Hire, Train, Compensate: Why It Isn't Enough
October 05, 2007
Three Steps Managers Must Take Now to Boost Sales Team Performance
By Dan McDade
The process for building a sales force is relatively straightforward—hire the best-qualified candidates, provide training and compensate for performance. It's a step-by-step course of action that basically any organization can follow. But is that all that is necessary to make a good sales team great?
The reality is that while these practices—hiring, training and compensating—are all fundamental to the sales management process, other steps are often required to elevate the sales team toward dramatically improved revenue generation.
Consider sales training methodologies. There are many popular programs out there, and the truth is that most of them work well enough in teaching sales representatives the mechanics of working deals and closing the sale. Why then, after engaging the sales force in such a program, do revenue numbers shift only incrementally? To this same end, why do exciting new bonus plans and other sales incentives often fail to deliver hoped-for results?
There are three additional—equally important —elements required to yield results once the hiring, training and compensation issues have been worked out. If hiring, training and compensating are the "science" behind sales, then deployment, monitoring and managing, and coaching and counseling are the "art." Managers who understand and manage on the basis of both the art and science of sales can greatly impact the outcome of sales opportunities.
Sales Deployment
Most companies tend to deploy their sales resources in traditional ways—for instance, small and mid-sized companies typically assign sales representatives to geographic territories—such as by ZIP code, state or region. Larger organizations may also deploy their salespeople based on vertical industries.
While this works well from an organizational perspective, the downside is that it requires little to no critical thinking. In comparison, ideal deployment processes involve "putting the best salesperson in front of the best prospect at the best time."
In other words, each sales rep is a unique individual offering a specific personality, skill set and background—and what works well in one situation might not work well in another. A key job of the sales manager should be to match the sales rep to the opportunity at hand.
Let's say Joe is your top salesperson. Does that mean he should work Company A just because it is located in his geographic territory? Maybe not, especially if another sales rep, Mary, has special knowledge of Company A's business and industry. Perhaps Mary even has mutual contacts with Company A's chief decision-maker. In this case, Mary may not be the best sales rep in the department, but she is the best sales rep for this potential client.
Instead of simply sticking to hard rules about territorial divisions, sales managers should apply practical thinking when making sales assignments. Smart deployment requires looking at each case independently and assigning a salesperson based on knowledge and availability. Regarding the latter—remember the adage about striking while the iron is hot. If your best sales rep is currently tied up, it may be best to pass the hot lead to the next best rep who is available.
Monitoring and Managing
In theory, a salesperson's time can be broken down into units. With 40 hours per week in a four-week work month, it can be assumed that a salesperson will have 160 one-hour units during which activities can be accomplished. Some tasks may take more than one hour—such as visiting a prospective client's office—and some may take less, but it is necessary to allocate these units appropriately.
Ideally, the sales manager will help sales representatives to prioritize these units so that the best opportunities get a disproportionate amount of time each month. It is also important that the deals that may close the next quarter be given the right amount of attention to move them along. Note that I did not suggest working only the hottest opportunities! Sales reps and managers frequently invest in sales cycles that are stacked against them and fail to invest in longer-term opportunities that could represent more revenue and profitability.
In order to accomplish these goals, it is my experience that a sales rep should have visibility into no more than 30 to 40 accounts at any one time, and should be focused on a short list of just 8 to 12 accounts each month. This should be broken down into four to six accounts that require up to 50 percent of the sales rep’s time in that month, and four to six accounts that require about 25 percent of his or her time. Some longer-term opportunities can also be worked into the equation that need less time-consuming "multi-touch" attention—for example, an email every couple of weeks, a handwritten note accompanying an article relevant to that account, or a phone call every few weeks to discuss something of interest to the prospect.
Utilizing time in this way ensures that prospects are continually being funneled through the pipeline, and that the sales rep does not focus too much time on shorter-term opportunities at the expense of those that are longer term.
Too often, sales reps have so many opportunities that their mode of operation is to give each account on their radar a "lick and a promise." Spread too thinly, the end result is that not much of anything gets closed. Imagine if a sales rep had 160 accounts and tried to give each of them equal time. Clearly, he would not be able to do much for any one account: one phone call, one letter, one sales visit. The chances of moving anything effectively through the sales cycle would be slim to none.
By monitoring and helping to manage the sales continuum, managers can ensure better results.
Coaching and Counseling
Many people think coaching and counseling are the same thing. Not true. Coaching involves working with an individual who is capable of doing his job, but doesn’t have the knowledge to do it properly. Conversely, counseling is focused on someone who has the knowledge for the job, but will not do it.
In other words, many sales reps have the aptitude for sales, but do they have the fortitude and attitude to be successful? It is the job of the sales manager to figure out on which side of the fence each salesperson in his charge falls. Given that salespeople are driven by the "Three C's"—Control, Credit and Compensation—this can sometimes be difficult to determine. The only way to efficiently and effectively measure sales performance is by carefully monitoring performance against a set of objectives that includes, but is not limited to, closing deals. In other words, if a sales rep is assigned 40 accounts, and at the end of a quarter nothing has satisfactorily moved along in the sales process, then you can bet that the next 40 will fare no better.
Conclusion
Hiring, training and compensating continue to be primary building blocks for sales force assembly and development. However, it is easy to overlook these additional elements—deployment, monitoring and managing, coaching and counseling—that are critical to optimizing sales performance.
By adding these additional steps to sales force management, a salesperson's chances for success are greatly increased, which will in turn impact your company's revenue.
Sidebar: Tip Box
• No matter what you assign to sales reps, they will find accounts that they feel are better targets. So rather than fight it, go ahead and allow the sales rep to add targets to his or her list. However, you must also let them know that at the end of the day—and assuming that the rep is not hitting quota—only movement among the list of assigned accounts is going to factor into performance evaluations.
• For managers, coaching is time-consuming but necessary, and should be looked at as an ongoing educational process to help sales team members reach their full potential. Counseling, on the other hand, has a finite number of steps. Designed to elicit a change in behavior, counseling should be directed toward those reps who seemingly have the tools for better performance but for whatever reason aren't using them.
• One can look at the importance of both coaching and counseling by thinking of the sales team as distributed among three unequal groups. Those reps in the top section (about 10 to 20 percent) care deeply about staying on top. Those in the middle (60 to 80 percent) are satisfied with staying in the middle but do not want to fall into the bottom section. And those in the bottom are fine with staying where they are.
• If counseling does not work with those on the bottom, in all likelihood they will be terminated. This will redistribute the sales reps and change the dynamic•since the new "bottom" will be comprised of previous mid-level performers. These sales reps will have a greater desire for improvement in order to boost back up their status.
This also indicates that a good manager should spend more time pushing from the bottom up, rather than focusing on the reps at the top, to improve overall sales team performance.
Sidebar: The Four Steps of Counseling
Steve is bright and affable—by all indications, he should be a go-getter salesperson. You've coached and motivated, and provided the proper training resources. Still, Steve repeatedly fails to meet quota and does little to fill the pipeline with sales opportunities.
Is Steve putting in fewer hours than he should be? Is he failing to follow up on what you know to be qualified leads? Is he a poor, unprepared presenter?
Many managers are unsure of how to counsel team members. But counseling can be completed in four clear-cut steps:
1. Identify the problem.
2. Identify the resolution to the problem.
3. Identify by when the resolution must occur.
4. Specify what will happen if the problem isn't resolved.
Often times, a situation goes beyond coaching to counseling. By identifying the problem and corresponding resolution, and setting a timeframe for improvement, the employee has a concise understanding of the expectations and outcome.
Dan McDade is the founder and president of PointClear, the sales and marketing services firm. Before McDade founded PointClear, he served as Vice President of Marketing for the direct mail firm, Jackson & Perkins, and as President of UST: The Business Marketing Group. PointClear's expert sales and marketing professionals provide clients with forecastable sales opportunities, actionable market intelligence and effective market coverage. To find out more about PointClear's products and services, go to www.pointclear.com.
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