The Importance of Performing Regular Sales Diagnoses

Too often sales teams jump to quick, ineffective solutions when they see a drop in sales performance. By doing so, they fail to address the root cause of the problem. 

When quotas aren’t being met and sales performance is dropping, one typical response is to blame the salespeople. However, the truth is that performance issues can arise from a myriad of sources, including management and process issues.

The effective solution to fixing sales performance issues is to diagnose the problem before you prescribe a fix. To address drawbacks with sales performance, companies need a clear understanding of the issues they are currency facing.

An accurate sales diagnosis examines the current state of sales and any associated challenges. Sales diagnostics can identify hard-to-find issues, allowing companies to address hidden issues at the source and concentrate their efforts on areas that actually need work. 

Diagnosing Sales Performance Issues

When analyzing the health of your sales team, there are several factors to take into account. Some key components include revenue metrics (everything from revenue to order sizes to product popularity) and competitive position (what does your company do well, and where do your competitors typically win).

Companies should then take a look at their internal structure. Salespeople are motivated by reward structures, for example, so it’s important to take note of how they are compensated for better performances. If an adequate reward structure is lacking, this may contribute to low morale and decreased motivation.

Pricing is another important metric. Salespeople need to know more than simply how much the product costs. By knowing which parts are negotiable and which are not, leaders can recognize opportunities to offer discounts and therefore boost sales. 

When diagnosing sales performance issues, companies also need to make sure the right KPIs are tracked, visible, and managed. Some important metrics include number of proposals, average deal size, and sales cycle length. Tracking these KPIs is an important step toward uncovering where sales teams are falling behind. 

By collecting and analyzing this information, sales leaders can discover roadblocks and ensure their diagnostics will account for all contributing factors. They can then develop actionable recommendations to correct issues they discovered, thereby eliminating bottlenecks and increasing revenue.

On the other hand, if the right components and metrics aren’t tracked, leaders will have a hard time finding the source of sales performance issues and will struggle to improve sales performance. 

Why Regular Sales Diagnoses are Needed

A sales diagnosis should not be a one-time examination of your team’s performance; rather, sales diagnoses should be an ongoing, regular process to ensure the continual improvement of the sales team’s performance. 

After performing a sales diagnosis, leaders are able to find the source of their most pressing issues and chart a course for the future. However, after making these necessary adjustments, it’s important to continue to perform regular sales diagnosis to ensure everything is working as it should, and that the desired goals are being met on a continual basis. 

This is why it’s vital that leaders set measurable goals and establish clear expectations. In future sales diagnoses, leaders can track their progress and compare with their previous expectations to see if the team is on the right track. 

If a team’s goals are not met, or sales performance has not improved as much as leaders had hoped, ongoing sales diagnoses allow leaders to continually adjust their course of action and make corrections, ensuring that the sales organization keeps driving revenue growth.

Download the Sales Diagnosis Checklist and get started today.

Use Intelligent Sales Data to Grow Sales

intelligent sales data to grow sales

In today’s world, data is a vital element of any successful sales team—but B2B businesses should be smart about the metrics they track. Keep in mind, the goal of collecting sales data is to grow sales. It’s easy to get carried away collecting too much information, which can overwhelm a sales team.

Overloading people with data can be just as useless as giving them none. Not only does it waste time, but it also shifts the focus to the data itself rather than what the data was supposed to enable—getting more business. 

It’s common for businesses to invest in collecting all the data they can, without a clear plan for harnessing that data to substantiate decisions. While claims of being “data-driven” may have increased in recent years, according to Gartner, the reality is that only 54% of marketing decisions are being driven by analytics. This means that a significant amount of valuable resources are currently being wasted on unnecessary data collection.

This problem is only accelerating during the era of COVID-19 as more of the sales process is conducted online. According to a study from McKinsey, today’s sales leaders consider digital channels to be twice as important as they once were. With more data generated by these online interactions, it may be tempting to collect more and more data.

On the other hand, the goal of intelligent sales data is to encourage a prospect to do business with a sales rep. To accomplish this, intelligent sales data focuses on collecting data that enables a sales rep to be more relevant and useful to a prospect. With the right amount of data from the right sources, companies can implement this strategy to grow sales.

Intelligent Sales Data in Practice

Today, sales can no longer be driven entirely by intuition and a vague sense of the customer’s needs. This might have worked in the past, but as nearly 90% of sales today are conducted online, data is more readily available than ever before. Businesses need to use this influx of data effectively to ensure that they reach the right buyers online.

Intelligent sales data focus on the target market and nothing else. To put this into practice, a successful data-driven sales team will track all prospect interactions to inform the sales process. With data on what works for their target market—in terms of where prospects originated, how sales reps reached out, what transpired, and why—sales teams can make better-informed decisions in the future.

Sales should only reach out to leads that fit certain criteria. By the time a new lead is sent to sales, it should have already accumulated a sufficient score as a result of significant marketing activity. It should also be the right kind of lead in terms of the role and persona. The role, level of activity, where the lead first originated, and how long it took to convert are all the pisces of information that lead into intelligent sales data. This is how intelligent sales data increases the effectiveness of the sales department—by targeting leads that are more likely to result in sales, the sales team can reduce the amount of time wasted on unproductive leads. 

Plus, as we have shown in the Four Quadrants Model of High Growth, existing customers have proven to be an excellent source of revenue. Intelligent sales data should incorporate patterns established by current customers, which helps drive revenues. 

With the right information from several tools—including marketing automation, sales automation, and accounting automation—intelligent data can transform the sales department and increase revenues. It is critica, however, to first determine what kind of information is needed, then build our systems to gather the necessary data, and then use reports and dashboards to inform what is working and what’s not.

SOMAmetrics is a revenue-focused marketing agency, delivering high-quality leads that close faster and at a higher rate. Our proven process identifies the best targets, defines the most compelling messaging, and runs highly targeted, digital campaigns—for about 35% of what it costs clients to do internally.

Let us know if you need any assistance in designing your intelligent sales data system.

Align Sales and Marketing for High Growth

Align sales and marketing for high growth

In the new B2B sales paradigm, marketing and sales must be numerically aligned to facilitate a high revenue growth rate. 

Too often, marketing strategies are implemented without defining the specific revenue goals they aim to achieve. Valuable time, energy, and resources are wasted when marketing is not aligned with sales—in fact, 60% of respondents to a 2020 LinkedIn survey agree that misalignment could damage financial performance

Especially as more of the buying process is completed online before sales reps get involved, misalignment could have increasingly disastrous consequences for the revenue growth of a company going forward. Fortunately, a strong alignment can help a company generate 209% more revenue from marketing

Sales and Marketing: Better Together

Sellers must be aware that 75% of sales should come from leads generated by marketing. This number makes intuitive sense—revenue-driven marketers know that the point of marketing is to generate and nurture leads that will result in sales.

With greater alignment between sales and marketing, both teams are better equipped for the sales process, which results in increased revenues. Marketing will have a greater understanding of which leads to nurture, which to pass along to sales, and which sources and content are the best for their purposes. Plus, sales will increase their understanding of each lead, which will improve sales outcomes.

Bear in mind that the journey of today’s buyer is complex—buyers are increasingly looking for sellers that will provide customized solutions for their individual needs. For this reason, it is increasingly important for sales and marketing to be in conversation with one another to establish a shared understanding of the needs of each customer.

How to Achieve Sales and Marketing Alignment

As discussed in depth in the Four Funnels Framework, all revenues start in marketing and end in sales. But the planning starts with sales. 

First, a company must define its revenue goals. From there, the company can work backward to determine how many inbound and outbound leads will be required to reach those goals. By rooting the marketing strategy in revenue outcomes, the company can align sales and marketing in pursuit of a shared goal: revenue growth. With both teams equally responsible for facilitating revenue growth, the alignment between sales and marketing increases—and so does revenue. 

It’s not enough for sales and marketing to operate in separate silos anymore—in the new B2B sales process, sales and marketing must work closely together to maximize revenue growth.

SOMAmetrics is a revenue-focused marketing agency, delivering high-quality leads that close faster and at a higher rate. Our proven process identifies the best targets, defines the most compelling messaging, and runs highly targeted, digital campaigns—for about 35% of what it costs clients to do internally.

Download the white paper that shows you how to tightly align Sales and Marketing for High Growth.

B2B Buyers Expect Seamless Digital Sales in 2021

B2B buyers digital sales 2021

Due to the COVID-19 pandemic and subsequent social distancing measures, traditional face-to-face sales have come to a temporary halt. B2B buyers and sellers alike are now forced to use digital routes instead. 

B2B Buyers and Sellers Prefer the New Digital Reality

What was originally a crisis response has now become the new normal, with many B2B decision-makers praising the effectiveness and convenience of digital sales. In fact, a McKinsey survey found that 70-80% of B2B decision-makers prefer remote digital interactions or self-service. Additionally, B2B decision-makers globally have reported that online and remote selling is as effective as in-person engagement—or even more so.

Furthermore, B2B buyers who were originally hesitant to make big purchases online have become used to the idea. In fact, according to McKinsey, 70% of B2B decision-makers are now “open to making new, fully self-serve or remote purchases in excess of $50,000, and 27% would spend more than $500,000.” Before the pandemic, the prevailing wisdom was that e-commerce was mainly for smaller-ticket items—but this has clearly changed. 

B2B sellers praise the effectiveness of digital sales, and B2B buyers love the convenience of digital self-service routes. As a result, the general consensus is that digital sales are here to stay, even after the pandemic is over. In fact, only about 20% of B2B buyers say they hope to return to in-person sales, even in sectors where field-sales models have traditionally dominated (such as pharma and medical products). 

The Challenges of Digital Sales for B2B Sellers

While digital selling is exceptional when it works as it should, it’s incredibly frustrating for buyers when it doesn’t. For B2B sellers, building seamless digital buying experiences remains a challenge. 45% of US customers still find B2B buying online more complicated than buying offline. 

In fact, many companies still lag behind in the digital transformation. Because the transition into digital sales was so abrupt, companies have struggled to make the switch. Digital sales

encompass a myriad of skills, tools, and processes that many companies didn’t already possess.

Only a third of buyers indicate that most of their existing vendors are well-prepared to support them in a virtual environment. Additionally, almost 80% of buyers have abandoned purchases because of poor website navigation, irrelevant search results, or unclear product information.

The pressure is on for these companies to catch up. In today’s world, buyers can easily switch suppliers to one that has already optimized their digital experience. 

Optimizing Digital Sales is Essential 

The rise of digital sales is raising customer expectations at a breakneck pace. 76% of customers now report that it’s easier than ever to take their business elsewhere, switching from vendor to vendor until they find an online experience that matches their expectations.

If a buyer has a less-than-pleasant experience on a seller’s website, they can easily switch vendors. In fact, 57% of customers have stopped buying from a company because a competitor provided a better digital experience.

Additionally, the demand for a seamless digital sales experience is so strong that 56% of B2B customers say they would “pay more for a better experience.”

In all, it’s clear that B2B buyers are increasingly demanding effective digital sales routes—and they will switch vendors and pay increasing prices until they find the experience they’re looking for. Therefore it is vital that B2B sellers optimize their digital sales routes and focus on their buyers’ digital experience. Companies that lag on the digital transformation risk losing existing customers and will struggle to find new ones. 

Choose the Right Market Focus for Revenue Growth

choose the right market focus for revenue growth

Choose the Right Market Focus for Revenue Growth

For a B2B company seeking to increase its revenue, the first step is choosing the right market. Market focus is the single most important factor impacting revenue growth.

There has been a shift in expectations for B2B marketing departments in recent years. Today, nearly 70% of CEOs expect CMOs to lead revenue growth for their companies. In order to facilitate revenue growth, today’s marketers need to increase their understanding of their customer bases and better anticipate customer needs. In today’s world, marketers who fail to work toward the goal of revenue growth will fall behind their competitors.

This means that today’s B2B marketers have to take things back to basics and reevaluate the fundamentals of their marketing strategies in order to maximize revenue growth—and this process starts with defining the right market.

Choosing the Right Market: Broad vs. Narrow

When it comes to determining a target market, many companies make the mistake of defining their market in the broadest possible terms. This might make sense at first glance—one could rationalize that a broader market definition will include more potential customers—but in reality, this is the wrong approach for revenue growth.

With a broad target market, marketing content will have to appeal to a wide variety of individuals with differing needs and motives for purchase. This makes it difficult for a company to demonstrate its depth of understanding of a potential client’s needs and the workings of the client’s specific industry. In addition, with an unnecessarily broad target market, marketers risk wasting resources on customers who are unlikely to purchase the product. In the end, with a broad market definition, marketers will encounter difficulties when it comes to differentiating their business from competitors.

On the other hand, a narrower market segmentation is often correlated with an increase in revenue. Instead of trying to reach a large audience with a vague and general message, marketing content will be much more effective if it is geared towards one specific customer’s needs. 

This might seem like a counterintuitive marketing strategy—how can a business be successful by targeting a single customer? It’s important to remember that companies within a market segment are in conversation with one another. By providing solutions to one specific company at the center of a market segment, marketers can simultaneously appeal to other companies with similar needs and goals. 

Putting Market Focus Into Practice

To make this concept more concrete, let’s consider an example in the form of a hypothetical company that provides software for the healthcare industry. According to marketing expert Geoffrey Moore, there are three elements of a B2B market segment: industry, role in that industry, and geography. With this in mind, the target market segment for this company could be defined as Hospital Administrators in the United States.

A specific number of potential customers will fall into this category, which can be expanded to include more potential customers or narrowed even further, as demonstrated in the table below. 

Segment

A. Hospital Administrators in California

B. Hospital Administrators in US

C. Healthcare Professionals in US

Estimated Number

400

2,200

128,000

Key Competitors

4-6

70-120

200-300

Message

Managing value-based reimbursement

Managing value-based reimbursement

Regulations in healthcare

Conferences

3

17

211

As discussed previously, it might initially seem like a good idea to target the broadest possible market—Healthcare Professionals in the United States—because of its 128,000 potential customers. But it is vital to consider the perspective of the buyer—will this software company provide value to all 128,000 US-based Healthcare Professionals equally? In addition, what messaging and strategies will be effective to reach all of these professionals with varying job descriptions, including Doctors, Nurses, and Hospital Administrators, to name a few? 

At this point, the company faces a difficult decision: It can choose to go shallow and wide, or invest exorbitant amounts of money in building expertise in each specific profession. Most companies choose to go shallow and wide, rather than investing in a focused market—and they are ultimately beaten out by companies that choose to go narrow and deep—which explains why the costs of sales and marketing rise faster than revenues.

However, there is another option—companies can choose to go narrow and deep in one segment at a time. This is the best option for increasing revenues.

Evidence has shown that with a narrower market definition, marketers can maximize revenue growth. Instead of burning through resources to compete with hundreds of other software providers, the software company can simplify the marketing process by honing in on Hospital Administrators in California, for instance. With significantly fewer competitors and fewer conferences to attend, marketers can increase the depth of their content and differentiate their company from the competition more effectively. Plus, it is more feasible for sales reps to become experts on the issues faced by this smaller market. 

When it comes to increasing revenue growth, choosing the right market is the single most important factor for marketers to consider. With the right market, B2B marketers can use their resources more effectively to increase revenue growth.

SOMAmetrics is a revenue-focused marketing agency, delivering high quality leads that close faster and at a higher rate. Our proven process identifies the best targets, defines the most compelling messaging, and runs highly targeted, digital campaigns—for about 35% of what it costs clients to do internally.

6 Steps to Streamline Your Sales Funnel Process

planning

The Issue with Funnel Bloat

Many of the sales managers I have worked with at over 100 technology companies believed that having more deals in the sales funnel translated to a greater likelihood of hitting their sales goals. While they looked at the size of the sales funnel (revenue potential), they forgot to consider when the deals were put on the sales funnel. They also neglected to determine if the deals were really viable.

In general, the rule of thumb is that sales funnels should be about 3X-6X the revenue objective to ensure that revenue targets are met. Most of my clients showed me sales funnels that exceeded this range. At first glance, I thought that the Sales Managers were doing well at managing sales funnel growth, but as I browsed further, I discovered that 80-90% of the deals were over 2 years old and not viable. Week after week, these Sales Managers would review the deals, and week after week their Reps convinced them that the older deals would close at some point in the future.

The next issue that I uncovered with my clients’ sales funnels was the viability of the newer deals being added to the funnel. After the initial call, Sales Reps should be validating the quality of the lead. Questions to determine viability can vary: Has a decision maker been contacted? Is there real need and pain established? Is the prospect looking at solutions to solve these problems within a reasonable time period? Did the prospect indicate some interest but didn’t have a real need?

One of my clients believed that every prospecting onsite meeting was a true indicator that the prospect was interested in the solution. The Sales Manager required that a quote/contract be left with the prospect after every meeting. When I worked with my client, I found that the Sales Reps did a good job of “showing” the solution. However, they were ineffective at qualifying for need, interest, decision process, and timeframe. This client’s prospects were in the State and Local Government space, where prospects are more willing to meet and see presentations. My client had hundreds of deals on the sales funnel; however, he never hit his sales targets.

Finally, the last issue that I uncovered was movement of deals from the top of the funnel to the “closed” or “closed-lost” stage.  Many deals were stalled in the various stages of the funnel prior to “closed” or “closed-lost” for many months or even years.

These funnel symptoms created a false impression that the client’s sales funnels were healthy and viable. These issues arise when a Sales Manager lacks a good sales methodology or has not made sure that their Reps understand the methodology. In any case, all three symptoms kept my clients from hitting their targets.

6 Steps to Cure the Sales Funnel Bloat

Even though Funnel Bloat can be deadly to a sales team’s ability to hit targets, it can, fortunately, be cured. Follow these 6 steps to continue finding leads and ensure that you don’t fall victim to Funnel Bloat:

STEP 1: Develop a sales methodology that works for your company.

Determine the following:

  • Who are your targets?
  • What pain does your solution solve?
  • What is an average time frame in which most deals should close?

STEP 2: Once you know these elements, figure out the number of stages most of your deals go through. Is the number of stages 5 or more? During each stage, decide what triggers must happen before the deals move to the next stage.

STEP 3: Retrain your team on the new sales methodology and make sure that they understand it.

STEP 4: Take a fine-toothed comb to your current funnel. Any deal that is older than your required time frame, whether that is 3-months, 9-months or 18-months on average, should be removed and re-qualified or put into a nurture program.

STEP 5: Build Sales Engagement tools that support the movement of each deal through the sales funnel.  For example, build an ROI calculator which is easy to use and shows cost savings or build a “standard” demo that can be used by your team in a middle stage to keep prospects interested.

In the final stage, before close, send your prospect a Memorandum of Understanding. The MOU should outline an overview of the prospect’s needs/pains, how your solution can solve their problem, the outlined ROI, and the agreed price. The MOU should also include a date for when the prospect will finalize and legally sign documents and procure the product.

STEP 6: Be ruthless with any deal that is added to the funnel. Your Reps should have to justify why a deal should be added based upon your company’s sales methodology. One of my Sales VP’s used to say, “Get the bad news early.” If there isn’t really pain or necessity, then you don’t really have a deal.

After the cure has been applied, though painful, you will have a viable sales funnel. Once you have a viable sales funnel, you will probably need to ramp up your marketing efforts to get the sales funnel to a level of 3x-6x your revenue objective. Funnel bloat is deadly, so apply the cure and hit your revenue targets.

How to Keep Your Team Motivated

two motivated people working hard on their laptop and tablet

A few weeks after school started this year, my daughter informed me that she was “done with school.”  Because she is a straight-A student and only a sophomore at her private Catholic high school, I was very worried and concerned. After many conversations, I found out that she wanted to have more fun and more respect from her elders. I took this information to heart and we made a plan. She is now a happier and motivated student.

I believe that motivation has to come from within. What should corporations do to ensure that their employees remain motivated day after day for years? Here are 3 steps your company can take to keep your team motivated and focused:

  1. Survey your employees to get a sense of what gives them satisfaction and what keeps them motivated at work.  These surveys should be anonymous. In the survey, ask your employees what they need from the company to feel like they are making a contribution to the company, their families and their communities.  In addition, the survey should address the following:
    1. Find out if they feel respected and appreciated by the company and the management team. Ask them to explain the ways they feel respected and appreciated. Perhaps they would like more responsibility or a greater say in how they perform their duties.  Maybe the team feels disrespected by a certain manager who may need to take some classes in managing people.
      1. Ask your employees if they believe they are working too many hours or feel compelled to work during evening and weekends to get caught up on their work.
        1. Ask your employees if they believe they are working too many hours or feel compelled to work during evening and weekends to get caught up on their work.
        2. Ask your employees if they believe they are working too many hours or feel compelled to work during evening and weekends to get caught up on their work.
        3. Ask if your company has too many or too few meetings. Either of these choices can lead to a lack of productivity and motivation.
        4. Once you have compiled the survey results, review the issues and determine how to address them in the short and long run.  Create a “task-force” to brainstorm on the issues and to make recommendations for improving the situation. Be prepared to implement the recommendations in a timely manner. Create a timeline for the roll-out of these recommendations.
        5. Share the survey results, task-force recommendations and roll-out plan with your employees to help them stay motivated.

The answers may be as simple as providing:

  • Employee training on subjects such as organizational skills, tool operation, or time management.
  • Team off-sites, a few times a year. These should be fun and engaging for your employees.
  • Opportunities for team members to earn bonuses or additional PTO days.
  • Lunch time activities such as yoga, meditation and stress management help keep employees motivated during working hours.
  • Some financial support for those who want to go to University or graduate school.

Companies who stay in touch with the needs of their team members are more likely to have loyal, productive and motivated employees. These are the things that success is made of.

I would love to hear how your company keeps your employees motivated. Please email me your ideas at alicia@somametrics.com.  I will compile these to share in a future post.

The Best Coaching Session

The best coaching session that my team had was when I was the Director of Inside Sales at an educational software company.  One day, out of the blue, the CEO called me to ask if he could “coach” 4 of my Inside Sales team members.  He wanted me to select two top producers and two under-performing team members.  His plan was to spend 1 hour with each Rep.

He did 3 things that made for a great learning experience for my team and a lasting impression for me, as a manager.

  1. Lead by example.  The CEO started each of the sessions by making phone calls.  He wanted each team member to see how he approached a first call with decision makers.  He didn’t let any of the prospects know that he was the CEO.  He made several calls, while the Inside Rep took notes.  After the first few calls, the Inside Rep was given the opportunity to make calls.  Back and forth this process went, for the entire hour.
  2. Have a goal for your session.  The goal for each team member and the CEO was to generate a meeting/ further conversation with the prospect to uncover need and interest.  The CEO threw down the gauntlet.  Who would get the most meetings, during the hour coaching session?  The CEO beat only 1 team member.
  3. Make it “win-win”.  The purpose of the coaching session was to give the CEO a better understanding of the challenges that the Inside team faced, every day.  He also provided team members with insights on how they might improve their messaging and responses to questions. At the end of the coaching period, the CEO came to my office and told me that he learned a lot:
    1. He didn’t realize how difficult it was to get to decision makers on the phone and the number of dials it took to do so.
    2. The team was far more advanced and knowledgeable than he had imagined.
    3. The energy and spirit of the team was very positive and supportive.
    4. He thoroughly enjoyed the session and if time permitted, he would come back.

I asked the team members how they felt about the session.  Hands down – everyone loved it.  While, initially they were nervous, by the end they felt like they had learned from the top sales guy at the company.  They also felt appreciated and understood.

Coaching sessions should be about improving performance and upping the game.  They should motivate and thrill team members.  Establish the goal of the coaching session, lead the team by example and plan to be amazed by your team.  This will be a “win-win” process for everyone involved.

The Perfect Compensation Plan

predictable revenue growth

Driving Sales Funnel growth, meeting revenue objectives, and getting sales teams to meet or exceed sales metrics are among the many challenges faced by our clients. Quite often, these problems are self-inflicted. Large salaries and commissions provide little incentive for sales teams to achieve the metrics that drive Sales Funnel and revenue growth.

In order to meet your targets, you need to introduce a compensation plan that encourages the appropriate behavior and provides the right incentives for your team to work towards their goal. Key Performance Indicators (KPIs) are the activities that drive Sales Funnel and revenue growth.  KPIs that fail to be established or met, will result in a loss for your target revenue. Example KPIs for Inside Sales might include:

  • Key conversations with prospects that establish pain & fit. Without frequent conversations with prospects, there will not be enough activity to grow the sales funnel.
  • A Sales funnel that is in excess of 3X the revenue objective.  We suggest that clients analyze the sales funnel activity from the past 3-6 months to determine their closing ratios.  Some of our clients have only required a sales funnel of 1.5X their revenue objective, while others have needed a funnel of 5X, to ensure that their targets were met.
  • A pre-established number of demos.  We suggest that our clients determine the ratio of demo presentations to closed deals, to establish this metric.  One of our clients found that 75% of demo presentations generated closed deals.  For this specific client, demos were very important and became a top metric for their Inside Sales team.

What is the best way to ensure that team members meet or exceed their KPIs? Fifteen years of experience and association with over 100 companies, has led us to this answer. The answer: Build a compensation plan with three distinct components: Base Pay, Performance Bonus, and Commission.

Three Components of a Perfect Compensation Plan

  1. Base Pay: Companies with a high base salary often have poor performance within their sales teams. Base salary should accommodate a decent quality of life within said region. Base Salary should not be able to provide “luxury” items, keeping incentive for the team to meet their established KPIs.
  1. Performance Bonus: Compensation plans must provide a pay-for-performance component to encourage appropriate team behavior.

For example: if the monthly KPIs include a specific number of Key Conversations, Sales Funnel growth, and Demos, the representatives should receive a monthly performance bonus for meeting or exceeding these established KPIs. Performance bonuses work very well to ensure that KPIs are met.

  1. Commission: Commission should reflect the achievement of KPIs.

For example: suppose that 5% is the highest commission rate given at 100% of quota.  If a team member has met 100% of quota and 100% of their KPIs, they should receive the highest commission rate.  If not, the commission rate should reflect their achievement of quota and established KPIs.

Appropriate “Selling” behaviors develop when compensation plans are structured around KPIs and Sales Funnel growth.

Improve Corporate Culture by Elevating the Morale of Your Sr. Executives

improve corporate culture and increase morale

Many of the companies that we have been asked to “turn-around” had executive teams that were without hope.  Despair and lack of faith were the emotions of the day, resulting in a missing sense of community and a negative corporate culture.  These executives couldn’t see a way out and had no vision for the future.

Recently, I was asked to do a GAP audit (Growth, Accountability and Performance) for one of our clients.  The CEO was at his wits end with the numerous challenges that he had to address.  Some of his challenges included:

  • A “me-too” product that was launched very late in the game and without key features that would make it a compelling solution
  • An ineffective Sr. Management team whose focus was on what the other guy wasn’t doing leading to an eroding corporate culture
  • A sales funnel that wasn’t nearly large enough to support the company’s revenue objectives
  • A non-existent strategy for developing the sales funnel
  • The perception of an “in-crowd”. Every senior manager felt like the CEO was favoring the “other guys”

The atmosphere at the company was so bad it was palpable.  The senior management team was without hope and no one on the team could share with me their thoughts for improving the situation.  Team members were in a state of panic. Corporate culture was basically non-existent.

When there is no hope, it is difficult to get out of a bad situation.  When communication breaks down, there is no way to have meaningful discussions.  When team members view each other as the enemy, alignment of thought is almost impossible.

Here are 8 things that you can do to massively improve morale and turn your company into a successful, high-performance, high-energy culture of respect and success:

  1. Admit that there is a problem.  Burying your head in the sand while this negative activity continues will not help you improve your corporate culture.  If you have a lot of finger-pointing and bad vibes amongst your team, you need to nip it in the bud and now.
  2. Find a conference room that you can spare for 6-8 weeks.  This room will become your success room; much like the cabinet war rooms that Churchill and his team operated during World War II.  I refer to this space as your success room, because this is the place that your team will use to map out a turn-around strategy.  The success room is the place where your senior managers will meet, twice a day, to hash out the issues and map out a recovery plan.  This room should be available only for this team and for the period of time outlined.
  3. On the first day, have your Success Team map out all of their complaints, grumblings, upsets and write these on the white board.  I highly recommend that you use an outside facilitator to help coach your team through this difficult process, as this allows objectivity and avoids accusations of ‘favoring’.
  4. Once all of your key issues have been identified and listed on the board, use brainstorming sessions to outline possible solutions to each of the problems.  Everyone on the team needs to be part of these sessions throughout the time allotted.
  5. Once you have identified your Goals, Objectives and Strategies, assign team members tasks that will move your company out of the problem(s) and into a viable solution(s).  There will be many tasks, as you uncover the issues.  Make sure that the tasks are broken into do-able daily, weekly, monthly and quarterly chunks.  Highlight the tasks, as they are completed.  Everyone will need to assume responsibility for achieving their tasks on time.  If a task is going to slip, the person responsible should let everyone know, ASAP.  The team should ask why the task(s) can’t be completed on time.  Perhaps they need additional resources (brainstorm on how to get these) or more information (brainstorm on where to gather this information).   Whatever the case, there will be no hiding out.  Get the information to the team and resolve the issue with the team.
  6. Have each team member write down what they appreciate about your company’s corporate culture and each of their team members.  You can do this on the board or distribute “thank-you” cards for each team member, so they know that they are valued by their colleagues.  While this may sound like a silly exercise, it does work.  When people feel appreciated, even a bit, it frees their energy so that they can focus.
  7. Hold 2 success room sessions each day, for the period allotted (I recommend a period of 4-8+ weeks).  In the morning, meet to ensure that everyone is in alignment with the plan and discuss items that need to change or be moved out to a later date, as above. During the afternoon session, ask team members to list any challenges or issues that may keep them from being successful.  Some of your strategies may need to be re-worked.  That’s ok.  Be willing to keep going until you get it right.  The more your team effectively communicates with each other, the better the communication will become.
  8. Make everyone in the room responsible for sales.  Revenue can’t happen if the product isn’t right or if there isn’t enough demand generation to build a viable sales funnel.  Revenues will be lost if customers move away from your company to your competitors.  Everyone needs to have an idea of how you will hit or exceed your quotas.  Everyone must contribute to supporting the Head of Sales to ensure that the company meets its growth goals.

This process will be tough going at first.  Over the weeks and months (hopefully no more that 2 or 3 months) your team will learn to trust each other, communicate more effectively and take responsibility for making a positive contribution to your company.  The uplift in atmosphere will improve your corporate culture, thus elevating moral and productivity. Where there is hope and energy, there is fire.  That fire will transform your company’s corporate culture.

Read about the importance of accountable leadership in a high-performance culture.

Sales Performance Incentive Funds (SPIFs)

Business man giving a thumbs up for es Performance Inventive Funds(SPIFs)

Sales Performance Inventive Funds (SPIFs) are a great way for Sales Management to motivate their teams. A SPIF is a bonus, paid to Teleprospecting and Sales teams for their achievement of specific goals. SPIFs are paid separately from the commission plan, and can be used to drive specific behavior or achieve specific goals.

In my experience, I was given a specific SPIF budget ($900-$1,200) per quarter and asked to determine the areas that required improvement. Having identified the issues, I would assign a SPIF day and week(s), and gather the team to focus on the issue that requires attention.

Done correctly, SPIFs are a great way to re-energize teams and shift their focus from daily, tedious work. Teleprospectors carry out 50-100 dials per day. Many times they are received with rejection. Team success and confidence can degrade over time. SPIFs create a competitive atmosphere, as spot bonuses are distributed when each objective is reached.

SPIFs are also effective training methods, with team members competing against each other, while collaborating skills and experience.

My most effective SPIFs have aimed to improve the following Key Performance Indicators (KPIs):

  • C-Level /Key Decision Maker Conversations:  These are the conversations that a Teleprospector has with a C-Level Executive or a person who is a key decision maker.  Conversations with these prospects tend to improve the quality of leads.  These are the people who understand the issues and can provide the best insights into their needs and pain.  These leads are most valued by Sales Reps.
  • Teleprospecting Funnel: Effective Teleprospecting teams are assigned a monthly lead quota.  In order to achieve this quota, they will need a list of “potential leads”.  These potential leads may have some of the qualification criteria.  They, however, are not quite ready to turn over to sales.  For example, if the lead quota is 8 per Teleprospector, per month, the list of Potential Leads should be around 3X that number of 24, to ensure that 8 will be turned over to Sales by month end.
  • Key Conversations:  A Key Conversation is a conversation with a person who can provide insights and answer the basic qualification questions that are required to make a lead qualified.  The more Key Conversations a Teleprospector has, the more likely they will meet their monthly lead quota.

While dials are important – Teleprospecting is a telephone job – they are not directly responsible for Sales Funnel and revenue growth.  KPIs such as C-Level conversations, Teleprospecting Funnel size and Key Conversations have a more direct impact on lead quality and sales funnel growth.  I have, however, used a “Dial-Ramp” SPIF when team dials have dropped by 25-30%. Power-dial days show the team how making more dials can dramatically impact their KPIs.

Make a big deal out of your SPIF days.  Create a flyer to announce the SPIF goals and objectives, the rules and hours of “play”.  If your budget allows, bring in lunch and take a team lunch break to enable them to share their experiences and early results. I recommend that small bonus amounts, for specific objectives, be paid out hourly.  For example, every hour set a Key Conversation goal.  The first person to meet that hourly goal would receive a $50 bonus.  Then at day’s end, have a big celebration, to celebrate the winners of the hourly bonuses and announce the over-all winner for the day.

The rhythm of your SPIFs will depend on team morale and performance issues.  SPIFs shouldn’t be the norm.  Rather, they should be used to re-energize the team and improve specific areas of performance.

Read about how to elevate the morale of your team by improving corporate culture.

Sales Management: How to Refocus Complainers at work to be Positive

complainers at work

As I sat at my desk browsing LinkedIn, I came across a Slideshare that was funny and clever and made me laugh out loud. It was about people who complain at work but let me tell you, for Managers, complainers are not fun. Complainers at work can suck the positive energy out of a team and bring morale down in a flash. This is where it is essential for good Sales Management to step in. Here are 6 strategies that I have personally used to refocus complainers at work to get them back on track:

  1. Let them vent. Set up a meeting with your complainers and let them tell you their perspectives about everything that’s wrong with the job. Let them vent about their frustrations and write their complaints down on your whiteboard. Review their complaints and ask the complainers to prioritize the most important issues. Let them know that you believe that there is a solution to every problem (which there is) and you will work with them to resolve the issues to the best of your ability.
  1. Select the top 2-3 issues and create task forces to address these issues. Each task force should be comprised of a group of 3-5 team members. Give the complainers at work a leadership role on some or all of the task forces. The goal of the task force is to brainstorm to find a solution. After the brainstorm session, weed out the ideas that aren’t viable and build a plan around the viable solutions. Present the solutions to the senior executives who, ultimately, will need to approve the plan.
  1. Tell your team to bring their complaints and solutions to you. Once your team sees that you are open to finding solutions to their issues (perhaps you’ll need to run several task forces to build trust), let your team know that you will listen to their complaints and work with the team to find workable solutions.
  1. Create a solutions board. Set up a whiteboard in the team area. This board is a place for team members to outline issues and possible solutions. Once a week, meet your team at the board and review issues and solutions. Prioritize the issues and create a plan (and maybe a task force) to resolve the issues.
  1. Personal complaints need HR support. If your team member is spreading rumors, gossiping about others, or is randomly ranting about unspecified “things,” I recommend that you work with HR to come up with some team building exercises to rebuild morale. When people meet outside of the office, they may gain a new perspective about the people or person that they think they dislike. Set an example of respect and make sure that you respect every team member and show it. Make it clear that every team member is to be treated with respect and dignity.
  1. Hold a team appreciation day. Set aside one day where everyone on the team is appreciated. During the appreciation day, get a big thank you card for each team member. Pass the cards around so that everyone can write statements of appreciation for each team member. If you have 5 team members, you’ll need 5 cards, for example. At the end of the day, each person gets their card. Each person has to think of a positive aspect to write about each team member so once team members receive their cards, they will understand that they are appreciated. This is a very powerful exercise and I have seen amazing results while applying this process.

If the complainers at work are under-performers, take time to provide additional training and support. It is the Manager’s job to help team members meet performance objectives, so ask them to outline where they feel like they need support to grow and provide them with constructive feedback. Good Sales Management means realizing that sometimes complainers need more attention. The additional training and support will help them to be more effective. With this approach, their complaints may decrease as their performance improves. If you work with your team and give them opportunities to find solutions, your complainers will feel valued and see fewer reasons to complain. We are all just people and you need these people (your team) to meet your objectives. In short, “you are all in this together.” Value your team and they will value you and the job!

 

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