The Number Game – Perform or Perish?

Having been into Sales for over a decade now, I blogged about “ABC of Sales” - Always Be Closing, I am tempted to write about my thoughts on “NUMBERS aka Sales Quota” which in sales is a familiar term and we live eat breathe our quota or numbers. I got tempted to write about by looking at some real life trends, and some thoughts I read and compiled from what sales gurus said.

I read an article which says over the past four years, sales quotas have risen nearly 33 percent, yet the percentage of representatives making their quota has fallen by 25 percent: A bad omen for companies, and perhaps a worse omen for the reps that depend on their sales to earn their keep.

The statistics comes from the Birgade Group, a Sales Strategy firm based out of Hudson. The report states that on an average, only about 50% of sales reps made their quota, and more than 42% of the companies reported that less than 50% of their reps were meeting or exceeding their quota. Such situation reflects the weakness at the TOP of the organization; a CEO should ensure that the organization has a well oiled sales process.

First very important thing is to ensure that the organization has a sales process, proper territory allocation, balanced offerings for sales people to sale, good backend support system and a fair and justified sales quota. This shall help in running a well oiled sales process, with good systems to support to track the progress and ensure things do not fall off the crack.

Second very important thing is to understand the human part of a sales guy and have figure out a best way to interact with them so that messages are passed, be it good or bad, but motivation levels and zeal to achieve is kept intact.

Third most important part is the incentives, rewarding structure. Remember the line “No Risk No Reward” thus if a sales guy has risked his career to an unpredictable compensation structure, only with the fact is that if he Kicks some Asses, he gets Big Mullah!!! The mullah should be really great, for him to keep his motivations to fire!!!

Let’s look at some scenarios of Sales Quota Failure and their aftermath:

Setting the Right Quota

Greed is Good is a famous quote, but too much of the same is Death!!

We have to be realistic in meeting the right quota. The biggest mistake we do is it we base on the fact “if they can why not we” ; some statements like “There was no reason why we could not grow at 70% in next 2 years”, issue is the company was anyways growing at 25% but the benchmark was with a business / segment who may have grown faster than a normal pace, say like the dotcoms in late 90’s to early 2000, but one should understand if your base is zero, the first dollar you make is 100% growth.

Thus being realistic is very important, and predicting correctly your growth strategy is very difficult. Even you have base, past data, good structure and composition, you may still go wrong. If you are new, the probability is higher. Even if you do the market research, it's hard to gauge how the market will respond, you might think it will sell, but do you really know how much? What's the competition like? What's the market like? Is the market saturated? Is your product unique enough? "There are a lot of things that come into play,"

As a manager, you should figure out how long it takes to actually sell one deal from start to finish. Is it eight hours, 10 hours, 20 hours? So when thinking about quotas, it's often best to start thinking of them as a function of capacity—and then start thinking about things like revenue and closing ratios.

Let him off the Hook – Easy Part!!

Before letting go of a rep who isn't hitting quota, an employer should look in a mirror!!!

You have to understand the overall environment. It goes back to taking the time to understand the gaps and do the pipeline inspections. You need to say, 'Tell me about the opportunities that you're working on, and tell me what happened in this conversation.' It's literally getting down into the weeds and understanding if the pipeline is real, and if there's hope. Good managers are doing that on a regular basis, and they know if their pipeline is well-qualified."

If the sales rep missed the quota, instead of reprimanding them, offer them training. When you run the numbers, it may be more cost-effective to invest in your employees, rather than firing off the poor performers and finding new ones, which, in sales, can be an expensive process that can take months. Study says a new sales person takes 4.5 months to be fully productive.

The problem identification is the key; "Maybe they're not so good on the phone, or maybe they have trouble closing, or maybe they can't handle rejection, I'm a believer that good selling is more of a science than an art. You can teach people. If you are born with some of those skills, that puts you in a better position from the get-go, but that doesn't mean they can't learn."

Biggest misconception today is that when a sales person come in, the company hiring believes “he has it all”, they believe they have all the training and ability, but the fact is you hire a sales person for his acumen, his nerves, his communication and his contacts. Rest the company owes to the sales person to offer them tools they need to be successful and use what they have in the right channel to bring out the best in them and deliver the best the company should deserve.

Oops I Missed it Again – Patience is the Virtue

This is a common issue with smaller companies. You get sales folks, try them out, give them aggressive targets, believe your product were sold earlier and not it is not, you fire and you hire and new team. The biggest mistake you are doing is you are not going anywhere. If you bring change sales team every six months, you are actually not making any progress. You need to figure out “Why?” Is it a Top Down issue of an ineffective management or a bottom up problem of lazy employees?

Marketing experts feels it can be bit of both. it starts from the very beginning: hiring the right people. I also agree and believe every organization should list out the metrics of a successful sales candidate for the position at hand, and when interviewing, trying to find a match that goes beyond just a "good sales person." After all, being a 'sales person' is a nebulous term. You need to ask, "Are you hiring a hunter? Or are you hiring an account manager and cross-selling and up-selling inside a current customer base?" Two very different types of selling, which yield two different types are candidates. Once you have identified the candidate, set the expectation, be patient and provide him with the time to get familiar with the product, services, markets, customer for him to deliver. Hiring & Firing will lead to nowhere.

Face It - When to drop the dead weight

Even after providing adequate training, coaching and mentoring, there may be a situation that you won’t get your worst sales reps selling.

At some point, all the training, tweaking, and coaching won't get your worst reps to start selling. But how do you know when it's time to let go of your lowest performers

If you've given everyone the same support, and seven out of 10 are performing at the level you've expected, and the rest aren't, you don't need to tweak the quota. Then you need to look at the individual and understand why they are not performing if everyone else is under the same conditions. If there is a situation, if you have hired the best sales guys (as per your requirement) and all of them are not performing, then we need to seriously retrospect “Why?” one cannot believe all can fail at the same time. There either has to be an issue, with the environment, offerings or the hiring. “Wrong people in wrong place”. Letting them go is the easiest part, as if the resource is good, he will find something else, but in midst of all this it is the organization who shall suffer.

If the offering, environment and condition are suitable and you have a 50% performing sales team, then we should face the fact that some people aren't cut out for sales—even if that's their current title. Sales people are money-motivated, they want to succeed, and most importantly, they want to be rewarded. But it always comes back to the organization.

"Management is a lot like parenting,” "You can't blame a kid for being bad if the parents don't teach them how to behave."

A B C of Sales !!

Stepping into my 8^th year of Sales, I have not had too many privileges of attending Sales Training, but yes I have attended a few, but good ones. Honestly, for any sales professional training is just a way of reinstating ones beliefs in the way one thinks or approaches sales. Its either you Got it in you, or Can never make it. Training or formal education in sales helps to refine thought and gives you a direction of thinking on approaching an account or product. Sales is a passion, an addiction, like smoking cigarettes, you can never explain a non smoker, what you achieve from those dreaded puffs.

In this space, I would bring out few tips of Sales which I have gathered and learnt over a period of time. This shall be a collection of such thoughts which are not originally mine and but been presented in an original compilation.

An old saying “You have two ears and one mouth, use them in proportion”, and how true. Listen More and Talk Less is the first step of being a good sales guy. Always allow the customer to speak. Forget fast talking and the gift of the gab – they might help build a relationship but they won’t get someone to buy from you, without some other skills thrown in!

The second step is to provide Accessibility; you should be 100% for your customer and only your customer while in a meeting. Avoid building barriers, like laptops, answering phones, keeping your arms closed, avoid sitting opposite to your client, and try taking a place as same side or round the corner. Your accessibility, attention and body language should be to prove that you have all your customers’ attention. Another interpretation of accessibility is to give the flexibility to the customer to contact you, be it email, phone, sms, fax etc. Be Available.

An early indication to a successful sale is to know the answer to an important question “Will they Buy?” To elevate a prospect to a customer and qualify the engagement, one should have answers to 3 things, a Need, a Desire and the Mean to buy the product or services. If yes, you have a qualified prospect!!! If No, better Move On, you cannot close this one!!

Look for Triggers, to purchase. Greed Guilt Fear Desire Necessity or Image may be a few triggers which can act as a catalyst to pace up the sales cycle. Focusing on the Key Trigger shall help you to touch the emotional hot spot.

Look for opportunities to Open Questions. There are “six wise souls” of questioning, “Who What Why Where When How”. In a sales situation, use the wise souls carefully to encourage your prospect to talk by asking open questions that demand more than one word in answer, such as:

“How are you preparing for the next round of reporting?” “What are the three things that worry you most, and why?”

Avoid closed questions that are easy to brush-off with one word answers such as:

“Would you like…?” “Are you happy with your current arrangements?”

AIDA – Attention Interest Desire Actions, these are the four logical steps which must happen in a buying process.

Assume you are walking through the shopping mall and see a poster in the shop window advertising a jeans sale – it grabs your attention. You wander into the shop and see they sell your favorite brand – interest. Then you try on a pair in your size, they fit perfectly, you want (desire) them, and you pull out your credit card – action.

A lot of time Sales person, often confuse between Features and Benefits. That’s the next tip, for any sales person to understand properly and use them while speaking to prospect. For eg: 250 gigabyte hard disk is a feature on a computer – the benefit is being able to store huge files and databases without worrying about space.

Thus a sales guy should be prepared and confident on their product or services knowledge and its feature and benefits. Use them in sales situations to your advantage. You may use the AIDA model to use to generate attention to action.

Keep your eyes open, because “What you see is What you say?” Observe what is your customer like, stylish, his interest, his office, what kind of a person he is, traditional, hedonist, a family value person, sporty, rational, tech savvy. This shall help you in having a better “meeting mind” cos you always don’t sell in all your meetings; you also make an impression!!!

Along with impression, you also need to earn “Respect”, if you are consultative selling you provide solutions, use your experience to provide optimum solutions, be a consultant to your customer, allow the customer to buy, and do not push everything. It is good to look at the big ticket sales, but then if you need to win respect, you can attempt to look for easy and small sales, earn respect and then use it back to your advantage for multiple orders. Never look at a customer and think, he is one off and let’s make most of it!!

An Agreement Staircase; a logical step by step approach to convert a prospect to a customer. We shall take an Umbrella seller to demonstrate this through this figure. (click to enlarge)

Getting several “YES” responses can be so powerful!

Getting a “NO” is a barrier, and there isn’t much use in turning into a one-way street unless that’s where you wanted to stop!

Design questions which result in a “YES” and watch the results flow! Don’t forget to wait for the “YES” or the nod after each question!

If you follow martial arts, you may know what I mean by Harnessing Momentum. In martial art one of the great skills is to balance yourself, whilst allowing your ‘opponent’ to gain momentum, and then to move aside to let them use that momentum for your benefit (the throw). Similar is with sales, when you probe and ask the right question.

Some magic questions may be

What, in your business, are you most proud of?
What would you do or change, next, if you could?
What is stopping you doing that now?

The point of the first question is to get the prospect chatting, make them feel comfortable, and particularly make them feel on top of the situation. Once they start talking, you’ll have them relaxed, with momentum, and ready to go to…

…question 2, which encourage them to state an objective – something they would like to do well, and be proud of, and (hopefully) something that you can help them achieve. Once they have done this, keep up the momentum, let them visualize the situation, then…

…question 3 simply allows them to prove, to themselves, that they have a need. If you can help with that need, you have turned the situation to one where they need to tell you “why not”, rather than you tell them “why” – their momentum should enable you to make the “throw”

One of my old sales managers jokingly use to say catch the customer by their b***s or they will catch yours, and that turned to be so true in crunch sales situation, whether you want to close or negotiating during a sales process. At times arrogance pays, when you can sense, a customer is just negotiating although he has the budget approved. Never forget to draw the line, cos in an arrogance you do not want to hurt the customer’s ego.

Once a rookie sat with his sensei and complained that his prospects kept giving him reasons why they wouldn’t buy. The sensei quickly explained that, at the traffic signal of life, an objection is a green arrow, pointing out which way you can go and when to go, not a red stop light in the sales process.

When you get an objection, the chances are that it will be about price (affordability/value), product (features), need (need something else), ability to make a decision, or relationship. A good salesperson can take any one of these and find advantage. Thus Welcome Objection and preempt them and then lead a sales discussion towards an objection you want to the customer to ask. But whatever you do, make sure that you smile to yourself when you hear an objection – it is a clear indication of where you need to go to finish your journey!

Be Honest and to do so Analyze what gets results. Always understand the hard truth is: a company admires activities but pay for results!!

Some of the things you know, but would like to measure…

Do you measure? Number of calls, sales per call Number of products held per custome Number of referrals Which products return maximum value to you based on $ versus effort The value of each customer to you Your closing ratio (compared to previous results) How your prebooked (renewal) income is growing (or shrinking) If you take a good look at these, you can find out which ones to focus on to achieve maximum boost to your business.

Do you also measure? Time spent traveling, browsing Time spent correcting mistakes or doing someone else’s administration Customers that leave you, and why The ratio of time ‘with customers’ to ‘time doing something less productive’ Time wasted with people that aren’t decision makers Time spent on calls that didn’t result in a sale These lots are some of the prime inhibitors of your business. You need to cut through them aggressively, with a sharp knife.

At end of a day, just ask yourself “Am I at peak productivity, or just wasting my time being busy?”

Finally, the best tip to sales is having the Right Attitude. One of my manager always emphasised the respect for No. 1, He said in a 100m sprint, people always remember who come first, and even the second person is fraction of a second slow, people do not recall him. Thus you should always aim of being Number 1. This is how true!!!

The sales message is simple:

If you think you can, then try it, do something, learn from it, improve you performance - WIN
If you think you can’t, then you won’t, and you will LOSE
If you are a Sales Manager and your sales people come to you with reasons why they can’t, you know what to do. Winners simply don’t make excuses for lack of action, lack of effort or lack of results

These are good tips, and handy ones, use them to your discretion based on what kind of sales cycle you are in. It may not be true to all sales process, but good to go for most of them. Bottom line of ABC of sales is Always Be Closing.

Happy Selling!!

The content is an original compilation of thoughts and selling tips gathered over my tenure, I would also take this opportunity to thank all my sales managers in all organizations I have worked to provide me with Sales Training and the sales experience which motivate me to share through my blog. Your contributions are always cherished.