Any business leader worth their salt wants the company's sales and marketing teams to function at peak performance. However, this won't happen automatically; the leader needs to be a leader in several vital areas before the teams will follow. Buy-in starts at the top, and management's words and deeds are what set the tone for the rest of the organization.
With that in mind, here are six key ways in which leaders can contribute to improved sales and marketing performance from their team members:
1. Show Respect
This is a fundamental step in optimizing your team's performance... one which sadly goes neglected more often than not. It's important to understand that your marketers and sales reps are "subject-matter experts" when it comes to prospects' pain points, concerns, and values. They have experience in offering targeted solutions that guide leads through the sales funnel and toward a final purchase decision with your brand. That experience — that expertise, hard work, and passion — must be respected by leadership.
Make it clear to both your sales and marketing teams that you understand how they are directly contributing to the company's mission, vision, goals, and ultimate success. Vocalize your appreciation for their efforts. By simply filling this basic human need — the need to feel respected and valued — you're already setting your teams on the right path, and motivating each member to give their best, even toward the most ambitious revenue goals.
2. Support Teamwork
Do everything you can to push back against collaboration's silent killer: the "silo mentality." Sales and marketing experts may be able to accomplish quite a bit apart from each other, but that pales in comparison to what they can accomplish together. For that reason, aligning your sales and marketing teams toward a common vision and goals should be a top priority on your leadership agenda.
Set up processes that promote communication and collaboration between the two teams, such as regular interdepartmental meetings. Communicate with team leaders in joint strategy sessions. Do what you can to walk the walk, and your managers and team members will fall in line.
3. Ask for Feedback (and really listen to it)
What if your departments aren't performing to expectations? The quickest and most effective way to uncover sales and marketing roadblocks is to seek feedback from your teams. Ask questions, and pay close attention to the answers. It may be enough to seek feedback from team leaders, but at times you'll need to get feedback from the entire team.
Your sales reps in particular can help you understand what prospects truly want, and why deals may not be closing as expected. These team members are "on the front lines" when it comes to customer interactions, and they can function as the de facto eyes and ears of your organization. Be willing to tap into their knowledge and experience, especially when contemplating major strategic changes.
4. Promote and Drive Ongoing, Integrated Training
Interdepartmental collaboration is one vital aspect of proper alignment between sales and marketing. For most modern organizations, integrated training on sales and marketing tools is another. It's vital that your sales reps and marketers understand how to use such tools effectively — whether it's a new lead database, a CRM, or an email automation platform.
They also need to understand how their activities with these tools play into the bigger picture. For example, when exactly should a marketing-qualified lead (MQL) transition into a sales-qualified lead (SQL)? And what steps need to take place in order to implement and document that transition? In this regard, it may be best to remove training silos within sales and marketing and bring the teams together for integrated learning sessions.
5. Focus on Results and Watch the Numbers
As you implement alignment between sales and marketing, you'll be asking team members to track specific KPIs for the sales and marketing processes over which they've taken ownership. When it comes to these numbers, balance will be needed on your part: you'll certainly never want to fall into the trap of micromanagement, which is both inefficient and counterproductive. At the same time, as a leader it's your responsibility to regularly and methodically review these KPIs within the context of the company's larger goals.
By keeping an eye on key metrics, you'll be able to spot any bottlenecks (or potential bottlenecks) in your sales and marketing strategy. You'll also gain insight into which team members could benefit most from constructive feedback. At the end of the day, it's important for sales and marketing leaders to remember that they're working toward an overarching objective, and are getting consistent support and direction from proactive leadership.
6. Celebrate Wins... and Have Fun!
In many ways, sales and marketing teams can be compared to sports teams. For instance, both work toward common goals. In order to be effective, both require hard work from individual members, along with a clear understanding of their specific roles. And both can achieve visible, measurable success ("points scored," if you will).
There are many ways to "score points" in sales and marketing. No matter how you keep track of those points, it's important to occasionally step back and celebrate the wins — all the times your company has experienced some type of success from the efforts of your team members. Take advantage of these opportunities to acknowledge the work of your team, and express your appreciation for them. There will always be room for improvement; but taking a moment to look at what you are doing right is great for team morale, and a driver for future success.
When it's all said and done, sales and marketing performance has a direct relation to qualities that any leader can develop: understanding, respect, empathy, consistency, and trust. By holding the vision of sales and marketing alignment, seeking feedback, and demonstrating your respect and appreciation for the efforts of each team member, you'll undoubtedly see improvement in each department's performance. Momentum will gradually build, and your company will be set up for sustainable success for years to come.
A healthy relationship between sales and marketing is vital to an organization’s success. Dive deep into this effective strategy in a new book called Sales & Marketing Alignment. If you'd like more insights on how you can improve your sales leadership, contact us. Or sign up for our newsletter for more valuable resources.
If you want your company to experience significant and sustainable revenue growth, it's vital that you have three pillars of sales success in place: strategy, process, and people. Why is each of these elements so essential to a well-oiled sales machine? Well, consider this:
However, when all three components are functioning at a high level and working well with each other, you're bound to see more wins than ever before.
Sales Success Starts With Strategy
You can think of strategy as an understanding of your mission or goal, along with the ability to select a path that will help you achieve it. In terms of sales success, strategy is a well-thought-out plan put into action.
Many business leaders either have an inconsistent, "winging-it" approach to strategy or no strategy at all. For instance, some marketing and sales managers believe that staying busy is the same as being strategic. As a result, their focus is on running more ads and uploading more social media posts, whether those actions contribute to an overarching plan or not. Other managers are scared to "rock the boat." So they stick with the strategy they inherited from their predecessor, who inherited it from the manager before him, who inherited... well, you get the idea. Still others (and this is especially common among small business owners) have no grand plan at all. They constantly run around "putting out fires" rather than thinking about the bigger picture.
The Basis for an Effective Strategy
The truth is, if you want to drive business growth, it's absolutely imperative that you have a sound strategy in place as your foundation. And your strategy should be constructed as a mixture of at least two major materials:
Once you have those key ingredients on hand, you can add other things to the mix: intentionality, creativity, logic, and action-oriented thinking. You can develop clearly defined goals to reach within the next three months, six months, year, or beyond. You can start thinking about the processes that need to be set up to achieve those goals and the people that will be the best fit for each process. Again, it all starts with strategy!
Process is Transportation for Your Strategy
If strategy is like the roadmap that helps you plan out the best route from point A to point B, process is the vehicle that actually carries you there. Processes are the specific tactics that make your vision a reality. And they are most effective when they're replicable, scalable, and flexible enough to evolve when necessary.
Process is also about working the margins to gain any edge on the competition, no matter how slight. Well-built processes may not guarantee your sales team a win in any given interaction, but they'll certainly increase your odds of gaining a win. Think of a baseball pitcher who has to employ the same mechanics repeatedly to hit his spots and get the outs. Similarly, your sales team will be more consistent and effective when they follow well-defined workflows day in and day out.
What are some particular areas in which process can drive strategic alignment? For one, think about the sales and marketing funnel. Focusing on process can help you map out your strategy to get customers from point A (the top of the funnel) to point B (the bottom).
Develop specific processes as answers to the following questions:
In addition, it's always a good idea to consider where automation can fit into your processes. Which parts of the funnel need to be handled by a human team member? Which parts can be "outsourced" to a program or algorithm? The bottom line is that processes can truly help your team members to "work smarter, not harder."
Get the Right People in the Right Roles
You can automate some of your processes. However, you can't automate the people on your team. You can't just fill key roles with warm bodies and expect that all your work with strategy and process will pay off. The simple truth is that not everyone is well-suited for the same roles in your organization. Not every star sales closer is cut out to be a sales manager. And not every sales manager is necessarily a star closer. It's important to understand both the strengths and the weaknesses that each individual on your team brings to the table — and then play to those strengths rather than attempt to shore up the weaknesses.
Never mistakenly think that marketing and sales require interchangeable skills. It "takes a village" (i.e., aligned sales and marketing teams) to stay competitive in today's business world. However, the village only functions properly when each member is in the right role.
Apart from getting the right people in the right seats, it's also important to actively promote alignment between teams. One key way to accomplish this is through regular integrated meetings. Granted, you don't need to have every team member from sales and marketing attend every meeting planned throughout the course of a week, but it is a good idea to have regular check-ins between sales and marketing leaders, along with key representatives that can provide helpful input when decisions need to be made.
At the end of the day, investing in these three pillars — strategy, process, and people — will help your company to enjoy sustainable sales success and your team to yield improved sales performance. Now that is a foundation worth building!
Learn More About Sales Success
A healthy relationship between sales and marketing is vital to an organization’s success. Dive deep into this effective strategy in a new book called Sales & Marketing Alignment.
If you'd like more insights on how you can improve your sales leadership, contact us. Or sign up for our newsletter for more valuable resources.
Business is good. Accounts keep coming in. Our team doesn't have any drama, and everyone works together well. The only problem is... I feel like opportunities are being missed because of my lack of organization. How do I get my sales team organized?
Can you relate to the above thoughts? Many SMB owners who run successful companies have to face the "organization dilemma" at some point in their journey. Maybe it was easy to handle the day-to-day of sales when you were just starting out — but now you have an entire sales team to manage, and dozens, hundreds, or even thousands of accounts to maintain.
Are you giving your reps the direction they need to succeed? Are you giving them guidelines and boundaries that will keep them focused? Has your sales process been broken up into defined stages or steps?
Your business may be doing great. With a more organized approach in place, it could do even better. So we go back to the original question: Where should you start?
Here are three practical tips that can help you keep your sales team organized, focused, and effective:
1. Get Intentional
The first thing you need to realize as an owner is that unless your company has a designated sales leader... you are the sales leader. You're the one your reps will look to for clarity, structure, and support. You're the one who can either empower your team to exceed expectations... or hinder them from reaching their full potential.
Bottom line? It starts and ends with you. And that's why it's so crucial to get intentional with your sales process.
Being intentional means starting with the end in mind. In other words, you need to develop a clear "game plan" for your sales team. What exactly is their role in the overall process? For example:
It's important to define your main objectives, and then work out the details that go into each one. This is where the concept of "co-creation" can really generate a positive impact on your process. Communicate with your sales team. Lay out your vision for them to see, and then work with them on how best to make the vision a reality. If you can come out of those meetings with a process your team can get behind 100%, it's a win-win, hands down.
2. Ensure You Have the Right Tech Stack
Let's say you've already defined your primary objectives, and have given structure to the overall sales process. All the documentation is set, and your team is onboard with your game plan. Now the challenge is to make sure that your tech stack supports your vision.
The size, scope, and nature of your business should inform the kind of tech stack you have — as should the makeup of your sales team, and your recently defined goals. Companies in the SMB space often use CRM platforms like Salesforce, HubSpot, or Pipedrive (to name a few). The exact features and subscription plan(s) you'll need will depend on the intricacy of your sales process.
Just as an example, imagine that you want your sales team to manage automated drip campaigns as part of their lead nurturing duties. You'd need to make sure that your CRM system offers email templates, the ability to set up automated email sequences, and a way to effectively segment prospects according to shared characteristics like funnel stage, company size, geographical location, and so on.
Along with a robust CRM platform that meets all of your sales team's needs, you also want strong reporting built into the process. KPIs and other metrics can provide you with a helpful "snapshot" of your sales process' current status. Reports can also help you to identify bottlenecks in the pipeline, and even determine which reps could use some extra training.
3. Work, Review, Discuss, Iterate
Okay, you have your process in place. You have the right tech stack to support your goals. What's the next step? Simple: it's time to work the plan.
Working the plan is often that secret ingredient that separates a good sales team from a great one. Just stop for a moment and think about all the ways that a cohesive plan will enhance the effectiveness of your reps:
Of course, as you and your team work the plan, you'll inevitably identify opportunities for growth. So make sure to periodically examine the data you receive. Hold intentional meetings where you ask your reps for their feedback, and then discuss possible solutions. Don't be afraid to iterate your sales process — the next version may be at least a little better than the current one!
True, it will take time and effort to develop and implement a more organized approach. But if you follow the three tips discussed above, your team will be more scalable, more focused, and ultimately more successful.
If you'd like more insights on how you can improve your sales leadership, contact us. Or sign up for our newsletter for more valuable resources.
Sales Tip: Send Client Meeting Recaps
Have you ever found yourself in a scenario where you thought: "I know this task is important, but I'm not quite sure if I'm the one with the authority to handle it? Besides, someone will surely take charge of the situation. I'm just going to sit on the sidelines and see what happens." What was the outcome? If you're like many of us, odds are the task didn't get done at all.
What's the Point?
Simply this: when everyone thinks someone else has ownership of a task, no one takes the initiative - and nothing gets done. And this is where the importance of meeting recaps come into the picture.
When we use the term "meeting recaps," what are we talking about? Well, if you're running an effective meeting, then you're not just dispensing information with no actions attached to it. Instead, there are going to be next steps, owners of tasks, and timelines that must be met.
So a meeting recap is more than a brief summary of the meeting. It should provide clarity on what tasks need to be done, who's going to handle those tasks, and when they need to be finished.
Keep Your Recap Simple
Draw attention to it with a strong subject line, even one that includes the phrase "meeting recap" in it. Don't clutter action items with a lot of unnecessary detail. Bullet point everyone's responsibilities. Use messaging like: "Here's what we agreed on; I/we will follow up in [x] days; if you have any questions, reach out to [x]," and so forth.
What Does a Recap Accomplish?
First of all, a recap ensures that everyone is on the same page. When the client is aligned with your sales team, and everyone is in agreement about next steps, it can take a lot of tension and uncertainty out of the relationship.
In addition, sending a meeting recap demonstrates your commitment to moving the project forward. Think of yourself as a guide. You not only point the client to their preferred destination, but you also help them navigate the path to get there. You're showing that you care, you're organized, you take pride in your work, and you believe in accountability - both for others, and for yourself.
More than anything else, an action-oriented recap shows that you're a professional. And professionals want to work with other professionals. It's that simple.
If you're a sales manager, how can you train your team to send out effective recaps? Consider this option: Conduct a team exercise in which each salesperson submits a sample recap email (perhaps one based on a recent meeting). Review the recaps at your next sales meeting. Let everyone discuss what they liked about each recap, what they would change, and whether it accomplished its purpose. You can use this as an alignment exercise for your team, as well as a valuable training opportunity.
If you know how to compose and distribute meeting recaps, you'll impress your clients, add value to your relationships, and keep everyone involved with a project in alignment. Not bad, right?
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A solid sales pipeline is a key component for any successful business. Of course, one of the key objectives for a new business or startup is to build that pipeline and fill it with leads. In most cases, that means you'll need to hire a new sales rep — mainly because you won't be able to handle all the sales duties on your own!
Still, you may wonder: "Can I really afford to hire a new salesperson? How will I maintain my profitability with that added expense? Why should I bring another team member into the fold?" Let's discuss the answers to these questions in the information below.
Why Some Hesitate to Hire a New Salesperson
The decision whether to hire a new sales rep often presents a challenge for small business owners and entrepreneurs. On the one hand, you absolutely need sales reps to bring in more revenue. On the other hand, you need revenue to pay your sales reps' wages. The whole thing has a hint of the "chicken or the egg" dilemma about it.
With that in mind, it's understandable why some business owners would hesitate to hire a salesperson to help grow their revenue stream. They may feel that, at the moment, they simply don't have the revenue stream to cover the expenses associated with a new hire: salary, insurance, training, equipment, etc.
Granted, it is important to have enough money in the bank to cover the cost of a new hire (between 6 months to a year's worth of salary is recommended). However, this is a key point to remember: At the start, building up your sales force is a balance sheet spend, not an income statement expense.
Simply put, it's important to think of a new hire as an investment that will yield returns several months in the future. If you have enough available cash to make the hire, then you should consider doing so right away. Watch this short clip from an interview I did on this topic with Don Myers, Master Chair at Vistage Worldwide.
How to Hire the Right Sales Rep
Even if you have plenty of overhead to work with, this is the million-dollar question: How Can you find the right sales rep for the position? Here are seven tips that can help:
1. Look for a candidate who will fit your culture.
This is especially important for small businesses and startups, since your culture may encompass only a handful of people at the moment. If you introduce a "disruptive force" into the equation early on, it could derail the efforts of your entire team.
True, credentials are important. However, you want someone who will not only "play nice with others," but also shares the same core values and sensibilities that your company has.
2. Determine their level of knowledge in your industry.
If the candidate already has a robust understanding of your industry, then there will be less of a learning curve for them as they adapt to your sales process. On the other hand, someone with zero experience in your industry will need that much more training. (Think of a sales rep who spent years in the automotive industry switching over to a marketing role for health and beauty products.)
It's important to note that a good candidate may not need a background in sales, specifically. For example, they may have experience in fields like business development or marketing. The main thing is that they understand your product, and can sell it in a way that makes sense to them.
3. Find someone who's willing to work hard.
This goes without saying, but any sales position involves a lot of hard work, perseverance, and resilience. Even though working with a small business or startup often contains an element of excitement, you'll want a salesperson who's willing to get down in the trenches and deal with the "daily grind" of reaching out to and qualifying prospects.
4. Look for a candidate who really enjoy sales.
Any decent sales rep needs to be a "self-starter" when it comes to making just one more call, sending just one more email, and reaching out to just one more prospect. Reps who aren't natural-born salespeople can do it, with effort (and some coaching). However, in the earlier stages of your venture you'll want someone who really loves the thrill of selling to others, and thrives as a communicator.
5. Discern the candidate's level of confidence.
Confidence is key to being a successful salesperson. After all, if you can't convey absolute belief in the benefits of your product, how can you persuade others to believe in it? In addition, sales reps have to wade through a lot of "no's" before they get to that "yes" they're looking for. A top-performing sales rep will maintain their self-confidence despite the number of rejections they have to face on a daily basis.
Bottom line? If you're serious about capturing more leads and growing your revenue stream, then you need someone with a healthy amount of confidence — in themselves, and in the product.
6. Seek out a candidate who's willing to learn and adapt.
Every new business will have its hiccups and growing pains. Your new salesperson will have to be adaptable, and willing to learn (and re-learn) their duties as the company grows and expands. It only makes sense that the ideal candidate would be ready and willing to roll with the punches, and keep moving forward.
7. Look for someone with a proven track record.
The sales industry is tough, and there's no guarantee of success on any given day. For that reason, you'll want to bring someone with a proven track record of success onboard — either in sales, marketing, or a related field. Success breeds success, and you want to surround yourself with salespeople who have what it takes to move the needle.
In summary, if you view your new sales hire as a necessary investment for future growth, and find the right person for the job, then you'll almost certainly start seeing good results within a year or less. At the end of the day, your sales performance will be better than ever, and you'll bring in more revenue than you did before. Who could ask for more?
If you'd like more insights on how you can improve your sales leadership, contact us. Or sign up for our newsletter for more valuable resources.
It's no secret that an organization has to enjoy alignment across all of its departments to really grow (or at least grow in a sustainable way). The problem is, it's common for departments, teams, sales managers, and even individual team members to be misaligned with one another.
In other words, they may have very different ideas about the value the company provides, the selling points that help to convert leads, and the typical journey that the ideal customer takes.
Misalignment can be a major problem for any business. Think about it: If one of your reps is selling based on price, and another one is selling based on customer experience, then where does that leave brand consistency? How can you focus on the prospects with the highest potential value if your reps aren't even sure who they are?
The point is, sales management involves working out any misalignment issues within your organization as soon as possible. It may not lead to immediate, explosive growth. But it will stabilize your processes and revenue stream. That is the foundation you need for your company to really take off. This is where the revenue equation comes into the picture.
What is the Revenue Equation?
If we were to express the revenue equation as a mathematical formula, it would look like this:
Sales Foundations + Sales Design + Sales Infrastructure = Revenue Stabilization and Growth
When those three key elements on the left side of the equation are completely aligned across the entire organization, the inevitable result is stabilization, and ultimately growth. The question for sales managers is: Do you understand the revenue equation for your company? And if you do, how about the rest of your team?
We've talked about these three elements in this recent blog post, but let's just remind ourselves what each component involves:
For sales managers, defining these three elements is the easy part. The trick is, making sure everyone on your sales team (and within your organization) is on the same page when it comes to these "pieces of the puzzle." If each sales rep has a different idea about what your company is all about, then many of them are selling for an imaginary company — the one that exists in their mind, not in reality.
Understanding the Revenue Equation is Vital to Sales Management
In practical terms, the main issue is how to get everyone on the same page. If you're the Change Agent, then you'll need to lay the groundwork for the Improvement Team to achieve that desired alignment. That means you'll have to dig in and ask some probing questions. Throughout this entire process, you'll also need to be guided by the three key qualities of the Change Agent:
Hold the Vision
Remember, the ultimate objective of your meetings with the Improvement Team is to work out any alignment issues. This is critical to stabilize and grow revenue. You can't forget that — and you can't let your team forget it, either.
Think of it like a family road trip. You need to figure out where you're going (not just the main destination, but any "sub-destinations" along the way). How will you get there? What's expected of each family member?
In the same way, with each meeting you need to be upfront and intentional about the main goal (your destination), as well as any "stepping-stone goals" along the way. Of course, sales managers also need to be clear about how you're going to get there, and what's expected of each team member.
Consistently Cultivate Trust
Depending on the dynamics of your company, you may need to do some pre-work before your team members start opening up to you. Create opportunities for them to express their true thoughts and opinions. This may mean multiple introductory meetings at the start, several one-on-one sessions, and even meetings without the team's direct supervisor (just to give the participants some space, and with the supervisor's approval).
Here's another thing to keep in mind: Sometimes team members, in the middle of a meeting, will experience what we'll call a "tangential epiphany" — a really great insight that has nothing to do with the topic at hand. It's important to handle those occasions with care. You don't want to derail the meeting. But you also want to demonstrate your respect for the team member's contribution.
The best way for sales managers to deal with that situation is to put the participant's idea "in the parking lot." Set aside time to loop back around to it at the end of the meeting. Alternatively, you could have a quick one-on-one with the team member afterwards to flesh out his or her idea. That's a great way to build trust, and gain more insight into your company's Revenue Equation at the same time. (In fact, sometimes those "tangential epiphanies" are the most valuable insights that come out of a meeting!)
Seek to Understand
Once sales managers have established a baseline level of trust, and everyone in the meeting knows why they're there, you can really dig into the details of your company's alignment issues. You can easily identify which areas need attention by simply having each participant rank, on a scale of 1 to 10, each of the following components is within your organization. The ranking should be done based on how well-defined each component is in the mind of each sales team member.
1. Sales Foundations
2. Sales Design
3. Sales Infrastructure
After you get those preliminary scores, you can explore the discrepancies and areas of confusion you find on a deeper level.
Effort Pays Off
It takes some effort, and it definitely takes some commitment, to work through this process. But the light at the end of the tunnel is a deeper understanding of where misalignment exists, and the beginnings of a game plan to fix those issues. If you and your team really understand the organization's Revenue Equation, you'll be able to work together to refine it, stabilize it, and eventually use it to improve your sales performance.
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Successful sales reps work across diverse industries, pursue different performance metrics, and have various selling styles. However, there are certain things they all share. One common denominator is training. Continuous, relevant education that keeps them at the top of their game, and up-to-date on the latest trends in their market is critical to success.
Of course, as a sales manager you want to give your team the tools for success — which often includes a guided training or "up-skilling" program. But what if you could turn your sales reps into their own teachers? What if each individual sales rep could regularly tap into the collective knowledge of the entire team?
When your reps are oriented toward collaboration and continual self-improvement, then your entire team's performance will enjoy a significant boost.
How to Make It Happen
It may not take a huge amount of investment to transform your reps into self-educating superstars. Once you establish a consistent framework in which your team members can learn from one another, they'll be able to "fill in the blanks."
Here's one idea: Develop a worksheet that your sales team has to complete on a quarterly basis. Empower them to proactively manage it — you don't want to be standing over their shoulder, urging them to fill it out. Assign a different rep to take the lead each quarter.
Any insights gleaned from this exercise can be distilled into actionable lessons. Then, they can be distributed throughout the team (either in one-on-one feedback sessions, during team meetings, or both).
Sample Sales Success Worksheet
The worksheet you develop may include questions such as these:
Of course, you may need to curate the feedback gathered from this exercise in order to make it as beneficial to the team as possible. Still, the objective is to promote critical thinking and collaboration. You want your reps to think about what is and what is not working — and to feel comfortable enough to share their insights with you, and with one another.
Why Is This Important?
It's been said that "no man is an island." The same could be said of sales reps. Not only does an individual's performance affect the bottom line of the entire team (and the company). But the team as a whole, when managed properly, can contribute to improvement for each individual.
Take this scenario as an example: A sales rep at Company X discovers that he can convert 10 percent more leads into customers by focusing on product quality rather than pricing. As his manager, you definitely wouldn't want him to keep that knowledge to himself. Instead, you would want your other sales reps to follow suit, and (hopefully) improve their performance as well.
With a consistent process in place to share ideas and insights (i.e., to transform your reps into their own teachers), it would be that much easier to disseminate the knowledge of a single sales rep throughout your team — and your entire department.
Avoid the "Silo Mentality"
Many sales organizations are victims of the "silo mentality" — departments are in fierce competition with one another, and sales reps are more concerned about individual accolades than team success. You want to avoid that mindset at all costs. By empowering your reps to teach themselves and each other, you'll almost certainly see a higher ROI from your efforts. And what more could you ask for?
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Are you a sales leader who sees that your organization needs to undergo a deep-seated, positive change? If the answer is yes, then you need to make an important determination: Are you the right person to implement that change, or should you play a supporting role? In other words, are you the change agent or the champion?
Change Agent Vs. Champion
In a previous blog, we talked about the main goal of a change agent — to affect powerful, lasting change within an organization. Change agents are more like guides than they are supervisors. Their job is to approach underlying issues and bottlenecks in the sales process with an open mind, like an investigative reporter approaches a "developing story. They must ask probing questions, listen to understand, and get buy-in from the entire team. Their sales leadership role is essential to making the organization's vision a reality.
Change agents have a lot on their plate, right?
However, a change agent's effectiveness is limited without the support of a champion. The champion is the sales leader who discerns the problem, and has the authority to assign a change agent. He then supports the change agent as he/she gets to work. The role of the champion is supportive in nature, but absolutely essential if you want the best outcome for your company.
Which Sales Leadership Role is Yours?
This is a key question to answer early on. After all, you don't want to spend the next several months in "shoes that don't fit!" Here are a few indications that you can take on the role of change agent.
If you can check all of these boxes, then you may be able to take on the role of the change agent.
On the other hand, you might have a full plate already. Maybe the thought of carving out 10 extra hours a week seems like an insurmountable obstacle. Or perhaps you don't naturally have the personality or skill set that's required for an effective change agent. There's no shame in knowing your limits. If you conclude that it wouldn't be realistic for you to take on the duties of a change agent, then you can start the search for someone else to handle that responsibility.
What Resources Will the Champion Provide to the Change Agent?
If you are going to play the role of the champion, then there are two important resources you must provide the change agent (once you appoint him/her).
1. Ample Time to Work
They say that "Rome wasn't built in one day." The same principle is true of organizational change. Your change agent is going to need enough time, over the course of several months, to identify areas of opportunity, explore options for change, and then implement those findings.
A change agent's average time commitment is usually 10 hours per week. This includes meeting with the organization's Improvement Team on a regular basis. They also need time alone to process the results of those meetings and come up with potential solutions for your sales team.
2. A Reasonable Level of Authority
A change agent also needs, well, a certain level of agency in order to handle their sales leadership role effectively. This will include the authority to call meetings, to pull your sales reps into those meetings, and to maintain confidential communication with team members. A change agent also needs the authority to assign employees individual (and even group) work to do. In fact, if you're going to be a truly supportive champion, you should even empower your change agent to hold you accountable for any work they need from you.
How to Identify the Right Change Agent
Any potential change agent you identify will need to possess 3 key qualities.
The question is, where you should look for that change agent?
The natural fit may seem to be someone who's already in a sales leadership position in your company, either in sales or marketing. The obvious advantage of going that route is the person's pre-existing familiarity with your sales process, and any problem areas.
Of course, that familiarity may be a double-edged sword. Perhaps your sales and marketing managers are too close to the problem. Or, there may be some internal friction that will hamper their effectiveness as change agents.
If that's the case, then you can broaden the scope of your search to include leadership from different departments. For instance, maybe your VP of finance has the right skill set (and distance) to lead the conversation around positive change. (And if they need some help in that role, you can always assign an assistant to lend a hand.)
Then again, what if every potential change agent in your organization is slammed with work, lacks the required skill set, or doesn't have the distance to successfully navigate volatile team dynamics? If that's the situation you're facing, then it may be best to bring someone in from the outside.
As the champion, you'll have to make sure that this external change agent has the resources they need for success. At the same time, you may need to set up certain safeguards in order to trust them with private information.
Effective Sales Leadership Results in Greater Performance
Whichever route you decide to take, remember that regular, two-way communication between you and the change agent is vital. If you both are closely aligned towards your common sales goals, then you'll be able to make a lasting change within your organization. The result of an effective sales leadership strategy will be improved, sustainable sales performance.
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There's a quote from one writer that goes like this: "Don't chase success. Decide to make a difference and success will find you." Even though that concept could be applied to many aspects of life, let's look at it from the viewpoint of sales success in your organization.
It's true that everyone in the sales industry wants that "big win," that easy fix to their performance issues that makes everything fall neatly into place. There's nothing wrong with that feeling. It's only natural.
Here's the thing, though. Chasing that big win is usually counterproductive. In real life, it almost always takes a series of small, deliberate actions to get to a place where your business is humming along. It takes cooperation and collaboration. It takes hard work and perseverance. It takes intentionality and planning.
Here's another saying (or part of a saying) that makes the point well:
Your actions become your habits.
Your habits become your values.
Your values become your destiny.
What Sales Success Stories Have in Common
The point is, business growth is the result of small, intentional actions and good habits. These form the foundation of your brand's values and reputation. And ultimately, they decide your organization's destiny.
Sales success stories may be flashy, or dramatic, or even heartwarming. But if you dig a little deeper, you'll almost always find that all success stories have a few things in common: namely, 3 solid frameworks that enable a sales organization to perform at a high level.
Let's talk about each one of these frameworks, and why they are so crucial to improved sales performance.
Framework #1: The Revenue Equation
The Revenue Equation framework is actually a combination of three critical factors that form the basis of your entire sales process. These three factors are:
When each of these factors are streamlined and optimized, the result will be revenue stabilization and growth. The question is, what do these elements involve, and how do they work together?
Sales Foundations (Who Are You?)
Your sales foundations are the values and characteristics that make your brand unique. Sales foundations include your company's reputation, your pricing strategy, and your unique selling proposition (USP).
Think of Apple, Inc. as an example. They have a reputation as a leader in technological innovation. Their price points reflect their position as a premier brand, and one of their USPs is their commitment to personal privacy and security.
As the name implies, your sales foundations form the basis of everything else you do within the sales process. That's why you absolutely must understand who you are as a company, and then play to those strengths.
Sales Design (Who Do You Sell To?)
Once your sales foundations have been firmly established, you need to understand who your target customers are. After all, you don't want to be "punching air" by targeting consumers that aren't likely to purchase from your business.
This is where buyer personas come into the picture. Your marketing team (preferably with input from sales) needs to come up with a profile of your ideal customer — or even multiple profiles, depending on how specific your targeting is.
With that buyer persona in hand, your sales reps will be in a better position to understand the thoughts, concerns, and desires of their leads, nurture them effectively, and eventually convert them into paying customers.
Sales Infrastructure (How Will You Sell It?)
Once you have a firm grasp on who you are, and who your ideal customer is, it's time to build your sales infrastructure. In other words, the processes that can bridge the gap between you and your consumers.
Your infrastructure includes the systems and software programs you use to manage customer relationships, your clearly defined sales funnel, as well as your KPIs, metrics and quotas.
When these three elements — sales foundations, sales design, and sales infrastructure — are all working properly, and are clearly aligned with one another, then your first framework (The Revenue Equation) is firmly in place.
Framework #2: The Individual Performance Planner
Your Revenue Equation is in place. Everyone on your team has collaborated to make it a reality. Now, you have to start shifting your focus from the big picture to the details. These details are comprehensive, from the Revenue Equation to the individual performance of your sales reps.
This is where collaboration and open communication become even more critical. Within this framework, your first order of business is to discuss with each sales rep what his or her strengths and growth opportunities are.
What short-term and long-term goals will the rep set inside (and possibly outside) of work? The outcome of these discussions will be condensed and solidified into their own Individual Performance Planner.
Intentionality is key in this framework. You have to demonstrate how serious you are when it comes to supporting your team members, and helping them achieve their goals. At the same time, your reps have to buy into this process, and commit to being the best salespeople they can be.
This give and take is the only way to achieve maximum value from the important (but still theoretical) Revenue Equation.
Framework #3: The Revenue Planner
This final framework is where you'll see the fruits of your labor. You have your Revenue Equation in place, and your team members onboard. Now you have the insights and the freedom to identify key growth opportunities within the sales process. Next, you'll develop a plan of action for each one.
Over the first three months of the process, this will involve taking various actions. Consider adjusting discounts to featured products, doubling down on relationships with established customers, or refining your price points. Really, the sky's the limit.
After achieving some quick wins, you'll want to stabilize your revenue in the following three months. Aim for continuous revenue growth in the months (and years) to follow. While the Revenue Planning stage is unique to each business, the framework it provides is useful across the board.
Create Your Own Success Story
Look deeply at sales success stories. Odds are you'll discern these three frameworks at work, in one way or another. Build your sales process around these frameworks. Then, your company will also enjoy quick wins and sustainable growth.
If you'd like more insights on how to improve sales performance for your SMB, sign up for our newsletter. Contact us directly, or explore our website for other valuable resources and webinars.
3 Keys to a Productive Sales Meeting
Meetings are just a part of life for most sales managers. They have periodic meetings with senior management. They may occasionally meet with high-value clients. And, of course they hold regular sales meetings with their team.
Anything we do repeatedly eventually becomes a routine, and any routine can deteriorate into a rut. If you're a sales manager who's holding weekly (or perhaps daily) sales meetings, then the last thing you want to do is have those interactions with your team become part of a rut — e.g., time wasters or, even worse, finger-pointing disputes.
With that in mind, here are three keys that will help you keep your sales meetings productive, uplifting, and motivating.
Key #1: Understand Your Team as Individuals
In order to have a productive sales meeting with your team as a whole, it's important to be mindful that each team member is unique. Personality, emotional makeup, communication style, goals, desires, concerns - all these factors differ from person to person. You must understand where each team member is coming from in order to communicate with them effectively.
Think of this as "laying the foundation" for a great sales meeting. Schedule some one-on-one time with each team member throughout the week. Observe how they react to constructive feedback, and any stressful sales calls that may come their way. Note their strengths and growth opportunities.
By building a "mental profile" of each team member ahead of time, you'll be able to generally predict how they'll behave in a meeting. Most importantly, you'll glean ways to help them grow as a sales rep within a group setting.
Key #2: Set Clear Expectations
At the beginning of each sales meeting, it's best to leave nothing to the imagination. Make the format, flow, and purpose of the meeting crystal clear to your team members. For example, everyone should know:
That last point is important. You don't want your meeting to turn into an interrogation session for underperforming sales reps. It's often best to give each sales rep some uninterrupted time to express his or her thoughts. This will enable your team members to be themselves without fear of censure.
Which leads into our third key...
Key #3: Establish a Judgment-Free Zone
Last but not least, you want to make sure that all of your team members view the meeting as a "judgment-free zone." The purpose of a sales meeting should be to exchange ideas and information — never to lecture or criticize team members over performance.
In fact, welcome the uncensored input of each team member. Their insights will help you to continually improve your sales process day after day.
At times, keeping the meeting "judgment-free" may require that you bite your tongue. Even underperforming reps that legitimately need some constructive feedback should be made to feel respected during these meetings (and during future one-on-one sessions).
The old saying "once bitten, twice shy" definitely applies in this case: You don't want to do anything that will scare your reps away from giving their honest, unfiltered opinions in a group setting.
Use Sales Meetings to Boost Productivity
There are challenges when it comes to preparing, coordinating, and leading sales meetings. However, if you implement the three keys discussed above, your team will enjoy productive, and even refreshing meetings.
Use your sales meetings to motivate the team to try new things. Energize them to "get back to the trenches." Ultimately, your entire team's performance will improve, and your business will grow as a result.
If you'd like more insights on how to improve sales meetings and sales performance in general for your SMB, sign up for our newsletter. Contact us directly, or explore our website for other valuable resources and webinars.
3 Sales Leadership Pitfalls to avoid
As the sales leader of your company, you want to train, support, and nurture your reps to the best of your ability. Sales leadership is about implementing repeatable, effective sales processes to grow revenue. How can you make those goals a reality? What actions and mindsets should you proactively avoid?
In this article, let's specifically tackle that second question. We'll talk about three sales leadership pitfalls that you need to navigate around in order to really improve your team's performance.
If you're staying far away from these situations, then give yourself a well-earned pat on the back. If you can relate to one (or more) of these scenarios, don't despair! After all, identifying the problem is the first step towards fixing it.
Pitfall #1: The Spaghetti Thrower
Have you ever thrown spaghetti noodles against the refrigerator? It's an old trick that lets you know when the noodles are cooked all the way through. If they're not done, they don't stick. If they are, they do.
Some sales leaders are like spaghetti throwers. They keep trying out new solutions, and hope that, eventually, something will stick. They may cycle through one "growth activity" after another - mission statement writing, sales training and up-skilling, marketing collaboration sessions, team-building...you name it. The problem is, none of those solutions ever really "stick." None of them make a lasting impact in terms of performance or revenue.
Here's the million-dollar question: Is the "spaghetti thrower syndrome" a solution issue, or a sales leadership issue? The reality of the sales industry is that there's no "secret sauce" to make the spaghetti stick to the fridge. Results don't magically appear overnight.
A sales leader's impatience will cause his or her team to constantly change course, without any set destination in mind. Then, everyone in the company is going to think something major is broken — even if it isn't.
The takeaway? Don't expect big wins immediately. Give any proposed solution some "breathing room" before moving on to the next big thing. Your team will certainly appreciate the increased stability — and will be more willing to make those changes that are actually needed.
Pitfall #2: The Cinderella Story
This is a scenario that may or may not be avoidable, depending on your company's particular circumstances. The basic premise is this. Your business (Cinderella) needs to grow sales ASAP. Otherwise, you'll lose your investors, partners, and maybe the company itself (translation: your carriage will turn into a pumpkin).
A lot of startups find themselves in this time squeeze between rounds of investor funding. It's a great problem to have — if your sales team operates like a well-oiled machine, and you're closing sales left and right. If not, then you may feel like hitting the panic button. When faced with a "do-or-die" scenario like this, many leaders will go into desperation mode, and resort to sales tactics that aren't good for the brand, and don't really work.
What's the solution to this problem? Basically, you need to take the time to analyze what your sales team is already doing that works. Then, optimize your process from there. Don't risk everything on a big, untested idea that could blow up in your face. Use what you have. Call in backup. When time is of the essence, make sure that you're not wasting any of your efforts.
The takeaway? Don't panic when your sales team is under the gun. Optimize the parts of your process that are working; and get help for the parts that need improvement. Don't gamble on an unproven sales tactic. Build on the foundation you've already laid.
Pitfall #3: The Runaway Train
This is perhaps one of the more common sales leadership pitfalls that companies fall into. The sales team is bringing in revenue (i.e., the train is moving). But there's no unifying strategy to maximize the revenue stream (the train is a runaway). As a result, the company is overly reliant on "barn burner" sales once or twice a year, and leaves a lot of potential profit on the table.
Oftentimes, the lure of a quick win is what makes this pitfall seem like an opportunity. For instance, think about a business that discounts its products to 50 percent off during an end-of-the-year sale. Sure, the sales team will be able to drive revenue hard over the course of that promotion — but at what cost? What about the leads that would have bought the product at full price the month before, but decide to wait for the sale instead? Or the customers that just bought the product, and then discover that it's half-price? The strategy may keep the company's lights on, but it simultaneously reduces the business' revenue stream and devalues the brand.
Sales leaders that get stuck in this kind of rut may think there's no way to "stop the train." In many cases, though, the company isn't really on the brink of disaster. Maybe all that's needed to get the train back on track is a change of perspective.
Ask yourself: "Instead of worrying about the next three months, what can we do to grow the business over the next year? Should we really sell based on price alone, or can we sell based on other factors, like quality or uniqueness?"
The takeaway? You may need to take a step back and see if you and your sales team are stuck in a rut, and leaving growth opportunities on the table. Never devalue your brand or product without a good reason. Don't focus on quick wins to the exclusion of long-term revenue growth. Look further ahead than the next few months, and look for ways to improve sales performance in sustainable ways.
Sales Leadership in a Nutshell
There you have it: 3 sales leadership pitfalls that you should absolutely avoid to the extent possible. If you've fallen into any of these thinking patterns, then get to work on setting things right! You may be surprised at how impactful even small adjustments can be to your team's overall focus and performance.
If you'd like more insights on how to improve sales performance for your SMB, be sure to sign up for our newsletter, contact us directly, or explore our website for valuable resources and webinars.
Constant communication within a sales team ensures that everyone's effort gets expended to achieve a similar goal. According to HubSpot, more than half of salespeople rely on peers to get tips on improving. Interestingly, 44 percent look to their managers, 35 percent to team training resources, and 24 percent to media. It is clear that effective communication within the team and with the sales manager is key to success.
However, creating an effective communication system is never as simple as it seems. After all, each member is focused on their individual accounts. How can you keep the communications framework open? Keep your sales team prepared, informed, and focused on the critical goals with these four ways to build an effective sales team communication channel.
1. Get to Know Your Sales Team
Communication will thrive when you show interest in your staff. Get to know more about each member's professional and personal experiences and aspirations. You will establish a link that will promote effective and clear communication.
Your team will pay close attention to the message when it is more personal. Think about how you would respond to a more personalized message. Personal knowledge also gives you the edge of using fun and humor when communicating key points.
2. Think About Your Goals
Before you start sending out an email or having an important meeting, clearly think about what you need it to say. Did you know that the value of communication gets lost during translation? Managers often prioritize haste at the expense of communication quality.
Start by defining what the outcome of your communication needs to be. You will find it extremely difficult to communicate when you have a half-baked conversation in your head. Your sales team will also find it relatively tricky to decipher your goals. Ask yourself what you want your sales team to take away from the conversation.
3. Keep Your Communication Channels Consistent and Recognizable
When communicating with your sales team, always use a consistent and recognizable channel. It can be somewhat confusing for the entire team when you shift between different communication channels. Choose a particular communication tool. Stick with it and alert your team if it changes.
Start by training your team on how you will deliver the information and what to expect. Doing this will ensure that each member of the sales team gets communication on time and effectively. Avoid frequently switching communication channels, which could cause some members to not get your message on time.
As a rule of thumb, good communicators are always good listeners. When managing a team, the majority of the communication will be from you. However, this does not mean that a two-way communication system is not vital.
Establish an open and regular dialogue with every member of your sales team. Periodic check-ins are an excellent way of ensuring that each member can share their thoughts. Your team will also get a chance to weigh in, thus fostering effective and honest communication. Most importantly, you can act on the feedback you gather from your team.
Advantages of an Effective Sales Team Communication Channel
Why is an effective sales team communication channel vital to your organization? Never forget you stand to benefit a lot from keeping your sales team informed, focused, and prepared. Here is what a successful communication channel will get you.
Optimizing your communication channels is just one way of effectively managing a sales team. If you'd like more insights on how to improve sales performance for your SMB, be sure to sign up for our newsletter, contact us directly, or explore our website for valuable resources and webinars.
How would you respond if someone asked you: "What's the main job of a sales manager?" Would you talk about pushing your team to meet quotas? Improving productivity metrics? Driving better performance?
Granted, when we're talking about any position in sales we can't discount the importance of the bottom line. But there's a right way and a wrong way to achieve the results you desire. The right way is to bring out the best in your team. That means supporting each individual member, mentoring him or her, and (at the same time) building a certain level of predictability into your forecasting model.
Use KPIs to Build Visibility into Your Sales Funnel
If you really want to drive team performance as a sales manager and motivate your individual employees to give their best work, then creating more visibility into the sales funnel should be one of your top priorities.
The truth is, sales reps thrive within clear boundaries. When you and your team know which Key Performance Indicators (KPI) are most important to sustained, lasting success — and why they're so important — then everyone can work together to meet the same goals. That's one critical way you can support your team.
To paraphrase Tom Petty: You don't want your people to be "out in the great wide open," sales reps without a clue.
So now the question becomes: Which KPIs should you focus on? There are a ton of crucial metrics in the world of sales, but let's narrow our discussion down to three big ones:
Let's take these one at a time, and see why they're so important to individual and team performance.
1. Sales Funnel Populations
It goes without saying that your organization needs to have a sales funnel with clearly defined stages. After all, your "sales pipeline" becomes much more predictable within such a structured framework. If it's predictable, it's measurable. And if it's measurable, it's improvable.
Once you have your sales funnel stages clearly defined (and your sales and marketing departments on the same page), you need to determine three things.
Why are these sales population KPIs so important? For one thing, they're great markers for the overall "health" of your sales funnel. If you see increasing populations, then you can expect revenue growth. If you notice decreasing populations, then you should brace yourself for revenue contraction in the near future.
These metrics also provide actionable insights. For instance, they can help your finance team forecast for future demand. They can shed light on which activities are driving growth, and which ones are ineffective. Moreover, they can provide a wonderful point of reference to which you, as sales manager, can align your teams for more stable, quantifiable growth.
2. Conversion Rates
We're specifically talking about conversion rates between funnel stages here. There are two key elements in play: the amount of time it takes to move leads from one stage to another, and the quantity of leads that make the conversion.
What are good benchmarks for your company? It really depends on your specific business and industry. However, if your percentage of leads moving from the evaluation stage (middle of funnel) to the decision stage (bottom of funnel) is low, or if it's taking those leads a long time to convert, then you'll need to make some adjustments.
Why are these two aspects of your intra-funnel conversion rate so important? Basically, for three reasons.
3. Close Rates
Finally, it's vital to understand your team's average close rate (aka "quote to close ratio," "lead-to-customer conversion rate," etc.) — both as a whole, and for each individual member. Not only does the close rate help to calculate ROI, but it also provides a baseline from which to manage your sales team.
Why are close rates so important for sales managers? Realistically, not everyone on your team is going to be a "sales superstar." But knowing the average close rate for your team can inform your expectations for new team members. In addition, knowing the close rates for individual members can provide a great starting point for your coaching/feedback sessions. This knowledge will also act as an early warning sign if someone needs extra support (for example, if a high performer's rate starts to drop month over month).
Your close rates can help you to inject a heavy dose of predictability and transparency into your sales process. They can help you set lofty but reasonable goals for each sales rep, incentivize improved performance, and forecast growth.
Leveraging KPIs for Sustained Success
There you have it: three important KPIs that every sales manager must use! If you take away one key point from the above information, let it be this:
Use your KPIs to create visibility, predictability, and accountability for your sales team — and yourself.
When your team members have clear, actionable direction and specific goals to shoot for, they'll not only be more productive — they'll be happier at their job. They'll be able to individually improve themselves. At the same time, you'll be in a better position to mentor and support them on a one-on-one basis.
Sales KPIs, when used properly, can be a dashboard for performance, both in terms of revenue and human capital. That's their true power. Don't take it for granted!
Of course, there's a lot more to the world of sales management than the three metrics discussed above. If you'd like to chew on some more practical SMB insights and advice, sign up for our newsletter; contact our team; or check out our website for valuable resources and webinars. We'd be happy to help you grow your business, one KPI at a time.
Compensation is essential in managing, motivating and retaining a sales force. A great sales executive compensation plan accomplishes quite a lot. It provides fair compensation to the sales executive, incentivizes specific actions and behaviors that suit the organization's needs, and motivates employees to hit set goals.
Today's sales executive wants a challenging job with a clear path to match his or her performance based on what he or she can directly impact and control. They want employers to recognize their performance with rewards that increase as their impact on the organization increases.
What is fair compensation for a sales executive? Unfortunately, there's no one-size-fits-all answer. Instead, gear your sales compensation plan toward what is right for your company. Design it to influence the outcomes you want, and align it with your SMB sales executive's strengths and motivators. Here are some guidelines to think about.
Sales Compensation Plan
An effective compensation plan will drive your sales team's performance. It includes details about all aspects of your sales team's earnings, such as salary, commission, benefits, incentives they are eligible to receive, and on-target earnings (OTE).
OTE is a metric that helps forecast the total potential compensation of a specific position when a team achieves all the set performance targets. It is common in sales compensation plans since it's a contract that guarantees a particular commission percentage.
You need a comprehensive compensation plan for all your sales team members based on their role, experience, the type of deals they handle and the sales cycle's length. Consider these factors:
Factors that Affect Your Sales Executive's Compensation Plan
Determining compensation for your sales executive is challenging. You must consider several factors in your plan, including experience, the current market and the business sector. How long will it take to train and bring them up to speed? Do they bring their own book of business? Here are five factors to consider when creating your compensation plan.
1. Determine if You Have a Farmer or a Hunter.
Hunters love chasing down leads and finding opportunities. On the other hand, farmers cultivate leads and opportunities and grow existing accounts to generate revenue. Making this distinction will help you select the right person for a sales executive position and determine compensation.
How do you know if you are hiring a farmer or hunter? There are certain soft skill sets associated with each. Try giving candidates sales assessments during the recruitment and hiring process. Here's what I mean.
Hunters tend to be outgoing, risk-averse and motivated by recognition. They are typically self-managed and able to operate independently. Their ability to bet on themselves makes packages with a high degree of variable compensation desirable for them and their employers.
Farmers excel when they can grow relationships, create ongoing value and connect with the same clients year after year. They thrive on driving customer loyalty and creating long-term value. Farmers are more security-oriented than their hunter counterparts, making a base salary and small variable compensation structure more attractive for them.
2. Incent Based on the Degree of Control.
This method holds sales executives accountable for things they control. For example, if a sales executive influences a sale alone instead of enlisting help or delegating tasks to their team members, they qualify for higher incentive compensation.
To implement this sales compensation plan, determine what variables the sales executive can control. Will they close sales or open doors for their sales team? For sales management, consider whether they can increase the sales team's closing rates, impact KPIs, affect Customer Relationship Management (CRM) adoption or decrease the sales cycle.
These tangible metrics help measure the impact of their work and determine their compensation.
3. Reward Successful Results with Variable Pay Plans.
Variable or incentive pay plans refer to pay that sales executives earn beyond their regular salary. It is not a guarantee, and you only pay it if the sales executive achieves his or her goal. Those goals are tied to tangible metrics such as sales growth, profits or productivity improvement.
Variable pay plans allow you to reward your sales executives for attaining successful results. It also controls compensation expenses when they don't achieve good results. These plans motivate your sales team's performance, encourage them to meet their specific job role's goals and any measurable targets you associate with their compensation. For example, their plan might be based on an individual sales quota for their team if they are responsible for sales team management.
Here are four main types of variable pay.
4. Work Back from the Revenue Targets Using OTE
Start with the goal or objectives in mind. When you work backward from your sales executive's revenue or success targets, it will help you determine an appropriate compensation package for them.
On-Target Earnings (OTE) provide you with a realistic view of what your sales executive's total compensation would be when they reach their expected (and reasonable) quotas and goals. OTEs could include the base salary plus the realistic commission from closed deals. You can use this metric to determine your employees' total potential compensation when they achieve their performance targets.
For example, if your OTE is between $200,000 and $250,000 annually, the basic salary could be between 70 and 80 percent ($140,000 to $200,000). You could base the rest of the OTE on performance, which you could pay annually, quarterly or monthly.
Start Creating Your Compensation Plan
An effective compensation plan is vital to the success of your team. Commit to continuously evaluating your plan to match the changing business climate and the outcomes you want to achieve.
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Whether you're the leader of a sales team or a member of one, your sales task list is always long and a constant juggling act. There are leads to generate, opportunities to cultivate, contracts to write, customers to call back, trade shows to sign up for and sales meetings to attend.
Which tasks take precedence over the others? Is your day just a series of running from one urgent sales task to the next? A recent study found that two-thirds of a sales rep's time is spent on non-revenue generating tasks. That means it's essential for sales managers and the sales team to understand the difference between urgent and important sales tasks. Why? It directly affects your ability to generate revenue, the sole purpose of a rep's job. Here are some tips to help you make this distinction.
Urgent Sales Tasks Generate Revenue
For a sales manager or a member of a sales team, an urgent task is one that generates revenue. For example, writing up a final contract or returning the call of a client who wants to make a purchase are revenue-generating tasks, and therefore urgent. When you and your team review upcoming tasks, the first question should always be, does it generate revenue? When the answer is yes, it moves to the urgent column of your to-do list.
Managers Highlight Urgent Tasks
It's always a good idea to highlight urgent tasks in some way. If you're a sales manager with a whiteboard, dedicate a section to urgent tasks. Or, use a different color — maybe green, the color of money — marker for urgent tasks. You want your team to always know which tasks to concentrate their time and energy on.
Team Members Create a To-do List
When you're a member of a sales team, you have individual tasks that you're responsible for completing. Some of these tasks generate sales while others don't. Create a prioritized to-do list each morning or at the end of the day for the next.
Let your urgent tasks lead the list. As your day progresses, and you add tasks to the list, you need a way to indicate urgent sales tasks. Consider highlighting them or using an online to-do list where you can rearrange your priorities.
Urgent tasks are always the ones that generate revenue. Whether you're a sales manager or part of a team, you want your company to succeed. Making sales is the best way to grow a business.
What is an Important Sales Task?
An important task is a job that needs to get done in the near future, but it does not directly generate revenue. Whether you're a sales manager or a salesperson, there are administrative tasks that must get done. For example, an important task might include completing yearly performance reviews for your team or entering leads from the last trade show into the database. These are tasks that must get done in a timely manner to keep the company running smoothly. However, they don't directly generate revenue.
Focus on the Urgent without Neglecting the Important
As a sales manager, it's your goal to keep your team focused on urgent tasks without neglecting the important ones. Consider dedicating one hour a day to important tasks or maybe one afternoon each week.
If you're a member of a sales team and your manager doesn't dedicate time to important administrative tasks, find time that does not interfere with revenue-generating tasks to tackle the important jobs in your workflow. However, be careful not to allow an important sales task to slow any momentum your team has built throughout the day.
Create a To-Do List
There are important sales tasks that need to be completed each day, once a week or once a month. Create a daily, weekly and monthly to-do list, so you don't miss any important tasks.
Find a balance between completing urgent and important tasks that doesn't leave important tasks sitting for days, weeks or months unfinished. Similarly, as a sales manager, dedicate a specific time each day or week to these tasks.
What About the Gray Area?
There are some tasks that seem urgent, but don't generate revenue immediately. For example, cold calling leads has the potential to generate revenue, but it isn't guaranteed. Of course, you have to develop leads to increase your customer base and generate greater revenue for your company. However, does it fall under the urgent and important task list? It's actually the gray area in between the two. Make time for these tasks as well.
Managers Help the Team Prioritize
As a sales manager, it's your job to help your team make the most of their time. You wouldn't want gray area tasks placed ahead of urgent tasks. However, you don't want your team working on important administrative duties while a batch of gray area tasks waits. Find the gray area tasks a spot at the bottom of your urgent to-do list, ahead of the important items.
Sales teams want to generate as much revenue as possible for the company, especially if they work on commission. Complete all your urgent tasks first. Then, devote some time to gray area tasks that have the potential to generate income, even if it isn't in the immediate future.
Create a Routine
Put these gray area tasks on your to-do list somewhere between urgent and important. Work on these tasks without completely ignoring your important administrative tasks. Creating consistency in your daily and weekly tasks will benefit you and your team. Sales team members thrive with a level of consistency and routine.
Ask for Input
Trust your team. They likely have many years of experience in prioritizing tasks. No doubt, they will offer solutions to help incorporate important tasks without losing momentum on urgent ones. Encourage your team to come and discuss the possibilities with you. When you put a co-created plan in place, it helps you achieve the team's goals with support and accountability.
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