Every corporate sales staff should have access to a corporate sales training program. After all, how else can you ensure the ongoing development and success of your sales staff?

There are several reasons I hear for why a sales staff doesn’t need a sales training program. “The staff is mature and has already learned all they will learn.” “Experience is the best training program.” “They do not have time for one.” “There is no one who can facilitate the training.” “The sales team is too busy.” “The sales team is all over the country.”

I think each of these reasons can be refuted once the impact of a corporate training program is understood. In other words, does it justify a sales training program if a business is able to increase its overall close rate by 10%? How about if the sales reps can increase their referrals by 50%? Or if revenues can be increased by 15%?

The point is, you must have quantifiable goals in order to justify a corporate training program.

In addition, and just as importantly, in order to ensure you reach your goals, your sales training program should have customized content delivered consistently.

• “Customized” means your training topics should relate to your company’s sales and marketing strategy and plan, and to the reps’ specific roles and responsibilities. The topics should focus on the skills and traits needed for execution and on your corporate sales processes and models.
• Content and its facilitation should be engaging. Use written content that includes real world scenarios, exercises, role-playing, action plan development, and perhaps even video and audio recordings.
• Consistency is a means to an end when it comes to training. Do not rely on a single session on a topic for that topic to become habit for your sales staff. You may have to train three times on a particular topic before the reps fully understand and can implement and execute.

So, set goals for corporate sales training programs that build a true business case, and then implement and execute programs that have customized content and are facilitated consistently.

Would you agree?  What’s the toughest objection you’ve heard when trying to implement a sales training program?

Dan

When evaluating which is better – salary or commission – the best answer is: it depends.

If the expectation of the position is to drive in new business, then I would weigh the compensation plan heavier on the side of commission. If the hiring profile is one of a hunter (new business generator), then I would weigh the compensation plan heavier on the side of commission.

However, if the expectation is to maintain business, then I would weigh the compensation plan heavier on the side of salary. If the hiring profile is one of a farmer (“maintainer”), then I would weigh the compensation plan heavier on the side of salary.

If their expectations are both, then you can split the compensation based on the division of roles and responsibilities. For example, if the representative will spend 50% of his time hunting and 50% of his time farming, split the compensation 50/50 as well.

From the Rep’s Perspective

Looking at it in reverse, from the point of view of the sales representative, you are not going to get many sales professionals to be truly motivated to generate new business if they get their salary regardless.

Likewise, you are not going to get many sales professionals to be truly motivated to maintain existing business if they are only compensated on generating new business.

A natural question that often times arises in this discussion is, “what is a fair salary or what rate of commission should we be paying?” That also depends. You need to consider gross margins, net margins, indirect costs to sale (travel, entertainment, sales staff benefits), and who else is involved in your sales process (engineer, design, technician, software designer, creative director), among other variables.

As a basic rule:

A farmer should be paid based on what the market says, as well as what she is worth to the company. If she is worth $80,000 to maintain $5,000,000 in business, and it would cost you that to replace her (including training costs, recruiting fees, perhaps hiring mistakes, etc.) then perhaps that is what is fair.

A hunter should also be paid based on what the market bears and what he is worth to the company. If he is worth $150,000 to drive in $5,000,000 in new business, and it would cost you that to replace him (including training costs, recruiting fees, perhaps hiring mistakes, etc.) then perhaps that is what is fair.

I hear a lot of owners say, “my sales people are not worth what they get paid.” I typically ask what they should make, and when they tell me, I ask how they came to that. Typically it’s based on their feelings rather than business data and facts.

You should consider the roles and responsibilities of the sales professional, their prescribed expectations (new or existing and their level of experience), and the profile for which you hired them (skills, traits, motivations, etc.), then design a compensation program that promotes success – for you, your company and the sales professional (not necessarily in order of priority).

Is this a good methodology? What do you think?

Dan

I am taking a leap with this topic and assuming that those of you in sales chose this profession so you can have control over how much money you make. That’s an assumption because roughly 90% of sales people say they are in it to make money but really just want to work less.

That’s why 90% of a company’s sales are generated by the top 10% of its sales force. Sales is either the hardest highest-paying career or the easiest lowest-paying job. I would like to address the 10% who are the hardest-working, highest-earning sales professionals and are motivated by making more money. (To the others, this will not make much sense.)

Looking Back

If you want to make more money than your best year ever, the easiest place to start is by going backwards. Look at the best earnings year in your sales career and conduct an analysis of the following key data points:

• How much did you sell (revenue and units)?
• Where did your business come from (prospecting, networking, client referrals, marketing, etc.) by units and revenue?
• What did your plan look like?
• How well did you execute it?
• What did you do well?
• What could you improve on?
• What unique circumstances existed (different comp plan, economic conditions, etc.)?
• Review the activities in your planner or CRM system from that year. How did each and every activity break out? Where did you spend your time and what was the result?

The Ratios

Now that you have the key data, you can do some easy math. Take each of the data points, calculate your ratios, and work that data backwards as well.

• X presentations resulted in Y sales
• X appointments resulted in Y presentations
• X referrals resulted in Y appointments (break these out by referral source – e.g., client, networking, etc.)
• X events resulted in Y referrals (or X client calls resulted in Y referrals)
• X phone contacts resulted in Y appointments
• X dials resulted in Y contacts
• X time (hours) resulted in Y dials

Calculate your time spent in each key area listed above. Do this daily, weekly, and monthly so you have taken into consideration different time allocations.

Ask yourself how much more you want to make than your best year and simply apply that percentage across all activity ratios listed above. That being said, it could also be argued that you are a better sales person now and that your ratios should be better than they were that year (and I do think this is a reasonable answer).

However, it is dangerous to use this methodology unless you can quantify how much better you are specific to each ratio above. (Example: my contact-to-appointment ratio today is 50%, vs. 30% during my best year.) I would rather start with a set of aggressive activity goals and if I prove that my ratios are better today than they were back then, I can always peel away some activities. It is harder, however, to find more time once I have my schedule in place.

So what exactly am I saying? Simply take your desired income increase (say, 15%), apply that to all the numbers above and you should be able to hit it.  To help ensure success, though, you want to take into consideration a subcategory listed above in your original analysis of your best year – unique circumstances. Depending on what those are, you need to adjust accordingly. By adjusting, I mean a) adjusting activity and results ratios (up or down) and/or b) adding components of activities that were not around during your best earnings year.

For example, if your best year was five years ago, more than likely you weren’t taking advantage of new prospecting methods like social media. You may not have had a CRM system that could chunk out all the data so that you could adjust day-to-day or week-to-week. You may not have had access to the good training that exists today, etc. All of these “unique circumstances” should be factored into your overall plan so that you are taking advantage of newer tools, technologies or situations (i.e., the economy) that did not exist in the year on which you based on your calculations.

So what do you think of this approach? Is it that easy? If so, why doesn’t everyone do it? What holds us back, do you think?  I know that we sales people (particularly those of us in the top 10%) like to think and act as if sales really isn’t a numbers game — that it’s more of an art form. But is it?

Brian

Having been in sales for a couple decades now and watching my peers struggle with consistency relative to their business – you know, the peaks and valleys associated with a typical salesperson’s performance – I began to wonder why some sales professionals achieve consistency in their pipelines while others continue to struggle.

I began to dig into the reasons and this is what I found:

Common to those that struggle with peaks and valleys are a) lack of proper planning, b) lack of plan execution, and c) lack of tools to manage the plan.

Proper planning

Those who have firmly scheduled prospecting activities in their day/week/month seem to suffer less from peaks and valleys than those who either don’t plan or don’t execute their plan. Proper planning means scheduling specific dates and times to prospect. The timeframes typically vary in duration and in time of day. Time of day should be flexible to take advantage of variations in your prospects’ schedules, increasing the likelihood of making contact. Length of time depends on an individual’s close ratio. For example, if it takes 30 dials to make 10 contacts and 10 contacts to make three appointments and you need six appointments per week, then you need to do two of these sessions of 30/10/3 in order to secure the necessary appointments per week. Proper planning consists of starting with the end goal and working the process backwards based on ratios, and then scheduling the necessary activities to achieve the desired results.

The example above is for prospecting but the same methodology works for referrals. If your plan is to obtain three referrals per month and you usually obtain one referral per networking activity then you need to schedule three networking events per month to achieve your desired result.

The point is, there is a plan, based on data, and the necessary activities are properly scheduled!

Execution

 
All of this planning sounds great, but if it isn’t executed, it’s irrelevant how good the plan is. Sales professionals who avoid peaks and valleys not only have a plan, they execute it consistently and without deviation. Years ago, I was a sales manager for a 10-person sales team in a large corporation and one phone-canvassing day the phones went out in our remote office. Without even saying anything my team grabbed their planners (this was before laptops), D&B cards and bag cell phones (now I’m really aging myself!) and went down to their cars to continue with their phone canvassing. It was automatic. They were so disciplined in their approach to the phone canvassing sessions I didn’t need to say a word. They encountered a problem, developed a solution and executed it according to plan. That is execution and that is what top performers do. They execute!

Tools

 
Another element common to those who don’t suffer peaks and valleys is the use of tools to properly execute their plans. My story about D&B cards, bag cell phones and planners was full of examples of tools. Today we have laptops, smart phones, CRM systems, etc. What I learned through my casual study of this topic is that those with sustainable pipelines use and rely on their tools (no matter what those tools are) and those that struggle view these tools as impediments to their success, or one more administrative function they do not want to perform.

Interesting, is it not? Those who succeed in building sustainable pipelines value the tools that help them achieve success, while those who struggle think of these tools as an administrative encumbrance.

Bottom line, my research seems to indicate that building a sustainable pipeline occurs by a) having a plan, b) executing that plan and c) using tools to help manage the plan.

What have you found in your observations? What are we missing here that could help others build more sustainable pipelines? Why do those who struggle continue to struggle and those who succeed continue to succeed?

I would be interested in your thoughts.

Brian

I have seen a significant increase in requests for and usage of customer relationship management (CRM) systems. Why is this? For one thing, it’s becoming difficult to keep up with one’s competitors without a CRM in place and in use.

CRM systems help to strengthen sales strategy, sales management and sales force development. Try this three-part quiz:

Part I – Sales Strategy (to be answered by owners and managers):

• Do you know what your close rates are, per industry and market?
• Do you know what your close rates are, relative to your more profitable work?
• Can you define purchase potential, per industry and market?
• Do you know if and precisely how you are ensuring consistent sales coverage of each industry and market?
• Do you know who is typically making the decisions regarding purchase of your products and services, per industry?

If you answered “no” to any of these, then implementing a CRM system makes sense in order to improve your sales strategy.

Part II – Sales Management (to be answered by owners and managers):

• Do you know, qualitatively and quantitatively, what your sales representatives are projecting as new business for each of the next three months?
• Do you know how many new business quotes were generated in the last 30 days?
• Do you know what types of customers are generating the greatest profit margins?
• Do you know what types of prospecting activities are generating the greatest number of new prospect appointments?
• Do you have the facts you need to help your sales staff make necessary adjustments?

If you answered “no” to any of these, then implementing a CRM system makes sense in order to improve your sales management.

Part III – Sales Force Development (to be answered by sales representatives):

• Do you remember the name of every contact you have made that could possibly buy, or be part of the buying process for, one or all of your products and services?
• Do you have your weekly activities planned out so that you are seeing your accounts as frequently as necessary in order to maximize your sales results?
• Do you know what your close rates are, and thus how many prospect meetings you need in order to make a sale?
• Do you know which networking activities have generated the most in terms of sales commissions?
• Do you know what you discussed in detail the last time you spoke with each of your customers or prospects?

If you answered “no” to any of these, then implementing a CRM system makes sense in order to improve your own development.

CRM systems are not a magic bullet, nor are they a replacement for good, old-fashioned sales activity. But they are an effective complement to it, and they help owners, managers and reps alike to quantify and maximize their efforts.

Do you use a CRM system for something other than the things I describe above? Or, on the contrary, can you make an argument for why a CRM system is not necessary?

Dan