30 to 35, you can draw a line in the sand between people who are used to calling around to get everything, and [it’s been] all about relationships and face-to-face.” But with Gen Y buyers and influencers, Needles added, “you have people whose expectation is that companies should put everything on their Web sites; they should be getting real-time feeds and information; and companies should be totally integrated into Twitter and the blogosphere.”

With two to three different generations involved in the typical b-to-b purchasing decision, Needles advises marketers to match their communications to each stage, and thus each group. For Gen Y audiences, during the research phase, it’s important to use digital tactics (Webinars, Twitter and blog posts) to attract prospects (who can then make suggestions to their managers on what to buy) while  Gen X audiences, or baby-boomer managers, require a combination of both digital and traditional methods of selling (RFPs, phone calls, in-person visits) to advance the conversation.

For now, gray beards still get the final call on where the budgets flow. But before long the folks in Gen Ys will move into more decision-making roles, with even more concrete change in the sales process to follow.

Are You Getting Interviews, But Not the Job?

Original Post: How to Diagnose Where You Might Be Going Wrong
By John Rossheim, Monster Senior Contributing Writer

Your resume has earned you interviews with several employers over the past year. That’s impressive, especially in this economy.

But none of those interviews has yielded a job offer. You’ve done the standard interview preparation. You’ve shown up on time and dressed in appropriate interview attire. But somewhere between the paper credentials and the live performance, you’ve failed to deliver.

Perhaps yours is a failure of imagination. Have you taken the time and trouble to imagine what your interviewers’ needs are, and the specific business problems their companies need you to solve? If you haven’t done so in-depth, it’s time to start.

But before you face the formidable challenge of thinking like your interviewer and her CEO, try taking on the perspective of a lesser intellect: a fly on the wall.

See What the Camera Sees

If you start by reimagining your interview preparation as a rehearsal for a performance, you’re already giving yourself a new chance to succeed.

“The best way for job seekers to improve upon their interviewing skills is through practice,” says Laurie Davis, director of counseling and programming at Yeshiva University’s Career Development Center. “A mock interview with a career counselor or HR professional will help them learn how they might better their performance.”

The next step is to make a video of your mock interview and review it with a professional who will not just tell you what you did wrong, but also give you ideas for improving your performance, whether by making better eye contact and leaning slightly toward the interviewer, speaking more directly and concisely, or putting your story forward more positively.

Seeing and hearing yourself literally from another angle, even if only on a brief video created with a PC or digital camera, will give you a much better sense of the dramatic effect of your responses on the interviewer. For example, “when you get those questions about strengths and weaknesses, answer the weaknesses question first — maybe including a little humor — and then finish on a high note with your strengths,” says consultant and executive coach Debra Benton.

What Matters to the Interviewer

As you approach an interview, consider how your manner and words will affect the interviewer’s state of mind.

“Be socially generous,” says Ann Demarais, author of First Impressions: What You Don’t Know About How Others See You. “Make the interviewer feel smart, talented, accomplished.”

Don’t make the mistake of letting the interview become a one-way question-and-answer session, which is bound to be too much about you and not enough about the
interviewer. “Always get the interviewer talking,” says Stephen Balzac, president of management consultancy 7 Steps Ahead. “Ask them about their concerns, issues and goals. Then respond with relevant, brief vignettes about your accomplishments in previous jobs.”

And recognize that if you come into the interview with an elephant shackled to your ankle — namely, unemployment or a long resume gap — the interviewer will notice and be distracted by it. “The job seeker needs to proactively explain why they’ve been out of the job market,” says John Robak, COO of engineering firm Greeley and Hansen and an HR manager of long experience.

The Employer’s Perspective

Finally, keep in mind that your abilities have no absolute value to the employer; they’re only worth what they can do for the employer this year. “Sometime candidates don’t prepare to talk about the match: how their background and skills align with what the company is looking for,” Robak says.

To force yourself into each employer’s perspective, come up with good interview questions customized to the challenges the company faces right now. At the same time, remember that your questions show a lot about how you think. “You get hired by the questions you ask,” Benton says.

What if the elephant of a job loss or resume gap isn’t the only silent distraction in the room? You’ll never know unless you ask the interviewer on the spot.

“Close an interview by asking if the interviewer feels there are any gaps left unaddressed, so you can discuss them,” says Kim Lockhart, a regional vice president with Spherion Staffing. “If you aren’t selected, see if the recruiter or hiring manager will provide feedback,” she suggests.

THE TOP 10 MISTAKES MADE BY SALESPEOPLE WHEN USING THE PHONE, AND WHAT YOU CAN DO TO AVOID THESE ERRORS

Based on observing, listening to, receiving, and placing thousands of sales calls, Art Sobczak put together a list of the Top 10 Errors Made by Sales people When Using the Phone. The list details the most heinous, avoidable errors sales reps commit every day; Mis-cues that sabotage their sales efforts. Read through the errors and then pay particular attention to Action Steps. This is what you can do to avoid the errors. Follow the advice, and be more effective.

A Warning to Ad Network Sales Professionals: Slow Down!

Though they have been around for years, advertising networks recently reached a pinnacle in terms of customer demand and market trends. This popularity has top sales professionals not only flocking to these positions but also giving in to the temptation of the lucrative deals being dangled before them by recruiters seeking to steal the best and the brightest to staff their client companies.

Unfortunately, many of these job-hopping ad network pros may soon discover that multiple positions in this hot niche don’t look so hot on their resumes. They may have been aggressively recruited to those greener pastures, but by quickly deserting one opportunity in favor of another they are demonstrating a lack of loyalty and dedication – and are missing the chance to build a track record of success that sets them apart from the pack.

Similar to an online public relations agency, ad networks give companies extensive market reach for a fraction of the cost compared to buying advertisements directly from each online outlet. That is because ad networks allow media buyers to efficiently coordinate ad campaigns across multiple websites. This, in turn, allows ad buyers to reach broad online audiences easily through run-of-category and run-of-network buys.

While opportunities abound in this market, sales professionals should consider their options carefully before jumping ship. With 80% of candidates in the ad network environment labeled as “fluid job hoppers,” it is a trend that is reminiscent of the rapid turnover of software sales pros during that industry’s boom.

The software boom ended and many stars found themselves all but unemployable because of their spotty track records and lack of company or customer loyalty.

That is why ad network sales representatives should learn from their software counterparts’ mistakes and be wary about jumping at every new opportunity. When the boom ends, they’ll find themselves competing – mostly unsuccessfully – with those few true professionals who stayed the course at their existing companies and took the time to nurture long-term relationships.

Thus my advice to all ad network sales professionals is: slow down! Don’t let your ego drive your career into the ground. Instead, stay the course at your existing organization and learn to grow your and their revenue. By acquiring long-term success, you will establish a track record that will ultimately advance your career.

I also have some advice for companies seeking to hire top ad network sales talent. Despite the high percentage of job hoppers, there are true professionals out there. The best way to find them is to partner with a recruitment firm that has a proven track record of success in this niche market. The best firms will not only vet out job hoppers but will also make sure they match the right professional with the client organization’s needs.