How to help your average seller be more successful in 2012
We often ask clients if they can name their best sales representatives or account managers. Frankly, that is generally pretty easy to do. But, can you segment your sales force into their 3 natural groups: Top-tier (best), Mid-tier (average) and Lowest-tier (challenged) categories?
We suggest that companies look at their sellers in three such performance (and developmental) groups for purposes of future planning and investment. These sales-force groups or segments can generally be described in the following terms:
- Top-tier performers—Sales representatives and professionals who consistently can be expected to deliver high-levels of both absolute and relative performance. These sellers are both highly self-motivated and directed. [The top 1/3]
- Mid-tier performers—Sales representatives who provide adequate performance considering market circumstances. From time-to-time they seem highly motivated but you can never be sure whether they are on “their game” when it is needed. These are your average performers. You know they are capable of more. [The middle 1/3]
- Lowest-tier performers—Sales representatives who are consistently operating below expectations based upon any standard applied. Motivation is consistently low and it is often hard to get their attention. They often owe their continuing employment to the perceived difficulty and high cost of replacement. [The lowest 1/3]
Experience tells us that the greatest sales performance improvements can almost always be had by focusing upon the developmental and the motivational needs of the Mid-Tier, or the average seller. Can you complete the above segmentation with your own sales force? If so, stop and do it. It will make the following discussion more meaningful and useful in improving future individual and company sales performance.
2012 is a mere two months away. We believe there are a series of actions a CEO or top-sales executive can take in the coming months to make an average seller more successful in 2012. While we are focusing on the mid-tier performer, the following comments can generally (and selectively) be applied to the entirety of the sales force. We suggest four actions be taken in the next 60 days.
1. Shake Up your accounts—A sales force can become complacent and call upon the same (comfortable and unproductive) accounts, month in and month out, unless the company steps in to disrupt the “spiral.” Change this “spiral” by reassigning 5-10% of your top-level accounts for 2012. Target making account changes where sales volume is flat and accounts are seemingly unhappy or ignored—you know who they are. It may likely cause a bit more travel, but who cares? (Of course, set some limits regarding seller productivity and client relationships, but remember, without some dislocation nothing will happen.) The reassigned accounts will see a new company face with some fresh ideas and approaches, and the sales force will need to prepare for sales calls (on “new” accounts) all over again. This is a little like increasing cold calling. It is an approach that can be effective with both top- and mid-tier sellers.
2. Re-focus your sales management team to productive tasks and sellers—It is not unusual to find that sales management is spending the majority of its time attending to performance, account or employment issues that relate to its lowest-tier performers—maybe up to 3/4 of their time. Now, take a minute and go back up the page and look at our sales-force segmentation rules, definitions and ratios. Is it not reasonable for you to expect your sales management to spend the majority of its time (2/3) with the issues of the Top and Mid-tier performers in the sales force—i.e.: in sales-force planning, coaching and developing? But, the reverse is often true for pragmatic reasons. Stop this misallocation of resources immediately and refocus your sales managers to spend their time with the sellers who can deliver the highest return on the investment of manager’s time (ROI). This will clearly not happen by putting much of their energy into the Lowest-tier. [More on the Lowest-tier at the end of this discussion.]
3. Change the sales-measuring stick to “growth”—Typical sales-force performance is often measured (and incentives paid) based upon sales or a volume-related goal of some type. Turn that direction by 90º in 2012 and measure performance based upon salesgrowth—year over year. You can still use your legacy goals and goal-setting processes, but the real currency and acknowledgment for the sales force performance should become growing their portfolio of accounts over the prior year. Of course, management will assure that any sales growth achieved meets company standards for profit—or I assume you won’t book the order anyway. Now you may ask: “But, each sales territory is different and $100,000 in growth may much harder in one territory than $100,000 in another.” This is correct, but is irrelevant for 2012. You want rapid growth in 2012 and if a seller does so they are successful. [Now that begs the issue of market share, but let’s keep it simple in 2012. By the way if you do not already calculate territory market share, stay around in the coming months and Wilkening & Company will discuss the how-to’s of estimating market share.]
4. Finally, reward sellers who really grow their accounts—If you are going to focus upon growth, pay for it. We suggest a new sales-growth bonus where incremental (new) bonuses are awarded for both relative and absolute 2012 sales growth. It should be funded with “new money” that is the result of the new profit contribution resulting from sales growth (in addition to price increases). While the current sales pay plan should remain in place, we would scale it down size to highlight the importance of growth and the new growth-based bonus. The growth bonus becomes the cherry atop the sundae. For the plan to get its intended results, the math and rules should work something like the following:
- Seller with top growth gets (say) $20,000 or ½ target annual incentive;
- Next two sellers get (say) $10,000 each or ¼ target annual incentive;
- A handful of the next-performance group gets (say) $2,000 each; and
- Lower half of performers get no bonus.
We have not spoken much about the Lowest-tier performers. You know, no one speaks much about this group. They are often ignored as orphans, and that is an expensive strategy to adopt. As noted, these are generally the sellers with the lowest chance and probability of success. Training investment generally will yield a low ROI and this is the group where your sales management team is drawn to spend most of their time. If you have identified current sellers who fit into this segment, we suggest you aggressively:
- Closely watch their assigned accounts (or territories) for competitive threats;
- Find ways to off load the personnel and remediation tasks required of such performers to company specialists other than your line sales managers; and
- Build a plan to begin replacement of your worst performers—and do it starting today.
So, with 2012 approaching, take 4 steps within the next 60 days that will help your average (and other) sellers get on the road to being a better (happier) and more confident producer. And, do not forget to measure success and progress every month (or week)—make sure you are winning.