Editor’s note: Paul Kirch is CEO of Actus Sales Intelligence, a Fort Worth, Texas, business and sales consulting agency, and Actus-360, a technology services providor. He can be reached at 214-295-6111 or at pkirch@actussales.com.
So often a decision is made to add a new sales person before a company is really ready to help them succeed. In part one of this series, we reviewed how to dig deep to ensure a good fit when hiring. But what if infrastructure issues keep your new hire from hitting the ground running? If new sales staff members are failing to produce you might want to look internally rather than blaming the people who are under performing.
There are many areas where you can be sure to drive success and keep from leading your team to failure. Even if you’re happy with your current team’s performance it is important to build the type of environment where onboarding and success are much easier for those who join your firm.
CRM system
A critical component in helping new sales hires succeed, a customer relationship management (CRM) system provides the opportunity to measure areas of improvement and create a real system for success. Tools such as Salesforce.com and Zoho provide visibility and accountability when it comes to your team’s efforts. If you’re living off of spreadsheets, you’re missing a golden opportunity to create a real system for success.
Remember, CRM systems are meant to be more than a contact management tool. Make the most of the available sales metrics and pipeline tracking. A pipeline generally looks at “open” opportunities by the likelihood that they will close. A best practice for marketing research is to look at a 90-day time frame and lumping opportunities by 15 percent, 25 percent, 50 percent, 75 percent and 90 percent likelihood of moving from a proposal to a win.
Compensation plan
So often we’ve placed candidates within an organization where there’s a lack of clarity around the compensation package. Or, what’s communicated in writing is different from what was verbally presented. Salaries should not be numbers grasped from thin air. When I work with firms to analyze their compensation plans, I look at various elements. One of the most critical is the average percentage of the profit margin. For example, if you have sales person who sells $400,000 in their first year and they earn $125,000 based upon their compensation plan, then you’re likely not going to make money on them the first year. When determining a salary, be sure to take benefits and other costs related to having an employee into consideration.
Note: Losing a new hire or someone who finally reaches a break-even point can cost you dearly. In a recent article on employee retention, Josh Bersin of Bersin by Deloitte shared that many studies show that losing an employee can cost tens of thousands of dollars.
Structured training
So often, employers believe that hiring an experienced sales professional means that they don’t require training or development. This is a very shortsighted way of thinking. Training and development need to become cultural staples within your organization. It’s a shift in mind-set from the operational side where training often happens while doing. Sales professionals are often required to create their own “style” of selling. The way one individual approaches a business development call may be totally different from his colleague. After all, the mood of the customer or the degree of urgency may dictate the tone of the conversation. This is true of e-mail as much as the telephone. There’s simply no way to systematize the entire process. It’s important to train your team to ask the best questions, learn to listen and guide them in being as consultative in their selling as possible. Conducting role playing exercises and other simulated sales situations should be regularly practiced and reviewed.
Onboarding
Far too often, there is no structured onboarding process to help ensure that the sales hire is able to get off to a good start. How are you helping them hit the ground running? Is their territory clearly defined? What about CRM setup? Have you let them know what you expect them to do during the first 90 days? Who will serve as their mentor? Nothing spells disaster for a sales person more than a feeling that they were misled during the hiring process or that they joined a firm that doesn’t understand their needs.
Territory assignment
I’m going to expand on the importance of territory assignments at the risk of offending any employer who believes it’s not necessary to have territory assignments (let me apologize in advance). If you are dealing with inside or outside sales professionals in the marketing research industry, it is critical that you set some parameters around where and how they prospect. It’s not healthy to have sales people fighting for leads and it often creates a feeling of unprofessionalism by clients when they get called by multiple people from one company. Territories don’t have to be geographic, though that is often the easiest way to define an area. From industry verticals to specializations or preassigned leads there are a number of equitable territory parameters you might set.
A dedicated leader
I caution any company that feels it can simply have the operations director serve in a dual role. Operations staff and sales staff have vastly different needs and their challenges are rarely in sync. In fact, anyone managing both operations and sales professionals will inevitably have to choose sides. A sales team should have leadership that understands the challenges they face and be able to serve as their voice at the table with other company leaders.
Not every company can afford to have a full-time sales manager. If an operations director must serve in a dual role, put that individual on the front line to get real-world experience. Send them on the road to client meetings, to get a firsthand perspective on what’s being discussed. Finding a local sales leader who is willing to mentor your team manager is also a great resource.
Commission
A few years ago, while leading an international sales team, I was asked to find a way to stop paying commission to my team. The president of the company’s justification: everyone worked hard and should be paid the same way. A noble gesture, yet commission plans are leveraged by companies for a reason. First off, it rewards success and serves as a motivational tool. Sales drives revenue and revenue leads to profit. One of my main motivators for moving into a sales role after 10 years of working in operations was to have a higher earning potential. Here are a few simple reasons why I believe sales professionals should earn a commission:
1. Clear measurement. A sales job is easily measured and based on a clearly defined target. If a sales person succeeds, they should be rewarded. If they fail, then there should be consequences. Often sales jobs are eliminated for under performance.
2. Crucial work. Charles Wang of Computer Associates International stated, “We have two departments, sales and sales support.” Without sales, a business has no products or services to sell. Yes, be proud of your offerings, but understand that they only matter when there are customers to buy them. Clients exist because someone developed a relationship where trust was bridged and there was an agreement to work together.
3. Challenging. Selling is arguably one of the most challenging jobs. I’m not referring to hours or problem-solving. It’s simply difficult to deal with rejection on a regular basis, while continuing to push forward to try and achieve a sales target that may or may not be realistic. If there are problems during a project, often it’s the sales person who has to try and mend the relationship. Once again, the sales role is measurable, but often the only thing being quantified is revenue.
4. Motivation. It’s a career choice. I went into sales for several reasons, but earning potential was one of them. If you hire professionals who are motivated by commission (at least in part), then you’re likely to see greater sales success.
I believe that a good commission plan rewards success, but does not simply hand out a huge check for subpar performance. Don’t be afraid to adjust the system. Take time to understand your financial situation and make adjustments as needed, while making sure that the system is fair to the team.
Who you hire is almost as important as how you manage and support them. Wait, shouldn’t that be reversed? Isn’t who you hire the most critical piece? For years, I would have stated yes to that last question. However, I’ve seen the same sales person succeed in one firm and fall short in another. Often it comes down to how an individual is supported, developed and measured. In one instance they were put in a position where they could thrive. In the other, they were just put into the company and asked to sell. I don’t want to downplay hiring, but simply point out that a good hire can end up bad when not supported properly. Don’t be afraid to ask your new sales person what they need to succeed. If you feel sales is one of the most important areas of your business, take time to get it right. Your bottom line will thank you for it.
To get a copy of our interviewONE Top 20 Creative Interview Questions, please email me at pkirch@ActusSales.com.