The Sales Leader’s Handbook: How to Maximize, Motivate & Monetize Your Sales Team
Table of Contents
- Page 2 Introduction
- Page 3 The Current State of your Team
- Page 8 What to Do Next?
- Page 15 The Gamification of Work
- Page 19 Money Matters
- Page 22 Conclusion
If you are picking this book up you are likely one of three things: a business owner or a manager looking to improve his or her team’s overall performance and in turn increase overall profitability, employee happiness, motivation and retention…or…you are a salesperson yourself looking to improve, professionalize and increase your success in your role and develop your leadership skills. Regardless of who you are or what title you hold…if the above mentioned is your motivation, then you have come to the right place.
This book is designed to have you take a good, hard and honest look in the mirror at the current state of your sales organization or individual performance. This will require some self-evaluation and a realization that in some of the cases, it will be you who is responsible for the current under-performance of your team or individual efforts. Everything begins and ends with your leadership. But, not to worry, you started this business or were hired for good reason, so we will dig into some helpful strategies that have personally aided myself, my leadership and peers throughout my sales career.
Initially we will take a look at the current state of the sales team as well as reflect on the times where things were happening seemingly, automatically and easily. We will draw from that exercise to come up with some direction on what to do next, be it making some new hires or saying goodbye to under-performers who just can’t seem to get on board (That one is their fault).
So many factors come into play for a team to be hitting quota or over-achieving. We will discuss attitudes, what types of systems you should have in place for measuring the front-end and back-end metrics, why recognition is paramount and most importantly how to make the day to day tasks for a sales person FUN and lucrative! Thank you for choosing to read this book and, I am looking forward to helping you and your organization build a powerhouse sales team that is firing on all cylinders!
The Current State of Your Team & Company
If something is broken it is only natural that we need to evaluate it to fix the issue(s). Here is a pretty common problem among most sales organizations and teams, have you suffered from massive turnover? I would say if you are losing a sales person by one and a half years into their role or less and, each new fiscal year and, you are looking at a batch of fresh faces there might be a deeper systemic problem here. Don’t chalk it up to “oh that’s just sales.” That is a cop out and you know it. There are plenty of organizations that can hold on to key people or even entire teams for multiple years, losing very few along the way. In order to be that team you need to tap into your people.
You need to identify where each person stands mentally at this time of evaluation. Is everyone bought in? I know that, having one-on-one meetings that, your sales people may not show all their cards, but if you have built enough trust they should come through. I’m not sure what, if any, disruptions occurred on your team but if events took place in your organization and you’re trying to feel things out, it is critical that you can, build a bridge and only hope that they cross it. Likewise, if you are a salesperson, speak up! If your leadership had a crystal ball we’d all be on a beach at President’s Club right now!
Even lacking psychic abilities, I am sure you’re intuitive enough to know what types of things may throw your people off track. Here are some critical events that you need to be proactive about before it hits the team:
In business it is common for like companies to acquire proprietary property from one another through a merger. Well, through the eyes of a salesperson this triggers alarms. With a merger or rumors of a merger looming, your sales people, well all your people, are going to start questioning their overall job security. Will the product line they’re selling or represent become obsolete? Will my territory change? Will my territory exist? Will someone take over my responsibilities from the other company we merged with? Will I have a job tomorrow? These are all valid questions that your sales people are going to start asking themselves. It is critical that you get in front of these questions and assume they are being asked even if everyone seems fine. Reassuring your sales team that things are only going to improve for both the company as well as for themselves will prevent attrition. They will not start that job search and start reaching out to recruiters and job boards to start a new job hunt out of fear. You’ve got to make your people feel secure and in order for that to happen they need to trust you.
I remember working for a company that went through a massive acquisition we were given about a twelve months heads up that it was in the process of going through. Well shoot! As far as my colleagues and myself were concerned we just bought our single largest competitor in the marketplace…I know, how awesome is that right? Wrong. We were in a fairly saturated marketplace and, I had been there five years and won as much business as I could have from our competitors. New business was a rarity, it was often that your wins came from the competitions’ shortcomings.Well, we just bought the competition..what the heck was I going to sell?! I had a lot of questions, none of which could be answered. Upper management was either aloof or playing it off that way and did not reassure us at all. The two companies lost multiple people over the course of those twelve months and I can guarantee you it can, be attributed to a lack of communication and information on, the security of everyone’s future.
Many of the same questions and concerns will be raised during times of acquisition just as much as within a merger, so be sure to address all the previously mentioned concerns of your team.
Critical Personnel Changes
I recall another time I was hired at a company, I was so excited! The company, product, culture and compensation (obviously the most important thing) were fantastic, or so I initially thought as the new guy. Two days before my start date I got a phone call from the Human Resources Department.
“Hello Nathan, this is Jenna from “The Company,” I just wanted to call to give you a heads up that your manager has resigned, but don’t worry you will be reporting directly to the director. See you Monday!” Click*
OK, I thought to myself, no problem. I mean I’ve seen a lot over the years in sales. I figured she had moved on to greener pastures or was forced out. So, fast forward to my first week on the job. I’m getting acquainted with the company, products, services and of course my colleagues. I consider myself a fairly perceptive person and through conversations I was beginning to see who on the new business team were being negative, cynical and jaded about everything here at work. Now keep in mind I am all wide eyed and positive as the new person but, I also like to think I persevere in circumstances where others decide not to. Oh, by the way, my director I was reporting into…yeah, his position was dissolved in a restructuring four days into my job and I was now reporting into the manager of existing accounts. Again, I still saw massive opportunity despite what appeared to be a setback or disruption I kept my head down and kept working away. I spent hours a day locked in a small room dialing and setting appointments. However, not everyone was feeling as optimistic as I was, and that is where knowing your team and where everyone stands will pay dividends in the end.
It wasn’t until I was in the kitchen, maybe two weeks following our director’s departure, that one of my clearly bitter teammates decided to have an aside with me. He noticed I was very positive and giving it my all to get results out of every work day. I wasn’t better than him, we were just at opposite ends of the Career Spectrum. I was new and eager to prove and please and of course make money, but the more he talked the more I understood his reasoning and position and this is where you as a manager or business owner can take a lesson. He explained to me that he was just over a year on the job (remember what I said about losing a sales person in this time frame? Funny how that works). In the course of that year he had seen four sales managers turnover and, a director and the company was acquired by a competitor. There were sweeping changes to how the new business sales team was expected to operate etc. I mean, I can see how someone with certain expectations coming into the role then, suddenly there is pivot, may become resentful, worried, scared and fed up.
No need to dig into the policy changes that derailed this individual but, the important lesson on this observation is that this employee was left in the dark and had no leadership or direction when he did, it didn’t last long. The next day he officially resigned.
A week later another former top performer who had bottomed out shared similar experiences with me and four days later resigned. Now most would say oh well its sales this happens, well I agree however, even if one of those two sales representatives was salvageable it would have saved the company money and increased revenue, which is really the point at the end of the day. There were steps here that were not taken or overlooked by the company that could have saved these employees.
First, I was not there during the time of the acquisition so I cannot speculate on what was done right or wrong on that front but I can speak to how the sales team should have been approached about this news. I am almost certain a company wide email and then a location based meeting took place. Great, you think you’ve crossed your T’s and dotted your I’s because the employees had a chance to respond to the email or raise their hand during the meeting. Wrong, they probably had a million questions and concerns! Even though you invited them to the human resources office anytime and that your door was always open, they may as well have had cement bricks strapped to their feet if you expected them to walk in there independently. The sales manager, director, or whoever is acting in these roles should have conducted closed door one on ones and asked one simple question…”How are you feeling about everything?” This would have given the sales representatives a chance to get some things off their chest. You may learn even more, like how they feel about the managerial turnover etc. This would have given you a strong sense of where everyone stands on your team. You could potentially salvage the disgruntled, or if that ship has already sailed, proactively engage in a hiring process and start searching for new hires to “keep on the bench.”
- Critical Personnel Changes (Managers/Directors/Influencers)
- Policy Changes (Comp Plan mostly…obviously)
- System Changes
- Basically ANY Change!
Sales people HATE change. I think it is a natural human defense mechanism, but sales people are particularly sensitive to it. If you are thinking about making changes or have already made recent changes and have not taken your teams temperature, you need to get on top of that. I know within larger organizations, particularly publicly traded ones, you will have to follow protocol from top bottom; but, if you can get permission or are the decision maker of these changes, I would recommend coming clean to the team. This is counter-intuitive to typical corporate behavior, but I can tell you as a salesperson myself, and having witnessed all of the above throughout my career, you’re pissing-off at least someone in your sales team and that’s all it takes for the disease to spread.
By having your team finding out through other corporate channels or through hearsay and rumors of changes you are leaving yourself open to a variety of vulnerabilities such as misinformation, people jumping to conclusions, rumors, and ship jumpers. We will go over more in later chapters in, detail.
Now you have a better of idea of where all the pieces fit with everyone. You know, after a deeper dive into these one on one meetings and announcements where you stand. From an attitudinal position, you may have discovered two out of your six reps have a negative attitude towards the company, three seem to be indifferent and one is un-phased and has a positive disposition about their personal mission and responsibilities…this is your “A” Player, if you’re lucky enough to have one. Now, the best way to double check your “gut” is to cross reference their attitudes with performance. If the two negative employees are bringing in the least amount of revenue month after month and their up-front metrics are down…then it would be safe to say that they are in fact disengaged. You as the leader needed to be in front of this at first sign, if a low headcount is detrimental to the business, then you should have been wisely conducting interviews to back-fill these two before they leave or you are forced to terminate their employment. Now, some are wondering why I am not going on to say that you should try and “save” these two sales representatives, well, I would encourage you to do so while looking for replacements. You can’t predict human behavior flawlessly, so having a proactive contingency plan just makes you plain smart.
Historically speaking, it is very hard to pull someone out of a downward momentum spiral. You will also have to make the hard decision to cut them loose after this discovery in order to avoid the spread of negativity to the rest of the team. These two are likely making up fifteen percent or less of the team’s results so it may be a bad investment to begin with. The only way you should attempt to save these sales reps is if you have determined, a strong aptitude for the role but they are lacking the right attitude. If this mindset can’t be corrected, they must go. Your three middle of the road sales representatives are the most vulnerable to the negativity. They are undecided and could go either way at this time, which is why the sooner rather than later exit of the under-performers can sometimes be a blessing in disguise. These mid-performers are necessary to the business. They keep the utility bills paid and, they may not be bringing in astronomical profits and margins but they are contributing and that’s important. You can lean on them from time to time and they will impress you from time to time. They typically make up around thirty percent of the sales teams revenue any given quarter. They are the consistent middle you will need to rely on during times of change.
Now the “A Player,” as I had alluded to earlier, is your Golden Goose. This person has a bulletproof mindset and it just might be because nothing matters more to them than their personal reason as to WHY they need or want to work their butt off day in and day out. Despite who comes and goes or who’s name is on the building, your “A Player” will continue to consistently produce. They typically make up sixty to eighty percent of the sales revenue in any given fiscal year. Some are lucky enough to have more than one; they are easy to spot. They just “get it.”
It will be important to know this individual’s motivations. I mean you need to sit down with your top performer just as much as you needed to sit with everyone else who was under-performing to find out what is going on under the hood. Identifying the needs and wants of this individual contributor will help you better attune your management style on how not to break what isn’t broken. Your Top Performers deserve all the leash you can give them, provided their upfront metrics are in order so you can report in to your leadership team accurately, and, of course, they are bringing in consistent quota crushing revenue for the team. Cha-Ching!
What to Do Next?!
Alright, we have run our diagnostics on the sales team and some need to go, some have re-engaged, others are in the middle and we have our critical players. Now I am certain you don’t need me to tell you what to do with your own organization after reading the previous chapter. If you have heeded my advice, then you know exactly what to do next and what direction you are going to take Monday morning when you walk through those doors. So let’s assume you have let all the under-performers go, rejuvenated your middle of the pack reps and bestowed a little more leadership and leeway with your top performers.
Well, first, the search for additional members to your team needs to be a consistent and constant endeavor…look, no sales manager likes looking for new talent, sifting through job boards, resumes, scheduling interviews, scheduling second interviews, third interviews….twelfth interviews…I know I get it. But if you don’t have a reasonable amount of talent on standby then you are at risk. Your top performer could leave tomorrow for a better opportunity…I mean, same goes for everyone on your team…you just can’t count on unpredictable variables like the human factor.
So, if the work is too great on top of your existing duties, leverage a Sales Recruiting Firm, hire an internal recruiting team or roll up your sleeves and dive into the process yourself. You know how much time you have or don’t for this task, but it is a MUST DO despite constraints or inconveniences. Ok. Now that, we have the recruiting machine humming in the background as a safety net. That should add some security to the sales department and keep you in a proactive vs. reactive position if or when people should surprise you and leave. Let’s move on to how this newly revitalized team is expected to perform and be measured moving forward.
Key Performance Indicators (KPI)
You’re going to need to pin down exactly what factors are strong indicators of the results you want. Defining your KPI is a critical component to any business and any department. It is the best way to measure why things are or are not working from a metric standpoint. Here are some fairly traditional KPI metrics that most sales teams would measure.
- – Dials (amount of dial attempts made to a prospect)
- – Conversations/Connections (number of times a conversation with a prospect took
- – Appointments Booked (number of meetings set)
- – No (the prospect decided not to buy)
- – Yes (the prospect decided to buy)
- – Average $ size (the average size of your deals closed for the
- – Pipeline Volume ($ volume in sales cycle)
- – Sold MTD (Amount sold in current month)
- – Sold QTD (Amount sold in current fiscal quarter)
- – Sold YTD (Amount sold in current fiscal year)
Depending on the nuances of your industry, there may be a few other things worth measuring to evaluate the front-end (activity) and back-end metrics (results) of your sales team. Make sure your team knows that they are responsible for knowing these numbers inside and out and must own this knowledge for every one-on-one meeting that you will be conducting. If a member of your team is not familiar with their numbers during a meeting this is a red flag. Keep a pulse on their results and activity and try to proactively investigate what is hurting their performance. Do not waver from these expectations. The more consistent you are about them owning this knowledge and delivering it weekly to you, the more consistent they will be about it…remember…everything falls on the leadership’s shoulders.
The other layer you add to these basic up front measurements are the formulas. That’s right, a great sales team is organized, disciplined and consistent until it becomes second nature…and mathematical…well sort of. It’s important to know these formulas and have your team know these formulas inside-out. The first is related to a few KPI’s mentioned above. It is your booking average. Your booking average is just that, the number of dial attempts to conversations to appointments actually booked. It looks like this:
Dials divided by number of Conversations = Contact Ratio (Average amount of dials it takes to have a conversation with the decision-maker).
Example: 10 dials/5 Conversations = 2.
Appointments booked divided by the number of Dial Attempts gets you your Booking Average.
Example: 2 Appointments / 10 dials = 20%
Pulling these KPI’s together are critical to a sales reps understanding of their business and your understanding of theirs. The fastest way to know if you have a bad call list is to work out these averages. If you are making one-hundred-and-fifty dials and speaking to two Decision-Makers and booking zero appointments, there is clearly something wrong here. The sales rep is going to eventually get frustrated and may not have alternative ideas or even know how bad it is without these formulas screaming it out to them. If you haven’t already implemented similar strategies it is time to get started. Adopt these now and implement them into your team as a best practice.
Another great way to measure success is with the KPI, Average Account Size. We need only to work some simple numbers here.
Total amount sold in the week, month or quarter and divide by number of deals closed.
Ex. $10,000 Sold / 2 Deals = $5,000 Average Deal Size.
Knowing your average deal size is important and over time this will start to vary. You can track it over the course of a fiscal quarter to get a better idea of where you and/or your team stands. You can begin to forecast more accurately if you know your averages. As you can see all these numbers start pulling themselves together. If you know how many dials it takes that lead to conversations and how many conversations you need to have to book an appointment, then you know how many appointments you need to have to actually close a deal and what your average deal size is you can start predicting your income and revenue generated. You will become a forecasting master! Sales reps will also take the stress out of what they perceive as “unpredictable income.” Please!? Unpredictable income? Get out your calculator and do the math. If you or someone on your team is failing, the math won’t lie. Sales is very predictable. Get your numbers where they need to be. It might take one rep twice as many calls to get an appointment..well I guess they are doing twice as many calls. Sales is a great career, a lucrative career, but you need to respect it and take the activities seriously if you want the rewards.
Don’t Just Talk About It, Be About It
If you honestly want to get the most out of your team don’t just talk about what they need to be doing in order to be successful…be about what they need to do in order to be successful. The true sign of a strong leader is to lead from the front lines. If you want to garner their respect roll up your sleeves and dive into the trenches with them. Get on the phone beside one of your reps, ask them for one of their call lists and dial it. If you did this even once a month with a different rep each month your respect level would shoot through the roof.
Check their calendar and join them out in the field for an afternoon and attend some of their appointments and help them close a deal. I mean, you didn’t get to the position you’re in by not knowing a few things about the business, product or sales itself, did you? There is nothing more distasteful in sales than having a manager who can’t lead. Like, truly lead. Someone who has a track record and historical success in the respective field you are in is best. If they are coming from another industry that’s fine, but you, better get down in the mud with your team and show them why you are there and why you’re their leader. It is important to do so to win over your veterans. They are going to know more than you or think they do, so earn their respect and get involved. Managers manage from the back, leaders lead from the front. Make this a personal objective to spend time doing what you expect your team to be doing.
CRM & Other Tools
The basics: Smartphone, email and a laptop or tablet…need I say more? Good. Moving on.
There are literally hundreds of options available to a sales team when it comes to how we are tracking the previously mentioned KPI’s among all the other things we are forced to track on a daily basis. It’s important not to have too many things in too many places. Centralizing your data, knowing where to find it, how to navigate it and read it are important…Otherwise, why the heck did we even bother covering the formulas and KPI in the previous chapter if you’re not going to use it.
The central piece to any sales organization in the Twenty-First Century is a Customer Relationship Management tool (CRM).
“CRM software is a category of software that covers a broad set of applications designed to help businesses manage many of the following business processes: customer data. customer interaction. access business information. automate sales.”
Basically, businesses’ names, contacts, phone numbers, emails, notes, details of the company, size of the sales opportunity, competitors they are currently using and size of the sales opportunity are just a few things you can put in this tool to optimize all the information you and your team collect on a daily basis. A great way to measure your team’s motivation is to review the CRM’s reports to see if they are actually inputting data into the system. A lack of information is a strong indicator of a lack of one of two things: motivation or know-how. Your A Player will have the most up to date and cleanest CRM, this correlates to their results and money they are making and, understand the importance of being diligent with this tool.I don’t care if you are a business of one or one hundred thousand…you must have this tool. In contrast, a messy CRM, lack of data and information is an indicator of disengagement and we already know what we have to do about that, don’t we?
You know, it’s funny. Being a sales person before the dawn of the Information Age, a sales rep was forced to keep diligent notes, carry product around and literally make phone calls out of a telephone book or phone booth with a pocket full of quarters! If you or your team can’t appreciate the opportunities that exist these days that are designed to better serve your mission towards growth, income and fast money you ought to give your head a shake. Your CRM is your golden ticket to making sure no rock goes un-turned or forgotten about! Here are a few of my favorite CRM tools in no particular order:
- – Bullhorn
- – Microsoft Dynamics
- – Salesforce
- – Hubspot CRM (Free)
Now a CRM is great, but it is no replacement for outspoken accountability. I am a firm believer in the good old fashioned White Board. Accountability to the success of the team as a whole is an external pressure that can drive motivation in a person…as if the awesome commission checks weren’t enough, right? If you conduct daily or weekly results meetings first thing in the morning with the whole team huddled around the whiteboard, each accountable for posting their KPIs on the board for all to see…how excited do you think they will be to post a zero? Not very. This is not to publicly humiliate or shame anyone, this is a reminder that you’re all in this together and have a load to bare, day in, day out, for your team.
I already mentioned smartphones and email; obvious must haves to communicate with your team as well as your prospects and clients. However, depending on the nature of your business you could go a little farther. There is a great internal communication tool for organizations and companies known as Slack.
“Slack is a fantastic communication tool. It surely reduces the need for email and acts as a real-time collaboration platform. The channels are super flexible and allow for public or private communication strings focused on project specific or role specific chat.” It improves overall workflow and communication. You can create Channels dedicated to specific topics or departments, organize it by departments, make calls to others on the platform, share files, to mention a few of its capabilities. You can download it onto your desktop or smartphone, oh, and it’s free.
The last essential tool I would add to a sales team would be a tool that gets your contracts into your prospect’s hands with a click of a button and just as fast back into yours for processing. Cha-Ching! Let’s talk about Docusign. This software has made the buying process so much easier for a prospect. So much so that barriers like time, printing, scanning, faxing or final in person meetings are now virtually obsolete. If you still are collecting signatures on paper, it is time to move you and your team out of the Stone Age. No one likes paperwork. With DocuSign, recipients of a document click a link to open the documents on an internet-enabled device (like a mobile phone, tablet, or computer). Tabs and simple instructions guide the user through the signing process, even adopting an electronic signature. The recipient clicks Finish to save the signed document.
Now I could dedicate an entire book to tools alone, these were some worthwhile mention-able ones and what I would consider to be essential to doing business in modern times. Equip your team with technology to better organize and speed up the management of information, collection of documents and sales process as a whole. I mean the faster you can move means the faster you can move on to the next sales opportunity, right? Now let’s pull this all together and show you how to make all of this a little more fun for you and your team!
The Gamification of Work and Awards
I know, impossible, making work fun? Like really fun? I am telling you it is! If you were to literally implement everything we discussed so far in this book while your team’s motivation is low, we may be moving in the wrong direction. I say that because there is always resistance to change, remember? Also, so far if you are implementing new practices and stricter processes they will not always find this to be to their benefit, even though that’s all, it is. So in order to get more out of your team you are going to need to give more. The best way you can make work more fun is the gamification of important behaviors and tasks that drive the results you are looking for. Not only will this make things more enjoyable, it will increase or pump a new competitive blood into the veins of your sales team.
There has never been a time in my previous sales careers that I did not have an abnormally great time whenever my sales manager announced a new contest. I remember when I was still finishing my university degree part-time and working as a personal trainer I got my first taste of the corporate award system…and I loved it. I know what you’re thinking…a personal trainer?…Well I had no salary and they basically tossed my inexperienced butt into the middle of the gym floor and said…go sell personal training and build your business. I knew there was a boat cruise, dinner and some recognition for the top billers in the company and I wanted to get on that boat. I had something to prove, not only to my colleagues but to myself. All I could think about was that cruise…I was persistent, I spent hours on the gym floor approaching everybody and anybody, the level of rejection I faced and felt would be comparable to a guy being turned down by hundreds of women he attempted to approach while at the bar with some friends…ouch…
Long story short, I was on that cruise three years in a row and promoted to sales manager. I delivered because I could see where I wanted to go and I saw what others were getting as a result of the work they put in. As a young man, I watched others go on the cruise their first year, earn trophies, get promoted, buy homes, new cars and I wanted all of that! The awards and rewards were tangible…and that is an important part.
I remember my director sitting me down and we pinned down my goals and worked backwards from there. I wanted to buy my first home, a new car and make the boat cruise. We worked out the cost of my car and my down payment on a home and mortgage. We then broke that down to the amount of personal training contracts I would need to sell in a year to accomplish this goal. Then broke it down quarterly, then monthly and, weekly. Catch my drift? I always knew where I stood in respects to my goals down to the week. I even had a picture of the car and house taped to the front of my notebook as a constant reminder of WHY I was doing this. This was a valuable lesson I carried with me into the sales roles to follow in my life. A lot of sales leaders focus on the hard data, what are you committing to this quarter in sold number…but only the great ones unpack their team’s personal motivations. You need to build a personal association to those sales numbers. It is one of the best ways to increase your sales reps’ performance. They won’t see the number anymore…they will see that house, car, investment money, engagement ring…whatever it is…it’s not just a number anymore.
Now chances are you have a sales team, not just a salesperson. This is a great opportunity to build some friendly competition among your team. We covered the KPI in an earlier chapter, well you can gamify these tasks to drive even better results. For example: The upfront activity of making phone calls is of high importance in most sales organizations. I mean, if you don’t pick up the phone at all…you’re probably not going to be in sales very long. So, you can run contests based around this metric. Whoever has the most dials by the end of the week can pick a prize. A way to make this fun would be to have a treasure chest or prize box on the sales floor. Fill this with: ties, cellphone cases, high quality pen, dress socks, gift cards, gas cards, leather-bound notebook etc. What would you put in this treasure chest?
Quarterly Revenue Champion
In addition to the call prizes, you can have a Quarterly Revenue Champion! You could have a trophy that they can proudly display on their desk or workstation for finishing as the top revenue generator on the team. Not only will this instill a sense of accomplishment and pride in the winner, if you have hired the right people for your team, they won’t be wanting to go without that trophy the following quarter and will be competing for it the next go-around. You know you’re on the right track if the friendly banter and competition starts getting elevated in the office. I mean, recognition and reward is part of the fundamental core to any good salesperson. Handsomely reward the right behaviours and consistently correct the wrong ones.
Perhaps one of the more fun ways to rally a team or even the entire sales division of a company is to have a week long sales contest every now and then. A great way to run these is to have a specific undersold item or service as the focal point of the contest and whoever sells the most of it in that week is the big winner. Usually a financial reward, on top of the one a salesperson already earns, is strong enough and of course a corporate newsletter of the overall standing with them sitting on top of the list. For example: Five-thousand-dollar bonus-award to the first place finisher, twenty-five-thousand dollar to second place and five-hundred to the third place finisher. The Monday following the contest, send out a total ranking sheet via email with everyone’s name and results, having the top three finishers in bold and a few font sizes larger than everyone else’s, along with a great head-shot of the big winner.
Have you ever watched playoff sports? Most of you will have. For those of you who haven’t, the playoff bracket is the flowchart to show which teams will be facing off against one another in competition for the chance at a National or World Championship. Each team will face another in elimination rounds until only one team is left standing victorious. The bracket challenge in a sales contest borrows these principles. In larger organizations you can pit locations against other locations. Small companies can pit individual contributors against one another in competition. The Bracket Challenge is a great contest to run over a month. This will give each competitor the opportunity to win their respective match and time to work through the bracket. My suggestion is to run this contest on the last month of the quarter. This is a great way to hype up the final push to bring in that final quarterly revenue. Whoever brings in the most revenue that week wins and their opponent is eliminated from the contest. This contest can be incentivized with gift cards or monetary bonuses. Post the playoff bracket on the sales floor for the entire office to see, encourage your team to wear their favorite team jerseys or sport memorabilia and have some fun with it!
President’s Club/ Annual Awards
Ahhh..the omnipotent President’s Club. The most prestigious award for the quota achievers. The most commonly used title for the highest award to be achieved by a salesperson in a company. Now there are other names like, Winner’s Circle, Top Performer etc. but we will stick to President’s Club for simplicity’s sake, but, what matters most is that you have this award in some shape or form. Most large companies have this award. An all-inclusive trip to a sunny destination for you and your spouse, paid for by the company. It involves shaking hands with, yes, the President of the company and other high-ranking directors, dinner and one heck of a party. Just make sure you avoid the CLMs (Career Limiting Moves). Don’t get blackout drunk and tell off your director or worse.
Now, if you are a large organization or belong to a large organization, let’s say one billion plus…and they do not have one, this is problematic. If you are in any position of influence, I would recommend finding a way to drop the hint that an annual recognition award ceremony for sales representatives who achieved their annual quota or beyond is not only something to be desired but is necessary! Sure, the money is great for your A players who are achieving their targets, yes, but the problem with having top performers is that they are never satisfied. If a career opportunity were to arise with a slight pay raise, better compensation plan, territory, benefit etc. you are at risk of losing them on a daily basis. A great way to show your best employees that they are appreciated is to throw them and their spouse an amazing party and give them an experience they will never forget. This will build culture, this will build loyalty and this will build consistent, unrelenting top performers.
There are people I used to work with years ago who are still at my previous company and it is for two reasons and two reasons only…I’ve asked them…President’s Club and all the crazy money they are consistently making year in and year out. I mean, why on Earth would you want to leave a place that takes care of your vacation once a year and treats you like the Queen of England in the process? You’re going to feel appreciated and in return appreciate your company. These guys bleed the corporate colors, I’m even convinced that some of them are so loyal they would lay down their very own lives for it! They are hardcore, but they have the house they want, car they want and life they want and they most certainly feel something is owed to the company for this, and that is why it is important for the company to feel the exact same way and demonstrate that through a President’s Club.
The point is, you have to make a big deal about successful behavior and successful results, from your top dialer to your top biller. Award the actions and results you want and watch your team’s energy, numbers and enthusiasm explode.
Have you ever lost a great salesperson due to the fact that you had a garbage compensation plan? No? Actually, you may have…see they won’t come right out and say it, but there is actually no reason to lose a great member of your team if you follow all of the above. In fact, if you are doing everything already and still lose your best person then you need to take a hard look are the compensation plan and get off of your wallet.
Compensation is a touchy subject, I mean, is there such a thing as the perfect compensation plan? I’m not too sure to be honest, but I can tell you what a terrible compensation plan looks like! Now I understand that some companies are facing obstacles such as: limited budget, cash flow, or a Board of Directors they are accountable to etc.However, it needs to be understood that in sales, such as life…You get what you pay for. So for the small independent business owner that is looking to build a sales team and with fiscal limitations starting out, my recommendation would not be to go out and hire three people on one hundred percent commission, rather, I would hire one person and offer them a better deal; a small base salary plus commission or perhaps a guarantee or draw. A draw against commission is a compensation plan based entirely on an employee’s earned commissions. An employee is advanced a set amount of money as income at the start of a pay period. At the end of the pay period or sales period, depending on the agreement, the draw is deducted from the employee’s commission. The draw is a strong middle ground for a smaller company or business when compensating their sales people. The only way I could see one hundred percent commission working is if you are willing to take a chance on a zero to inexperienced salesperson. You are just not going to attract a top performer with commission only opportunities (not counting B2C here…many of them live on commission only…but only the best survive.).
The more tenure and skill you are looking for in a person, the greater their base salary and commission is going to be. In fact, it is a strong indicator of a top performer over time. If you change companies every two to five years and have successfully negotiated a better salary and higher-upside as well, then you are doing something right, for you and your family. Here are a few ways I have seen companies, both large and small, structure their compensation plans for their sales people. I will speak to the up and downside of each:
100% Commission: Just don’t, honestly, if you are a small company that can’t afford to pay a salesperson then you should probably wear the hat and do it until you can. As mentioned above, a good way to avoid paying a talented person on what they deliver is with a draw against commission.
50/50: Big fan of the 50/50 split. Meaning, fifty percent of your income is a base salary and the other fifty percent is achievable through commissioned sales. For example: if a salesperson’s base salary is forty-five-thousand dollars they have an opportunity to earn an additional forty-five-thousand throughout the fiscal year putting their On Target Earnings (OTE) at ninety-thousand dollars. This additional $forty-five-thousand is typically divided by the four quarters in the fiscal year so they would have an earning potential of eleven-thousand two-hundred-and-fifty dollars per quarter.
There are variations of this split model some being 60/40, 70/30 and even 80/20. It will really come down to the nature of the role.In high-base sales scenarios like the 80/20, you will typically see very little commission but their OTE will land in or near to someone with a 60/40 split or even a 50/50 split. They may earn seventy-five-thousand to eighty-thousand dollars a year in base but an additional ninety-thousand to one-hundred-and-two-thousand in commission only. Often times the 50/50 option yields more upside. Example: sixty-five-thousand base salary yields a one-hundred-and-thirty-thousand OTE.
Pay Frequently, Pay Often
Another very important aspect to the comp plan is pay frequency. I myself had worked on monthly commissions for years and personally loved having money flowing fast and frequently through my hands. It was a steadfast reminder as to why I put up with the lows and was a quick reminder back to the highs of sales. I mean this person had chosen to do sales out of any other job or career path for one reason, earning potential. The idea of having a flat salary would personally destroy my soul. You’re telling me that no matter how much harder I work than the next guy or girl that we are going to earn the same amount of money month in, month out? If I bend over-backwards in July and coast in August, I am going to earn the same amount of money? Honestly, the idea is unfathomable to me…but hey, I’m a sales guy…If I am going to work my tail off then you better believe that the compensation better reflect those efforts. Flip-side, if I do not do what I was tasked or set out to do, it is me who suffers for it at the end of the day, earning less. When you think about it, it is one of the most accountable jobs a person could have out there.
One of the less attractive compensation models is the quarterly model. Typically in this model you are measured for your quarterly results and paid somewhere between halfway and the end of the first month of the next quarter. So it is a three month effort and four months to see the fruits of your labor. I’ve done it, it works, but it does not beat monthly. If you want your people to get complacent, pay them less frequently. If you really want them to get complacent, see what happens if they miss their number by a small margin and have to go eight months before their next big check! The only upside to quarterly is that when you get paid it is in nice large sums of money. If you have a hard time saving your money or realizing how much you are earning on monthly payouts, quarterly can have an impact on your perception. An advantage to a salesperson with poor spending, investing and saving habits. If you are paying your salespeople their commission over a period longer than one fiscal quarter…I can’t believe you have a sales person or team. Those checks better look like some Power-ball Lottery winnings when they come in then!
So ask yourself, how are you compensating your salespeople today? How is pay frequency affecting the morale of my team? Is it time to rejig the compensation plan?
Well, we’ve discussed the landscape of your business and what it looks like versus what you want it to look like. Hopefully, we have created a little more self-awareness in you as a leader when it comes to understanding your team. It really is on you to build the bridges that you want and expect your salespeople to cross-over. If you are missing something or not connecting the dots, you really only have yourself to blame. The unfortunate part is that you may lose some very talented people due to your lack of insight. Sorry to be so blunt but it’s true. Don’t get complacent, be the great communicator and cohesive leader you were hired to be. Be engaging, have the hard conversations with your team. Remember just because you open the door to a conversation doesn’t mean they are going to walk through it. Go to them, initiate the conversation and dig deep to get to the root of their motivations’ and drivers.
Don’t be that leader who is secretive or keeps things under-wraps unless it is absolutely necessary due to shareholders or other public company policy. Even if that is the case, reassure them somehow without compromising the information and let them know that when it is appropriate for you to divulge the information, you will.
Keep an eye out for your team’s motivations, remember, numbers don’t lie…people do. KPI’s are worth a thousand words. If someone is not meeting their activity or sales targets or is beginning to trend in the wrong direction, get in front of it, and if you aren’t measuring these activities…reread this book and start!
Be sure to be measured and have systems and tools in place in order to proactively promote a winning culture and team. If you don’t know the activities that define success in your business, you are in trouble and if you don’t measure them with fanatical accuracy, then they are useless. Leverage the technology of today and get your hands on some tools that will make this task easier. With those tools, bring some fun into the workplace, run those competitions, drive some friendly rivalries and light that spark.
Most importantly walk the talk, sit side by-side with your team on the phones, in the field and in their meetings and you will garner all the respect in the world. Finally, have fun, pay often and pay well.
I hope you found the insights in this handbook helpful. I really do hope that even if you learned one thing or can go in tomorrow and apply just one of these ideas or principles and yield a stronger result, then it was worth your time reading this. At the end of the day we are all good people who want to do the right things, both personally and professionally. Just remember that your sales people are exactly that…people. Understand them better, go deeper, communicate effectively and give them the tools and resources they need and they will be forever grateful. It’s not just about the money, it is about their lives, their goals, their families…help them connect their work to it. Sales people are a special breed and great ones are hard to find. Take care of them and they will take care of you.