Today's blog is by Thomas A. Stewart. He is the executive director of the National Center for the Middle Market, the leading source for knowledge, leadership, and research on mid-sized companies, based at the Fisher College of Business and in collaboration with The Ohio State University, SunTrust, Grant Thornton, and Cisco.
In sales, ABC means "always be closing" – but what are the ABCs of creating and running a great sales force? The National Center for the Middle Market (NCMM) delved into best practices when hiring and managing sales forces in a recent study, titled "The Force Is with You: Building a Highly Effective Sales Organization." The study – developed by NCMM in collaboration with the American Marketing Association and Greg W. Marshall, professor of marketing and strategy at Rollins College and co-author of Sales Force Management, the top-selling sales-management textbook – is based on a survey of 400 middle market C-level executives who aimed to uncover what makes the best and brightest sales forces tick.
Our driving questions behind this study were:
- What do middle market companies value in their salespeople? How does this affect their hiring and development practices?
- How do executives demonstrate this value to their sales forces? What methods are they using to motivate their sales forces?
- How do companies organize and deploy their sales forces and enable them with technology?
- How do the best sales forces interact with marketing, customer service, and other company functions?
It's no surprise our findings indicate that middle market executives consider their sales forces to be integral parts of their respective companies. However, there are some surprising differences in how companies evaluate sales hires – as well as how compensation for sales teams is handled.
Hiring and Development
Executives consider interpersonal skills to be more important than selling skills when hiring new salespeople. We believe this is due to two factors. First is a shift in sales force structures – particularly in larger middle market companies – from a focus on individual performance to company or team selling. The ability to collaborate with coworkers is a key attribute for an individual contributing to an effective sales team.
Second, the finding is consistent with an emerging consensus that it's better to hire for attitude and train for skill than vice versa. What new hires may lack in selling skills or experience, many companies make up for by providing formal training or development programs. High-growth businesses invest more in formal mentoring or coaching programs than the average middle market company does, and are more likely to deliver training hands-on, through mentors, than in classrooms or electronically.
Executives also divulged the skills they're emphasizing in that training and development. While many noted that their teams are already skilled in maintaining existing customer relationships, they are focusing their efforts on improving customer prospecting and the ability to drive the business by finding new markets. Many are also considering increasing the technological capabilities of their sales forces. Companies that deployed CRM systems report much higher levels of sales force effectiveness than others – but, surprisingly, more than 40 percent of middle market companies do not yet have CRM platforms.
Compensation and Promotion
A significant challenge for many companies is putting the best compensation practices in place to motivate and retain their salespeople. It can be difficult to identify an optimum pay structure; there is no single best approach. Our data show that many middle market companies are moving toward team-based review and payment processes; surprisingly, however, high-growth middle-market companies diverge from the pack and are more likely to emphasize individual commissions and incentive pay. Conventional wisdom and the move toward team selling for complex solutions and services argue for team-based compensation. But classic individual incentives have not lost their power to motivate sales or their place in the compensation mix.
In terms of sales force leadership, the best place to look for upper management candidates may be within your own company. Of middle market senior sales managers, 59 percent had been promoted from within their organizations. This came as no surprise, as executives are clearly confident in their own teams: 83 percent of high-growth firms believe their sales teams are more effective than other sales forces. With exceptional salespeople in their ranks, executives are recognizing the opportunity to leverage existing talent for management positions.
To Build a Great Sales Force, Get to Know Your Team
From NCMM's research into middle market sales forces, we've determined that the key to creating a successful and efficient sales force is understanding your team's needs. First, decide what you want to see from your team; perhaps, you want to increase new business efforts, grow existing client relationships, or enter a new market. Establishing clear goals will lead you into the second step – discerning superior methods to motivate your employees or teach them the skills required to meet these goals. Finally, implement the required measures and your sales team will have the knowledge and willpower to help your company meet and surpass its goals.