Sales & Sales Management Expertise

What to Trust When Evaluating Sales Performance and Talent

Tags: Sales Tracking, sales management, sales assessments

When evaluating sales performance - past, present and future - it’s difficult to figure out what information or data to trust when making decisions.  Just like investments where past performance is not a guarantee of future results, past sales performance does not guarantee anything for the future.  It gives you some, not all, insight into sales results, but it doesn’t tell you how the result was created.

Pipeline analysis (a great performance management tool) is a lagging indicator that can be used to uncover previous sales activity and give you some indication of future sales, but there are problems with that data point:

  • The sales person might be putting in data just to keep you off their back
  • Unless your pipeline is mapped properly with check points,
    then the probability of opportunities is subjective, not certain.
  • If the CRM being used does not provide reporting on conversion ratios from one sales step to the next, you certainly don’t have information needed for intentional coaching.

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Linda and I went to a “box store” to find appliances for a townhouse we had purchased.  We needed to replace all four major kitchen pieces: dishwasher, refrigerator, range/oven and microwave. We were working with a salesman and we were getting close to making a selection between models.  As Linda and the salesman were talking, Linda asked me to search for the ratings on the appliances.  This is what I found:

  • Refrigerator/freezer – 4.3 – 1,200 ratings
  • Range/oven – 4.2 – 2,000 ratings
  • Dishwasher – 3.2 – 1,600 ratings

I hadn’t looked up the rating yet when Linda asked me what I found out.  I reported the 4.3 and the 4.2; however, as I reported the 3.2 on the dishwasher, the salesman stepped back into the conversation and asked what the 3.2 was.  I told him it was the rating on the dishwasher based on 1,600 customer ratings.  His response was “You cannot rely on those ratings.  Those ratings are based on this model two years ago when it first came out – this is a newer version of the model.”

It was so hard for me to not reply with, “So I should trust the 4.3 and the 4.2, but not the 3.2?”  I didn’t want to go there because I know how I get when I challenge someone trying to sell me something. I'm a pain in the *ss.  I cannot help it when a salesman screws up the opportunity to handle something the right way and fails.  But, that’s not my point here.  My point here in this story for this article is this:

Your salesperson, and any sales candidate you are interviewing, will also refute anything negative you ask about, but will never debate the positives.

And that is a problem if you are not aware of that and deal with it when it happens.  Case in point.  We use Objective Management Group for evaluating both sales teams that exists today and future talent to hire.  The tool has been “tested” hundreds of thousands of times and is the most consistent and reliable sales talent evaluation on the planet.  (check it out)

With this business tool, we find a mix of things that are supportive of successful selling:  Strong desire, commitment, responsibility, and sales DNA.  And there are findings that indicate hindrances to successful selling:  lack of skills in consultative selling, asking questions, hunting, closing, and qualifying skills.

Time and time again, when we review the results with the sales manager or the sales person and we ask, “What did you think?”, most of the time we can count on the following:

  • I thought it was interesting.
  • I’ve taken lots of these in the past and you just have to take the results with a grain of salt.
  • I thought it was dead on.
  • I thought the findings really depend on different situations; some of the questions didn’t fit the way I sell.
  • There were a lot of things I agree with and a couple of things I didn’t understand or agree with.

We ask the sales person to then discuss the finding they want to talk about first.  Almost 100% of the time, they will want to talk about the things they disagree with. Obviously, those are the things that are viewed as “negative”.  Never, not once ever in over 20 years, has someone gone to desire, commitment, responsibility, hunting or closing findings that are positive and said,  “I don’t agree with this.  I’m really not committed, I don't have desire for success in sales, I make excuses when I fail, I suck at prospecting and I can’t even close a door.”

NOT EVER!

What they all want to focus on is the 3.2 rating to try and convince me that the negative findings cannot be true, BUT all those positive things, “Yep, that’s me.”

So, there you go.  Your salespeople, as well as the candidates, will do their best to convince you that all the positive data and outputs are accurate and true, but anything negative can be explained away.

Buyer beware!

Additional Resources:

Sales Managers Must Sweat the Small Stuff!

Tags: sales management, sales development, performance management, sales assessments

I’ve not read the book Don’t Sweat The Small Stuff and It’s All Small Stuff by Richard Carlson. It’s a catchy title and I’m sure a good read. But, if you are a sales manager responsible for developing your people and for driving sales growth, this is awful advice. I subscribe to the theory that the devil is in the detail$. I purposely made the last letter the $ sign and here’s why.

Take a look at the following Success Formula designed to help an individual salesperson figure out what sales activities they need to be doing day in and day out to be successful.

This salesperson is using personal income as their metric for success. Their success standard is $58,800. In order to do that, they must perform the formula as it is expressed here starting with averaging 20 dials per week to perspective buyers. (Do NOT get hung up on “this is cold calling and I do not cold call.” Regardless of how your leads are generated, you must do something proactively to reach out to them either by phone, text, email or other methods of initial contact. For illustrative purposes, I’ve used the word “dials”.)

Here are the details: The data tells us that this salesperson must have a certain level of effort – the 20 dials a week (average) and a level of effectiveness – the conversion ratio from one step to the next. What I am demonstrating is what happens if, instead of performing to plan in effort and effectiveness, this salesperson is off of target by just 1%. As you can see in each individual step, a drop in performance of just 1% has a negative cumulative impact of 7%. So what?

It may not appear to be much, but here are a couple of things to think about:

  • Suppose the number was 10 x greater and now the miss was over $30,000.00 instead of $3,000.00.
  • Suppose you had a team of 10 producers and 7 of them missed the mark by $30,000.00 in personal income. Their commission payout is 33%. That means each individual is missing a sales goal of $100,000.00 and you have 7 people missing the mark. Where is the $700,000.00 of sales going to come from?
  • Suppose the miss on effort is 5% and the miss on average size account is 5% and the miss on submissions to approvals (for those of you that have a product that requires underwriting or approval) is off 10% but all the other conversion ratios are met at 100%.

Look at that impact - a loss of more than $8,000 to goal! That is the scenario that is more likely to happen. We know this because we have evaluated hundreds of sales organizations and the company we use to evaluate sales organizations has evaluated literally thousands of sales organizations. One finding that always jumps out is that less than 10% of the salespeople evaluated are using a consistent sales process. (Note: we work with mostly successful companies that are trying to figure out how to be more successful, how to eliminate the variability in performance or how to maximize potential of the sales team. We don't commonly work with sales teams that are broken, so don't misinterpret this as something that only applies to companies that are failing to grow sales!)

It is a staggering percentage that less than 10% of all salespeople across all industry segments use an effective sales process. How can this be given the billions of dollars spent on sales training and sales enablement tools like SalesForce.com? But, that is the big stuff to be tackled another day. What we know is that a sales manager can make a huge impact today by sweating the small stuff. IT MATTERS!

 

Additional Resources

How good is my sales team? – Free Sales Achievement Grader

Success Formula (Free Download)

Grade your sales process – Free Sales Process Grader

The Extraordinary Sales Manager eBook - Download your copy!

 

If you could use some help NOW, Text me at 513 226 3913, Subject- Help Sales Process. Please include your name.

Sales Habits, Sales Managers and Changing Habits

Tags: hire better sales people, sales management, sales assessments, building successful sales teams

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As I continue to think about habits of sales people and the role of the sales manager in identifying, assessing and “correcting” habits, I keep looking for additional information that might be additive to this string of articles. I came across an old email sent to me from Ike Jablon. Ike is a media relations specialist at SoftwareAdvice a company that helps businesses find sales software. I asked Ike to tell me more about Software Advice.

Here is his response: “Many sales professionals come to the conclusion that technology, namely a CRM system, can be critical to maintaining organization as a sales-oriented business scales and grows. We're a free and trusted resource for CRM buyers who are feeling overwhelmed by all the choices of solutions out there. Our team of software advisors provides free telephone consultations to help buyers build a shortlist of systems that will meet their specific needs.” 

Ike sent me a link to a survey that was done regarding the hunt for sales managers/directors. Here is the link to the survey findings: Sales Director Job Listings. Obviously, the connection here is the finding around the job post for the role and their experience with technology. The report shows that 29% of the companies surveyed require “technical expertise”. Of those 29%, 100% of them require the candidate to have expertise in CRM technology.

I have a habit of saying, “What’s interesting is…” Occasionally, I will catch myself and re-phrase the statement so that it sounds more like: “What I find interesting but what you might find boring as hell is…” So, this is what I find intriguing or interesting and you might find boring as hell:

  • Why only 29%? With more companies requiring more work to get done by fewer people, why wouldn’t companies demand that the person who is the direct link between sales strategy and sales execution be masterful at using technology? Using the right technology and using it well can help a director increase their span of influence and free up their time so they can have more interactions with their people that are meaningful and intentional instead of data gathering. E.g. “So, what’s in your pipeline?”
  • A secondary education was required by 66% of the respondents and, of that percentage, it appears that about 70% of the job postings indicated that the employer wanted somebody with a degree related to business – Business, Finance, Marketing or Communication degree.

top-degrees-requested

I understand the findings and I understand the tendency to want these requirements but… is it correct? Is this what companies should be looking for when hiring a director of sales?

I reached out to several sales executives and presidents of companies to inquire about what they see as the most common bad habits in sales people. I will be referring to their responses in the next several articles but, for this moment, let me share with you what Dave Kurlan, President of Objective Management Group, sent me:

  • Demo too soon in the sales process
  • Give up on contacting prospects several attempts too early
  • Don’t thoroughly qualify
  • Make too many assumptions
  • Don’t reach real decision makers

My question to potential employers is this: How does the business degree help with these bad habits? The answer is that the degree doesn’t help with the most common bad habits of sales people. Time and again, I’ve worked with sales directors with the appropriate degrees and still find these habits… as well as others. If having the degree was so critical, then why do these problems still exist? Why do most sales organizations have 70% of their sales force not hitting goals? Why would someone with an MBA allow a sales person to continue to be on the sales team after 18 months of failing to hit sales quotas? Imagine for a minute the IT director found out that 70% of the time a computer application responsible for financial reporting was providing incorrect information. What would happen?

  • The work experience required is also as expected. Experience in industry specific sales, experience in sales management, a minimum number of year sales etc.

sales-experience-preferred

I admit that I’m biased about what it takes to be an extraordinary sales director. I believe the same qualifications that make a good coach make a good sales manager. You have to be part psychologist, part teacher, part parent, part mentor, part accountability partner, part boss. Being a strong manager isn’t about being nice or mean. It isn’t about looking at the numbers and, when the numbers don’t add up, bringing in HR and putting the producer on a PIP.

I heard Dr. Peter Jensen speak at the EcSell Institute Sales Management Summit. He addressed the audience with the concept of the 3rd Factor of human behavior. The first two being nature and nurture. The third factor is our bias. In this specific case, he was talking about successful management. Regardless of the group or team you are trying to manage, coach and or improve, those successful coaches that he observed had a “coaching bias”. In other words, the most important thing to the coach was the development of another.

My question is: How do you find that in your next sales director?

My answer is:

  • Create the right profile for the role. Identify what you need them to DO rather than what they have done.
  • Create a job post that attracts exactly what you are looking for. Tell the readers of the job post that “The job isn’t for everyone. If you are going to be successful in this role with my company, then you MUST be able to demonstrate success doing…”
  • Assess if they will do what you need them to do not can they do. The #1 assessment tool in the world helps Anthony Cole Training Group help its clients hire the right people and eliminate hiring mistakes thus impacting both top-line and bottom-line.
  • Interview for what you are looking for. If your sales director has to inspire trust from the team, do you feel like your candidate is someone you can trust? If they must be masterful at performance management, how will you know your candidate can do that based on your current interviewing approach? If they must develop your sales team, how will you know that your candidate has developed extraordinarily successful sales teams (not just have a successful sales stud or studette that carried the rest of the team)?
  • Win the bet on the first tee. Make sure they know exactly what is expected and how they will be managed for the first 6 months on the job. Tell them exactly what will happen if people don’t improve and/or if metrics do not demonstrate that they are having and impact.
  • Make sure that, if they don’t come to the table equipped with all the know-how on using technology, that you direct them to sources like Software Advice to determine the right CRM, pipeline management, sales force automation applications for the job you need to get done. Don’t let them get hung up on the marketing glitz of the CRM with the biggest marketing budget. Don’t let them bring their past into your experience.
  • Pay for what you hope to get not what they’ve done in the past. Hiring the right person is similar to investing. Past performance is no guarantee for future returns. Make sure everyone has skin in the game for future growth.

 

Additional resources:

Don't miss out on our Extraordinary Sales Manager Webinar Series! It's not too late to get involved - Part 2 is coming up June 29, 2015. SIGN UP TODAY for the "Hire Better Salespeople" FREE webinar and get ready to take your hiring to a whole new level!

 

Did you like today’s post? Read more of Tony Cole’s Blog HERE and don't forget to comment below and subscribe so you don't miss any of ACTG's upcoming articles and events.  For more great tools and information on what we can do for your sales organization, visit our website at anthonycoletraining.com.

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