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Posts Tagged ‘Sales Force Development’

Does Your Hiring Process Resemble a Trip to Lost Wages?

by Charlie Hauck

And I don’t have to tell you why people call that place Lost Wages, do I? I am headed there to present to a group of business owners soon, so the idea of what really goes on in most hiring processes struck as cruel irony. Phrases like Resume Roulette and Credential Craps started coming to mind as I thought about my program. Just because a candidate’s resume looks like he or she is an ace doesn’t guarantee the face card will follow for a winning hand of Black Jack. It is scary to think how often people have said “hit me” only to bust on what looked like a sure winner.

How much does it cost?

When you consider the bottom line impact of a hiring mistake, Lost Wages could not be a more appropriate reference. Some people calculate the cost of a bad hire to be 1.5 times the annual salary of the employee. And depending on the industry, or the level of the position, that figure could be very conservative. Despite hard times, we still hear of companies where turnover is as high as 15% in some areas. That math is staggering when you consider there are enough tools available to minimize hiring mistakes. Why so many business leaders/owners still consider assessments or testing to be an unnecessary expense shocks me.

It’s not real money is it?

The costs of bad hiring practices may not show up on a balance sheet as a line item, and perhaps everyone has just accepted them as just the cost of doing business, but when the impact of not making the right choice is so high, how can companies afford to not do things differently? Upgrading your IT system happens because you found something that is more efficient and can help your profitability. Doesn’t it make sense to upgrade the expectation of what kind of human assets you add to your organization?

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Your Business Development Results Are Only History

02/04/2010 Leave a comment

That’s right. Looking at your results is just a history record of what you have done in the past. It’s a lagging indicator (or rear view mirror) of the sum total of your efforts over the past few weeks and months. Maybe it was prospecting, networking or listening to your past and current clients that got you there. That being the case, is there any way that you can find a forward looking or leading indicator of your future results?

Your Sales Pipeline isn’t the whole answer

You’d be partially right if you thought that your Pipeline is part of the answer. Depending on your qualifying and closing averages, it can give you a good clue as to what to expect in the future. So sure, you can do the same you’ve been doing, and work at it harder, more frequently and with more intensity. Nobody would discourage that behavior, but it takes a lot of time and effort to get the desired incremental returns on that kind of grinding.

The Intangibles

So perhaps a better leading indicator of future results is not always the quantity of effort, but rather the quality of the effort. Can it be that your own personal and professional development could really have the biggest impact on your future results? No doubt that the old adage about working “Smarter” comes into play here. But how do you define it? Is it increasing product knowledge, sales skills or other expertise in your field, or is it more about intangibles like passion, self awareness, emotional control, understanding, insights and perception? Only a consistent program of self development is the way to find the answers that are right for you. How hard would it be to get off the roller coaster a little bit every week to focus on self development as your leading indicator of success?

Many thanks to Daniel Grissom for inspiring the concept about the Leading Indicator.

What does the North Star have to do with Business?

01/27/2010 Leave a comment

I know where the North Star is with 100% certainty. It’s like death and taxes. Unless someone moved it, or everything written about astronomy over the last few hundred years is just a big hoax, it’s usually pretty easy to find if you know where to look. Sometimes when the conversation comes up with others, and I show them where it is, I’ll get a reaction like this … “No, that’s not it. It’s not the brightest. That’s not North”, or some other reason for them to dispute the reality. Although they obviously don’t know where it is, they are almost certain of where it isn’t.

What’s the point Smarty Pants?

So when we recommend to managers that are selecting sales people to use an assessment before making a hiring decision, we sometimes get a similar reaction like this …  “No, they don’t work. I don’t want to spend the money. I’ve done it before. I can trust my gut. But we know him or her.” … and all the other reasons.

OK, I’m alright with skepticism up to the point where it doesn’t fly in the face of the truth or the proof. The stats for our assessments are this: When you follow the recommendation to Hire, there is a 94% chance of success. When you ignore the recommendation Not to Hire, your chances of success go down to 25%. Those stats are based on hundreds of thousands of real life data points and have been back tested to confirm the validity. No doubt that 94% isn’t as sure as 100%, but it’s pretty darned good when it comes to understanding the future potential and production of a very important and expensive asset.

Is it really that simple?

No it is not that simple, so don’t believe it when you hear it. Nothing is that simple anymore. Using an assessment is just a part of a process. First, it has to be the right assessment. Too many products out there are marketed to have the same effectiveness, but the truth is that they do not have the same predictive validity. Secondly, potentially good sales folks can easily be de-railed by a weak on-boarding plan, mis-alignment of sales management, insufficient coaching, poor fit with the work environment or many other parts of the process. Being blind to these others factors is probably the reason that those who have used an assessment in the past no longer believe in their usefulness.

Next time you get ready to put on a new sales rep, can you please ask yourself how certain you are of the parts of your process?

Ice Cream for Breakfast?

01/20/2010 4 comments

The feeling of being denied the freedom to make your own decision is one of the worst feelings in the world. I don’t know too many people beyond the age of two that would argue with that statement. If I decide to go out and ride my bike, eat lunch at 1:30, have ice cream for breakfast or stay up until 3:00 AM, well, that is my choice thank you. So why should I change my mind if that is really what I want to do?

I’ll just sit here while you try to convince me

So when did it become fashionable to deny a prospect the choice to hear a pitch, stay with a current vendor or take advantage of special pricing from a competitor?  Is it that everyone we approach must be stupid or making a mistake if they don’t buy from us? Or is it just possible that we aren’t right for everyone? The tried and true process of spouting features and benefits is a tad “seller-centric”. .. meaning that those “can’t miss” benefits should work for everyone because that’s what the sales person is telling you. Just because you offer a car with fold down seats does that mean I should be thrilled even though I have no need for that particular feature that is so desired by someone else?


Just trust me, please

Someone once told me that feature and benefit selling amounted to “positive performance before trust” when used to fuel the sales process. I didn’t quite grasp that idea until I found myself as the prospect a few times. You could almost feel the salesperson telling me to just go ahead and trust him. And the funny thing was that the more he told me about this feature and that benefit that made no difference to me, the harder it was to believe I should grant him any trust at all.

So in an effort to find a more nurturing way to sell I began using a permission based sales approach that embraced the fact that either party could say NO, that allowed both salesperson and prospect to feel in control, and that used question marks instead of exclamation points or periods to drive the process forward. Wouldn’t we all like to work in an environment that felt that comfortable?

A Funny Thing Happened When He Quit – Part 3 of 3

11/24/2009 Leave a comment

In the first and second installments of this blog, we looked at the story of Robert, a senior sales rep who grew complacent and elected to leave (under duress) his high salary position due to some performance and behavior issues. The fact that he had left a fair amount of business on the table at his existing clients was surprising news to his old managers. Robert then found himself with a new job that required him to implement a different sales discipline that allowed him to be successful under the mostly commission based comp plan. And with that new found discipline, even Robert was surprised to see his results go up dramatically.

Of the many comments received about this story, some suggested the following:

  • The fault lies with sales management for not paying attention.
  • Just because someone on the team speaks up, doesn’t mean that what they are saying is always negative and should be let go because of it.
  • Robert was just a phony trying to do a minimum of work just so he could collect a paycheck.
  • Somebody should have done a better job of “motivating” him.

Any of the above could be true, but the fact of the matter is that every situation is different because of the vast combination of workplace elements combined with the unlimited array of human factors. As with many of the dynamics in the sales world, there is never a shortage of right vs. wrong thinking, finger pointing or what seem to be perfectly rational explanations. The temptation in these situations is to try to find the “answer” to solve the “problem”, when in reality these problems are just conditions that have been going on forever, and will continue to persist as long as sales and business continues to be an imperfect world. So with no magic bullet and no hard science, all that can be done is to treat the conditions themselves rather than being frustrated that there is no single answer to the problem of managing people.

It’s all really simple, right?

So, in the business of sales, someone will have to unravel all the inter-related items that can affect the performance of each rep, each sales manager and the overall success of the company.  In the case of Robert, just a sampling of the questions that could be asked are:

  • Did Robert really have the Desire, the Commitment and the self responsibility to be successful?
  • If not, then why did he succeed in one position and not the other? Was it only about the comp plans?
  • Why were some of Robert’s peers hitting their numbers when they were in the same market with the same products? Did they just have a “better territory”?
  • What parts of Robert’s game really needed fixing the most?
  • What impact does sales management really have on performance? Should they be cheerleaders or intimidators, or both?

Certainly there are many “Do it Yourself” approaches than can be tried, but in the end, Sales Force Development is a planned process with many moving parts.

[Author note: Someone asked if Robert was a real life character or if I just made this story up to serve my own purposes. The truth is that “Robert” is a compilation of three different reps that had almost the exact same situation occur to them in real life in the last six months. True story.]

Where does margin come from?

We all know how to calculate margin in the simplest form by subtracting the cost of goods from the price those goods were sold for, but do many sales people, experienced or not, understand how to sell margin to their clients, suspects or prospects? When people on the street are all hyped up by presenting features and benefits, margin seems to be the last thing on their minds. What is the first thing on the mind at the executive level of the companies those salespeople are pursuing? Well, at that level it is profit or the operating margin of the business.

Rise to the Head of the Class

Features and Benefits are old school issues today. I didn’t say they weren’t important, just old school. The business development people that will rise to the head of the class and become highly profitable for their employers, and highly valued by their customers, are the ones that can provide products and services that generate profit for those customers and clients. Features and Benefits are a surface level approach that can be challenged by a “me too” competitor that is willing to drop price or make unreliable commitments. Everyone knows the downside of those experiences.

What’s the big picture?

Business development teams that can understand the business issues of the people they interact with will provide more value for longer periods of time and at higher margins. Knowing why a feature or benefit is valuable from the prospect’s perspective will build more trust than simply knowing what those features and benefits are. Features and benefits are “seller-centric” in nature, and if not attached to the total financial picture of a prospect they can be too assumptive and quite easy to ignore. The challenge then becomes how to open a business / profit conversation that doesn’t begin with a feature / benefit or price cutting pitch.

You don’t have to hire all MBA’s, but what would happen if your team embraced a little bit more business sense out on the street?

Sales Teams … Should you play the hand you’ve been dealt?

10/12/2009 Leave a comment

Anyone that’s played poker knows how hard (or stupid) it is to push a pile of chips into the pot when you’re holding a marginal hand. Yet month after month, thousands of companies push out a paycheck to sales reps that have very little chance of delivering a win. A good poker player always knows the odds of winning based on the cards he has in his hand. However, those that lead a sales team often don’t have any quantitative appreciation of what they have on their hands other than what happened last month or last quarter. And if they don’t know what they have, then how can they continue to make those monthly bets that a miracle hand will suddenly appear?

Are you “All in”?
Fortunately for the poker player, he can always fold and save his bets for the next hand. Not so easy with a sales team though. Since many companies are already “all in” with the bets on their sales team, they attempt to change the odds by motivating, training, pleading, intimidating or any other tactic they think will change the outcomes. But what if the odds are so heavily stacked against you that no amount of continued investment will make any difference? How would you know if certain reps are not trainable, are not coachable and can’t be motivated? Who are the real winners or the potential winners?

What next?
The answers lie in not relying too heavily on gut instinct, or hope, or other intuitive or traditional approaches that don’t have a predictive validity. Many sales leaders are aware that there are many profiles, assessments and other tests available that apply some science to evaluating what they have on their hands. The challenge is in finding the right tool for the job, and to make sure that it is being used by a qualified practitioner. Too many times, the wrong assessment is used for the wrong reasons and another bad bet gets made. You can increase your chances of success by finding a Sales Force Development expert that has the right tools to evaluate the make-up of your current team and show you what your chances are.

Take out the risk
If you want to start seeing how you sales team rates, check out our tools section and try out some of the free assessments from Objective Management Group.