Posts Tagged ‘Human Resources’

Should You Adjust Sales Compensation in a Declining Revenue Environment?

September 14, 2010

How one adjusts the compensation of their sales force is something many people have been talking about recently, both on business oriented discussion boards online and in person, privately as well as at well attended events.

On the surface, these are simple questions with several variables. In general, I have always been a supporter of lower salaries with the majority of the upside in total compensation coming from commission, especially when the salesperson controls the sale from start to finish. However, if the product or service being sold has quite a long sales cycle, 9-18+ months perhaps, and is a pretty high ticket item, I would usually say a larger base salary is needed because people do need to eat while they are developing a long term relationship.

The deeper question though is why so many companies are considering changing their compensation. Are they paying their sales people too much up front to begin with? Has the sales cycle just gotten too long? Has their sales team started to buy into the “bad economy” excuse and lost their focus on developing new relationships and growing the ones they have? What exactly is making it a “declining revenue environment?”

In over 20 years of selling and managing salespeople, my response to a change in compensation either by the company or by the salesperson is simply “SELL MORE!” While it isn’t nearly that simple, I would look at all factors of the “declining revenue environment” before making any strong consideration on changes. Plus, we have not even begun to discuss the potential for negative reaction from the salespeople. What would they do if there was a change? Would such a change cause you to risk losing too many of the right people and put you in a steeper declining revenue environment?

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Closing the Deal on the Go: What to Do When Your Salespeople Are Dealing with Difficult Clients: Showing Support in Difficult Times

January 20, 2010

The other day I posted an article about what to do when you deal with difficult clients. Today I thought I would write about what to do when your salespeople encounter such clients.

Salespeople can find dealing with difficult customers draining, especially if they do not feel they have the support of their management. Therefore be on their side when they are right, and be there to listen. Help them more effectively deal with difficult customers with role-playing exercises. Tell them when a customer goes over their heads to you. And let them know you will speak with them about any action you take when intervening in one of their accounts. If you do not do this, you risk damaging your relationships with both your salesperson and their client.

Also, resist taking the easy way out when a salesperson’s difficult client comes to you, even if placating them seems like it would be the best short term solution, because ultimately your people must live with the consequences of you decision, plus, that difficult customer may soon becomes your consistent problem.

This post is based on material originally published in Closing the Deal.

For more information on Closing the Deal, check it out on Amazon.

(Burghgraef, Richard. Closing the Deal: Hot Sales Strategies that Make Money. Encouragement Press. Illinois: Chicago. 2007)

Why Is Promoting a Top Salesperson to Sales Manager a Bad Idea? The Same Reason You Don’t See Barry Bonds Working as a Hitting Coach

August 23, 2009

We work with a lot of successful companies at Randolph Sterling, many of which grow very quickly. One particular company we worked with went from one small office with three sales reps, to four offices with 12 sales reps two years later, to eventually 8 offices with 28 sales reps. The president and vice president of this company had no problem managing one office plus their other duties in running the company. However, when they got up to four offices, it got more difficult as they seemed to be spending all of their time going up and down route 95 traveling between New York, New Jersey, Philadelphia, and Washington, DC to manage the respective sales teams. When they got to 8 offices, it was just too much for them so what did they do? They promoted the top salesperson in each office to a sales management position.

The plan was a complete failure. The managers, who continued to work their sales territory because the president didn’t want to lose that revenue, continued to grow but everyone else stagnated. Most of the #2 guys in the offices eventually left.

How could this happen? These guys are great reps, they should be able to help these other guys out to be better too, right? A great theory but rarely does it work in practice. The reason why is similar to the reason why many great baseball managers were not the top players of their era—the skills to be successful are different.

Look at long time St. Louis Cardinals manager Tony La Russa. Never a great ballplayer, (a career .199 batting average over 10 years and 132 games played) but his ability to communicate with his players, to study their strengths and weaknesses, as well as those of the opposition in order to put his team in the best position to be successful, and to work with upper management to communicate what he needs to win championships, allowed him to become one of the winningest managers in major league history. Do you think a guy like Barry Bonds, arguably one of the best hitters in baseball history (we will save my opinion on his alleged steroid use for another time), honed his communication skills to allow him to hit so many home runs?  Guys like that usually have very little patience for the guy at the end of the bench who you may need to call on when a starter gets hurt. Their attitude often is “I could do it so why can’t he?”

The story is many times the same in the sales world. There are some very successful sales managers who have been tops in their company and others that the dual role of sales rep and sales manager very well, but these are rare occasions. When looking to hire a sales manager, think of the skills that you want in that person to be successful…does the top rep have those skills? Does he want the job (and the possibility that he will be making less money?) Is there someone else within the organization who may fit those skills better? Maybe it’s the solid, mid level rep who always takes the new guy out to show him the ropes to make him feel part of the team? Maybe you should outsource some of the sales management functions?

There are several options for this very uniquely skilled position. Take the time to find the right fit, not simply the right now fit.

Randolph Sterling Introduces the SAM Peer Advisory Concept to the Raleigh/Durham Market

August 21, 2009

Thursday, August, 13, 2009 marked Randolph Sterling’s launch of the SAM (Sales and Marketing) Peer Advisory concept in the Raleigh/Durham market with a seminar to introduce it, sponsored by Business Clubs of America.

We have been running SAM groups in the Chicagoland area for 3 years, but with the launch of our new office in Cary, NC, we felt it was a great time to introduce our SAM concept to the area. Peer Advisory Groups are not new to The Triangle nor to most places, however most peer advice has been limited to CEO’s and key executives in groups like Vistage, and do not really cater to sales and marketing professionals.

I have been a member of Vistage for five years and have seen how working with my peers to uncover business problems has helped my company grow, and therefore have become a strong supporter of peer learning. As a salesperson, I noticed that most account executives really do not have a strong internal support system, not because they or management are doing something wrong, but because they have an intense pressure to perform and do not want management to know if they are having problems. We figured that we could change this with a peer advisory group strictly for sales and marketing professionals. We have been successful in our Chicago office doing this for three years, so we thought, “Why not get this program started in North Carolina?”

Our seminar began with an introduction to Randolph Sterling and why we decided to start our SAM Groups. Next we asked our participants one simple question: What is the largest obstacle for growth that you see in the next 6-12 months?

The responses varied as we went around the room, giving each attendee a chance to introduce themselves, their business, and their answer to the question. Many of the responses were along these lines:

  • How do I get my prospect to “pull the trigger” on this project? I know I am saving them money and time.
  • With a limited budget anticipated in 2009/2010, how do I decide how much to spend on sales, marketing, social media etc? I can afford to do these things, but I can’t afford for them not to work.
  • How do I get people to understand that I am a necessity when I am often viewed as a luxury?
  • One part of my business is going strong, but another part is just not converting into sales. What should I do?

Others simply said their biggest obstacle was themselves.

We then asked for a volunteer to present their issue.

One of the great values of a SAM Group membership is the fact that everything said in meetings is confidential. I can’t get into too many specifics about the issue we discussed, but I can tell you about the process. 

First, the volunteer takes about 5 minutes to explain their problem—they always think they need about 30 seconds, but come on, these are sales people, the only thing they can do in 30 seconds is cash a commission check.  Part of the explanation process is for the presenter to discuss the issue in detail, its overall importance, what they have done so far with regard to this issue, and most importantly what they are looking for from the group. Some look for guidance, some are completely lost, still others are just looking for assurance that they are on the right track.

Next, the rest of the group asks questions of the presenter to further clarify the issue. Most times the “simple” issue is not the issue at all and through this process we uncover the real thing that the person needs help with. This is also the hardest part of the meeting as salespeople are always ready with “solutions” and attempt to skip right over the clarification process. This can sometimes lead to a great solution to what is not the real problem.

Finally, once the group has a better understanding of the issue, they will offer suggestions. The presenter’s job at this point is to simply listen to the solutions being presented. Some of these solutions are presented by people who have been in the same position while others give advice based less on experience and more on theory. Both are welcome as it is the presenter’s responsibility to sift through the suggestions and decide what to do next.

“I really enjoyed seeing the process,” stated Creative Gifting’s Debra Simonette. “It was nice to see that people who always seem to have the answers have issues to figure out as well. I liked being able to be a resource to them.”

Robert Morris of Axia stated, “I think it is a great concept. I don’t have a local sales manager so it is nice to be able to talk to people in my market who are talking to the same people I am selling to and get advice from them.”

“I definitely see SAM Groups as a great addition to the business landscape of the Triangle,” stated Business Clubs of America’s Cathy Sanita.

Personally, I am very much looking forward to working with more companies both in Chicago and in the Raleigh/Durham area. 

But, after that, what’s our next step?

Taking SAM Groups global through the internet.

We invite you to try the process outlined above in our comments section.

How to Keep Your Good Sales Reps

August 2, 2009

People will leave jobs for a variety of reasons. It is just a matter of fact that you will not keep all of them to be able to have them receive their 25 year anniversary watch. How do you keep from losing too many of the good ones…keep investing in them.

Here is my version of the typical sales force (of 3 salespeople or more) that I see. You have your big producers. These are the guys who bring in so much money for the company that they are given somewhat free reign simply because you don’t want to upset them and have them and their book of business leave. Then there are the bottom feeders that are just holding on. Much of sales management’s time is spent trying to help these guys sell something or replacing them. Then you have your middle guys. They are usually hitting quota (or close) and pretty much follow procedure. Their expenses are under control simply because they just don’t have the type of “pull” that the big boys have. As a sales manager, these guys cause you very little trouble, so you don’t spend too much time with them other than the occasional check of an expense report. They will come to you when they need you, right?

Unfortunately, they don’t and it is these middle guys (who are generally quite profitable for the company) who are the ones who leave. Their territory is given to a bottom feeder “with potential” who may or may not grow into the position…usually not because while sales managers speak so highly of the personal relationships that they want their reps to develop, they figure that when the old rep left, the new rep will retain that business because they were “buying from the company.”

So is that the best it can get? Absolutely not. I find that the strong sales teams that I work with are that way because they have invested time, energy, and of course some money into the development of these middle guys. But what if the sales manager has no free time after coddling the high producer and interviewing to replace the bottom feeder? Invest in an outsourced assistant sales manager who can come in a few hours a week and work with those middle guys, going out on sales calls with them, giving them insight, and just talking to them about opportunities and obstacles. Also invest in peer advisory groups for them, so not only can they learn from others who are out calling on the same doors (not competitors but people selling to the same people they are) but they will also have a place where they can talk about some of the frustrations on the job without their sales manager thinking that they are not getting the job done.

Before you know it, these middle guys will not only not be thinking of leaving, but they will be nipping at the heels of the top dogs.