This is the last in the series of four blogs on sales compensation; the hybrid or combination model. As a quick review we covered:

• Aligning your selected compensation plan with management's goals and the sales professional's day to day activities.
• Ensuring reinforcement comes as close to the desired sales behavior as possible.
• The strengths and weaknesses of the 100% base and 100% commission models.

Previously we covered frustration with sales compensation and the constant search for the perfect program.The last blog reviewed 100% base pay as an ineffective model to motivate sales professionals.

Now let's examine 100% commission, as the perceived end all for the "real" sales professional, basically this model is an urban myth!

One of my favorite talk shows is William Shatner's , Raw Nerve. The other day I was watching him interview Gene Simmons of KISS fame. I didn't realize the meager background Gene came from, much less some of his philosophical underpinnings.

Two things struck me about the interview.

Our first blog covered the all too frequent dissatisfaction employers, managers and sales people have with their compensation. This  generally results in a holy grail search for the perfect compensation plan to motivate sales professionals, yet not break the bank.

The three basic compensation plan are:

1. Base Pay
2. 100% Commission
3. Hybrid (combination of both)

After spending  25 years in corporate America there was one thing I found as predictable as death and taxes; dissatisfaction with sales compensation plans.

Inevitably, senior management was worried that some sales professionals or teams were getting a wind fall, or the system wasn't motivating the sales people to perform as desired.

There is a great commercial for Travelers Insurance with the cute dog worrying about the safety of his precious bone, ala investment, which is keeping him up at night with the background song of Trouble by Ray La Montagne.

 

 

Recently, I was returning on a flight from Denver to Phoenix  and I struck up a conversation with a retired Komatsu (heavy equipment company) engineer. He managed the production system for years prior to his retirement.

We talked about the methodical process Komatsu went through to ensure all components of their equipment worked the way they were designed.

He asked me what I did, and I responded that we teach sales professionals to understand and use established best practiced sales processes just like he did for Kamatsu's production process. 

He gave me a very quizzical look followed by a rye smile. He then said, "Dave just like there is 'no crying in baseball', there is no process in sales!" He followed with, "you can't equate the science in setting up a sophisticated manufacturing process with the cavalier nature of sales." 

I was golfing with a client in the typical business scramble and the twosome we were playing against was having a little trouble. They started to try  and change their respective swings in mid round. My client said something very profound, "if they didn't bring it with them they won't find it here!"

We ended up winning the round. I thought about how true my client's statement was, preparation is everthing in business, sales and life.

I had just finished reading Lou Holtz's book, Wins, Losses and Lessons, his autobiography and the theme of preparation wins the day was  repeatedly underscored.

Closing a sales deal starts with hard preparation and practice. In order for preparation and practice to be effective there needs to be a  consistent process to follow.

As a result just like Lou Holtz preparing for everyy game like it was for the "national championship", as sales professionals...

While working with a client at their sale's meeting a sales professional said he was getting frustrated because the prospect would not return his email and voice mails, and wondered if he should stop trying.

The sales professional met the prospect at a trade show and he had agreed to subsequent contacts.The account was appealing  and targeted by management  and was considered a very desirable client.

During the discussion by his fellow sales professionals ideas were offered as potential solutions:

Call the receptionist seeking help looking for a more effective way to contact the person. Stop by the prospects office and inquire about the best way to contact him, sighting your efforts to date. Send a registered letter to the person asking for a meeting to follow up on the trade show introduction. Send a registered letter with a memory stick...

Time and time again we walk into clients and hear moaning and groaning from end users that the system is too complex, or it takes up too much time, and I get frustrated and then just don't put my stuff into the system. As CRM solutions and technology have advanced many of these hurdles have and are being overcome.

Today's technology allows you to customized and change the out of the box CRM versions to work with your process flow; however, over the past 15 years we have seen many of the sales professionals 'winers'  that are typically of an older generation or those who have not been formally been trained on use of computers or have never had the accountability or responsibility to have to use one.

One of our very successful customers, who is in his upper 60's still jokes that cell phones are still not going to catch on. However, he has recognized that he must adapt his organization and give his sales team the tools they need in order to make quick decisions as well as allowing himself to see the macro...

My wife and I live in Phoenix and enjoy hiking in the desert. A couple of weeks ago we were hiking the Superstition Mountains, the legendary location of the “Lost Dutchman’s “mine.

We met an old prospector right out of 1849 panning for gold oil painting. We struck up a conversation and I asked why he did it?  He said, he loved it, been doing it all his life and made a decent living at it.

After our hike, I thought what a great lesson for sales people today to recognize that “sales prospecting” is a way of life, it’s actually the first thing that happens before a sale is even made.

Find those streams of prospects, pan for nuggets they will lead you to the “mother lode”. Doing it consistently, using best practice methods and adding an element of passion and world class selling results will follow. Review your db, CRM tracking system, and make it standard policy...

The other day I was attending a network event when a sales professional stated his business was way off, the phones just stopped ringing, and his commissions were drying up fast.

He inquired if I could help him?

I asked, “How much time did he spend prospecting each week?”

He said,  “Maybe an hour on Friday afternoons, my important work for the week has been completed.”

I explain he had his priorities misaligned and he needed to put prospecting had the head of list each week. I suggested he set in his Outlook calendar or Google calendar a block of specific time and day that is sacred with no interruptions. Do not answer incoming calls, respond to emails, answer your door – just hunker down and prospect.

In today’s market place sales professionals must spend 20 – 50% of their waking hours filling their pipe line with new leads that turn into appointments and eventually become full fledge prospects and ultimately result in a sale.

There is no easy way around it!

If...

I’m sure you have heard, “that person is a natural born sales professional!”

In many of our engagements over the last two years we hear sales professionals complain “the old days are gone it’s all about price!”

Price has never been excluded from the equation. Perhaps there was a little less emphasis in the past, but always lurking near the surface.

Although we are in the most difficult economy in our lifetime hasn’t it always been about price, value and relationships?

Sales professionals can become pessimistic allowing the customer and themselves to obsess over price. World class sales professionals continue to dig deep and wide looking for opportunities to creatively bring value, innovation, cost reduction, and relationships to the sales process.

As owners, sales managers, and sales professionals we must all look introspectively and resist the tendency to fall prey to the price mantra.

Do you believe in your goods or services? If so challenge yourself to find the differentiators. Price will has always been and will always remain relative

...

Generating leads and following up on them is a tedious job yet a fundamental requirement for world class sales performance. Warm leads are precious and the process to turn them into initial appointments and true prospects needs to be consistent.

As the CEO or VP of Sales are you aware of the number of leads your sales people process each day, week, or month? Can you identify where the leads come from and how timely they are followed up on?

Statistics demonstrate that all too often sales people do not have enough leads at any one point in time to keep the pipeline filled; thus they have gaps or voids in the flow of legitimate prospects. Another critical issue is frequently sales professionals don’t follow up on “hot” leads in a timely fashion and loose the majority to competition.

Keeping your sales force focused on consistently generating leads and tracking their status via a CRM is one of the single most important task management can provide.

...

There is an off stated myth that successful sales professionals are lone rangers by nature and don’t respond to the structure a highly performing sales team has to offer.

Managing a super star much less a group of lone rangers or rain makers can be a thankless and frustrating affair. Generally speaking these situations only advance the individual sales person and sub-optimize the total interest of the company.

Often managers get roped into believing: I’ll just let my superstar do whatever because they generate results. This is short term thinking and death to a high performing sales culture.

The highest performing companies are those who cultivate an elite world class selling mentality that reveres and respects the sales professional and constantly underscores their worth to an enterprise.

To optimize the company, sales team and individual sales professional here are a few hints:

Develop team & individual goals. Create a culture where high performers are rewarded &...

 

Last week I presented at a senior executive forum in metro Phoenix. During the discussion the principle of ethics in business and the sales process was raised.



One of my mentors and highly regarded business associates posed the notion that part of the current business dilemma we are experiencing today, has to do with unbridled greed and unethical business practices.

Possibly a subject left to discuss when times are better?

Doing the right thing is not restricted to when the timing is right, but rather a pattern of behavior honed over years of understanding the ethics and standards we follow in our society.

Without getting too preachy, I would suggest each of us examine our own sales process and reestablish the values, rules, and practices we as leaders convey to our entire enterprise.

 We often give sales professionals great latitude in dealing with customers and prospects, reconnecting them with your ethical foundation is the right thing to do and good...

A couple of months ago my two sons’ and daughter urged me to remain “relevant” by being connected to Facebook, LinkedIn and other social networking offerings.

After an initial defensive response, I pondered their observation and deduced we all must keep moving ahead never accepting the status quo. The notion that we are not a finished product unless we say so is thought provoking!

This is thought provoking for personal as well as professional endeavors.

For owners, sales managers, and sales professionals the question is are you keeping pace?

Are you remaining relevant to the needs, wants and desires of your customers?

Does the market place offer new opportunities that “old “perceptions are preventing you from taking advantage of? 

Pose these questions to your sales team, challenge them to think out of the box, encourage them to try new approaches, keep them relevant!

Time is money!

All sales professionals have the same amount of time to sell (24hrs/7 days a week)? How they spend their precious time can make a big difference.

According to a survey conducted by CSO (Chief Sales Officer Insights) only 35.7% of the average sales person’s time is spent in face to face selling. Arguably the most important use of a sales professional’s time allocation.

Certainly there are other tasks: administration, quote preparation, generating leads, meetings, etc. that require an expenditure of time.

Are you aware and monitor where your and your team’s time is spent? Do you condone where the time is spent? Do you coach sales professionals to increase valuable face to face selling time?

One obvious area to examine is the use of technology (CRMs, laptops, cell phones, webinars, etc.) to reduce manual processes, thus increasing face to face sales time.