When the no brainer is full of risk.

I have spoken to some companies recently who are considering the appointment of salespeople to work on a commission only basis. In the current climate and from a client perspective, this appears almost a no brainer. After all, as you pay only for results, how can you lose?

In one instance, having decided to appoint someone on a pure commission basis the client asked me to call him again in a month “in case it doesn’t work out and we have to go the salaried route”. This got me thinking that in several years of recruiting sales people I have never had a conversation where the client believes there is a realistic chance of it failing inside a month. In order to make an informed choice as to whether or not to go this route, there are a number of key points to consider:

1. Are you certain that you are applying the same rigorous selection process as when the role is offered with a full benefits package? As you are not paying salary, pension, and car allowance etc is there a chance that you are lowering the quality bar? And, if so, how could this impact on your business?

Ultimately, it’s best to base the selection criteria purely on the salesperson’s track record and view package as part of the decision, not the guiding principle. After all, it’s no consolation to hire someone cheaply that can’t do the job. In addition, if the person is prepared to effectively work for free, what does that say about their sense of self image and negotiating skills, both key parts of a successful sales person’s make up?

2. So, when is a good time to use the commission only approach? When is it expected to succeed, rather than being a purely cost based decision?
The answer is when the role is at a transaction level;there is already big demand for the product, service and brand,it’s an established market sector: typically in high growth phase in terms of product life cycle, good margins are being achieved, although they are coming under increasing pressure from competitors, and there is a race on for market share. A good salesperson can see how they could make money quickly and enjoy success.

3. Does this also mean there are also circumstances where commission only is
unlikely to work?
The answer is Yes. A scenario where the role is to take a new product or service to market, there’s limited brand or company awareness and to really raise the risk, the hiring company is also a start up.

In reality, this is not so much a sales job as a one person business development,marketing and sales team. There is a significant piece of work to be done in terms of market education and awareness raising before any selling can be done. The likelihood of the salesperson losing interest along the way is extremely high, leaving the client back at square one.

So if you are thinking of commission only sales hiring ask;
Is it to meet SALES DEMAND that you need help with, or is it DEMAND CREATION that is the priority?

The answer to this question could make all the difference………..

More with less hits the sales team

You know that saying "what goes around comes around"? For years IT suppliers have been leveraging the “more with less” challenge faced by corporate IT departments. Now IT budgets are being cut, with projects being delayed and cancelled on an unprecedented scale.

From a sales team perspective, there are only two options. Stay stuck in the headlamps, don’t change anything, hope it passes quickly and maybe manage to hold on to our jobs (not recommended). A more proactive approach is to accept that as IT spend is down, we all need to fight even harder to win a larger percentage of the smaller spend.

Once we have established that our messaging is optimised for the current market place, we need to maintain the quality of our prospecting and lead generation activities and at the same time increase the quantity of opportunities uncovered
to counter the drop in IT investment. However we win our business and whatever the split is between existing and new clients, we can back calculate the ratios required to uncover say 25% more leads on a per salesperson/team/company basis from the last 6 months prospecting activity.

I mean you do keep this information, don’t you?

Ever had a CERTAIN SALE just disappear?

You know the scenario. The sales campaign starts really well and the prospect is full of enthusiasm and good intent. It's only a matter of time you tell yourself (and then your manager), before we close this one. Now they won't take your calls. Don't reply to your emails. It's all gone very cold.

How can this be avoided?

It's a huge topic, but a few pointers that might help are:

1. Always have at least 3 contacts (ideally more) in each account.

2. Get access to people at different levels in the organisation.

3. Also, try for different departments or parts of the business.

4. Have a different message prepared based on who you are selling to. After all, you wouldn't use the same arguments with the Operations Manager as with the CTO, would you?

5. Always base your judgement on the chances of the deal happening on what the prospect DOES and NOT what they say.

6. Never stop qualifying and testing for commitment.

As I said, it's a huge topic but hopefully you can see the risks of NOT doing this?

3 ways to deal with falling sales - which would you choose?

In the current climate, there just isn't enough business around for everyone to make their numbers for 2009. That's why you need a cunning plan.

Option 1.
Ignore it. The media hype these things up anyway. We'll be okay, it's just a slow period and things will pick up soon. Just get your head down and keep your chin up. Where are my happy ears and rose tinted specs anyway?

Option 2
Change some of your sales people. After all, there are lots of people out there who have been let go and we can even save ourselves the recruitment fees. Some of the current sales team don't have the profile required to take this value proposition to market. (Some points to ponder: Did you consider this before hiring the people you are now replacing? If you did and are using the same process this time, can you really expect a different outcome?).

There are some excellent salespeople available on the market, but is the best approach really to look for people who aren't currently working? Or would it be better to really tie down what's required in terms of knowledge, skill and behaviour in each role? Then set about finding the BEST person for each role. However, they will invariably be more difficult to tempt in the current market, certainly more expensive than someone who isn't working and almost inevitably present less business risk.

Or you could end up in a worse position than you are already in. Less time available and even further behind target.

Option 3
Take some time to understand WHY sales are not where we need them to be. What are the underlying causes? Assuming that no two organisations can have an identical experience, what is it about your organisation and its behaviour in the market that is resulting in the current sales performance?

Let's drill down a little…..by product line or service, by region, team, salesperson, industry sector, customer, sales channel used. Let's look at average win rate, time from engagement to decision, forecast accuracy etc. This could mean looking at your pricing policy, distribution strategy, sales competence or reporting systems or a myriad of other things. How are your competitors performing? Any specific trends we can identify re- size of competitor, sales model, marketing tactics? What can we learn and reuse?

There are many variables that could be contributing to the outcome. Why not start drilling down into these and spotting the trends and indicators that will enable us to make some adjustments based on actual evidence, to drive us forward? The good news is that it's all based on actual evidence from your market as of today.

Somewhere in all that data we will find the right answers, if we know where to look.

Would you like an open door to your ideal prospect?

Are you are taking a new product or service to market?

Within your target market, have you identified who the decision makers and influencers are in each organisation? Do they report into different departments? Maybe some are in IT, Procurement and line of business roles. How are they measured internally for their own contribution to the business? The key is to get this insight.

Once we know how are target contacts are measured, compensated and promoted, we can start to think about how our solution helps them to deliver and to protect and enhance their own positions. In other words, we can focus on their challenges and help them to achieve them.

Isn't win/win selling ALWAYS the best way?

Why doing the RIGHT things in the WRONG sales campaigns won't help you

What do you think is the biggest waste of a salesperson's time?

Admin, travel, sales meetings? No, it is the sales campaigns that are lost - those situations where the prospect either does nothing, or buys an alternative product or service. Either way you lose out, as you have already invested time resource that you can't get back.

Most of the advice on improving sales is based on what to do once you have started a sales campaign. In other words, you are at the point where you have convinced yourself there is a realistic chance of doing business with the prospect.

So, on what basis have you reached this conclusion? Are you sure you are talking to the right person? If you don't have access to the final decision maker, or there is no budget available, or the company is in financial trouble, it doesn't matter what you do, you are unlikely to sell to them. And finding these things out later leads to a long, painful and ultimately fruitless campaign.

It gets worse. Whilst you've been talking to this time consuming non- buyer, how many real opportunities have you missed? You could have been engaged with prospects that are at the centre of your sweet spot. The type who tick all your boxes in terms of what you look for in a prospect. The problem is that once you are engaged with a few, poorly qualified prospects your sales revenue has declined along with your enthusiasm and belief. You now have less time to deliver your target. And you are beginning to question your judgement.

So, what can you do to avoid this scenario? Be REALLY clear about your target market, basing this on objective, business level benefits that can be communicated in clear language. After all, if you are not sure why they should buy your "stuff" what chance has the prospect got?

If you have a list of existing customers, start by asking yourself and your clients the following: WHY did they decide to buy from you? Go beyond the obvious and predictable to discover where the real value lies. You will usually find that you are either saving them money or making them money (ideally both) and that this can be substantiated with a return on investment of less than 12 months.

To put it another way, what you have delivered has created true business value within their organisation. Your solution will have made their organisation more efficient, effective, and profitable. In addition, you have raised the profile in their organisation of your main contact, as he or she is intrinsically linked to this successful decision. This could be good for their future promotion prospects and also, an ideal position from which you can both explore potential opportunities.

Alternatively, if you are taking a brand new concept to market and looking for your first customers, you need to talk to your senior managers and if possible, the investors behind the project. Ask them why they believe there is a market for this and what do they base this belief on? What are the current options for the target market? Who are the main players at present? How successful are they at present? How do they communicate value?

You get the point. Before launching off into sales mode, take some time to assess what you are really looking for in an ideal prospect. Once you have this defined, use it as a benchmark for how much time and effort you invest with prospects initially. The further they are from your ideal, the firmer you should be in the qualification phase. Beware of people who are happy to talk but have no real authority or buying power. Qualifying early and hard on an ongoing basis is the best way to ensure that you don't waste valuable time on window shoppers or tyre kickers. Yes, make to them and keep them informed of your offerings, but make sure you spend your prime time with qualified prospects only.

40% of sales people WON'T hit target this year

Not just this year, but ANY year. This is a fact. It's based on a 10 year study of actual sales productivity and performance. So, what can businesses do to optimise sales and profits?

Well, the good news is that there are only ever 2 challenges in sales. They are both biggie's though.

The first is to ask; Are we finding enough qualified sales opportunities?
Is your sales proposition clear and concise?
What are the compelling reasons for your target market to buy your solution?
Can you prove this with a ROI/ TCO (return on investment or total cost of ownership), business case?

.....and a host of other related points.

The second question is; Are we winning enough of the opportunities we are finding?
What ratio of sales bids,proposals or quotations did we win last year, quarter, month?
When we lose business to our competitors, what reasons are we given, when we conduct loss analysis reviews?
On average, how long does it take to develop a prospective buyer from initial contact to signed agreement?

again, there are lots of things to add to this list, but you get the point?