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Understanding the Sales Force
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Like many of you, I'm back from a much needed vacation where I met a guy who could have been one of the sorry CEO's I have met over the past several months. I was in the pool, playing catch with our six-year old son, when Henry began a "dialog" with me. He said, "You can't play catch in the pool. It's against the rules." I was stunned, but apologized, said I wasn't aware of that rule and removed the football from the pool. There was another guy in the pool and he mentioned to me that the pool rules did not include an exclusion about playing catch. I mentioned that to Henry and he became irate because he owns one of the resort's units, wrote the rules himself, and said, "It better be on that sign!" So what's wrong with this picture? - Doesn't "resort" make you think fun, water and sun?
- He and his friends were at the water's very edge but didn't want to get wet, so he didn't want any splashing which leads to no playing catch.
- He and his friends were at the pool but in the shade.
- It was 80 degrees but he was dressed for winter.
- He was at a resort but wanted the quiet of a senior community.
How is Henry any different from Bernie? Bernie is the President of a company that had experienced flat sales for the three strong economic years leading up to the recession. He had been looking for a VP of sales for two years but hadn't found the right candidate or failed to pull the trigger. He attended an event where he heard me speak and asked me to contact him. He asked for my advice and I recommended that if he was serious about finding the ideal VP, then he should: - Evaluate his sales force to better understand its real capabilities and identify the challenges a new VP would have to deal with;
- Identify the changes that the sales force needed to make to be more effective;
- Save the new VP at least a year by providing him with a comprehensive understanding of each salesperson's strengths, weaknesses and coaching requirements.
- Identify the salespeople that could make the transition to being more aggressive at finding and closing new business;
- Identify the salespeople that could not be developed and plan to replace the under performers;
- Use this intelligence to find the ideal VP of Sales Candidate.
Once in a while, CEO's and Presidents don't take my advice and Bernie, who was comfortable (hired gun, not an owner), over confident (he thought he knew better), and not afraid of failure (sales were flat, not declining), promoted one of his existing salespeople to take the VP of Sales position. Ordinarily, this is not a particularly smart move but in this case, it was really dumb. His new VP had never managed a sales force, had no experience selling in a recession, had never reversed a flat sales trend and had never assessed a sales force. What made Bernie think he could do all this effectively without experience? Six months later, how do you think he's doing? Last I heard from Bernie, George was "trying some things." Bernie and Henry could be the same guy. Henry was probably an arrogant, over confident president who didn't fear failure just like Bernie. They both know better than everyone else. Compare Bernie's story with Jack, president of another manufacturer with flat year over year sales at around the same time. Jack already had a new VP in place, knew there was complacency, knew he needed change, and despite having the expertise to do it himself, knew that it had to come from outside, not within. Just seven months after evaluating and training, Jack's sales force is accomplishing things today that they couldn't even imagine last spring. They transitioned from account managers to hunters; they transitioned from making proposals and presentations to conducting quality sales calls where they do nothing except ask great questions; they've gone from selling on price to selling value; they've moved from believing they had to have the best price to selling at their price; and they're closing business at a much higher rate than at this time last year - despite the economic crisis. Which type of leader are you - Bernie or Jack?
Here are ten steps that you can take to not only survive, but thrive in this recession: - Size up your sales team - we have some free tools like the Sales Force Grader, the Sales Hiring Mistake Calculator and the Sales Achievement Grader; and fee based tools like our world-class Sales Force Evaluation.
- Get the right people in the right sales/sales management roles. Our Sales Force Evaluation will provide these insights.
- Talk honestly with your sales force about the tough times ahead. Tell them the truth!
- Gain their commitment and buy in to work harder, be tougher and do what it takes in these more difficult times.
- Perform a pipeline analysis and work the pipeline. My sales development firm offers EPACS - Emergency Pipeline Analysis and Coaching Strategies where we properly stage, strategize and coach on every opportunity.
- Create the necessary infrastructure. This includes an appropriate sales process, recruiting process, sales management systems, and software.
- Develop Sales Management on accountability, coaching, recruiting, leadership and motivation.
- Develop the salespeople on process, skills and overcoming their weaknesses.
- Sales Execution - just do it.
- Sales Management Execution - make sure they do it and help them do it.
Ultimately, you must focus on the machine that generates revenue, not costs. (c) Copyright 2009 Dave Kurlan
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The actual results are even more surprising than the number of people (several hundred) that have already visited the FREE Sales Force Grader.
To date, the worst score is 0 - definitely a surprise. While we would expect there to be some sales culturally challenged companies, we didn't expect any to be that bad....
To date, the best score is 81 (out of 100) - a surprise there too since I would have expected at least a few companies to score closer to 100. This tells me there is still work to be done to improve sales effectiveness at even the most effective companies.
To date, the typical score is only 30 -a surprise...while I know that most companies need a tremendous amount of help, I didn't realize that so many companies needed so much help - even the companies (maybe yours) who tell us that everything is OK...
In a related finding, we have also found similar statistics on the sister page, Free Sales Hiring Mistake Calculator. The cost of a typical company's sales hiring mistakes is $1,367,250.00! Yes, that's the typical company; the average company is even higher - $5,659,032.00 And the highest cost recorded so far? $32,583,450.00
What can you learn from all of this?
If your sales force scores below 80 and you need to positively impact 2009 sales, then passively waiting to see if things improve (hope) is not a strategy. While there are always some things you can do by yourself, most of the things that need to be done to make a sales force significantly more effective require outside help. After all, you are already doing some of the things that need to be done - you simply aren't doing them effectively enough!
(c) Copyright 2008 Dave Kurlan
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A potential client wanted to know how Objective Management Group could justify the cost of a 25 person license (unlimited assessments for one year or 25 salespeople hired for $18,000) versus a $3500 per 100 assessment price for DISC. There are several factors here but they are all worth noting. - Actual Use. Conducted properly using best practices, you would assess candidates as their resumes come in using our simple automation process. Our data shows that you would assess at least 20 candidates per hire for a total of 500 assessments or more (which puts DISC at - $17,500!). Don't know where you would find 500 candidates? We provide more than just the use of a great tool; we also help you build a process that impacts the quantity and quality of the candidate pool. If you follow our process the candidates will come!
- Predictive Validity. Objective Management Group's assessment was built for sales and is only used for sales. As such it is highly predictive of on the job success with a predictive validity around 95%. 92% of the candidates we recommend that are hired end up in the top half of their sales force within 12 months and 75% of those we don't recommend who get hired anyway (clients who are smarter than we are) fail within 6 months. Behavioral Styles assessments (like DISC) are not predictive of on the job performance. But suppose the DISC was predictive. How much more predictive would our assessment have to be in order to justify the higher price - not just the $500 extra, but the whole $14,500 extra? I'm sure you'd agree that if we were simply one candidate more predictive it would more than justify the difference.
- Case Histories. More than one company has asked us to assess their top producers. If they were applying for a job, our assessment would have recommended 90% of the top producers.
- Intended Use. Behavioral Styles and personality assessments were designed to show how people are different. That's essentially their purpose. Today they show the different ways in which people communicate, and how they might behave in different scenarios, given their tendencies and traits. Objective Management Group's assessment was built to predict sales success in your company and industry, selling into your market, against your competition, with your pricing strategy, expectations, sales cycle and challenges all factored in. Ours isn't a one size fits all sales assessment. Could you imagine using the same selection criteria for selecting a route salesperson selling Leggs to convenience stores and a salesperson selling 6-figure custom designed capital solutions? That's how DISC and others like them are used.
- Price Comparisons. - If one is to compare prices, it should be on the exact same assessment from different sources; comparing the price of DISC to the price of an OMG is like comparing the price of a Kia to the price of a Lexus!
- Summary. I'm biased. I developed OMG's assessments nearly twenty years ago and continue to enhance them to be more even more predictive with every passing month. What is the cost of a single sales hiring mistake? And what is the upside to getting it right by selecting a strong, successful salesperson - each and every time? Use the right tool within the right process and you'll avoid the mistakes that most companies make.
(c) Copyright 2008 Dave Kurlan
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I received an email last week from a LinkedIn connection promting his new super duper lead engine that connects salespeople with the most powerful buying influences in the world. Wow. I'll be the first to agree that if you're buying a list, one that actually contains the contact information for CEO's, Presidents and other top officers can be much more helpful than a list that targets middle managers. But let's stop there. First, a list with the names of CEO's and Presidents won't help anyone who sells products or services that top executives don't buy. Second, and let's not fool ourselves on this, these are NOT LEADS!!! They never were and they never will be. Call them what they are. They are names on a list and if hand them to your salespeople and call them leads they'll stop calling after about 5 conversations - lousy leads. If you let them know that they are simply a tool to help them identify potential customers you'll be in much better shape. Just be sure that they know how to make calls like this. The "how" is the key. If they aren't great at this then it's clearly a waste of time. (c) Copyright 2008 Dave Kurlan
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Tags: Selling, Sales Force, Sales Assessments, sales, sales management, salesforce, dave kurlan sales force profile, free sales content, sales experts, sales tips, sales blog
I can't count and may not even know about all of the portals now on the web that feature subject matter experts, content, free downloads, articles and tips from people like me. It's generally a good thing, at first, until someone like me loses control of his intellectual property - the articles I write. Some sites run my articles with my permission. Others simply include the RSS feed. Others run teasers with links back to my Blog. These are all OK. However there are some that run my articles, copy my articles, take excerpts from my articles or rewrite my articles and pass them off as their articles. That's when it becomes a generally bad thing. One site that said they would change that is ilearningGlobal.tv. They claim to have the exclusive technology that will stream high-def, full screen content from experts like Dennis Waitley, Bob Proctor, and me directly to your desktop and protect the content from being pirated. Sounded good to me. They invited me to join their faculty, offered a revenue sharing model and said they would fly me to their studios to record my content at their cost. Sounded even better...until my third conversation with them when they were more interested in the 3,000 of you that visit this blog each week, the 10,000 that subscribe to Baseline Selling Tips and my network of sales development experts that provide our world-class sales assessments to companies around the world. Why? The engine underneath this cool concept is...Multi-Level Marketing. They wanted me to generate a down line with a few key people that would really market it. Market what exactly? $79 per person, per month subscriptions to "their" content. And the revenue share? 3%. Wow - is that appealing! I've never been willing to go near the MLM space, either as participant or consultant. And what makes them think they can even sell these subscriptions? One site that I thought had a lot of promise and to whom I agreed to let feature my content is CanDoGo.com. Their premise was to feature nuggets of content rather than content in its entirety. They too were going to sell subscriptions but recently changed the model and went to a free service. One of the sites I particularly like because of their design and richness of content from experts like me is EvanCarmichael.com. Two more that do a great job of culling the best from the best are EyesOnSales.com and TopSalesExperts.com. And then there are sites like Guy Kawasaki's AllTop.com, which aggregates the top content on a variety of subjects. And then there is the webinar version of all this, BusinessExpertWebinar.com, which features various experts in webinar format all through the day. Today's Lessons: I still hate Multi-Level Marketing. If you can invest even an hour a week in their business, think about the impact that additional hour per week will have on your existing business!
If you have something that others want you have leverage. As soon as you give them what they want your leverage goes away. If someone dangles an offer that sounds too good to be true they probably want something for nothing. You get what you pay for. Much of the free content out there (not mine, of course) is either contradicting, regurgitated, unproven, inapplicable or stupid. And there is a huge gap between a great article on strategy or tactics and your ability to apply that strategy or tactic, as written, at your company. Watch your step. (c) Copyright 2008 Dave Kurlan
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