I’ve written on this subject, talked about it at workshops/keynotes and presented it to our clients in our Sales Managed Environment® Certification program for over 20 years.  But, here I go again and for good reason – it’s still a problem.  It’s still in the news.  It’s still something that we get asked about when we present at the Community Bank CEO Network and other venues.  It’s a problem that doesn’t seem to have a solution.

Wrong!

Let’s take a minute first to analyze the problem or to help you identify if you have a problem.  (This will be kind of like Jeff Foxworthy’s “You know you're a redneck if…” routine.)

You know you have a sales growth problem if…:

• You cannot consistently and accurately predict future sales GROWTH
• You recognize that most of the sales (90% or so) are being generated by 33-45% of the sales team.
• Less than 10% of the sales are being generated by over 50% of the team
• You have salespeople in the middle of the sales performance bell curve that are not performing as you expected. (Did you really hire those people to only perform like the average sales person on your team?)
• Your new hires are not ramping up fast enough
• Your cost of “ghosts” (people that you hire and are no longer there) is a 2-comma problem
• You seem to be coaching the same stuff over and over and over again
• Your people continually make excuses for lack of outcomes, performance results.

I could go on, but why?

I first recognized the sales growth problem in sales organizations many years ago when I was working with Anthem Blue Shield and Blue Cross here in Ohio. I was meeting with Jim Barone, who is currently the National Vice President – Business Development for Lincoln National.  At the time, he held a regional sales management position for Anthem and he and I were scheduled to meet in Cleveland with his sales team for a training session and sales meeting.

In preparation for the meeting, I reviewed the production report year-to-date for the team (about 25 reps). I had not yet read any Perry Marshall material on The 80/20 of Sales and Marketing (The book hadn’t been published yet…) and, though I had heard of the Pareto Principle, I really didn’t understand it like I do today.  When looking at the numbers, I discovered that roughly 20% of the reps were responsible for about 80% of the results.  That was startling. But, not nearly as startling as what I discovered next.

The bottom 20% of the team – about 5 reps – were responsible for less than 1% of the results and the bottom 33% of the team was responsible for less than 10% of the results.  The first question I was going to ask Jim was, “Why are these people still with you?” (CLICK HERE here to get rid of the 80/20 in your organization.)

Over a year ago, I did the same type of analysis for a large nationally-based broker dealer specializing in serving the credit union market.  We looked at 100 advisors.  What we were looking for was data to support the position that, in order for a financial advisor to break through the upper limits of their productivity, they had to segment their book. 

As I looked at the collective data, it became very obvious that every advisor in every quintile had a book that had a similarity – 36% of the clients represented in their client base (as many as 1,000 clients) were responsible for 94% of their total AUM (assets under management).  Furthermore, when we analyzed the bottom 36%, that group only represented less than 5% of the total revenue.  Taking one more step, we uncovered that it would take 16 sales from the lower 36% to equal the average AUM from the top 20% of the book.

We thought we knew this, but now we had the data to prove it. 

Just for fun, I looked at the AUM from the 100 advisors for the broker dealer and guess what I found?  You guessed it – 36% of the advisors were responsible for over 90% of the total AUM.  Again, the questions have to be – Why do you have the other 64% of the advisors?  Why do they perform so poorly?  Were they hired this way – to perform at this level?  What was missing in the on-boarding, training and management of those advisors?

One of the easy reactions to the data is this – “Tony, you have to understand that some of the advisors we were looking at don't have the same tenure as those in the top 36%.”  Okay, I will buy that.  But, are you telling me that is the case from #1 all the way to #100?  The answer is no.  In the mix of the top 1/3, there are less tenured advisors, and in the bottom 1/3, there are very senior advisors. 

The tenure argument doesn’t work. The economy argument doesn’t work. The competition argument doesn’t work. The compensation argument doesn’t work and, finally, the DoL regulation or regs of any sort argument doesn’t work.  In every instance, the numbers hold up.

So, what is the problem?  What are the constraints to sales growth? Why is it so $%^&* hard to solve the sales growth problem?  There are five reasons I want to discuss, but first, let’s agree to some assumptions:

• Your organization has a solid strategic plan to gain market share. (If not, contact Gazelles.  Verne Harnish is a genius and the concepts in his book, Scaling Up, will change your business.)
• Everyone is either rising or sinking with the economic tide.
• Your company’s compensation plan fits with in the suggested range of the industry. (Contact Peter Bielen or Scott Stathis to discuss compensation.)
• You have access to the products and services that the ideal prospects identified in your strategic plan want and need
• Your support partners provide you the backend client services that you need.

Again, the list can go on – in general, let’s assume that the basics to start and sustain a business are in place.  But, something is missing year in and year out that makes sales growth so difficult.  Here are the 5 constraints to consistent and predictable sales growth:

1. Weak or lack of Performance Management. Understand what performance management is NOT – setting goals and then telling people that they have to work harder if they are not hitting the goals.  It is NOT using PIPS as a way to get people to perform.  A solid performance management structure and strategy requires a couple of steps, systems, and processes.
   1. Identifies the right metrics to measure success
   2. Creates benchmarks that force salespeople to work harder and better
   3. Holds people accountable to the THINGS they need to do to get sales growth results
   4. In addition to the items listed above, the executor (sales manager, sales coach, sales leader) needs to have the right sales management behaviors and skills
2. Any coaching is in-the-moment coaching rather than Coaching for Success. Coaching for Success is intentional/planned coaching.  It is based on what the data identifies as choke points in executions or lack of effort.  In-the-moment coaching does not focus on changing behavior and improving skills. It’s kind of like what happens in a time-out in most sports.  There is a situation in the game that requires some additional thought and strategy.  The coach calls a time-out to discuss the strategy and lay out a plan to execute “in the now.”  That type of coaching is designed to solve the in-the-moment problem, but it virtually does nothing to change behavior or improve skill overall.  Coaching for Success requires:
   1. Data points established as a result of the performance management success formula (The metrics that define success identified in your performance management strategy)
   2. Data collection
   3. Reporting that identifies the variance in actual performance from goal performance
   4. Gaining business intelligence from the data report
   5. Effective coaching skills http://c.ymcdn.com/sites/www.bisanet.org/resource/resmgr/onesource/9_skills_to_coaching_success.pdf, systems and processes
   6. A consistent process of disciplined coaching designed to help the advisor get on track and stay on track because behaviors change and skills improve.

The remaining constraints are:

3. Hiring sales people based on the wrong criteria with the wrong processes and systems. To Hire Better SalesPeople, you have to have a better way to attract better people and a better way to eliminate those 90% that will not do 100% of what you need them to do.
4. Ineffective motivation via culture, sales meetings and recognition. Most sales managers don’t know what motivates their people.  If you are going to Motivate for Success, it is important to know what motivates them.
5. Inadequate hiring. When just enough is good enough, the sales organization fails to regularly Upgrade the Sales Force.

Pass this article on! http://bit.ly/2jPOGFO 

Contact us – 513.791.3458

Contact Tony Directly -  tony@anthonycoletrainingcom or text 513.226.3913 with the message “Call me”

Additional Resources:

• Sales Managed Environment® Certification Program
• 9 Keys to Coaching Sales Success - Download free eBook

Assertive (not aggressive) salespeople win more business than others.  They care so much about doing the right thing for their clients that they are willing to risk the relationship and the deal in order to make sure the prospect or client makes the right decisions.  Does that describe your people?  Are they assertive?

When we say assertive, what do we mean?  What sales habits do assertive and successful people do day in and day out?  In 2010, I wrote a blog entitled 5 Direct Sales Activities That Lead to Sales Success that has been one of my highest readership blogs.  I went back and reviewed and here are the five steps:

1. Activities that lead to getting names - networking, speaking engagements, sponsored seminars, meeting with centers of influence and/or asking for introductions
2. Calling a suspect on the phone for an appointment
3. Conversations and meetings to qualify a suspect
4. Gathering additional information that leads to a presentation meeting
5. Presentations/pitch meetings that lead to decisions

Steps 1 and 2 have changed dramatically in the last 6 years.  Social selling and the evolution of the buyer’s process utilizing all of the multiple channels of information has completely changed the process of prospecting for business.  Step 2 - getting a suspect on the phone - is virtually impossible with voicemails and phone trees.

Our Own Prospecting Case Study

Earlier this year, we decided to test the waters for our hiring business solution, www.hirebettersalespeople.com.  We had some initial success right off the bat with our launch in January of 2016, but then activity seemed to cool down.  We purchased a local lead list based on company size and title and I began calling.  Here are the calling results:

• 66% of the dials took me directly into a recorded phone tree
• 25% of the calls took me to a receptionist who was very helpful and informative but transferred me to voicemail
• Of the remaining 9%, I had in depth conversations with 3 people, met with one and generated one sale from that contact

3 people fit our profile; I met with 1 and sold that one… but not to help them hire better salespeople, but rather to help them test, train and track some of the salespeople that were not “hitting their weight”.  The second was not interested at the time and the 3rd introduced me to someone in the home office. That contact has put us in the middle of negotiations for a 5-figure initial engagement.

I tell you that story to make the following points about step #2:

• Calling prospects on the phone doesn’t work like it used to.  
• It requires more attempts and effort than ever before - you have to have a different tactic and message to differentiate yourself.
• Once you make contact, you have to be extremely good at what you do and have a compelling reason for people to listen and stay on the phone. THAT is where being more assertive makes a difference.

Steps 3, 4, 5:  How to be More Assertive at Qualifying, Presenting and Getting Decisions

In our primary markets of financial institutions, investment services and insurance brokerage, we ARE the resource for sales growth solutions.  We coach our clients on the fact that the reason for either their sales growth or loss is due to their peoples’  1) effort or 2) execution.  But what does assertiveness have to do with Effort and Execution of steps 3,4 and 5?  In a word, EVERYTHING.

Steps 3,4, and 5:

3. Conversations and meetings to qualify a suspect
4. Gathering additional information that leads to a presentation meeting
5. Presentations/pitch meetings that lead to decisions

In each one of these steps, the skill of asking the right questions, the right way, at the right time is critical.  In our selling system, we explain that -  in order for a prospect to qualify - they must:

1. Have compelling reasons to buy, make a change, do something different
2. Have the capability and willingness to invest the right time, money and effort required for the purchase/change
3. Be in a position of decision making and be able to make the decision to find a solution to the compelling (have to fix) issue,  can make the money decision, can leave a current or add to a current relationship, and say yes or no.

There are lots of questions that need to be asked in order to find out if the prospect qualifies in these three areas.  Some of these questions require a sales person to be assertive.  Questions such as:

• How will you go about telling your current broker/banker/relationship that you are no longer going to do business with them?
• If you don’t have the money, how will you solve the problem?
• The budget you have won’t be enough to get you the outcome you want. What part of the solution do you want to eliminate?
• What will you tell your partner when they say they don’t want to make the change?

Additionally, sometimes statements are required that would be considered counter-intuitive to selling, gutsy and risky.

• Based on our experience and deep domain knowledge about your business, your best action to take would be this: ________.  If that doesn’t seem to work for you, then there’s a possibility that we won’t be a good match.
• If I treated my clients the way you’ve been treated, then I would expect to be fired.
• When we finish our presentation, solve all of the problems you’ve asked us to address within your budget and answered all your questions, I’ll need for you to be in a position to make a decision on whether we’ll do business together or not.
• Maybe the most important thing for you to consider is “fit”.  If there isn’t a fit between our two companies, then our products and pricing really don’t matter.

Imagine for a second that you had salespeople that were gutsy enough to have these types of conversations. What would happen?  You might fear that you would lose more business. But… suppose that wasn’t the case.  Suppose by being more assertive and gutsy, your salespeople eliminated tire kickers earlier.  Suppose this lead to the elimination of “think it overs” and actually got people to decide.  Imagine for a second that your salespeople stopped making presentations to people who could only say “no” and never had the authority or intention of saying “yes”.  What would happen?

Your people would sell more, more quickly, at higher margins.  They would stop wasting time, stop getting delays, stop being shopped by a prospect that was just trying to keep a current provider honest.  

Here’s How Sales Managers Can Get Their Salespeople to be More Assertive

Sales managers must hold their salespeople accountable to the right level of sales activity.  To do this, you must have a success formula and a well-defined sales process so that you can identify where the choke points are for individuals when they fail to close “sure thing” opportunities.  You must also have a pipeline tool that actually helps you predict the possibility of an opportunity closing rather than a tool that just reports that there is activity in the pipeline.  And, finally, you must have a full pipeline – an anemic pipeline makes cowards out of salespeople. These are the tools you will need to help your salespeople be more assertive and close more business, more quickly, at higher margins.

Sales management, sales leadership and sales presidency require special diligence this time of year. Actions taken now will assure successful sales results in the coming year. In order to transition smoothly, here are 7 sales management steps that should be completed before the end of the year.  

By now, you should have:

1. Evaluated the individuals on your team for the year. Unless you have anomalies at the end of the year, your team’s individual outcomes and results are pretty much set.
2. (Based on the evaluation) Begun to have meetings with all your people. The meetings are similar to performance reviews, but they’re not the corporate type of review that gets put in the HR file.  These reviews put your team members in 1 of four groups. You then have a discussion about what group they are in.
   1. Met or exceeded sales goal and sales activity requirements group
   2. Met or exceeded sales goal but currently not at sales activity targets group
   3. Met or exceeded sales activity targets but failed  to hit sales targets (below 100% is failing)
   4. Has not met sales or sales activity targets

(If you would like information on what the conversation should sound like for people in each of these groups, call me or text me at 513-226-3913.  If I don’t answer, just leave a message with your name, mobile number and email requesting, “Where’s Walter?” information.  You can also email me at tony@anthonycoletraining.com.)

3. Reviewed performance, actual effort and execution effectiveness results against targets for the year.
4. Assessed where the choke points are for people on the team who are not succeeding. To do this, you look at the conversion ratios in your sales success formula that was built last year and reviewed every quarter.  (Don’t have a success formula?  Click here –> Success formula download)
5. Revised the success formula for 2017 based on each person’s commitment to performance via the “extraordinary discussion”. (Haven’t had that discussion? Ask Jeni at Jeni@anthonycoletraining.com to send you that information.)
6. Conducted an offsite where your salespeople identify personal goals, translate the personal goals into a personal income requirement and translate that into a work plan that you will follow up with every quarter. (Yes, we have information on what that offsite should look like.  Even though it’s late to be doing that now, conducting the session in January would be better than not conducting one at all.  Let us know if we can help: 513-791-3458)
7. Talked to your HR department about additional FTEs for the coming year to grow your sales team and replace the people that are not performing. Think about this: Suppose you had to hire better salespeople (3) but can only grow your sales team by 2 – who would you let go?

These 7 things are the minimum functions for sales management at this time of year.  Failure to execute on these 7 steps will pretty much guarantee that your next 12 months will look like the past 12 months:

• Only a few people will meet or exceed the goal
• Most of the people will miss the goal by at least 10% and some as much as 20%
• The bottom 33% of your sales force will represent less than 5% of your new business revenue
• Salespeople that fail will continue to make excuses
• The salespeople that had a “one-off” great year will coast in the next year and live off the laurels of this year.
• Your top performers will continue to be frustrated by lack of attention, support and recognition for their outstanding contributions.

So, what are you looking for in your next great sales person?  I guess the most important question is this: Are you really looking for the next great sales person or are you looking for a sales person that will fill the FTE allocation?  Will you settle for someone that is “at least as good as” your average sales person?

No one in their right mind would say “yes” to those questions, but if your sales organization is large enough, the data would support that your hiring practices are getting you exactly that.  According to Geoff Smart (Topgrading), 75% of the hires made are not as good as or only as good as the person they are replacing.

If we were to look at the 80/20 power curve in your organization, we would probably find out what we normally do – that about 36% of the sales force is responsible for over 90% of your sales results.  So, what is the other 64% doing?  How did they end up on your sales team?

In order to get the right people, you have to know what you should be looking for.  In conjunction with Objective Management Group, we have studied our clients.  We have evaluated their top performers and non-performers.  Looking at over 100 data points, we know what separates those who will sell from those who won’t sell.  Do you?

Ignore the words and numbers.  Just look at the sea of green which is representative of performers and compare that with the sea of red representing non-performers.

Here is the list we’ve come up with after analyzing the sales teams of 5 of our clients in the financial services/banking business:

1. Strong desire for success in selling
2. Strong commitment/motivated to do everything possible to succeed in selling
3. Trainable
4. Has a strong figure-it-out factor
5. Possesses Sales DNA Competencies
6. Has no need for approval
7. Controls emotions
8. Has supportive beliefs
9. Comfortable discussing money
10. Handles rejection
11. Hunter
12. Sales posturing
13. Consultative seller
14. Qualifier
15. Closer
16. Follows consistent sales process
17. Compatibility with top performer profile
18. Prospects consistently
19. Schedules meetings
20. Reaches decision makers
21. Recovers from rejection
22. Does not need to be liked
23. Comfortable talking about money
24. Has a strong self-image
25. Loves to win
26. Motivated by recognition
27. Loves competing with others
28. Rejection proof

What I find interesting about some of the items is that there are a few that have a significant variance between the performers and non-performers:

1. Commitment – The commitment to succeed in selling is 77% GREATER in performers than in non-performers.
2. The trainability in performers is 34% HIGHER.
3. The hunter skill in performers is 112% HIGHER.
4. Performers have a 48% HIGHER figure-it-out factor.
5. Performers score 119% HIGHER in handling rejection.
6. Those that hit sales goals score 87% HIGHER in sales posturing
7. This one blows me away – neither group is particularly strong in closing: non-performers have only 13% of the closing skills required.  Even though top performers OUTSCORE their counter-parts by 150%, they still only have 33% of the required closing skills.

How do you explain that last item?  Look at the others strengths:  Desire, commitment, trainability, hunter, figure-it-out qualifier, consultative, posturing… they are REJECTION proof! 

The purpose of this post is to get you to think more seriously about what it is that you really know about the candidates you are looking to hire as well as what you really need to know before proceeding with the interview and hiring steps.

Any questions? Please call or write:
513.226.3913 tony@anthonycoletraining.com

As the story goes, Chicken Little gets hit on the head and declares the sky is falling.

Last spring, the Department of Labor passed new fiduciary regulations on the financial advisory business, and since then, there have been an untold number of articles written about the impact on advisors, the industry and consumers.  Several of these have stated that:

• Trillions of dollars will saved in investor commissions because advisors will soon be held to a much stricter fiduciary standard that affects transactional incentives.
• Advisors will lose ½ of their revenue because what was a solid investment recommendation and seen as ‘suitable’ will soon be considered conflicted advice because it paid them commission.
• The industry is in turmoil as it attempts to figure out how to meet DoL regs, hold on to high-performing advisors and effectively make-up the assumed lost revenue.

The sky is falling?!?

I read Bank Investment Consultant at least 3 times a week.  The publication and its editors/authors do a great job of keeping people connected to the industry in the loop on the latest changes, trends and thought leadership.  Lee Conrad, Editor of Bank Investment Consultant, recently wrote an article titled:  Bank Advisers:  Prepare to Cut Your Book by Half

Here are a couple of excerpts from the article:

The fiduciary rule will require most bank advisors to trim their books of business to a much more manageable level. How much is really a guessing game at this point. But, for many advisors, especially those who have focused on transactional business, it will be significant.

This was just one of the discussions from our last Industry Leadership Forum in Denver. We hold these meetings in conjunction with Stathis Partners as small, invitation-only gatherings for industry execs to discuss the top issues on their radar screens.

So, how many clients can an advisor reasonably manage when they are acting in a fiduciary capacity? The numbers bandied about in our meeting were in the low hundreds: about 200 give or take.

***

REALITY CHECK
How many clients do advisors really have? Consider some research we did earlier this year for our annual Top Program Managers ranking. In addition to asking each nominee how many advisors they had on their teams, we also asked how many households their teams served. We've never used those results until now, but the average was 750 client households per advisor. The median was a bit lower--about 550--but many of the individual programs had well over 1,000 clients per advisor.

***

TEE-UP THE CROSS SELL
Here's one more assumption, on my part, that I feel pretty good about: Advisors don't want to lose too much of their pay. If they generated, say $200,000 in annual production in 2016 and next year they find themselves with a book of business that's been cut by half, the natural move for them will be to get more profit from each client. (Just how to segment a book was another discussion at our forum, which we'll write about in a future installment.)

So, here is the first thing you should keep in mind about Dol and its impact:

It’s easy to get caught in the DoL quicksand.  Two friends of mine who also happen to be well -respected people in the industry, Michael Graham from Midwest Securities Trading Company and Kevin Mummau from CUSO, are not panicking.  Actually, we all seem to agree that this is a great opportunity for advisors:

• The money hasn’t gone anywhere.
• Advisors that aren’t very good at really advising clients and struggle with “fiduciary” standards will leave the business.
• The solutions to the “problems of revenue loss” already exist: financial planning and risk management products.

So, is the sky really falling? We will answer that question in our next post!