What's Your Plan, Stan?

I’m paraphrasing a line from Paul Simon’s 50 Ways to Leave Your Lover, which I’m sure most of you readers are too young to remember. But, it is that time of year when salespeople need to start developing a plan for the next year. Unfortunately, and I probably should say tragically, this is the time of year when salespeople realize they either won’t make their goal for this year and/or can’t make their goal for this year.

However, New Year’s resolutions will kick in; and many salespeople will say things like “this year, I need to sell smarter” or “this year, I need to sell harder”. In either case, the salesperson making that commitment is damaging their opportunity for success in 2016. More often than not, these sorts of New Year’s resolutions evaporate more rapidly than the traditional ones that focus on getting on a diet for the next year.

So, let’s change the game.

Let’s apply the rules of The New Math of Sales Excellence. You can’t have a plan without metrics. New Year’s resolutions are wishes; they aren’t plans. So, I’m going to walk you through an exercise in the next few paragraphs that I refer to as backwards planning. Let’s start with the year-end goal for 2016 in mind.

How many accounts do you need to close in 2016 to be successful? Or, how many transactions do you need to close in 2016 to be successful? Once you have either of those numbers in mind, you can start your backwards planning exercise. Based on your historical success rate, how many quotes or proposals do you need to produce to get one new account or one new transaction?

So, what you need to do is multiply the number of accounts or transactions that you need by the average number of quotes or proposals per sale, and that produces the number of quotes or proposals that you need to make.

So, for instance, if you need to get 100 transactions next year and your hit rate is 1 in 3 closings per proposal or quote, you need to have a plan in place to produce 300 quotes or proposals in 2016.

Moving up the funnel (remember, we’re doing backwards planning), how many first meetings with new customers do you need to conduct in order to earn the right to create a proposal?

Again, let’s assume the ratio is 3 to 1. Then, we know we need 300 quotes and we know that every third first meeting gives us a quote, so you now need to multiply 300 times 3 and that produces a goal of 900 first meetings during the course of 2016.

Now, the next step is typically 10 to 1 or even worse. That is the number of prospecting cold calls, phone calls, emails, et cetera that you need to launch in order to get a first meeting. So, if we need 900 first meetings and the ratio is 10 to 1, then you need to have 9,000 emails, cold calls, tradeshow encounters, face-to-face meetings, networking encounters, et cetera to make your goal. Once you’ve estimated the number of touches that are needed to produce a first meeting, you now have a plan that enables you to do the work necessary to be successful.

The vast majority of salespeople don’t do this type of backwards planning. Consequently, they are forced into what I refer to as the cheerleader mode of motivation. In other words, they’re going to work harder, they’re going to work smarter. They don’t have metrics, so they can’t fine-tune their process. This leads to trying to remedy a problem with a sledgehammer. It only works if your problem requires a sledgehammer.

Let’s build metrically managed processes and adhere to the philosophy of The New Math of Sales Excellence, in order to help you get to where you want to go in 2016.

- Guest post by Gil Cargill, Cargill Consulting Group. Reprinted with permission.

9 Ways CEOs Negatively Impact Sales

In many of my consulting engagements, the real sales productivity obstacle is the CEO.

Now, I don’t pretend for a minute to say that CEOs and/or business owners are deliberately sabotaging themselves.

But, nonetheless, their actions contribute to persistent underperformance of the salesforce.

Following are the nine actions that I’ve seen contribute to this, as well as a recommendation to cure them.

  1. Hiring: It all starts with hiring.  If you hire wrong, you will have poor or no sales results.  CEOs and entrepreneurs frequently hire based on the “likeability” of the salesperson.  Make sure that any person that you hire is not only likeable but, even more important, successful selling in the form and fashion that your market requires.  Don’t hire someone who has sold produce to sell software, for instance, regardless of how likeable they may be.
  2. Creating factions within the company: The CEO that allows any member of the team to disrespect other members of the team (regardless of their position) is allowing a very negative environment to surface and, tragically, flourish.  Sales is a team sport.  When the CEO treats sales like a team sport, productivity blossoms.  Don’t make the mistake of letting a salesperson bully a non-salesperson and/or vice versa.
  3. Top-level criticism: I’ve seen many CEOs express their frustration/anger with the sales results produced, in public.  This same CEO frequently makes a habit of criticizing a salesperson.  One of the first management rules is praise in public and criticize in private.  Violating this rule reduces morale and inadvertently causes management to overpay for continued underperformance.  Without the overpayment, attrition would be higher than acceptable.
  4. Allowing inconsistent demand-generation activities: Someone on the team, other than the salesperson, should be involved with demand-generation activities (a.k.a. prospecting).  In today’s market, gaining access to decision-makers is extraordinarily time-consuming and it reduces the productivity of an outside salesperson dramatically.  If you make your salespeople prospect, they will underperform relative to optimum standards.
  5. Measuring against history: This is a common business problem.  When I hear statements like, “Sales are up 15% versus last year”, I obviously congratulate the entrepreneur but I always wonder if they could be better.  If so, what will it take to be better?  One of the benchmarks of a world-class salesforce is the fact that they have a huge database (literally, everyone in the demographic sweet spot) and they touch that database frequently with educational messages.
  6. Unequal treatment: Many small salesforces have a “favorite salesperson”.  This person is similar to the teacher’s pet which irritated all of us at one point in our education.  If you have a teacher’s pet in your business, make sure he/she performs in the same form and fashion as everyone else.  Maintaining a teacher’s pet damages the morale of everyone else and reduces their productivity.
  7. Inconsistent policies: There’s nothing worse than the entrepreneur changing his/her mind regularly.  This causes the entire team to wait for the next change of mind.  Consequently, the team waits and management fumes because sales results aren’t forthcoming.  Set a course and stick with it long enough to know that you have to change.  If change is required, let your team know why you’re changing, how you’re changing and, most importantly, help them understand what’s in it for them to work with you as you go through this process of change.
  8. Don’t conduct sales training: The entrepreneur that doesn’t conduct sales training / practice is the entrepreneur who has no idea what his/her salespeople are doing in the field.  This entrepreneur assumes that their comp plan will motivate salespeople to perform at levels that are significantly higher than the salesperson may want to perform at.
  9. Misaligned compensation: Remember, you can’t make an adult want to make more money than they want to make.  Having a comp plan that rewards handsomely in an environment where the salespeople don’t want to earn more money is a waste of time and energy.

I could go on with this list, but I hope you’re getting the drift.

Compare your behavior as the owner/entrepreneur of a business to the behaviors described above.

If some or all of them match you, you can get tremendous improvements from your sales team, as well as a reduction in your personal stress, by embracing the possibility of changing some or all of the ways that you recruit, hire, train, deploy, coach and de-hire, from time to time, your sales team.

- Guest post by Gil Cargill, Cargill Consulting Group. Reprinted with permission.