Increasing Sales Force Productivity
Maintaining a strong sales force during difficult times is where training and development organizations struggle to maintain ground, as training budgets often become the focus of cost-cutting initiatives. The right type of salesperson can be a point of differentiation that sets companies apart in a sea of commoditized, or nearly commoditized products. A salesperson who creates value with clients is an asset in a down economy.
Beyond product knowledge and a foundation of how to sell effectively, there are skills that help salespeople become more productive: prospecting, presentation skills, negotiation skills, communication skills, reaching high-level executives, writing an account plan, analyzing a customer’s business and recognizing market trends. These pieces should be part of a larger plan based on the individual’s traits as a salesperson, the needs of their clients and the business objectives of the organization.
Measuring results is important in establishing the credibility of your training initiatives for your company. Ingram Micro, a global wholesale provider of technology products and supply chain management services, uses a combination of surveys and sales data to measure the effectiveness of ongoing training initiatives for its sales team.
One of the goals of Ingram Micro’s sales training is to help associates close more profitable sales. Information gathered prior to training was crucial to setting a benchmark for comparing post-training results. Sample groups of participating associates and non-participating associates provided a basis for comparison. Post-training information determined that associates who took the training increased their sales margins.
Good training achieves two things: It gets your sales force up to speed on products and skills, and it helps indoctrinate change throughout the organization so the entire organization sells. To increase the effectiveness of training initiatives, organizations must be able to identify and enhance the team members who are mostly likely to become top performers, spending limited training dollars where they will make the greatest impact.
Your current top performers are easy to identify: They are hitting or exceeding quota. That’s the behavior of top performers. Identifying the characteristics of these top performers is more challenging. When you identify these characteristics, you can identify those who share the characteristics and develop them to become top performers. Consider a professional baseball player. It was probably recognized early on that he possessed natural talent through his behavior, but consider the characteristics that needed to be identified and developed to make him a top performer. Not everyone can be developed to be a top sales performer, just as not everyone can be developed to play in the major leagues.
Identifying the right people is just part of the solution, you also need to get your people into positions where they will have the greatest chance of success. Determining where your people will perform best is something you can control with the right tools. The HR Chally Group, a leading research and sales development firm, has documented the characteristics shared by top salespeople. They have been able to predict behavior, rather than just describing it. They also found that there is an important distinction between what a person can do and what they will do.
Knowing which salespeople are more likely to become top performers helped General Motors Service Parts Organization (GMSPO) increase the sales results of each new hire by 35 percent, an increase of $1.8 million in annual revenue per representative. GMSPO wanted to increase market share while adapting to changing customer expectations. Through a process that included dealer interviews, the company developed profiles to identify the candidates who were most likely to help meet the company’s objectives.
To help clients create solutions, salespeople need to be able to change the way they sell. Salespeople must feel confident that they have a valid reason to call a client. Sometimes, salespeople are intimidated by the thought of calling a high-level person in a prospect organization, but that’s exactly what they need to do.
The ability to listen effectively and understand a client’s business ranks high on the list of what clients want from salespeople. According to The HR Chally Group nearly 40 percent of a buyers’ decision to purchase is directly related to the effectiveness of the salesperson. This exceeds both product quality and features in ranking of importance to customers.
Salespeople must be able to prove that they understand their clients. The Principal Financial Group discovered that tenure does not guarantee a permanent relationship. The company built a 25-year relationship with a multinational account, and suddenly was faced with losing it because the client didn’t feel they were being treated with the importance they deserved. Fortunately, Principal had a top performer on the team who was able to convince the client to stay. She identified the key decision-makers and convinced them that they were valued.
The importance of salesperson effectiveness shouldn’t be surprising. Thanks to the ease of gathering information via the Internet, customers can learn what they need to know about product features online. If salespeople don’t add value, they’re wasting the client’s time.
Differentiating yourself by equipping your entire sales organization with the strategies and tactics of your top performers requires the collective involvement of multiple players, including executive management, sales management, learning departments and sales professionals themselves.
Understanding the 80/20 Rule
In most organizations, 80 percent of revenue comes from 20 percent of the sales force. Increasing that 20 percent by even a small percentage can yield dramatic results. If you have a sales force of 100 people and the right 10 people are identified and developed to reach the productivity of your top performers, your bottom line would increase by 40 percent! You can’t expect 100 percent of your sales force to perform like your top performers, but it is realistic to assume that you could take an additional 10 percent to that level of productivity.
When considering who should be included in that 10 percent, keep in mind that talent can’t be taught, but talented people can improve. It is an important distinction to remember because when you are trying to drive fast results, you want to focus your efforts on the areas that will produce the greatest returns in time and dollars.
But don’t discard your company-wide training initiatives. While everyone might not become top performers, getting your whole sales organization trained in the strategies and tactics necessary to identify and manage opportunities and build long-term customer relationships can add to the top line of your organization. It will also improve forecast accuracy, drive predictability and resource allocation.
Wells Fargo, Treasury Management, was able to accomplish just that. By integrating the right strategies and tactics, they increased forecast accuracy with an existing sales force. Now, when a sales manager presents a 90-day forecast, actual revenue is consistently within 5 percent to 10 percent of the forecast. This is attributed to focused training that helped the sales force understand the client’s buying process, define where the customer is in the buying process, understand how to get to the key decision-maker and know when decisions are going to be made.
Expanding Your Horizon
Look beyond the traditional sales role. In most organizations, there is a broad spectrum of people who influence sales and also support existing client relationships. Client services, research and development, accounting and tech support are a few examples. These are roles that touch clients in some way during their ongoing relationship with your company and help create the overall experience of what it means to do business with you. These people are as much a part of your success as the individual salespeople. But do they share the same information? Are they using the same processes and language to communicate about client relationships?
Looking outside of traditional sales roles to get your entire organization involved in the sales process can help encourage organic growth. Through slight modifications in responsibilities, and even compensation, these roles can be leveraged to support new product sales, current account penetration and referral business.
Using Different Methods
People learn in different ways and at different paces. Once you have the right people to build an exceptional sales organization, training initiatives will ensure that their natural talents are developed to help them achieve their maximum performance level.
While face-to-face workshops provide the human interaction and group dynamics necessary to truly learn and indoctrinate sales practices, advancements in e-learning are providing a solid foundation to introduce key concepts and reinforce the adoption of your top performers’ best practices. For example, recent advancements in e-learning, such as “performance simulation” from Indeliq, an education technology developer, allow participants to develop their sales effectiveness in risk-free environments, rather than practicing newly acquired skills on existing customers. Additionally, the always-on availability of a Web-based curriculum lets sales professionals learn at their own pace, location and time of day.
When using e-learning, you should provide a central go-to person who’s available to provide coaching. Some companies have even established sales development advocates who serve as trusted advisors for providing clarification of concepts and illustrate how best practices can be applied to real-world accounts.
Whether your training initiative is delivered using instructor-led workshops, online or through a blended approach, each method has strengths and must be evaluated based on the business objectives of the organization. Realistic expectations of each methods value should be established prior to implementation so success can be measured and performance evaluated. Working closely with sales management when selecting the most appropriate method will go a long way toward increasing success.
By involving sales managers in the training process, the skill gaps of your sales force can be identified, measured and met. The sales manager must become a coach. This is one of the key reasons why the most effective salespeople do not necessarily make the best managers. Even if the manager-candidate has mastered effective selling, there’s no guarantee that she can effectively coach or motivate others to follow suit.
Get your whole organization behind the initiative. There are several essential elements for building an exceptional sales organization:
- Communicate the value of the initiative from the top down prior to launch.
- Executives should “walk the talk” through ongoing use and reinforcement of the programs.
- Success is continually merchandised to create ongoing buy-in from those who are resistant to change.
- View training as an ongoing investment, not a one-time event.
- Develop effective coaches to ensure the success of the initiative.
- Ensure initiatives are driven by business demand, and success is measured by how they impact results.
The Growth Road Map
Organizations that demand a high level of quality from their sales force and put training initiatives in place to ensure that quality also establish a good reputation among prospects and clients. Salespeople who can correctly identify a customer’s real needs can more easily make the connection between the client and their solutions.
It is essential for organizations to have a road map for growth and a solid foundation to build from. It is like building a house. The construction of a house follows a well-developed blueprint, so everyone knows what role they will play in making the house come together, and the elements are added in a logical sequence so the house is built in the most efficient way. Every well-built house also starts with a solid foundation.
Training departments must develop a blueprint for the professional development of each individual that maps to business objectives. The bottom line is that all training decisions should consider how the initiative will contribute to organizational success.
Differentiating your company based on the effectiveness of your sales organization can ensure your future success in a competitive marketplace. This requires much more than the sales organization; your entire organization needs to be on board to increase sales productivity.
Sam Reese is president and CEO of Miller Heiman. His sales and marketing management career has provided a foundation for helping companies drive measurable change in their sales organizations.