Want sales training to work? Get the right people on your team

by: By Dave Stein, CEO and Founder, ES Research Group, Inc.

        It makes little sense to spend the time and money training and developing your sales team when the people in whom you are investing do not have the capability for sustainable improvement.

“Mishiring” is an epidemic. Depending on the industry, ESR estimates that somewhere between 20 and 33 percent of salespeople do not have the capabilities to be successful at their jobs. Investing in sales processes, training, attractive incentive plans, technology, marketing support and strong products and services to sell will not do much unless you have a team of qualified sales professionals with the right attributes.

The demands of today’s hyper­com­petitive buyers’ market have forced many sales leaders to rethink their approach to hiring. They have learned, all too painfully, that hiring methods of the past no longer apply. These lessons include:

  • A salesperson with a past record of stellar performance will not automatically perform in the future. Different company, different competitors, different offering, different customers.T
  • The accuracy of salespeople’s resumes and online profiles is declining, so rigorous and methodical reference checking is a must.
  • The number of interviews you’ve done or your ability to “read people” can hurt rather than help hiring effectiveness.
  • A bad hire — a salesperson that does not make it through the first year — will cost anywhere from $150,000 to $800,000 or more, including lost business opportunity.

More sales leaders are building high performance teams of winners by applying a formal process to what in the past they had done by the seat of their pants: hiring. A hiring process provides the sales leader with an objective assessment of each candidate, which is the most critical success factor in hiring.

Steps for smart hiring

Form a three-person hiring team.

Agree on how the position and company will be described in a consistent way to candidates.

Build a profile for each sales role.

The profile defines the critical skills and traits required for success. (A skill is a developed aptitude or ability, such as listening, presenting, cold-calling and negotiating. A trait is an inherited characteristic, such as tenacity, intelli­gence, drive for self-improvement, integrity, positivity, flexibility, curiosity and coachability.)

Write an accurate job description to provide to recruiters and posting sites.

Create a resume screening filter to eliminate candidates who don’t qualify at the outset.

Engineer sets of first-, second- and, if required, third-round interview questions. For sales candidates, devise questions that will evoke responses that will enable you to determine, based on their behaviors, whether the candidate possesses that skill or trait without telegraphing the answer you are seeking.

Build a rigorous reference checking procedure that validates candidates’ claims. Sales leaders with a wide network can often find “blind” references that might provide an honest appraisal of a candidate, knowing that the discussion is strictly confidential. It works for my clients.

Verify past performance claims using candidates’ W-2s or other documentation. We also strongly suggest performing background checks, done with the candidate’s cooperation.

Build sales call and sales presentation simulation exercises for final candidates. (This is the closest you’ll get to seeing them doing what they will be doing much of the time once they are hired.)

Build a relationship with a predictive testing provider. These tests are inexpensive, nearly impossible to trick, and are very accurate in determining a candidate’s likelihood of success.

Create individual ramp-up or on-boarding plans for each new hire. These assure that the gaps between the profile and the candidate’s skill set will
be closed within 90 days of employment. They will assure your new hire gets up to speed on the industry you are selling into, for example.

I know what you’re thinking. You don’t have time for this.

Let’s look at the numbers. If building this process were to take you as much as 10 hours and taking the first candidate through the process (rather than the typical “tell me about your strengths and weaknesses” interview) an additional five hours, that’s 15 hours. If you can raise your average from, say, two out of three hires working out to three out of four, and a wrong hire costs your company $500,000, that’s a heck of contribution to your company’s profitability.

The bottom line: What percentage of salespeople hired into your team in the past three years have been terminated or quit because of performance issues? If the answer is greater than 30 percent, you need to buy or build a structured hiring process, install it, and use it.

Keeping Your Sales Team Motivated and Rewarded with Modest Increases in Sales Volume and Profitability

By Michael Maciekowich, Astron Solutions

Since the financial collapse of October 2008 and the sluggish economic recovery that has followed, many organizations have struggled with the issue of sales compensation.  For a short period of time during 2009 and 2010, a number of organizations suspended their sales incentive / commission plans, instead focusing on fundamental customer retention strategies.  The focus was on setting customer retention and satisfaction targets tied to the sales team’s base pay adjustments.  In one creative case, an organization developed a matrix that linked customer retention and customer satisfaction to the percent of the base pay adjustment.  For example:

Customer Satisfaction Level (Based on Survey Results)

% of Customers Retained

75% Satisfaction Rate

85% Satisfaction Rate

95% Satisfaction Rate

100%

5% Base Pay Adjustment

7% Base Pay Adjustment

9% Base Pay Adjustment

95%

4% Base Pay Adjustment

6% Base Pay Adjustment

8% Base Pay Adjustment

90%

3% Base Pay Adjustment

5% Base Pay Adjustment

7% Base Pay Adjustment

During the 2009 -2010 period this program was used to meet a very important need of the company – retain happy customers.  Discretionary bonuses were granted if any salesperson was able to “up sell” to current customers.  There was very low expectation for any new sales.  If a new sale occurred, the sales person was rewarded through a discretionary bonus.

As this organization began planning for 2011, opportunities to “up sell” current clients on enhanced products / services, as well as refocus on new and expanding sales, were prevalent.  The decision was made to maintain the base pay matrix as established, as it was effective in keeping the sales person focused on current customer retention and satisfaction.  In addition, a new sales incentive matrix was established to focus on a combination of new sales to new customers and enhanced sales to current customers.  Since the economy was still recovering it was decided to calculate the sales incentive as a percent of base pay, instead of the traditional percent of sales or profits.

For example:

New Customer Sales Levels as % of Budget

Current Customer “Up Sell” Levels as % of Budget

50%

75%

100%

110% +

15% of Base Pay

20% of Base Pay

30% of Base Pay

100%

10% of Base Pay

15% of Base Pay

20% of Base Pay

90%

5% of Base Pay

10% of Base Pay

15% of Base Pay

In essence, the sales professional had the potential to not only earn a 9% base pay adjustment based on the Retention / Satisfaction matrix shared earlier, and also could find his / her sales incentive payout enhanced.

A key component of this system is the ability to fund the potential payouts from the margins created by the enhanced sales and high customer service and customer retention.  The company believed strongly that the customer retention / satisfaction focus on the base would allow the organization to aggressively market and use testimonials in the attracting of new client organizations.  As of the end of the first quarter of 2012, the organization has paid out 8% in base pay adjustments, with 95% customer retention and satisfaction, and has also paid out 10% of base pay in sales incentives, with new customer sales at 75% of budget and current customer “up selling” at 90% of budget. Profit margins are low at 11%, but the company feels that without this program margins would have been nonexistent.

This is an example of the creativity a number of organizations are utilizing to drive success in a still uncertain economic environment.  The message is to examine ways to incentivize and reward sales staff on the key strategic objectives needed to keep the organization focused and primed for future success.

 

Michael F. Maciekowich is a Founding Partner of and National Director for Astron Solutions. His areas of expertise include the development, design, and implementation of executive, physician, and employee base pay, short and long term incentive programs, sales incentive programs and performance management systems in all industries. His primary focus is the integration of compensation and human resource strategies with organization-specific missions, visions, values, and strategic operating plans. Michael has thirty four (34) years of consulting and industry compensation experience. Prior to Astron, Michael was the National Director of Healthcare Rewards Consulting and the Metro New York Operations Manager for Rewards Consulting for the Hay Group. He was also compensation consultant with a number of consulting firms, including Towers Perrin (Senior Consultant), Hartstein Associates (Vice President), Adams, Nash & Haskell (Vice President), The  Omni  Group  (Vice President  and  Partner),  and  Modern  Management  (Senior Consultant). In these roles, he focused on the role compensation plays in human resources and labor avoidance strategies, assisting hundreds of organizations in the process. Prior to his consulting career, Michael was responsible for compensation services at the American Hospital Association, Honeywell International, and Zenith Electronics.

Six Ideas for Finding New Sales Leads

By: Ann Handley of Entrepreneur.com  

Business Women using Social Media Marketing

Sometimes in life, you kick over a rock and find a thriving colony of activity. So, too, in business. With so many tools, niches, sites, apps and platforms to look for and nurture customers, it’s easy to overlook less obvious opportunities. Here are some to try.

1. SlideShare
SlideShare.net offers the ability to upload and share presentations, e-books, PDFs and webinars. It isn’t exactly a backwater, but it’s a bit of an undervalued spot. With 60 million visitors per month and 130 million page views, it’s the world’s largest professional content-sharing community and one of the top 200 sites on the web.

SlideShare is also one of the only high-traffic platforms that integrates organic and near-seamless lead generation. The network’s LeadShare service requires viewers to fill out a contact form in exchange for downloading a presentation or PDF, and it encourages viewers to contact the business for additional information at various points throughout a presentation. Of course, this feature comes at a price: To enable lead-capture, you’ll have to spring for a Pro SlideShare membership, which can cost $19 to $249 per month.

2. Product videos
Well-produced product videos are a slam-dunk for increasing sales. Visitors to housewares retailer StacksAndStacks.com were 144 percent more likely to make a purchase after seeing a product video, according to analytics technology company Kissmetrics.

Keep product videos brief–less than 30 seconds is optimal–and consider embedding calls to action in a way that’s helpful and not irritating. Online catalog aggregator FlipSeek does this effectively; for example, it can make the cute shoes a model is wearing clickable, providing a direct link to the corresponding product page.

3. E-mail signatures
Including a brief, text-based call to action in your e-mail signature may not be the sexiest idea, but considering the volume of e-mail you are likely sending, it’s a tactic worth trying. Consider integrating your blog’s URL, a new e-book or some other relevant download into your e-mail signature as a way to nurture relationships with prospects. Technology like WiseStamp allows you to add dynamic content like your latest blog post to any outgoing message.

4. LinkedIn Answers
Browse the questions asked on LinkedIn and use your expertise to solve problems for others, looking for opportunities to link to your relevant product or service. But, as with most things in life, moderation is key: Don’t shill your own stuff unless it truly offers a relevant solution.

5. Error pages
Turn the most boring pages of your site (even a 404 error page!) into lead-gen opportunities.Mint.com’s playful error page  shows a nerdy-looking developer saying, “Page not available. But Justin is.” It goes on: “Justin is a Mint developer who likes slow cars, sharp crayons, reheated pizza and awkward silence.” The page gives links to other Mint.com pages “if you’re more interested in personal finance.”

6. Pinterest
This new kid on the social media block is worth checking out as a traffic-generating lead-gen referral tool. Visits to the invitation-only online bulletin board skyrocketed in the second half of 2011 to 11 million. Brands with compelling boards drive traffic to their own sites.

What’s “pinnable” for a business looking to generate leads? Consider moving beyond product shots to include other images, infographics, videos or articles. My company’s page, features vintage marketing ads as well as marketing fails, charts and stats and a board reserved for business “inspiration.”

Ann Handley is a veteran of creating and managing digital content to build relationships for organizations and individuals. Ann is the co-author of the best-selling Content Rules: How to Create Killer Blogs, Podcasts, Videos, Ebooks, Webinars (and More) That Engage Customers and Ignite Your Business (Wiley, 2011).

Fostering a Positive Relationship Between HR and Sales

By Resolution Systems, Inc.

A sales management team needs to ensure that their department is on good terms with human resources professionals employed by the same company, as these two groups need to work together for the benefit of the entire business. Though fostering this relationship may be difficult, reps should be in line with the thinking of their managers.

These two departments often work together on many projects over the course of a year, and there has to be no negative sentiment from staff members about their co-workers because of this collaborative relationship.

A high level of collaboration is especially necessary between the two departments when it comes to hiring, as the human resources employees need to understand exactly what the sales managers desire in each of the new workers that are brought on.

The sales management team has to communicate exactly what they are looking for and give the HR department specific parameters for each role that needs to be filled. The less control that human resources has over deciding the type of salesperson to hire the better. This is likely going to be accomplished by leaving little room for interpretation and providing a detailed description of the ideal candidate for each open role.

If there are different openings, a management team has to provide several descriptions, as they should not give the HR department an all-encompassing list of requirements for any open sales jobs.

The human resources professionals at the company should know that a major accounts salesperson is going to be completely different than someone who is operating as an inside sales rep.

Though they may possess some knowledge on the subject prior to working in HR, these individuals are not likely to have enough background information to make a reasonable decision.

People from the HR department need to have the differences clearly explained to them by employees within sales. Correspondence between the two sections has to occur on a regular basis and help to identify the gaps that can exist, and managers need to bridge these gaps through some type of constructive sit-down.

There should be some type of social function that is hosted by the company to help break down the barriers that exist between certain departments. Dealing with other employees becomes much easier for many workers if they are interacting with someone they have already met.

If there is not a collaboration between the two departments throughout the hiring process, where people are able to be candid and honest about the potential candidates, the sales team is going to be composed of individuals that do not make the company enough money. All of the alpha personalities may be written off by HR staff members if the right guidance is not given, and this could lead to a leaderless team in the future.

The human resources people may keep bringing on salespeople that would work better in the HR department than out in the field securing business through being a social and assertive representative. This is a case where the two sections had a poor relationship and weren’t willing to work together, and the entire company may be affected by these decisions in the long run.

There should be no evidence of a power struggle between the two departments, as each side should acknowledge the strengths and value that come from the other party. There needs to be a team atmosphere in the office, and no employee should consider themselves superior to someone from a different area.

5 Questions Great Job Candidates Ask

By Jeff Haden, INC.com

Be honest. Raise your hand if you feel the part of the job interview where you ask the candidate, “Do you have any questions for me?” is almost always a waste of time.

Thought so.

The problem is most candidates don’t actually care about your answers; they just hope to make themselves look good by asking “smart” questions. To them, what they ask is more important than how you answer.

Great candidates ask questions they want answered because they’re evaluating you, your company–and whether they really want to work for you.

Here are five questions great candidates ask:

What do you expect me to accomplish in the first 60 to 90 days?

Great candidates want to hit the ground running. They don’t want to spend weeks or months “getting to know the organization.”

They want to make a difference–right away.

What are the common attributes of your top performers?

Great candidates also want to be great long-term employees. Every organization is different, and so are the key qualities of top performers in those organizations.

Maybe your top performers work longer hours. Maybe creativity is more important than methodology. Maybe constantly landing new customers in new markets is more important than building long-term customer relationships. Maybe it’s a willingness to spend the same amount of time educating an entry-level customer as helping an enthusiast who wants high-end equipment.

Great candidates want to know, because 1) they want to know if they fit, and 2) if they do fit, they want to be a top performer.

What are a few things that really drive results for the company?

Employees are investments, and every employee should generate a positive return on his or her salary. (Otherwise why are they on the payroll?)

In every job some activities make a bigger difference than others. You need your HR folks to fill job openings… but what you really want is for HR to find the rightcandidates because that results in higher retention rates, lower training costs, and better overall productivity.

You need your service techs to perform effective repairs… but what you really want is for those techs to identify ways to solve problems and provide other benefits–in short, to generate additional sales.

Great candidates want to know what truly makes a difference. They know helping the company succeed means they succeed as well.

What do employees do in their spare time?

Happy employees 1) like what they do and 2) like the people they work with.

Granted this is a tough question to answer. Unless the company is really small, all any interviewer can do is speak in generalities.

What’s important is that the candidate wants to make sure they have a reasonable chance of fitting in–because great job candidates usually have options.

How do you plan to deal with…?

Every business faces a major challenge: technological changes, competitors entering the market, shifting economic trends… there’s rarely a Warren Buffett moat protecting a small business.

So while a candidate may see your company as a stepping-stone, they still hope for growth and advancement… and if they do eventually leave, they want it to be on their terms and not because you were forced out of business.

Say I’m interviewing for a position at your bike shop. Another shop is opening less than a mile away: How do you plan to deal with the new competitor? Or you run a poultry farm (a huge industry in my area): What will you do to deal with rising feed costs?

A great candidate doesn’t just want to know what you think; they want to know what you plan to do–and how they will fit into those plans.

Jeff Haden learned much of what he knows about business and technology as he worked his way up in the manufacturing industry. Everything else he picks up fromghostwriting books for some of the smartest leaders he knows in business. @jeff_haden

7 Things to Look for in a Sales Manager

By Lee Salz

Many execs put industry experience at the top of their criteria list for sales-management candidates.

“The successful applicant will have 10 years experience in the widget industry.”

Hogwash!

The end result of this approach is that companies hire the industry retreads.

Perhaps, employers think that this person will bring along valuable competitive secrets — maybe even some clients. While that may occasionally happen, this approach negatively impacts the company. They may as well hang a sign outside that says, “No new ideas permitted” because that is what you get when you focus your search on industry people only. What often happens is that the individual gets hired because they can create the illusion of brilliance by using industry jargon to blind the interviewer. “Eureka! We’ve found our sales manager! She is very strategic!”

Every company thinks they are in an industry that is so unique and has so many nuances that the hire must have industry background. But most industry information can be taught. The company needs to get over its hubris thinking that its industry is so special that it takes an industry veteran to be successful.

Product knowledge is not the main driver in a successful salesperson, nor is it the primary one for the successful sales manager. CEOs bounce from Fortune 1000 company to Fortune 1000 company based on their CEO acumen, not their industry knowledge.

A more prudent approach for hiring the right sales manager is to look for a candidate who comes to the table with the specialized skill-set associated with a sales manager. This is a specialized skill set that is often portable to any industry. The role of the sales manager is to both be a leader and a manager, which are not usually skills developed in the womb; they are cultivated and developed through training and experience as a sales manager. Some of the elements that companies should be focused on when hiring the right sales manager include:

  • Recruitment. Whether the company has an opening on the sales team or not, the best sales managers are on a never-ending quest for strong talent. As the prospective employer, you want to understand the candidate’s process for screening sales candidates. How do they prime the applicant pump? Can they develop a profile of the ideal salesperson, and prioritize it between required and desired attributes? What is their process for evaluating candidates against the profile? Ask any company why they miss their revenue targets and most will tell you that having unfilled slots on the team is a contributing factor. Recruitment is a very important arrow in the sales manager’s quiver.
  • Onboarding. Rarely can you hire a salesperson, hand them their territory, and send them off with a good luck kiss. Not if you expect them to be successful. Another key skill of the sales manager is their method for quickly assimilating the salesperson into the organization. What is their strategy to minimize the amount of time that the new salesperson is in a non-revenue generating capacity? What is their plan to make them productive in the least amount of time? How do they measure whether or not the neophyte salesperson is going to be successful?
  • Process. Many companies have one superstar on their sales team — their rainmaker. That’s not exactly a scalable model. It limits growth and creates exposure for the company if the rainmaker leaves. Scalable sales organizations are based on process. The entire team follows a specified model based on a defined formula. Find out if the candidate can create this process for the company, what experience they have in doing so, and what the results were.
  • Metrics. The wonderful aspect of sales is that there is so much data that can be reviewed to understand trends and make changes to the business. While interviewing, scrutinize how the sales manager uses metrics in their approach. See how they have used metrics to affect performance of their team. Learn their approach to scrutinizing a sales pipeline or forecast.
  • Compensation. The beauty of sales is that the compensation plan serves as the salesperson’s job description. This can also be a curse for the company if the wrong behaviors are rewarded by the plan. This is another important skill that a strong sales manager should possess. Find out their approach for developing the right compensation plan for the company. See how they determine which behaviors to reward, when, and how.
  • Skill development. Sales is philosophy, so no one ever knows everything about it. It’s also very easy for salespeople to develop bad habits. Thus, the sales manager should have a skill development plan for their team. Get to know their approach for developing their team members. Probe how they inspire the overachievers to continue to overachieve. Ask they manage the underperformers and lead them to either perform or deselect from the company.
  • Leadership. The first six items fall into a management category. However, the strong sales managers are also leaders. Their sales teams will run through walls for them. Their salespeople not only want to be successful for themselves, but also for their manager. Determine how this sales-management candidate creates an environment where others are inspired to follow them and their teachings. Leadership skills and sales force retention work hand-in-hand. Strong leaders keep their strong players on the team for the long haul.

In addition to cultural fit, these are the seven key elements that a company should use to make a decision to hire a particular sales-management candidate. What the employer will get with this hiring approach is a strong, scalable organization with fresh ideas.

Create Early Warning Systems to Detect Competitive Threats

by Scott Anthony, Harvard Business Review

Eighteen months ago, a massive earthquake struck off the northeast coast of Japan. The tsunami it unleashed caused devastating damage whose effects are still being felt. But it could have been even worse. Instead, a mere three seconds after the earthquake struck, a sophisticated early warning system kicked in. The system then triggered a series of messages via TV and cell phone warning about the impending tsunami that came about nine minutes later — which, as a Time magazine reporter noted, “can be just enough time to take cover, drive a car to the side of the road, step back from getting on an elevator or stop medical surgery.”

Corporations should have early warning systems to detect emerging competitive threats that have long-term potential to affect their business. Just as seismologists used research to determine what to watch for and then distributed networks of sensors to identify the right signals, strategists can look back at past transformations to inform their own analyses.

Strategists need to understand how tomorrow’s industry could be structured. The work of two of the most important scholars in the field, Clayton Christensen and Richard N. Foster, suggests considering five questions:

1. How willing are customers to continue to pay for further improvements in performance that historically merited attractive price premiums? One of the key tipping points in a market occurs when a company, in Christensen’s language, overshoots a given market tier by providing them performance that they can’t use. Your television remote control probably serves as a daily reminder of overshooting. Each of those buttons can do wonderful things, but would you pay extra monthly fees for yet another button? Probably not. When overshooting begins to set in, industries can change rapidly.

2. Are customer preferences and habits changing due to enabling technologies and/or changing social norms? Companies often miss important shifts because they start not among mainstream customers, but at people at the fringes of the market. But remember, the quirky behavior that teenagers follow today (100 text messages an hour!) becomes mainstream just a few short years later.

3. How active are startups at the industry’s edge? For much of the 1980s and 1990s, many parts of the startup ecosystem focused on communications, technology, and health care. In the past few years, there have been significant investments in markets like data analytics, 3-D printing, renewable energy, and financial services. Executives in market leaders in those sectors need to watch these developments carefully, because the seeds of transformation are being sown as we speak.

4. Are competitors with disruptive strategies having a material impact on portions of the industry? Christensen’s research shows clearly that transformation often comes in the form a disruptive innovator that makes consumption simpler, convenient, and more affordable. When a company with a lower-cost business model or one based around radical simplicity gains traction, it augurs significant change. Disruption is moving from a dream (or nightmare, depending on your perspective) to a reality in the financial services industry. Jack Dorsey’s Square is processing millions of dollars in payments a day with its simple but powerful solution. Wonga‘s payday loan offering continues to grow rapidly. And companies like Google, Apple, and even telecommunications titans are eying the industry. Executives that dismiss these developments do so at their own peril.

5. Will current or pending changes in government action shift the basis or competition or make life easier for entrants? The government is often portrayed as an inhibitor to innovation, but that’s not fair. Many commercial innovations, including the Internet, mobile technologies, and countless lifesaving drugs, have their roots in government research. Nonetheless, in Seeing What’s Next we described how governments can curtail both the motivation and ability of innovators to drive disruption. When governments change the rules, or focus their ample buying power in new directions, executives need to stand up and take notice.

Companies need to do more than analyze early warning signals. They need to make sure they organize and act in ways that maximize their chances of responding accordingly. And they need to recognize that, all too often, the right time to start is before they feel the need to response. Good early warning systems provide the data to help inform these decisions.

(One increasingly important component of a company’s strategic early warning system is sniffing signals in social media. Doubting companies should look no further than seismologists. Remarkably, the Twitter Earthquake Detection system detected a recent earthquake off the coast of the Philippines before advanced equipment. It is another sign of how breathtakingly fast our world is changing.)

Scott leads Innosight’s Asian operations. His fourth book on innovation, The Little Black Book of Innovation, is now available (HBR Press, January 2012). Follow him on Twitter at@ScottDAnthony.