Selling Power Blog

Six Quick Tips for Jump-Starting Sales

With the economy still sputtering and CEOs keeping a tight lid on spending, sales managers report that paths to decision makers are blocked with obstacles. This is frustrating for the entire sales team. I recently spoke with a number of seasoned managers to get a firsthand look at their challenges and coping strategies.

1. Real opportunities are harder to identify. Most sales managers direct their salespeople to explore opportunities with companies that are doing well. But often, salespeople are not capturing these opportunities. Why? Because the decision-making process has migrated upward, and salespeople are struggling to make connections with these upper-level executives.

A solution: Higher-level executives can join in on sales calls.

2. Real solutions are harder to justify. The salesperson proposes a great solution that will do wonders for the client, but the client does not see enough benefits to justify the purchase. Why? Because many companies are still in a budget-saving mode and don’t even think beyond the current quarter.

A solution: Have your salespeople spend more time mapping the pain points earlier in the call. Ask the client to put a dollar figure next to each pain. Justify the economic wisdom of your solution by using your client’s numbers.

3. Friendly relationships are not always productive. Some salespeople work hard on making every call a pleasant experience, yet they are often surprised when a competitor calls on the client and walks away with a sale. Why? Because some salespeople have a strong need to be liked, and their need for approval prevents them from asking some of the tough questions that would advance the sale and actually help the customer make a favorable decision.

A solution: Train these salespeople to sell with the customer’s needs being priority number one. If training has no effect…move them to customer service.

4. With sales being slow, it’s more difficult to cut off problem clients. While sales managers preach that every sale counts, they often fail to count the time and expense it takes to close certain sales.

A solution: Give your sales team clear directions about when to say no to a customer.

5. When business is slow, creative ideas are harder to find. While it’s easy to say that sales problems are nothing but wake-up calls for creativity, salespeople are often hard-pressed to come up with new ideas for increasing sales. Why? Because they think that they’ve tried everything under the sun.

A solution: Pull in your top performers and list their best practices. Then ask them to mentor your sales team.

6. When business shrinks, salespeople get confused about your expectations. Why? In tough times, salespeople worry more about their job and income.

A solution: Don’t add to their stress with unrealistic expectations or ambiguous leadership. Offer a clear vision of the future and create a solid plan that leads to new opportunities.

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Four Tips to Get Better Results from Your Sales Comp Plan

Today's blog post is by Christopher Cabrera, CEO of Xactly Corporation, the industry leader in sales compensation automation.

 

According to a recent Deloitte survey about sales compensation, sales leaders are facing a fundamental paradox. Of the 300 sales leaders Deloitte surveyed worldwide in 2013, only half said they were happy with their sales productivity. (The six-year average satisfaction level is even lower: 47.5 percent.) But when asked if they believe their compensation programs effectively drive desired sales behaviors, only one-third of sales leaders surveyed said they did not.

That raises a question. As Deloitte asks, “Why do leaders generally believe that their compensation rewards the right behaviors, yet they aren’t content with their compensation programs or their sales forces’ results?  There’s a missing link in the belief about what compensation plans can accomplish.”

Well then, what can comp plans accomplish? Deloitte found that sales leaders tend to change their comp plans to address lackluster productivity and performance, thinking the plan itself is the problem instead of looking for the underlying cause.

At the risk of stating the obvious, well-crafted compensation plans can and do drive desired sales behaviors. Poorly crafted ones don’t. The problem is, it’s hard for most companies to know which kind they have until the end of each sales period, when it’s too late to make corrections.

Here are four tips to help you get better results from your sales comp plan. 

1) Give them time to work. It only makes sense to change a plan that isn’t working — who wants to repeat mistakes? But to get the complete picture, make sure you have complete data. Use the analytics in your incentive compensation tools to determine if your comp strategy is effective. These reports will pinpoint which incentives work and which don’t.

Some things to consider: Are your territories balanced, or do some reps have more opportunity than others? That could affect turnover. Are some teams consistently underperforming? That could be a sign of a leadership problem. Have formerly high performers slipped to just so-so? They may need more incentives. A non-monetary incentive might help, especially if it’s personalized for the recipient. A new SPIFF could re-energize a complacent team.

2) Build the plan with a broad team. Gather your compensation analysts plus representatives from sales, marketing, and operations, so you can vet your comp plan upfront. By all means, include a sales rep or two — they’re the ones who’ll be living the plan. In fact, try this quick test to get an idea of whether your reps are aligned with company goals: Ask them, “How could max out your earnings this quarter?”

A simple question. But if the answer is too simple (“Um, sell more?”) then your reps don’t understand your comp plan. And if they don’t understand, they’re probably not doing what matters most to the company.

On the other hand, if they know they’ll earn more if they go after SPIFFs, improve margins, bring in new customers, bundle products, include training in deals … then you know your priorities are coming through loud and clear. 

3) Rewards or incentives? Aren’t they the same thing? Well, no. There’s no question that rewards are nice, but they’re recognition for past behavior. Incentives, however, drive behavior. They provide motivation. You want your salespeople to keep their eye on the prize, and do whatever it takes to earn it. Ideally, they have real-time visibility into their performance so they know at any time how close they are to achieving their goal.

4) Measure performance frequently. Xactly has identified several important trends by analyzing years’ worth of data among our customers. Our analysis of that data shows that reps hit quota at a higher rate when they have quarterly quotas: 67 percent average attainment vs. 60 percent attainment for reps who have annual quotas. When you measure quarterly, you can correct course for market changes, competition, the economy, and other variables. 

The Deloitte survey also recommends that managers also consider the complete employee lifecycle when evaluating their sales organizations. 

How to Be a Feel-Good Millionaire

Many people say that one of their goals in life is to leave the world a better place than it was when they entered it. The thought of improving the world may show lofty ambition – but also hints at arrogance. Good salespeople don't aim to improve the world; instead, they work at improving themselves. If self-improvement is the first step to improving society, what would be the next logical step?

We bring to the business of selling more than just the knowledge of the product, people skills, and the motivation to win. We also bring to our customers our own set of personal and ethical values, values that communicate who we are and what we stand for. Good salespeople know that real champions are not measured by how much money they can collect but by how much meaning they can contribute. Real champions know that laughing all the way to the bank loses its appeal when you realize that, on a gloomy day, a fat checkbook won't hug you back.

Within the last decade, value-added selling and ROI selling became a key ingredient in generating more business. Given the increased complexity of our changing world, I believe that the next wave of progress will be value-added meaning. Sure, business will always demand that we produce profit, yet our minds always demand that we find meaning. Sensible business leaders help their sales teams understand the basic human need for creating both.

For example, the White Dog Café, a Philly farm-to-table restaurant formerly owned by Judy Wicks, used to hold Table Talk programs, during which interesting speakers shared ideas with the patrons. Anita Roddick, the late founder and CEO of The Body Shop, was invited to speak to a wall-to-wall Table Talk audience. Her talk was called, "The Socially Responsible Business: Where Profits Meet Principles."

The idea of “food served with thought” caught on quickly, and Wicks won the Business Enterprise Trust Award for building a greater sense of community. She created value-added meaning for her customers, and business boomed.

Technology giant Google routinely invites authors, musicians, innovators, and speakers to their offices for talks, interviews, and conversations designed to explore the zeitgeist of the day. Examples include Stephen Colbert, who discussed his new book, America Again: Re-becoming the Greatness We Never Weren’t (October, 2012).

While value-added selling creates dollars that we can take to the bank, value-added meaning creates a different currency, one we might call "feel-good dollars." While it takes a long time to become a millionaire in real dollars, we all can become overnight millionaires by earning "feel-good dollars." How? By adding meaning to our customers' experiences.

Salesforce.com founder Marc Benioff has found a way to sell software in the Cloud while adding meaning to communities around the world. He does good because it feels good. He said in a speech he delivered recently, “Philanthropy is the best drug I ever took.” His Salesforce.com Foundation has contributed more than $40 million in grants and more than 440,000 volunteer hours.

You don’t have to be a billionaire like Benioff to feel good. We can increase our feel-good worth by how much meaning we contribute. Good salespeople ask themselves, “What can I do today that will help my customers feel good about doing business with me and my company? How can I bring more meaning to my customers and community at large? How can I add value to the profession of selling?”

Add to your treasure chest of values by getting better at doing good because it feels good when you do it. Become a feel-good millionaire, starting today.

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A Sales 2.0 Conference Q&A with Andy Zoltners

At the recent Sales 2.0 Conference in San Francisco, Selling Power caught up with Andris (Andy) Zoltners, who was there to present “A Top 10: Insights that Lead to Sales Success.” In addition to being one of the founding directors of ZS Associates, Zoltners is a Frederic Esser Nemmers Distinguished Professor Emeritus of Marketing at the Kellogg School of Management at Northwestern University. He has personally consulted for more than 200 companies around the world and taught thousands of executive, MBA, and PhD students about sales force strategy; sales force size, structure, and deployment; sales force compensation; and total sales force effectiveness. For more insight based on ZS Associates’s research and expertise, download the first chapter of Building a Winning Sales Management Team, by Zoltners and coauthors Prabhakant Sinha and Sally E. Lorimer. (Note: This interview has been edited for style and clarity.)

Selling Power Editors (SP): At the Sales 2.0 Conference, you said there’s not a sales force in the world that doesn’t have topline revenue opportunity of at least 5 to 10 percent. How can companies tap into that?

Zoltners: First, they have to find where the opportunity exists. That’s different in every sales organization. You have to look at the drivers of success. You have to hire the right people, train them, and manage performance. You have to size and organize the sales force, get the right compensation plan in place, and align territories. The problem for most companies isn’t that opportunity doesn’t exist, it’s that they’re sometimes reluctant to do the things necessary to take advantage of it.

SP: Like what, for example?

Zoltners: This goes back to one of the questions I asked the audience: would you rather have a stable sales force or an adaptive sales force? With an adaptive sales force, I would come in and say, “We’re going to change account responsibility.” Will they ask salespeople to adapt? Are they open? 

SP: So you’re saying the culture has to be open to change. 

Zoltners: Yes. But the other side of this is that management has to make intelligent changes. Eighty-five percent of sales forces have changed their sales-comp plan in the last year. What does that tell you? Getting it right can be a struggle.

SP: Why is that?

Zoltners: Well, [ZS cofounder] Prabha Sinha, Sally Lorimer, and I wrote a book about this years ago [The Complete Guide to Sales Force Incentive Compensation: How to Design and Implement Plans That Work].  But it’s a big book, and some people have told us you need a PhD to read it. (Laughs.) [Incentive pay] is complicated. But if you want to design and implement a plan that really works, you need to get this right, and you need to have alignment among the entire organization. For example, if you have an aggressive finance team that sets unrealistic numbers, that’s going to reduce the effectiveness of your comp plan.

SP: You mentioned during your presentation that there is no magic number when it comes to setting quotas at the territory level. Why is that? 

Zoltners: Companies may set goals too high, too low, or they don’t allocate the numbers appropriately across the entire sales force. The secret is that the goal should not be a single number. A single number is too rigid. There should be a range.

SP: And why is that?

Zoltners: Flexibility. Think about it at an individual level: if a big account moves from Milwaukee to Atlanta, then the sales rep in Milwaukee is saying, “My VP of sales is telling me that 40 percent of my territory just went away, and he still wants me to make my number.” Meanwhile, the rep in the Atlanta territory gets free incentive money. If the goal number is meant to give reps something to strive for, then you’ve just made it meaningless.

SP: ZS Associates has been conducting research since 1983 on sales leadership. If you had to pick, which group is more important to a strong sales team, excellent reps or excellent managers?

Zoltners: You really need both, no question. The issue is that we’re generally more careful at selecting reps than [we are at selecting] managers. We see more training for reps, more coaching. It’s an issue of scale: if you have only five new managers, it’s difficult to put together a training course just for them. But an excellent manager is going to end up hiring excellent reps. That’s why the link between sales force productivity and the quality of frontline sales managers is so strong. Because the manager selects, develops, manages, and leads the team.

SP: What’s the definition of an excellent rep?

Zoltners: They know their products, [and] they have empathy for the customer. They execute the selling process well. To me, success in selling is not about the numbers or the hard metrics. It’s about the soft stuff – people. Revenue comes from people. Some of the best sales forces in the world haven’t had the best products. And some of the weakest sales forces I’ve seen have had great products. You might be making your numbers, but you have an average sales force.

SP: Can you elaborate?

Zoltners: Look at insurance companies. Many insurance companies make their numbers but have as much as 60 percent turnover among the sales force.

SP: Is turnover in this case a sign that there’s room for improvement?

Zoltners: High turnover is usually an indicator of a problem. In this case, existing salespeople do not share their accounts, and new people do not have enough opportunity to be successful.

SP: In your research, you’ve said that many companies tend to retain poor or under-performing managers for “too long." What constitutes "too long"?

Zoltners: One day is too long! Evaluate and replace sooner. 

SP: Sounds simple. Why is it so difficult?

Zoltners: Because they’re buddies. The company says, “He’s done so much for us. We should give him another chance.” They don’t want to make their valued employees sad.

SP: So what’s the solution?

Zoltners: You make ’em sad.

SP: What role does technology play in creating a successful sales culture?

Zoltners: I’m a meat and potatoes person. The precedent that sales can really sell better with all this technology needs to be established. You have to be smart about how you use technology. If you’re overzealous, it can end up costing you money.

SP: Would you say technology alone isn’t the answer? That it’s more about how people use technology?

Zoltners: It’s about getting the best people to engage in the right activities. You can’t ask for anything better than that.

For more insight based on ZS Associates’s research and expertise, download the first chapter of Building a Winning Sales Management Team, by Zoltners and coauthors Prabhakant Sinha and Sally E. Lorimer.

The Persuasive Power of the Zeitgeist

No, I’m not an economist, but I do have a theory about what influences financial decisions, and it has nothing to do with anything Wall Street ever discusses. It’s called the zeitgeist.

This is a wonderful German word for which there is no English equivalent. It denotes the collective thoughts and feelings that dominate the era we live in. While the word zeit means “time,” geist has two meanings: “spirit” and “ghost.” Loosely translated, it means “the spirit of our time” or “the ghost of our time.”

For example, the zeitgeist in the Y2K era was paranoia about computers crashing on January 1, 2000.

The zeitgeist of the dot-com boom was marked by euphoria caused by the illusion of growth without limits. It was a Pied Piper that invited people to join in a happy parade celebrating greed.

The zeitgeist of post-9/11 was like a fire-breathing dragon that attacked at dawn, killed thousands and vanished into an invisible cave, which left us in a cloud of fear and anger. It was marked by severe disappointment. We paid a heavy price for harboring the illusion that our financial, economic, and military power would make us invulnerable.

Today’s zeitgeist is dominated by the bomb blasts at the Boston Marathon, the nuclear saber rattling of North Korean leaders, the political debates about gun control and government spending.

Today’s zeitgeist is also influenced by mobile technology, social media, cloud computing, big data, a shift to an interconnected world that sets the expectation that delays are a thing of the past, since we want to do everything in real time. While technology mixes excitement and hope into the zeitgeist brew, the failings of humanity -- such as killings in schools and at marathons and other threats to our safety -- add a taste of futility and despair to the mix. HG Wells once described the character of civilization as a race between education and catastrophe.

The pendulum of time keeps swinging, and so does the zeitgeist. Psychologists tell us that people who suffer disappointment tend to retreat and rediscover their true strength. What feeds the zeitgeist in the month of April is fear -- fear of acts driven by human insanity or natural disasters. What will change the zeitgeist of our time is courage. It takes a lot of courage to objectively appraise who we really are and what we truly want to get out of life. Upon closer reflection, we begin to realize that the zeitgeist does not really control our lives, we do.

History tells us that periods of disappointment are always followed by periods of going back to basics. For CEOs, that means trustworthy and responsible leadership. For managers, it means that their actions must inspire trust. For salespeople, it means more genuine face-to-face contact and more handwritten thank-you notes instead of hastily punched out texts, tweets, or emails.

Visionary leaders know that the zeitgeist is really a composite of the past that often ignores future possibilities. While today’s zeitgeist urges us to examine the past, we may elude its grip by envisioning and consciously planning a brighter future. Progress demands that we accept the basic insight that’s been taught time and again: our inner strength comes from hope, progress springs from our imagination, and greater meaning comes from building a better future for the generation that follows.

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Why Sales Leaders Should Champion B2B Demand Generation

Today's blog post is by Jeff Ogden, award-winning B2B marketing expert, president of the sales lead generation company Find New Customers, and creator of the popular syndicated online TV show Marketing Made Simple TV. Follow him on Twitter at @fearlesscomp.

Salespeople are having a tough time nowadays. It is getting harder and harder to crack into accounts. The time has come for sales leaders to say to top management, “We need a best-practices B2B demand-generation program here ASAP!”

A very recent study by Crain’s BtoB magazine found four areas of concern:

1. The marketing mix is still not meeting the needs of the sales pipeline.
   Less than half of respondents in BtoB’s study say that their online marketing mix is addressing the needs of sales, and it has been the same for two years.
2. Brand differentiation is becoming increasingly important, but marketers struggle to achieve it.
   Sound-alike products are a huge problem for sales. If customers cannot see the differences, then sales cannot protect margins.
3. B2B marketers are not able to effectively target and engage decision makers.
   Only slightly more than 1 out of 3 believes their company is effective at engaging decision makers. So the vast majority are poor at it.
4. Marketers need better visibility into the value of their marketing programs.
   Measurement continues to be a big issue for companies. They struggle to measure the effectiveness of marketing channels, clarify the need metrics at each state, and are plagued by poor data quality.

Our conclusion is that, in many companies today, marketing is doing a poor job for sales. This is why the time has come for sales leaders to stand up and say in unison, “I’m mad as hell, and I won’t take this anymore!”

Data from a large automation-software firm showed that 1 out of 5 leads closes, whether or not you are lead nurturing; however, what about the other 4 out of 5? The data showed that you can achieve a 300 percent increase in close rates when you nurture these leads. Three hundred percent -- yes, you read that right! Don’t you want a 300 percent improvement on win rates? Would it be nice to get a lot of sales-ready leads from marketing?

It’s time to walk into the CEO’s office and tell him/her, “I want a best-practices B2B demand-generation program in this company!”

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Are You Selling at Every Level?

While many companies promise to build their organization around the needs of their customers, few companies can claim that they organize themselves around the needs of their salespeople. Yet the two are inevitably linked: in a sales-focused culture in which the entire company (not just the sales department) is involved in selling, salespeople are more successful and customers are more satisfied. Highly successful companies not only create customer-focused organizations but also back up their commitment with sales-focused cultures.

What are the elements of a sales-focused culture? Ideally, a company sells at three distinct levels. At the C-level, top executives set the tone for the organization by clearly articulating the company's mission, vision, and values. While the company's mission describes the noble purpose of the organization (selling meaning), the vision statement induces people to aim their effort toward greater future achievements (selling inspiration). The description of the company's values provides a sensible guide for creating relationships (selling trust). For a true sales culture to exist, C-level executives need to continuously sell meaning, inspiration, and trust to the company's employees, customers, suppliers, and shareholders. Research shows that companies whose employees understand the mission, vision, and values enjoy a greater return than other firms.

At the middle level, sales and marketing departments create messages that are in sync with the company's mission, vision, and values. While marketing creates the brand promise, sales delivers by elevating the customer relationship to a branded sales experience. The key to a true sales-focused culture is to align sales and marketing.

At the street level, salespeople act as company ambassadors who are fluent in two languages: the customer's language and the company's language. They are able to diagnose the right problems and deliver the right solution. Ideally, the sales team's internal and external relationship skills will build a competition-proof connection between the company and clients that will ultimately extend from the mailroom to the boardroom.

To borrow an analogy from the world of music, C-level selling is like an overture that offers a preview of imminent excitement and drama. Midlevel selling engages people with a catchy tune that resonates pleasantly in the customer's mind. Person-to-person selling is more like jazz, which is the art of the moment. Good salespeople can instantly improvise and hit the right note at the right time to turn the right prospect into a happy customer.

Very few companies are able to act in concert from top to bottom. It takes an enlightened CEO and highly talented sales and marketing teams to create a sales-focused culture with all members of the organization playing their part in a symphony that inspires the customer’s delight. It's easier said than done, but the results can be magic for top-line and bottom-line growth.

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Why You Should Step Up Your Sales 2.0 Investments

Sales 2.0 isn't a buzzword; it's become a professional discipline. It's not a passing fad but a massive shift in the global business culture. It's not about sales or marketing tools but a business transformation that delivers better results.

Today, Sales 2.0 plays a vital role in selling. And as the old ways of selling are fading away and salespeople and sales managers are educated about the increased risk of becoming victims of change, I want to reassure old-school salespeople that the core of selling will never change. That core is the ability to create, expand, and enhance relationships, face-to-face and online.

The good news: Sales 2.0 has not made B2B salespeople obsolete. In most cases, it has made them a lot more productive and effective.

What is Sales 2.0? It's the use of best-practice sales processes enabled by technology to improve speed, accountability, collaboration, and customer engagement. Sales 2.0 is a more efficient and effective way of selling and buying.

The economic pressures in our business environment demand that sales organizations become ruthlessly efficient. But Warren Buffett reminds us that efficiency is not enough: "We are tempted to see where the arrow of performance lands and then draw a bull's eye around it." We need greater effectiveness, which means we need to stop trying to improve processes that don't deliver value.

It means that we deliver greater value in the context of the sales rep's world. The equation is simple: deliver more value to the sales force so that it can deliver more value to the customer. Sales 2.0's mission is to create the right results in the most economical way.

As more ROI reports emerge, business leaders sit up and take notice. Last year, Brainshark reported that its $3,600 investment per sales rep in Sales 2.0 tools was instrumental in a 35 percent year-over-year increase in sales. Just last week, Ken Powell, VP of sales enablement at SunGard stated, “In 2013, our investment in Sales 2.0 solutions is over $4 million, and we project that this will translate into an additional $100 million in revenues.”

With the right set of Sales 2.0 tools, science can become part of the sales process, allowing companies to create a culture of measurement in which value takes center stage. Sales managers can enjoy productivity gains and increased sales while making fewer decisions based on hunches and more decisions based on science. Salespeople benefit from a level playing field, where their professional sales talent pays off in greater dividends.

In its latest Sales Performance Optimization survey, CSO Insights found that Sales 2.0 companies actually overachieve compared to less efficient organizations. In Sales 2.0 companies, a higher percentage of salespeople make quota, and more salespeople close the deals that they forecast. If you want to explore how your peers are leveraging Sales 2.0 tools, check out our new site, www.salesopshop.com, where more than 1,000 sales leaders and sales operations managers collaborate to win. 

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How Well Have You Adapted to the Global Changes in Selling?

To survive in the sales world, global executives must be adaptable. Studies show that there are three ways people commonly adapt to foreign cultures.

The first is unconditional acceptance of the foreign culture with a critical view of home. For example, a VP of sales marveled that in Japan cab drivers wore white gloves and the hotel staff always welcomed her with friendly smiles. She complained about the lack of courtesy in American business and scorned the negativity of American workers.

The second approach shows a strong loyalty to "back home" culture and a critical view of foreign culture. A manager who went to France complained that everyone was rude, griped about the French taking too much time for lunch, and felt that the French were too slow to understand new business ideas. He concluded that the French could benefit greatly from American know-how.

The third approach is to selectively adapt and integrate the best characteristics from all cultures. A successful adapter will patiently sip green tea with a Japanese executive and refrain from drinking alcohol during a meeting with Arab investors while remembering to make specific notes for a board meeting back home.

Many salespeople don't realize that they need to adapt their sales strategies, as well.

The first style of sales adaptation is to cling to the past while being critical of the present. A seasoned sales rep told me, "I will not bring up the subject of business unless the client brings it up." This salesperson believes that social media is a waste of time, thinks that CRM is a hindrance to belly-to-belly selling, and refuses to leave voicemail messages.

The second adaptation style is to embrace new ideas unconditionally while categorically rejecting old practices. One salesperson I met declared that face-to-face selling was a thing of the past. Believing that the future of selling would be exclusively in electronic commerce, he built a Facebook page, tweets six times a day, started a blog, and built his own landing pages to attract prospects. After two years of hard work, he is still struggling yet scoffs at people who still travel to see customers in person.

The most successful style for adapting to the ever-changing present is to rely on those practices that continue to work well while searching for more effective ways of doing business. The well-adapted executive still writes thank-you notes and personally extends special offers to valued clients. Successful salespeople use social media to engage customers in conversations on their terms while not ruling out lunch meetings. And they know – executives and sales reps alike – that keeping up with what’s current is a demanding job. They realize that if they cling to the past they won't be free to seize new opportunities.

Conversely, people who think of only the future tend to live in their imagination. The best way to adapt is to constantly learn more effective ways to manage the present and be receptive to new possibilities. Adapting to the present demands receptivity and the desire to move into more successful ways of being in touch with reality.

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