Okay… so I know you might be thinking, “What the heck does growing sales have to do with a peanut butter and jam sandwich… AND why jam and not jelly?”

Not “jelly” because… well, I really don’t like jelly. I grew up with my Mom’s homemade strawberry jam.  And, for years, I would just eat jam sandwiches because I didn’t like peanut butter. But then…

THE SALES GROWTH & PB&J CONNECTION

In 1973, I was offered a full scholarship to play football at Boston University. I accepted and signed my letter of intent but, later in the year, that coaching staff left BU and went to UConn and so I followed. 

As a senior offensive lineman at Hammonton High School in New Jersey, I was 6’4” and 170 lbs. on a heavy day.  I was instructed to consume more calories, lift more weights and ingest lots of protein to build muscle.  Peanut butter was now part of my dietary intake.  During the summer leading up to my freshman year at UConn, I would consume 10,000 calories a day.  That included breakfast and then 5 peanut butter and jam sandwiches between breakfast and lunch.  So, there you go.

As any peanut butter and jelly/jam aficionado knows, when making the perfect sandwich, you want to spread both ingredients all the way to the edges of the bread.  No bread uncovered.  You spread peanut butter on one slice, jam/jelly on the other slice and then smash the two slices together so that the combination of ingredients oozes out of the sides of the sandwich.  Then, just cut in half and eat!

The first time I heard the expression, “Let’s not spread our training program dollars around like peanut butter” was from George Emmons, then president of the community bank at Key Bank.  I asked him what he meant by that.  He said, “Tony, we have limited resources to get this done and so we have to be judicious in how we use our dollars.  We have markets like Seattle that are our highest potential growth market and then we have a market like Vermont.  Vermont is a great market for us - very strong - but we already enjoy sizable market share there, so our ROI isn’t going to be as great.   We need to invest our dollars where we get can get our greatest return.”

And there, my friend, is the connection between building a sales growth sales team and making a peanut butter and jam sandwich!

Now, on to growing sales …

“PEANUT BUTTER” AND YOUR SALESPEOPLE

When you think about your sales team, the collective book of business and the market pool, you have to be more intentional in your investment of time money and effort.  Not all of your salespeople are equal, not all of the clients represented in the book of business are equal and not all of the businesses/people/prospects that are available in the market place can bring you the same revenue, value or profit.  Given the variability, you cannot (and should not) spread your resources like peanut butter.

In my previous articles and blog posts, I’ve talked about the 80/20 principle - the simple concept that 80% of your results come from 20% of your efforts.  You can substitute efforts with people - salespeople, client people, people in the market, etc.  Having said that, I highly recommend you follow Perry Marshalls process of the 80/20 of the 80/20.  Simply stated:  Do the 80/20 math again with the remaining salespeople, clients and prospects.  See below as an example of how to segment a revenue book.  (click here to read the detailed article about the 80/20 of the 80/20).

I believe the chart is easy enough to follow.  The key things here to recognize are:

1. About 96% of your results are coming from just 36% of your team
2. That 36% isn’t tapped out – the top 3 might be, but if you add admin and support staff, you can probably get them to double productivity – spend “peanut butter” differently for this group than for the rest of the group.
3. You have great opportunity/potential in the 2^nd group of 80/20 – the next 3 salespeople (next quintile). Lots of “peanut butter” (intentional coaching) here in training, development, management, marketing/lead generation resources.
4. The last quintile - the bottom 3 people - are not going to get you to the mountaintop based on their current productivity. Unless they are brand new, they not only get zero “peanut butter”, but they also get the opportunity for alternative employment.
5. Some of the people in the bottom quintile might be there because they are new to the organization, so don't’ abandon them; however, make sure you have a very intense on-boarding program to make sure they climb into the next quintile and beyond quickly. Lots of “peanut butter” here.
6. Your middle quintiles - salespeople in the middle 33% of the company - need to get lots of attention (“peanut butter”) for a short period of time because they have to demonstrate that they can actually produce the way you thought they would when you hired them… or they unfortunately validate that you made a hiring mistake.

WHEN TO USE A LOT OF “PEANUT BUTTER”

Follow this same process when analyzing the individual books of business for each salesperson.  Your salespeople should not be treating them all the same. The top 33% of the book brings over 90% of the revenue – treat them that way – with LOTS of “peanut butter”.

And, finally, when approaching the market place, use the information/data from the analysis above when looking at the individual books of business.  Identify the common characteristics in the top 33% of the book of business and then look for new opportunities that look like your top 33%. Stop spending time, money, effort and peanut butter pursuing anybody in the market place that doesn't (or have any chance to) look like your top 33% of your current clients.  (There us a great book on this concept, Selling to Zebras)

Additional Resources:

NO MORE HIRING MISTAKES - Hirebettersalespeople.com

In my series (see previous posts) regarding the constraints to growing sales, the two remaining topics are:

• Ineffective motivation of the sales team
• The “just enough is good enough” approach to hitting setting and hitting goals
  
  

THE POWER OF THE “RIGHT” MOTIVATION

Ineffective motivation of the sales team is not uncommon and it is the subject of one of the more frequent questions people ask me: “Tony, how do I keep my sales people motivated?”  My first response is normally a question in return:  “Do you know what motivates your people?”  The most common answer: “Well, uh, yeah, I think so.”  I cannot help myself when I ask, “Do you know or do you think you know?”  Their most common answer: “I think I know.”

With that in mind, how do you possibly motivate people when you just think you know what motivates them?

What we know about motivating salespeople is that it has changed over the years.  When we first started evaluating sales teams using the #1 Sales Evaluation Assessment – Objective Management Group Sales Evaluation and Impact Analysis – the findings told us that people were externally motivated.  Motivation was money and the things money can provide.  Today, however, we see a different set of results (Read this HBR article on motivating salespeople).

The current findings tell us that sales teams are highly motivated to succeed, but the source of motivation is internal rather than external.  They are motivated by a job well done. They want to be recognized for success and they are motivated by achieving their own personal standards for success and achievement.

I was 9 years old when I walked off the football field the very first time.  I had just finished practice and my dad was waiting on the sideline for me.  He asked me what I thought and I told him I loved it.  “Someday I’m going to go to college to play football.”  Dad asked me if I was sure and I said “yes.”  He then told me, “College football players are in great shape so, if you are going to play college football, you’ll have to be in great shape. Take off your helmet and shoulder pads and start running some laps.”  I followed his advice and I ran laps every night after practice to get in shape to play college football.  In February of 1973, I signed my letter of intent to go to the University of Connecticut to play football.

My dad - my manager - knew my goal and used that occasionally to keep me on track.  Occasionally, when I would fall off the training wagon, he would ask me if I still planned on playing college football.  I would always answer, “Sure!”  He would then say, “Well, I wasn’t sure. I haven’t seen you run or lift weights in a while.”  That’s all he needed to say.  Off I went.

When you know what motivates your people, you can then have the appropriate discussions to keep them on track.

“JUST ENOUGH” IS NEVER GOOD ENOUGH

“Just enough is good enough.” THIS MINDSET DRIVES ME CRAZY!  How do you know that this is your culture?

• Year over year growth is one of the metrics you use to determine if you are getting better
• Comparing one unit in your organization against another is the way you communicate to the teams about which ones are having success – stack ranking and comparing the rank of one team against the others as a way to explain, “If they can go from #22 to #15, then so can you!”
• Hitting sales goals on the backs of the few
• You have people on your sales team who - month after month, quarter after quarter and year over year - fail to hit their sales goal.
  • I don’t mean those that are at 99% one year and 101% the next and then 95% the third
  • I mean those that consistently perform in the low 90’s or high 80’s.
  • Those people that fail to perform still earn incentive comp, are not subject to any disciplined approach to improving skills or changing behaviors
  • There is never a discussion that sounds like, “What happened to the superstar sales person I thought I hired ____ number of years ago?”

I understand how this happens. There is so much pressure to just hit the numbers that, at the end of the day, it really doesn’t matter how you hit the numbers; you just have to hit them.  But what are the long-term consequences of this sales environment?

• Turn over of really good producers that are tired of carrying the load
• Producers who are close to being really successful manage themselves downward instead of upward.
  • They witness that there are no consequences for failure
  • They become “at leasters” – “I’m not as good as Julie, but at least I’m not as bad as John.”
• Recruiting top talent is difficult because, when they talk to your top performers, they tell them that there will be a lot of pressure to perform because nothing happens to the slackers and the company depends on the top producers to make up the difference.
• When goal setting time comes around, people at the top get more heaped on them and those in the middle to bottom of pack argue that the goal you give them was never one they bought into.

SETTING THE BAR FOR SUCCESS

Bottom line is:

• Organizations have to have a mind-shift first about what it means to be successful in the organization.
• There have to be systems and processes in place to catch failure before it happens rather than when it actually happens. Failure never happens all at once. It’s gradual; however, instead of addressing the issues when they appear, managers put salespeople on “double secret probation.”
• The metrics used to determine success have to include diagnostics of the improvement of quintiles year over year. (See chart below for a snapshot of quintile performance.)  The idea is that when you take the snapshot next year, the numbers for each quintile have to be better than the previous quarter, year, etc.
• A willingness and commitment to set the bar higher for success and then hold people accountable to actually DOING the THINGS required to be successful rather than just looking at training data.

I will continue to explore and discuss these constraints to consistent and predictable sales growth.

Additional Resources:

The 80/20 of the 80/20 - What it means for your company and next steps

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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.

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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