The Six Dimensions of Sales Roles

6 Dimensions of Sales Roles

Defining sales roles has a direct connection to the sales compensation plan. When identifying those roles, consider six dimensions. A sales role (channel or job) is comprised of multiple factors that make it effective, yet can stretch its capabilities to a point that either maximizes or limits its effectiveness.  The factors below must be considered when structuring and managing sales roles. You can use these to define sales roles pretty specifically down to what you will need for the organization and for the compensation plan.

  1. Sales Strategy Responsibility

This dimension defines the type of customers the organization is targeting. Is the company retaining current customers? Is it penetrating current customers through either product penetration (selling more of the same products) or buyer penetration (getting additional buyers)? Is it pursuing customer acquisition? This combination of possibilities provides overall direction for the job.

  1. Product Responsibility

This dimension describes the products, services, and offers the job will bring to market. Does the rep sell one product, multiple products, or the whole portfolio? The more products each rep is asked to represent, the more his bandwidth is stretched. A product specialist, for example, should be focused and narrow. A rep selling the whole portfolio may need some overlay specialists for support, especially if it’s a complex offering.

  1. Market Segment and Channel Responsibility

For reps working directly with customers, this dimension identifies the groups and characteristics of those customers. Market segments can be defined as simply major accounts, key accounts, middle market accounts, and core accounts; or they might be defined by customers, values, or needs. Market segments may also be described vertically, such as healthcare or transportation, or a combination of these variables.

Channel responsibility refers to coverage and management of third party channels. An organization might use distributors, resellers, referral partners, or other types of third party businesses to help get to customers. In that case, it will usually use a role that works with its channel partners. In fact, it may need two roles: a channel acquisition role (someone to go out and acquire those relationships) and a channel management role (somebody to manage, cultivate and develop those relationships).

  1. Sales Process Responsibility

This dimension refers to the breadth of the sales process the job will span. The sales process may be expansive covering lead generation, qualification, solution design, proposal development, deal closing, and even implementation.

If you ask a sales person to do all of those things – going from lead generation all the way through the close and the implementation – it stretches his bandwidth. That requires a broad set of skills, as compared to having some jobs that are lead generators or maybe – odd concept – marketing generating an abundance of leads. One role may pick up qualified leads, close them, and turn them over to an implementation specialist. Many organizations over-simplify what’s really required in the sales process.

  1. Marketing, Technical, and Operations Responsibilities

Some jobs will have dual responsibilities, performing disparate functions. Some jobs are contaminated with other operations roles and have been cobbled together over time. Moving non-selling roles to other functions out of sales can help clean up the sales job and increase its effectiveness.

  1. Management Responsibility

This dimension identifies roles the job may have in managing other people in addition to selling. The classic jobs affected by management responsibilities are the selling sales manager and the selling branch manager. These combination roles often appear in organizations with emerging management levels. Having a seller straddle both sales and management is sometimes a first step toward pure management jobs that allows the organization to still attach a unique quota to the job and align its cost with a revenue stream. The reality is sharing a dual selling and management role can create conflicting priorities. A pure management role, effectively defined and staffed, can provide a much greater revenue impact through leadership and development of multiple sellers.

The big concept concerning sales roles dimensions is that the more a job is asked to do, the more stretched it gets, the less effective the job becomes. This customer coverage discipline of job definition is important to understand to make the organization more effective and to have a solid foundation for the compensation program. Once you decide which breeds of dogs your organization needs and clarify their priorities, it’s time to begin compensation plan design.

 

Next week I’ll write about how to differentiate your top performers. Contact me at mark.donnolo@salesglobe.com with any questions.

Time for Coaching Sales

Coaching is a critical role for sales managers. But consider your own organization: how many managers spend time each week coaching and developing their teams?

For the rest of us, it’s a struggle. Sales managers just don’t put the necessary time into coaching. Sometimes – often – it’s because they don’t have the time available or they really don’t understand how to coach.

If you’re thinking, “Each of our sales managers spends about 30% to 40% of their time coaching,” then congratulations. You are in a small but decidedly elite group.

But it’s not that sales managers don’t want to. In a recent survey conducted by SalesGlobe, 84% of companies perceive coaching as either “very important” or “one of the most important factors of sales success” for their organizations. And the reps are actually really interested in doing the work. Surprisingly, although sales people often take a cynical view of training, most are open-minded when it comes to coaching and development that contributes to their success. In fact, 75% of sales leaders see their organizations as receptive to coaching.

Balancing out the role between sales and sales management is crucial to allow bandwidth for coaching time, and setting priorities for sales managers is the first step.

Leadership must make the mandate for coaching clear. If coaching is not a priority in the organization, it will only be conducted by those who are interested. Many of the top performing sales organizations around the world require that their managers spend target amounts of time weekly on coaching. To ingrain the process in the organization some companies will go as far as requiring managers to post their coaching time on a public calendar, making it visible to the organization. Like most business priorities, coaching has to be viewed as essential by leadership in order for managers to make it a priority in their own jobs.

 

To learn how to make coaching a priority for your sales team in 2013, email Mark at MDonnolo@SalesGlobe.com, or visit us at SalesGlobe.

To Cap or Not To Cap?

Now that the election is over and all those spirited Republican vs. Democrat office debates will start to cool down (maybe), here’s a fun idea: why not kick up some dust with a new fight? Should the sales compensation plan have a cap, or not?

This is a surefire way for some lively conversation.

A cap is an upper limit on incentive earnings. The benefits of caps include mitigating risk for the company. We’ve heard stories, and you probably have too, of a sales team or single rep hitting a mega-deal and raking in a seven-figure commission check. These stories scare the heck out of finance.

These stories also motivate the hell out of the sales organization, which brings us to the downside of caps: they can be very demoralizing. Even if the cap is way out in the stratosphere of potential earnings, its existence is felt. The sales organization knows there is a limit to their earnings, and they don’t like it. For the highest performing reps, they might ultimately look for a role in another company, one that doesn’t cap incentives.

While we don’t recommend caps, there are some legitimate reasons a company may employ them. For example, caps protect you against unexpected payouts resulting from mega-deals or bluebirds beyond the rep’s control, poorly set quotas, unreliable financial modeling, or production-constrained environments where demand may outpace supply or the company’s ability to maintain quality levels.

On the other hand, uncapping the plan requires good historic data and financial modeling. An uncapped plan must also be consistent with the sales culture of the organization, especially if reps may earn more than their managers or senior sales leaders, in some cases.

Caps are less about the math and more about the people and behaviors.

What’s your position in this spirited debate?

To learn more, please visit us at SalesGlobe.

Doing Away With Quotas

Ah, quotas. Can’t make people like them, can’t achieve goals without them. Or can you?

We recently spoke to a sales executive who told this story:

“Several years ago our sales force for one of our business lines was cut from 25 reps to 15, but the quota went up. The sales leader was bold, and he had some bold leadership traits. He walked in to the meeting and said, ‘I’m doing away with quotas. I don’t know what the right number is. I know you guys are the best of the best and it’s a big market. Now, my number, is $100 million, and there are 15 of you. So you can all go figure it out if you want. But there are no quotas and I’m not measuring to a quota. I want to see what we’re capable of as a team.’

‘And then he said, ‘Give me a list of what’s getting in the way of your success.’ The reps came back and said, ‘Titles,’ so he changed all their titles. And guess what happened that year?  They sold about $127 million, best number ever, highest per person, and we never set a quota for anybody. The organization had a target and there were a certain number of people, but there were no incentives at the target. It was paid off of what you drove home for the business. To some extent he set the people free. It was a powerful enablement, to say to your people, ‘You’re the best of the best, and I just don’t know how good you can be.’ He’s a motivator and a very good team builder, and kind of an impassioned leader. I don’t think everybody can get away with that.”

Could your sales organization get away with it?

 

To learn more, visit SalesGlobe.

Sales Roles and Productivity I: Follow Me

 

Let’s acknowledge that different sales roles have different definitions of productivity. For example; the transactional sales rep selling local advertising with a quota of two sales per week will have a very different schedule than a long-term consultative sales rep selling an expensive piece of technology.

Different types of sellers, different characteristics to their productivity. Demanding a rep with a sales cycle of two years to close deals more quickly probably won’t result in more sales. More likely, it will annoy the potential customers and send your rep looking for another job.

So how can you define productivity in your organization and differentiate it between sales roles?

We worked with a company that recently made a change to build more of an account management focused organization because so many of their people concentrated on just hunting.

But they were in a new market, and both management and the reps were a little disoriented. So, in order to help the reps, the managers temporarily took over the selling. They broke the market, did the major hunting, and passed it along to the reps for account management.

“We said, ‘We’ll go find the customers, we’ll develop the pattern, how they buy, what the customer looks like, persona, cycle,’ everything,” said the vice president of marketing for the company. “And we’ll train the salesman. We will get the first order, we’ll teach you how to do the second order, and then you’re on your own for the third order.”

“We built a war room down on the first floor and started going through this whole process of building this together. The reps wanted to know what we were doing in there, and we said, ‘You focus on the day job. Don’t try to create this new market. Because then, you’ll lose focus, you won’t make quota, and we will go broke as a company.’

“So, we said, ‘We’ll teach you how to do this and add it to your portfolio.’

“There were questions like, ‘Will I lose quota? Will you take business from me?’ So, we had to work through all of those territorial things that we as sales people like to hold on to.”

It was an interesting concept. This company, a major technology company, didn’t put the salesperson out and say, “Go develop the business in this particular area.” They prepared it for them. They went through the process with them, and then repeated it, and let them catch on that way.

“We knew that the first time we were going to get our nose bloodied. We had to understand how the deal happened,” he said. “There were things we didn’t understand when we got started. Our sales guys got chewed up. We figured out what the pattern was, and learned that we had to develop it, and then hand it off to that organization.”

How well would a practice like that work in your organization?

To learn more, visit SalesGlobe or email mark.donnolo@salesglobe.com. 

Communicating Change to a Sales Team

Perhaps the hardest aspect of business communications is the timing. You’re always behind the 8-ball. So much of communication is formally announcing what people already know thanks to the rumor mill and the water cooler.

 So there’s a natural pause. “Do I really need to announce to my sales team that we’re redesigning territories? They already know it.” But avoiding that formal announcement is a mistake: it’s a missed opportunity to frame the change in positive language and directly address the natural fears associated with change.

 Before you talk yourself out directly communicating to your sales team what to expect with their new sales comp plan or job roles, consider making time for an “assessment phase” to do the following:

1. Send a clear message from leadership making a compelling case for why change is necessary now.

2. Gather input from the people who will be most affected by the new sales comp plan or territory redesign (or other change) through formal or informal interviews and/or mini-surveys.

Whether rumors have begun flying about an expected change, or you’ve just noticed a few fearful glances around the office, beginning effective communication early will usually garner a greater percentage of buy-in from people who feel they’ve been heard.

 

To learn more, visit SalesGlobe or email mark.donnolo@salesglobe.com.

People and Politics of Sales Compensation II

This is the second in a two-part series. Read Part I here.

While the group of folks charged with designing a sales compensation plan can put the “fun” in dysfunction, the group can also work beautifully together. After all, they share a common goal — to create a comp plan than harnesses all that power behind the sales force, and make everyone some money.

Consider your current mix of people and the following key points when creating the sales compensation design team.

1. Listen to the sales organization. As participants in the plan, this group can offer insight into how well the plan works, as well as any challenges. Interview sales managers, survey front line sales reps and be receptive to feedback throughout the year.

2. Include a cross-section of leadership in the planning and design process. Leaders from the major functions involved with sales and sales compensation should be
included during when making major decisions. Involving executives from sales leadership, financial leadership, administration leadership and human resources leadership ensures each organization has a voice at the table.

3. Follow a design guide and establish a decision making procedure. A design guide outlines the process – soup to nuts – of evaluating and creating a sales compensation plan that is aligned to the goals of the business. A guide keeps people on track and focused on the strategic goals of the plan, and prevents individual functions from getting sidetracked by a separate agenda. Make sure the guide outlines how decisions will be made within the group to prevent disagreements from becoming stalemates.

4. Gauge and then respect your CEO’s level of interest in the design process. While some CEOs like to be involved as the compensation plan is designed, others just like to hear the final number.

We’d love to hear who is involved in your organization’s sales comp design team and how it works — or doesn’t.

To learn more, visit SalesGlobe or email mark.donnolo@salesglobe.com.

 

The People and Politics of Sales Compensation

This is the first in a two-part series. Read Part II here.

The people and the politics of sales compensation is about the softer side of sales compensation – who’s behind the scenes collaborating (or not); the steps in the process; how well the process works; how people work together; commonalities between the various functions involved; and solutions for challenges.

The human element touches sales compensation throughout the entire process. It happens during the year – asking sales managers to participate in the plan and convey how the plan is working; asking sales operations and HR to communicate and evaluate the plan. The human element assembles the compensation design team and establishes the principles for how the team will make decisions – who will crunch the numbers; who will evaluate the finished product and finalize the compensation plan. The human element determines the variety of perspectives included to make sure there is a well-rounded representation from the company. How they interact keeps it interesting.

Here are a few of the usual suspects:

1. The C-Suite. The C-level is almost always involved to some degree. Very often we see the C-level person – perhaps the CEO – pop his head in the room to ask, “Is this going to cost me the same or less than it did last year?” Other times we’ll have CEOs actually at the table and involved in the process. CEOs have very different levels of involvement in the compensation process, ultimately because CEOS, based on their personal preferences, have different degrees of comfort with sales compensation.

2.  Sales. Sales, obviously, is at the table, and they’re always asking for something (more money) often in the form of a bigger accelerator. They may grumble that HR doesn’t understand sales or what sales needs.

3. Sales Operations. Sales operations sometimes drives the process and other times responds to the process by trying to keep meetings organized and trying to devise a system that makes sense. Depending on where sales operations resides in the organization, these people can have different points of view. Sales ops most typically will be within the sales organization, but sometimes will be within finance or even HR. Where they sit, very often, determines their point of view.

4. Finance. Finance is typically at the table, either at the C-level or someone on the project team. They have an Interesting negotiating position. This perspective often brings some old cliché’s about sales: sales is overpaid; they have no value. Finance wants to negotiate: “If we have an accelerator on the plan, what are we going to take away on the downside so we can pay for the accelerator?”

5. Human Resources. Very often HR drives the process; and if they’re not driving the process they are certainly a partner. Their role is to looking at what’s happening in the market and make sure everybody is aligned with the market; try to bring some discipline to the process; and offer some expertise if that doesn’t reside on the team already.

6. Marketing. Marketing is not always involved in sales compensation, but sometimes they have an agenda, like sales. In a multiproduct or multiservice organization sometimes marketing tries to get a lever in the plan for each of the different products they represent, which can add complexity to the plan.

While all these interactions take place designing the compensation plan, the field sits and waits, knowing they will most likely get a bigger quota – often for a lower percentage increase in compensation. The sales compensation design process brings together many competing points of view and potentially competing priorities. It quickly, as we say, puts the “fun” in “dysfunction” in organizations.

Who are the people involved in your sales compensation design?

To learn more, visit  SalesGlobe or email mark.donnolo@salesglobe.com. 

 

Rapid Sales Comp

We all know time can get away from us; and sometimes the consequences are bigger than others. When it comes to designing a sales compensation plan, it helps to have months of input and design meetings. However, it can be done quickly if need be. We can abridge the process for efficiency and still retain its power.

Consider these five points when designing a sales comp plan – even if you’ve run out of time.

1. Clearly define the sales strategy and roles, and align your compensation plan. Sales strategy and sales roles provide the foundation for the direction and actions of the business. Sales compensation should align with the sales strategy and motivate the sales organization.

2. Differentiate top performers. Make sure your plan rewards top performers competitively with the industry and significantly differentiates them from the average and low performers. Don’t over pay for low performance; instead, use those funds to invest in attracting and retaining the right talent.

3. Keep your plan simple and clear. Pay for three or fewer performance measures that match the strategy, and don’t put any less than 10% of target incentive on any one measure. Use plan mechanics (e.g., commission or quota bonus structures) that are simple and clear with minimal use of modifiers such as hurdles, gates, and links.

4. Formalize the solution selling process and use sales compensation to support it. Beyond the headlines of solution selling, define what it means to your organization, the sales process, and how the organization should work with customers. Don’t hard-wire sales compensation to solution selling unless the process and skills are well developed and
opportunities exist in all markets.

5. Develop a market opportunity driven quota setting process. Quotas are the lynchpin between pay and performance. A well-designed sales compensation plan can be rendered ineffective with poor quota setting. Make sure your quotas represent the growth opportunities in each market rather than a future projection from historic performance.

To learn more, visit SalesGlobe or email mark.donnolo@salesglobe.com. 

Strategy and Sales Comp Part II: Putting it in Action

With all the power sales compensation can wield, it pays to invest the time to connect sales comp with the strategy of the business. Below is the second installment of nine important factors to consider when designing a sales comp plan that will drive more revenue. Read the first five in Strategy and Sales Comp Part 1: Making the Connection.

4. Reduce the complexity of the sales compensation plan. Often, the more technical an organization is – or the more engineering-oriented an organization is – the more complex the sales compensation plans will be. There’s a temptation to include everything even remotely important in the compensation plan. The key, however, is to include the two or three things that are most important to maintain clarity of message.

5. Manage the crediting and compensation costsMake sure you’re crediting the appropriate amount to people involved in the sales process without over-crediting. It’s a balance. We don’t want a single credit in a team sale or a complex sales process, nor do we want to over-credit. If you have too few credits people run to the opportunity and then run away very quickly once they realize somebody else has grabbed the credit. If you give too many credits, too many people belly up to the chuck wagon, and it motivates the wrong behaviors.

6. Increase sales productivity. The right daily actions of a sales person increase the overall activity of the organization. Sales compensation can be a powerful tool to motivate the right actions. Use sales compensation as a lever to drive productivity and to create the right motivations in the organization.

7. Control channel conflict.
In a multichannel environment with a direct sales organization and indirect channels, getting those resources to align to the customer is essential for success. Get these parties to work together without competing with each other or degrading your value proposition in front of the customer.

8.  Build a sales culture. The sales culture is an unspoken but powerful force in the organization. But assessing it is fairly subjective. A lot of organizations will say, “We’re over the top in sales culture.” Others will say, “We need to move in the direction of being sales-oriented but we don’t want to destroy the culture that we have. That’s very important to us.” As you make changes in sales programs and sales compensation programs, ask how those changes are going to support the culture. Also question the degree of change the organization can handle to make sure that we don’t push it in the wrong direction.

To learn more, visit SalesGlobe or email mark.donnolo@salesglobe.com. 

Recruiting and Retaining Sales Talent Part II

From SalesGlobe Forum
Held in Dallas on 11/6/09

This is the second in a two-part series. To read Part I click here.

SGF Member: One of the things we struggle with is, unlike someone who sells a product, we sell a service. Attracting the right people who know how to sell a service versus a product is very difficult. So I’d be interested in feedback, and what processes they’ve gone through to find that type of person.

We’re finding difficulty in finding sales people that have that aptitude to sell it. Is that something you can see on the front end? Do you have a process to pick up on a person’s competency to sell a solution, or beyond the product?

SGF Member: We spend a lot on the profiling, but for the most part, you’re still trying to get the right skills and profile for that person to be long-term successful.

SGF Member: A really interesting concept in the business or consulting industry is to take a person who is really an expert in what we do, and based on that, maybe they can sell. They are a consultant, they start as a specialist or a practitioner. Because they can’t sell consulting unless they really know how to do it.

But the dilemma is interesting. Your grow people up and you say, “Ok, now you’re a partner. You’ve got to sell it.” And suddenly he can’t sell. You’re moving people from expert to seller. And here we’re talking about: how do we take an expert and make them a seller?

SGF Member: See, for us the challenge is to find someone who is operational on the client side, who is part farmer and part hunter. Pretty simple. We do it the exact same way. They understand the breadth of it, and then you maybe help form the growth from a client relationship side.

And then, on the sales side, they’re purely hunters. Their job is to go in, understand the unmet needs of the clients, and see if there’s something our organization can do for them. Then convince them at a very senior level to do that, and then be willing to divorce themselves from it, with no emotional tie: “Charles, it’s nice doing business with you. I’m going to hook you up to Simon. He’s your client relationship manager, he’ll love you. See you later.”  So that I can focus on sales.

The challenge is finding that individual. We’ve done a great job at integration, handing it off so it’s seamless, and the client really feels engaged. What we struggle with is finding that person to do the job Simon would do. I’m not going to say it’s an easier job, to find those types of people that go out and have the grit to sell a service.

I’m wondering how others have dealt with that themselves.

SGF Member: The one thing that’s difficult is you’re not hiring entry-level sales people in that kind of job. You can have a fine track record of success in selling services: you just have to tell them what’s unique about your services versus what they’ve sold in the past. I also think you can’t hire them en mass. This is where search firms and networking come in, to hire them one at a time.

But I think you have to look at a track record of success at selling services. I don’t think you can take a product person and make him a service sales person.

SGF Member: I would agree. At my company I didn’t know anyone who made the transition from applications to the services side. We did have some people who came from the services side who made the transition to the applications side, but they had the credibility to back them up.

SGF Member: So what I’ve done is, I take a look at the most successful profile. And my business developer officer and I try to match that up. It’s difficult. You need a combination of skills. The ones that are very successful have to have the credibility, so they have to have the knowledge, the terminology, the experience.

SGF Member: We have a very solid team today, 94 people. But finding those people, you make a lot of missteps. You use a lot of recruiting firms. It’s been a challenge. So we’re very patient in the process.

SGF Member: Is there any other process? Any other way to adapt or to speed up the process? Are you able to test drive them?

SGF Member: Well not necessarily test drive them, but we talked about psychology – people, psychology and the process really then allows you to test all three of those before you ever make that hiring decision. In a 30-60 minute interview you really can’t take that much away. You really want to spend three to four hours getting these guys together and see what they would do, long term.

You can take a page from consulting – running through the pieces of what you’d want them to do. Or put them in a job, and see them in action. That’s one of the things with sales people is, they’re sales people. They’re really good in a short period of time. They’re really convincing. You get them and really see how they are in time.

This is the hardest. I got fooled many times.

SGF Member: I am a big fan of case interviews. I like to hear cases of them on a job because that’s how you really hear things. Give them a period of time. See how they deal with situations selling to you what you need. When we used to hire applications sales folks, we used to have a 95 percent success rate.

SGF Member: Is it unchartered that you can do that?

SGF Member: Nobody in our space approaches businesses like we do. So that’s great. We like that. We like unchartered. But it’s strange. We worked with a couple headhunters, and when you look at these people, at their credentials – they’re awesome. So I went before anyone else met them, and I asked a couple questions. And they said they were really good in this particular space. I don’t want a box.

So you get people who –  maybe you run into this –  if they were acceptable in their environments, they would die in another environment.

SGF Member: So are you having trouble finding the right candidates, or are the ones you’re finding not performing?

SGF Member: Well form follows function on that. I’m through with the other piece of that. It costs a lot of money to bring people on, it costs a lot of money to train them, it costs a lot of money for that entire process. If they don’t develop to the level of some of your expectations…

I’ve hired some great candidates, but the company hasn’t put them in the right position. Classic sales guy here, but guess what the company spend $5 million last year and they’re not going to buy anything for the next two years. We’ve got a great guy on the account – he’s a great guy. He didn’t suddenly forget how to sell. So you’ve got those issues.

SGF Member: So I’m asking, do you have the right candidates, and are you doing the right things for them, putting them in the right position, to be successful?

SGF Member: I want to go back and make sure I answer that properly. I think it’s a little bit of both, but more times than not it is people in the environment that’s nearest or exactly like other environments, and they’re just not having the same level of productivity.

SGF Member: I think I made my errors in that. I got in this trap: I was going out to hire sales people, and that’s what I should have been hiring. It was a large complex sales organization. The sales people didn’t develop relationships with the customer. They were more used to a lot of environments. They weren’t as successful with the longer term, ongoing relationship with the client. And so I brought in a relationship management.

I learned there are more differences there than commonalities. You don’t have to get an account manager for this customer, but it’s another filter. And looking at this candidate, if they have this kind of relationship.

In our organization that kind of relationship guy, that’s how we separate those components. Because if it’s a client you’re already engaged with and doing business with, you just trying to nurture, grow and develop that relationship.

For a client manager, put that person in front of clients that you trust. Ask your clients, “How would you feel about doing business with this person, versus your original contact?”

SGF Member: I like that trusted customer relationship.

SGF Member: I like that idea. Throwing someone new out there?

SGF Member: That doesn’t have to be the customer that guy services.

MARK DONNOLO: Ok, any other points to bring up?

SGF Member: I don’t know if you guys have exposure to this or not, but our company uses the Gallup Poll exclusively, for psychological profiles and things like that, hiring sales people across the business.

When we start a new division we go to Gallup and say, “We want these characteristics for a communications rep.” Or you can probably call Gallup and create a profile, and say, “We want these characteristics profiled.”

For us, that’s the first step: put them through the interview process. But if they don’t score well on the Gallup, they don’t move on. If they do score poorly in some areas, at least we know where. If they have vision, or know how to build a relationship, at least we know where to dig deep.

It was discussed earlier: some of those tools, when we start a new division, it’s very helpful. We know what we want in a sales person and we know the characteristics that need to be there.

SGF Member: So you’re using a good filter then to increase the probability that you’ll have a good candidate.

SGF Member: Yes, for people who work in our business units who are going to have to go in and sit down to talk to Mr. Chairman and CEO of PepsiCo or Walmart or Walgreens.

SGF Member: Can they design a profile for that as well? They can? Excellent.

SGF Member: I’m a big fan of psychological profiling; I’ve taken a half a dozen. And I’ve been impressed. I took this 30 minute test and you nailed me. I mean it was really telling. And it’s good for the candidate as well, just as it’s good for the company. Because it makes sure you get somebody that’s a good fit for them as well.

I spent the last few weeks looking at this thing. And what I liked about this approach as opposed to the Gallup plan is they analyze the top-middle, and they build a profile for your company versus a generic, this is a hunter, farmer, whatever it is. And then the system kicks out a set of interview questions, based on those questionable areas where they don’t fit.

So those people in the remote stores or wherever it is, so that’s actually a good guide. It’s kind of interesting, and seems like it’s taking us to the next level.

To learn more, visit SalesGlobe or email Mark Donnolo at mark.donnolo@salesglobe.com.

Recruiting and Retaining Sales Talent

From The SalesGlobe Forum
Held in Atlanta on 11/13/09

MARK DONNOLO: In this current economic climate, it’s a good time to recruit or upgrade your sales talent; to get rid of your bottom performers and actually bring in, ideally, a top ten percent. How you systematize an approach and adjust the compensation for those coming in? The top performers are leaving their company. They’re unhappy, so you have a chance to get them, but there’s a dollar figure hanging over the head.

Has anybody had any luck with a program or a system for that?

SGF Member: That’s a pertinent question for our organization. There’s a lot of available talent, and if you’ve got an attractive environment for winning sales people, true pros, you want to get them. It’s also a time to call underperformers.

We racked our brains because we don’t have the most lucrative compensation package. But we’re post-acquisition, and there’s always an integration budget that’s really nice and flush. And you have to have a good idea of how you’re going to use those dollars. So we’ve considered formalizing this “upgraded talent” and creating a sales bullpen. And, in order to have people come in that are attractive to your business, based on their historical performance and what they’re going to do for you going forward, we have used some integration dollars to formalize this upgraded talent and create a sales bullpen.

And I’m not sure if this is going to be successful or not. It was a great idea, because you’re talking about affording good sales people. So, once we create this bullpen and recruit the best talent, they would be joining the organization to bring new talent and bring the organization to a new level. But they wouldn’t be placed in roles right away. You’d have your own sales team seeing this unfold and probably raise their own performance. So, hold them in a bullpen and try to place them quickly, and use integration dollars to afford good sales people.

SGF Member: Definitely in today’s environment – in the macro economic situation – there’s tremendous talent out there. The talent I see out there is the talent that’s still with companies, not having left, because usually they’re the ones companies are trying to hold on to.

When someone asked, “How do you get rid of the lower ten percent?” I look at it somewhat different. I’ve inherited a highly tenured sales force – people who have been around for a long time. One of the fallacies is trying to look at how their performance has been over the years. The lower ten percent may not be the people who have had the worst results.

The change-out might be needed of people who have consistently hit their numbers. And the reason for that is you’ve got to look at the skills that they have and how they got there. And sometimes the reason they are where they are is they have the right customers. And what they’re bringing in every year, you might want to get double. Look at the existing team. It’s not just about who’s got the numbers and who hasn’t.

But the flip side is: when you’re looking at bringing someone in, the first thing I tell the HR people is, forget about this benchmark data you have. If you go after eight players it’s just like acquiring a company. They’ve got their own profit and loss statement. So first, what are your expectations out of some of the people you’re bringing in? If their compensation expectations are high, then the return you expect from them should be high as well. And when you get top talent like that, they don’t mind when you set the bar high.

SGF Member: For adding top talent to the organization, we look at people within our organization that are top talent. Because if I bring people from outside at income levels that are significantly higher, I put my top talent internally at risk. I’d rather cut more than the lower 10 percent because I think I’ll get more out of the higher performers than I would …

SGF Member: If you look at deals won over last few years – significant deals – and you look at the 80/20 rule, does it follow what you’re saying? That the top performers are bringing in 80 percent of your revenue, not 80 percent of your deals but 80 percent of you revenue?

SGF Member: Yes. And you know those people are your go-to people on everything.

SGF Member: So you’re loving on them more than usual right now because you don’t want them to look around or get discouraged.

SGF Member: That’s right. And to the question you had about the executive team who doesn’t love paying sales people a lot of money. We actually are led by a CEO who came up through sales, but I think some people say, “Well that’s a lot of money to make, I didn’t make that when I …”

But I say, “Well it may be different today.” We are pushing that envelope really hard. I think I’m putting a lot of personal reputation on the line, for that, because I think that is the way to transform our sales organization. The investment in the sales people will be required to change our company. But it’s scary, because you have to pay a lot more than people are used to.

SGF Member: Just yesterday I had a conversation with my CFO, and said this person is way out of line. We got through the conversation and bumped him up $40,000 in total compensation – some salary and some variables. You absolutely have to reinvest in your folks. You have to be continually recruiting your folks.

You made a great point about another company. I spent a lot of time talking to another company before making my decision, and I had an option to potentially join them. They were dangling those $800,000 – $1 million compensation packages in front of me. But they were 2008 figures. So I said, “Show me the 2009 figures,” and that dog’s not hunting in 2009.

So I think from the recruiting standpoint, from your perspective, it’s about, “Where’s the puck going?” A lot of people have had great years, and they are looking at W2 statements for 2009 and asking if they’re at the right place.

Everyone’s asking that. Everyone’s sales compensation is coming down. There is a great opportunity. And everyone’s open. And if there’s a compelling story to where your company is going, and what the upside is – no caps, a big market opportunity – if you’re as good as you say you are, the sky’s the limit. So I think I’ve seen a market that’s extremely receptive.

SGF Member: Just a quick question if you find this in your experience. Your top performers – it doesn’t matter what you pay them, they are workaholics. They’re going to give it all to you no matter what. Why not take care of them and love on them and appreciate them, those top performers. Are you finding that to be true?

SGF Member: I paid our top twice as much this year. Because I paid them for the responsibility that they were shouldering. Like you said, they work so hard, they contribute to every deal, they’re helping sales people in other territories. So I started giving them money. I had sales people that made $200,000 more this year than they did last year. And nobody can believe that. But we’ve had a phenomenal year on the backs of a few.

SGF Member: I have one question about an issue I’m facing in my company.

I have a tenured sales force, and our focus is clearly on business development. I’ve emphasized a key account owner; I want these people to feel they own the account. The challenge I have is focusing on business development and account ownership. A lot of time my sellers are in involved in service delivery and problem resolution. But there needs to be more focus on business development.

I see two questions. One, how do you deal with that with the seller? I’m trying to get that emphasis on new business development and not so much on service delivery. And the other question is, how do you get the other folks in the organization that are responsible for service delivery to step up to the plate and do that? Because right now, it gravitates to the seller.

SGF Member: This is absolutely something I see this time and time again. I’m responsible for service delivery and sales. When I came in I said, “You know what? The services delivery element is as important in terms of the ongoing sales as anything.” So we changed our model to show that. Then, when I look at that, there’s a couple of things:

Whoever is leading the service delivery side, if your sales people are spending that much time on service delivery, you have the wrong person leading the charge. The person has to basically tell the sales guys to get out of the way. It has to be that brutal. Now what you’re going to find, there are going to be sales people who choose not to get out of the way. They’re not the right sales person. I mean, yes, a sales person cannot ignore the fact the customer has an issue, but he’s got to facilitate to get the right people involved, not be the person. Once you’re in that position, you’re always in that position. You can never get out of it. So, it’s a combination of the two. The answer, in my experience, is you have to have the right person leading charge on service delivery end.

SGF Member: We actually have a hard line of demarcation between sales and delivery, and there’s an account manager – really a project manager – who takes over.

And there are hunters and farmers, and they look very different. You will get the deal closed and at the 60 percent sales stage we’re going to introduce the professional services team. We’re going to say, “This guy right here will manage the entire delivery process. Bottom line accountability, here’s his home phone number.” The sales person will delegate that.

Where I’ve seen that not work in my previous career is when there’s not a clear delineation between roles and responsibilities. I’ve seen sales people gravitate towards that. Because cold calling and business development, that’s the harder part of the job. So one piece is structure. And then the second piece is stack ranking – pipelines. And peer pressure from a continuous track record. Stack ranking to me has been one of the best performance management tools in my career.

SGF Member: When you talk about the delineation, how does the customer like that?

SGF Member: Well, I’m 45 days into it. One of my observations is that we break a relationship a little, and that’s not ideal there. But the point still remains the same, and that is there is a role in the company that that person is solely responsible for.

SGF Member: I buy into that. Let the hunter be the hunter and cut them loose. It’s always soft. We’ve adopted this thing where the person that takes the account, they go in there, and then the hunter leaves, but doesn’t leave for first six months. We make sure there’s a transition and a time period.

SGF Member: That’s a big key – that relationship and the expectations with the client. But the sales person should be out looking for revenue. You remember the NRGAs – the non revenue-generating activities. You don’t want your hunters involved in those.

The NRGAs is a big topic with us right now, and also they’re hard to do business with. I formalized it. We’ll see how effective it is, but we formalized it as a pinnacle issue. We’ve got sales people doing what we’ve not hired them to do, and we need to stop that. So we’ve got an executive sponsor on the non revenue-generating activities that are contaminating their performance. We’re trying to shift that to someone who’s got the pull in the organization to make it happen, and trying to cut sales people loose.

To learn more about recruiting and retaining top sales talent, visit SalesGlobe or contact Mark Donnolo at mark.donnolo@salesglobe.com.

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