Initial Core Identification of Problems in Your Sales Organization
Is poor performance always the fault of the sales people?
As we began a new sales turnaround assignment, the performance metrics illustrated that inconsistency was the consistent theme. In reviewing a graphically illustrated chart of individual sales performance, one thing that stood out with this group was that nearly all reps exhibited a yo-yo pattern of week to week sales results. This was not only the case with the lowest performing sales reps, but with the top performing reps as well.
Observing inconsistency in underperforming sales teams is not unusual per se, but when this inconsistency is prevalent with everyone including the top sales reps it is a reason to dig for deeper understanding. There could be many reasons for this phenomena including:
• The sales compensation plan does not sufficiently incentivize reps to keep their foot on the gas from bell to bell
• There is an overall lack of motivation within the team
• A fluctuation in the incoming lead flow
• The sales reporting period is too long which leads to complacency
• A lack of conviction or belief in the value proposition of the product
As a sales implementation turnaround consultant, we typically only have ninety days to get the ship back on course and accelerated to full speed. Time is the enemy. We can’t afford to spend an inordinate amount of time peeling back the layers of the onion one layer at a time.
So, how did we quickly identify the core of the inconsistency issue?
We threw a pile of cash at the reps for two consecutive weeks and witnessed the results.
It was a tiered cash incentive so the more that they exceeded the target objective, they retroactively were paid more for each sale. So you probably want to know, “Why was that the right move under these circumstances?”
The key metric in this exercise was the inconsistency of the best sales reps on the team. When the best sales reps have the ability to significantly increase their earnings when selling a short sales cycle product, they will give you their best effort. Top reps never leave cash on the table.
The result? Sales stayed essentially the same for the sales division. One week, half of the top reps increased their sales above their YTD average. The next week, pretty much the other half of the reps accomplished this feat; meanwhile the first week performer’s sales declined.
Huh? There was a significant cash incentive available for sales people and the division’s sales did not increase? How was that a win for the company?
Sometimes in a sales turnaround, the value of a specific incentive or sales promotion is not measured in dollars and cents.
In this case, the value was information…the rapid discovery of a major issue affecting sales performance. If we had not done this, months could have been spent trying to identify the problem with any degree of certainty. So, what information did the results of this incentive reveal?
1. We could eliminate the question of whether or not the sales compensation plan was lacking the financial incentive for them to sell strong each day. The sales contest circumvented the normal comp plan by providing a focus on an immediate cash payoff; yet, sales did not increase.
2. The issue was not motivation. Cash payoffs are a horrible way to motivate a sales team on a long-term basis. But, on a short-term basis, money talks and should provide an artificial stimulus to motivate the sales force…especially the top reps.
3. The fluctuation was not the result of deviation in lead flow. We insured that the incoming leads maintained constant during this period.
4. By having two one-week sales contests, we created one-week sales reporting periods. Therefore, we eliminated the length of the reporting period as an issue.
The issue turned out to be a lack of conviction and belief in their product. If the rainmakers of the division had a deep conviction regarding the value proposition of their product, the financial incentives would have pushed them to close harder and increase their sales. What we uncovered was that the high number of customer complaints and cancellations had shaken the reps confidence in the value of their products. The back-end fulfillment was producing a poor performing product within many verticals, and the breadth of prospects that the reps felt could be positively impacted by their offering continued to narrow.
We essentially used this financial incentive to quickly uncover a psychological issue that was leading to poor and inconsistent results. This sort of sales behavioral psychology is regarded by management gurus and academia as “soft values”, and not given much attention in sales operations management. It is hard to identify, and even more difficult to quantifiably measure its impact.
We had already conducted numerous skip-level meetings (Check out our article on skip-level meetings), and the depth of fulfillment’s contribution to the sales problem barely surfaced. Using a traditional approach to behavioral analysis, it could have taken several months to legitimize this issue. Instead, we were able to reveal it in less than two weeks. To learn more about our approach to sales growth through behavioral psychology, you may want to read our article, “Are KPI’s Killing Your Sales Organization?”
It is fair to ask why, if the product was so bad, could the reps sell this product at all?
Why could they sell it in spurts of inconsistency? The answer is that certain verticals were getting a higher quality product produced, and were much more pleased with the results. Therefore, when the reps received leads within certain verticals, they were able to back it with their own personal conviction and belief in the product. The difference in their tone and attitude between the good verticals and the bad was palpable. Once the sales force became confident in their value proposition, the sales increased and the inconsistency was no longer an issue.
Belief is a powerful tool, and the most overlooked value in sales performance.
ALL major achievements begin with the belief that it can be done. It has landed a man on the moon, broken the sound barrier, and even allowed us to make telephone calls without wires. Without first having the belief and conviction that it could be achieved, none of this would have been accomplished.
Making sales is no different. It all begins and ends with belief by a sales rep. Both in the belief that they can help the customer and, more importantly, the belief that they can do it!
Posted June 29, 2013 / By Chris Hickey
Tags: sales consulting, sales consultant, sales leadership, sales turnaround, turnaround management, sales management, sales management training, sales management coaching, sales operations, interim sales management, sales force effectiveness, sales coaching, sales strategy
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