Five Minutes With Gerhard

Here is today’s featured video on SellingPower.com.

Gerhard Gschwandtner interviewed me before one of his sales leadership conferences.  If you click on the link (or the photo) you’ll have access to other videos as well, featuring Howard Stevens, Jim Dickie, and a other thought leaders in the area of sales performance.

Note:  I understand the upcoming Sales 2.0 Conference in Boston is sold out.  If you happen to be attending, please say hello.

Hiring The Right Salespeople: Try This

I’ve written a lot about hiring sales people and sales managers on this blog.   ESR knows that the epidemic of ineffective hiring is one of the reasons that sales performance has been so dismal over the years, even before the current economic situation.

The best sales methodology, training, tools, technology, coaching, and reinforcement doesn’t have much impact if the people in the sales jobs don’t have the foundation for selling effectively.  It drains the enthusiasm and motivation of the team, wastes money, and forces sales management to spend time selling for the misfits rather than supporting and leading the rest of the team.

I’m in Ireland for two weeks facilitating a series of workshops with Irish CEOs and sales executives.  Hiring is a big issue here.  The record among Irish companies in this area hasn’t been good.

Here’s a refresher.  ESR recommends:

• Build or buy (then customize) a profile-based, structured hiring process;
• Use psychometric and predictive tests as well as income verification and background checks;
• Train hiring teams on the skills required for effective employment of the process, including interviewing and reference checking;
• Don’t by-pass the process under any circumstances;
• Understand that a key to successful hiring is objectivity.  Hiring salespeople on gut feel, the old-fashioned way, doesn’t work.

Consider adding a subjective measure or two where appropriate:

• Walk the sales candidate to their car and do a quick appraisal.  Clean inside and outside, or junk strewn about?  Untreated rust spots?  What about those bumper stickers?  How would your customers react?
• Invite the candidate and their significant other to a social evening along with you and yours.  Dinner in a nice restaurant gets the job done, especially if part of their job is entertaining prospects and customers.  Observe how they and their partner communicate for a hint of how they build and maintain relationships.

The definition of A, B and C players differs from sales vp to sales vp.  My take is you can’t make C players into B’s, because, by my definition, C’s don’t have the requisite traits.  And you can’t train someone to improve what’s in their DNA.

If you follow that logic, you’ll want to never hire a C player again.

Photo credit: © Dmitri MIkitenko – Fotolia.com

Groundhog Day

I’m in Ireland this week and next working with Sales Executives and CEOs in a series of one- and two-day workshops as part of the International Selling Program offered by Enterprise Ireland (Ireland’s commerce department) and DIT (The Dublin Institute of Technology, where I am an adjunct professor of sales and sales management).   My overall message to the 125 or so people I’ll be in front of is one word: process.  (Here it’s proh-cess, not prah-cess).

I cover three of the most critical processes for building an effective sales capability: qualification, hiring and planning.  Sales process itself is covered in another module.

Timeline to disaster

One of the big challenges here is similar to that in the U.S.—selecting a sales VP (or director) who can get the job done. Considering the average tenure of sales VPs these days—less than two years—I created a pro-forma timeline for the newly-hired sales VP who isn’t going to work out long-term:

• Months 1-3: On-boarding. VP learns about the company, salespeople, colleagues in marketing, services, customers, competitors, etc. Asks a lot of questions.  Generates excitement and hope.
• Months 4-6: VP makes changes in approach, terminology, territories, business partners, marketing materials, routine (sales meetings, forecast calls, etc.) VP may bring in former salespeople that worked for them in the past.
• Months 7-9: Little to no performance improvement realized. VP says that new mechanisms haven’t “gained traction.” Or that their new reps “need a little more time.” VP suggests that there have been changes in the market/economy/environment since they joined. Assures the executive team a little more time will do the trick.
• Months 10-12: An occasional success! The heat is off for a time, until the CEO realizes that “one big win does not a trend make.” (Dave Hathaway, partner, now retired, from prestigious VC firm Venrock Associates said that to me in a board meeting when I was an inexperienced VP of sales and bragged about a big deal we had just won.)
• Month 13: Consultant or board member or expert is brought in to assess the situation. Meetings, reports, discussions, back and forth
• Months 14-16: VP and CEO see the handwriting on the wall, but keep it to themselves, hoping that the situation will magically approve.
• Months 17-20: CEO covertly searches for new VP. VP covertly taps into his/her network while updating their resume with the appropriate spin on this latest position.
• Month 21 (or The New Month 1): New VP of sales arrives… On-boarding…  It’s Groundhog Day!

Who is responsible?

You might wonder who are responsible for this all-too-common situation.  It’s the people who continue to hire the wrong VPs of sales or promote their best salesrep to the job.

What is the root cause?

The profiles for a Sales VP and a salesperson are, by definition, different.  Granted, most successful sales VPs have a sales background.  But promoting a successful salesperson into a management role doesn’t work unless that person has the skills and traits required for that job.  Here are a few generic sales leader skills:  management (!), team building, conflict resolution, strategic planning, coaching, hiring, and motivating.  There are numbers of additional skills required for success in each unique sales leadership position.  Plus there are a list of traits, too, many of which even top-performing salesreps just don’t possess.  Process orientation is just one.

Wait, wait!!!

If you’re about to hire a sales VP, director, or sales manager (or are about to promote a rep into one of those positions) and you don’t have a profile for that position specifying the skills and traits required for success with your company’s sales people selling your products to your customers against your competitors, STOP.

Powering Through The Economic Crisis

You may have noticed that I’ve been posting less frequently during the past two weeks.  ESR is in the midst of a number of projects and new initiatives.  In addition, I’ve been on an increasing number of phone calls with clients, prospects, vendors, sales training associations’ leadership, and business associates.

I wrote Here’s What’s Going On two weeks ago.  There has been lots of activity (and some productivity, as well!) since then.

Here are some points, observations, and opinions I’ve taken from my activities over the past few weeks:

1. I read all the news.  I understand the economic situation.  But deals are getting done.  Four of ESR’s clients I spoke with yesterday are cautiously optimistic about their Q1 numbers. They’re winning business.  A few others are struggling.  But the point is, there is still business going on.
   

   ---

2. At the moment, ESR believes sales training will be down twenty or more percent in 2009.  If we don’t hit bottom and come out the other end of this situation soon, that number could go down much further.  That’s bad news for a lot of reasons.
   

   ---

3. As a result of the slowdown in training, many of the sales training companies we cover have been hit hard.  They’ve significantly reduced their staffs and slowed or stopped development.  If you’re engaging with a sales training company, you really need to understand their current financial situation.  ESR isn’t interested in advertising which firms are having trouble.  But we do guide our clients in the right direction, helping them figure out how to mitigate any associated risks.
   

   ---

4. We’ve convinced a number of our clients to redeploy salespeople who aren’t suited for the sales positions they hold.  By that I mean performing a comprehensive assessment of their past and current performance, their skills, traits and behaviors against what is required to comply with and execute their selling process.  Relative to that, I recently did a briefing call with DDI.  They’re a leader in the talent management and assessment area.  I’ve written about PIWorldwide as well.  HR Chally is another solid alternative.  Now, more than ever, every company, even the smallest, needs to have a talent management/assessment firm partner with a sales specialty.
   

   ---

5. Under Brian Lambert’s leadership, ASTD is making significant progress in the sales training discipline.  Brian has a lot to offer the industry. I sit on the ASTD sales training committee along with a number of very experienced and professional consultants, trainers and practitioners.  (Al Case, ESR’s Principal Analyst, and I will be presenting at ASTD’s Conference in June.  The subject:  How to Measure Sales Performance Improvement.)
   

   ---

6. We’ve had a record number of inquiries come in during the past month from people charged with driving sales training initiatives within their companies.  The common theme is that they have to “get it right this time. ”  They can’t waste any more money on ineffective training and, with this economy, they’ve got to get their salespeople bringing in as much business as possible.  Even with overall sales training down, this is encouraging.  Several of those people are charged with moving their companies from positions of commodity to value providers.  A bit late for that, but better late than never.
   

   ---

7. With the last point in mind, Irish sales trainer, coach and consultant Niall Devitt wrote a post this week that describes precisely how sales leaders go about buying sales training the wrong way.  The post, entitled Need Sales Training? Let’s Sit Down and Talk About It is well worth reading.   Niall sets an example for sales trainers as well.  I commend him on his understanding of how sales performance improvement should be approached and his integrity for not folding, even with money on the table during these tough times.
   

   ---

8. Louise Leonard, program manager for The Dublin Institute of Technology and Enterprise Ireland’s International Selling Programme, sent me a list of sales-related concerns expressed by the sales executives and CEOs who are participating in the program.  I’ll be addressing many of them during upcoming two-week, five-seminar trip to Ireland.  Although Ireland is plowing through their own set of economy-related challenges, the International Selling Programme has  a record number of participants this year.  Better attendance at each of the sessions as well.  This program is a seriously good place for Irish companies to be investing their money.

Photo: © 2004 Dave Stein — MacGregor Powering Through a Summer Day

Should You Spend Your Money On Sales 2.0 Or Sales Training?

Sales training is more than 100 years old.  With few exceptions, it’s not very sexy.  Many salespeople believe (PDF) they’ve been through enough of it to last a lifetime.  For many reasons, most of their managers don’t see any value, so they take a tactical, event-based approach just to check the “trained my people this year” box.

On the other hand, Sales 2.0* is sexy.  It’s new.  There are terrific, proven, Sales 2.0 solutions that can support the sales and marketing function in being more efficient and effective.  There are also enough white papers, advertisements, websites, articles, blog posts, conferences, books, tweets, strategies, tips, definitions, claims, approaches, experts, studies and hype to confuse any sales leader who is wondering how to come out the other side of this terrible economic situation.   The promise of success from this Sales 2.0 wave is  overwhelming.

What should you do?

First let me state that ESR doesn’t sell sales training or Sales 2.0 applications.  We sell independent research and informed advice.

As an objective observer, let me suggest a simple way to assess your situation:  Neither sales training nor Sales 2.0 will deliver any real, long-term value (measured in any number of ways: more sales, more profitable sales, bigger sales, shorter sales cycles, etc.) unless you have the right people and processes in place first.  (Hopefully this isn’t the first time you’re hearing this.)

Tens of thousands of companies invested in CRM, skipping one or both of those two critical success factors.  That’s why something like only one in six companies claim their CRM systems are contributing to their selling efforts.  And how about this: less than two in ten companies get sustainable, predictable performance improvement out of sales training!

If we invest in Sales 2.0 solutions without the proper foundations in place we aren’t just going down that same road?  You bet.

Do you have the right people selling for you? If not, start fixing that right away.  Is there isn’t broad compliance across your team with the use of a flexible, pragmatic sales methodology?  If not, get that in place.  (The foundation of the methodology should be based on the current and expected attributes of the markets you are selling into and the buying preferences and tendencies of your customers, e.g. if your buyers use Twitter to communicate with their suppliers, that capability should be built into your methodology…)

Spend your money on people and process first.  Then tools. Sales 2.0 isn’t a shortcut or a replacement for those or other critical, foundation components of a sales infrastructure.  Neither is tactical, single event-based training.

One more time, listed in the right order: (This is only a partial list for purposes of illustration.)

1. Get the right people on board;
2. Build or rebuild a flexible, pragmatic buyer-centric sales methodology;
3. Train your team on the methodology;
4. Then, provide them with the right Sales 2.0 tools to make them more effective and efficient in use of the methodology.

Tell me where I’m wrong or off base about this.

* Sales 2.0 is a registered trademark of Sales 2.0 LLC

Photo credit: © Vivid Pixels – Fotolia.com

Sales Hiring From a Recruiter’s Perspective

As ESR continues to assess our clients’ sales challenges, we maintain that having the wrong people in the sales jobs is, in many cases, the biggest inhibitor to the success of a training intervention.  My interview with Todd Harris of PI Worldwide highlighted one of the tools available for sales leaders to get an objective assessment of candidates as well as existing sales personnel.

I’m far from done with this subject.  I wanted to get another perspective, so here are some questions I posed to Kathleen Steffey, CEO of sales recruitment firm Naviga Business Services, based in Tampa.  Kathleen also writes the SalesJournal blog.

Dave Stein: As CEO of a national sales and marketing recruitment firm, share with me what changes you’ve seen in your business in the past three months.

Kathleen Steffey: In the last three months I’ve seen growth and expansion with my existing customer base and a decline in “new” customer contracts. Because of this trend, my business has made a shift to heavily focus on existing customer penetration and customer management. We’ve created new programs to capitalize on our existing customer base-viral marketing campaigns, referral programs, aggressive business development penetration (all inside our existing customer base). I am also focusing heavily on recruiting performance to make sure we are executing on every single piece of business we receive to maximize revenue. Customers are behaving in a very smart way and show a thorough decision making process when it comes to candidates. They are taking every aspect of the hiring process much more serious as every penny counts these days. Because my business is steadily growing, we are currently looking for additional recruiters. Our recruiter candidate pipeline is the best I’ve seen in years, in terms of quality. I am taking advantage of the down market to select only the best and brightest to join my team in the next month.

DS: I’m curious about high-performing sales reps. Do you see them looking for new opportunities or are they sticking with the companies for which they are currently working?

KS: The volume of candidate flow has increased dramatically.  Many, many “A” player sales reps have been laid off and/or are looking for a new opportunities due to the instability of their current employer. I personally know many sales executives who have contacted me to express that they are looking for a new opportunity.  They are coming out of the woodwork right now.

DS: What about sales managers? Any new trends there? Are your clients hiring?

KS: I have seen a trend of customers that have a strong focus on evaluating overall team sales performance and linking it back to poor sales leadership. A handful of my customers are deciding to really clean shop and terminate low performing sales reps and terminate non-influential sales leaders. We have many confidential searches going on that support this scenario.

DS: What advice might you give to a sales rep or manager who is currently employed?  Stick where they are or look around for a better opportunity?

KS: If someone is employed with an organization that is reacting well to this current economy-shifting, changing, creating, enhancing, looking at different verticals to penetrate, etc, then you have a proactive organization that is adjusting to the current state and shows promise. I say stick it out and keep at it… Penetrate your prospects harder than ever and make sure you’re creating value, providing solid industry insight and serving them well.. better than you ever have.

I can’t comment on whether or not someone should stay with their organization.. it completely depends on the state of the business, industry, product, etc. I do know that two of the hottest industries that are doing well right now are healthcare and energy, in the event people need focus on where to look.

DS: I know your firm does about 20% retained and 80% contingency work. What advice can you give a hiring authority as to which way to go?

KS: While both options offer our customers the same level of attention and quality, I would have to suggest that going retained always wins. A retained relationship brings focus, commitment and efficiency to the customer/vendor partnership and displays strong value in filling the position with Naviga. At the very least, a retained relationship removes other variables that the hiring manager would normally have to deal with if working contingency-job advertisements, other recruiters, internal responses to postings, etc. A retained relationship allows Naviga to streamline the recruiting process and save valuable time for our customers.

DS: How is your firm helping companies hire the right candidates?  As you know, ESR’s research identifies this as a big, big problem.

KS: First and foremost we get to know our customers. I view this as a critical piece in quality recruiting and making an appropriate match. We understand the make-up of the organization—revenues, employees, top leadership style, product/service focus, market differentiation, strengths/weaknesses, etc. Next we get to the critical part of the engagement and this is where we reveal the sales culture/environment. We understand the sales team, territories, product price, sales cycle, ramp up, top performer profiles, sales leadership and how the team is led, CRM/reporting requirements, candidate profile, etc.  We’ve found that there is a significant correlation with how the team is led and the performance of the overall team. We take this discovery serious to determine if our candidates will be in an environment where they can be successful.

I am a strong advocate of this statement, “The best predictor of future performance is past performance”.. I train and coach my team to measure the quality of the candidates by their past performance and to relate the sales environment associated with those successes to the current position we are looking to fill. I am also a strong advocate of looking at W2’s, understanding the past compensation programs, looking at industry, product/services, average sales cycle and deal price and evaluate whether or not there is a sales environment/culture match.

Because Naviga specializes in sales recruitment, our evaluation process is very specialized and “sales centric.” We have a standardized evaluation process that every recruiter uses and it’s based on the position we are recruiting; for an example-it can vary based on hunter, farmer, or leadership positions. We use a standard list of eight (8) key sales dimensions when we interview candidates. We ask questions around selling skills, sales knowledge, intellectual ability, personal, interpersonal, motivation, tenure and compensation. Our internal evaluation process is a hybrid of Greg Alexander’s Top Grading for Sales approach, which is adjusted for our business model/customer needs.

Photo credit:  © Lisa F. Young – Fotolia.com

Here’s What’s Going On

ESR has a unique perspective on sales performance improvement. We don’t deliver sales training or sales consulting. We’re sales training industry observers, analysts, researchers and advisors to our clients on what works in sales effectiveness and training.

Here’s what’s been going on at ESR:

• A large client in the financial services sector is working very hard to keep their sales opportunities from coming down to price.  That tendency is considerably worse right now than it’s been in previous years.  They have superior service, a stellar reputation, a world-class team, enviable financial viability, and other significant customer-focused advantages. But in many situations, it’s a challenge to get the customer to acknowledge the direct link from all those capabilities to measurable business value for them.  The client is becoming considerably better a competing, employing advanced selling skills, strategies and tactics for overcoming price disadvantage, when it exists.  Even though demand is up, commoditization is the biggest challenge.  All in all, a challenging year.  I believe they’ll get through this pretty well, with everything considered.
• A smaller client is facing other challenges.  They are doing well at demand creation.  A strong marketing function is serving the sales team well.  However, they’re facing the all-too-common 80/20 situation.  The 20% of the reps that are bringing in the deals are top quality.  The company has to make a move to redeploy the reps who can’t be trained and coached into a higher level of sales productivity.  Also, the company is relatively process deficient.  They possess a single, high-level Powerpoint slide that represents their selling process, but it is in no way sufficient to drive consistent performance across an entire sales team.  The good news is that a strong management team is determined to overcome the challenges they have.  We’re working with the CEO who will be driving the transition to a more effective sales capability.  They aren’t looking for shortcuts.
• One Fortune 500 company is coaching us through creation of a collaborative proposal for ESR to perform an assessment of their global sales approach and capabilities.  That will result in an RFP and a vendor evaluation and selection process.  They need to transition from the commodity approach they employ now to a more collaborative and consultative relationships with customers.  They are seeking a long-term sales training/consulting partner.  We are delighted that they are taking a strategic approach to sales effectiveness. They aren’t looking for shortcuts either.

Predictive Testing For Salespeople. No Reason Not To Do It.

I’ve been a proponent of psychometric/predictive testing for salespeople for many years.  I was a non-believer until Nancy Martini, now CEO at PI Worldwide, put me through their Predictive Index and SSAT (see below) in 2001.  After I took the two tests online, Nancy emailed me the manager’s version of my results and I nearly fell off my chair—the appraisal was that accurate.

My friend,  sales trainer Steve Waterhouse, is a PI consultant as well.  Those tests are terrific tools for a sales trainer to have for diagnosis.

Let me state this clearly:  One of the root causes of the many B2B sales challenges companies have today is that they have too many unqualified people in sales jobs.  Among ESR’s clients and the companies we spoke with as many as 25% to 33% (depending on the industry) of sales people aren’t suited for the jobs they hold.  That means, based upon skill and trait gaps between what is required for success and what those reps possess, there isn’t enough time or money for them to ever come up to speed.  The solution is simple, but not easy.  Don’t hire people that can’t get the job done.

We know for a fact that profiling and a structured interview process are critical for hiring success.  We also know that psychometric and skills testing saves interview cycle time and significantly reduces risk.

I posed some questions to Todd Harris, Ph.D., Director of Research at PI Worldwide.

Dave Stein: Why is predictive testing so important for a company’s sales effectiveness?

Todd Harris: Twenty-five years of research clearly indicates that personality factors significantly impact sales success.  For example, in a recent Predictive Index® (PI) study of 32 outside sales representatives tasked with selling manufacturing equipment to medium-sized businesses, those who were more independent, confident, assertive and embracing of change achieved over five times more sales volume during a 27-month period than those who were not.

DS: How accurate are your tests?

Trust

I’ve been very critical of sales tips during the past six months.  My column in Sales and Marketing Management Magazine about it as well.

The simple reason is that sales tips keep salespeople and their managers focused on tactics and shortcuts rather than investing the time and effort required for planning and executing a strategic approach to sales performance improvement.

When we interview high-performing salespeople, what we consistently find is their success comes as much from who they are as what they do.  The foundation of their Personal Capital—a rep’s unique customer-valued amalgam of skills, experience, contacts and knowledge—is their customers’ trust in them.   And with respect to the companies for which those top performers work—integrity is consistently the number one or number two attribute sales people must possess.

When it comes to the subject of trust in selling there is no better source of knowledge, insight and practical advice than Charlie Green.  His wonderful book, Trust-Based Selling, is one every sales manager should read.  But let me warn you.  This isn’t a typical sales tips book to be skill-skimmed or speed-read.

Trust-Based Selling can be a key component of a strategic initiative to upgrade the quality and resulting performance of the individuals on your sales team.  Once you read this book, I don’t believe you’ll look at the subject of trust in selling in the same way ever again.

Photo credit: © Lisa F. Young – Fotolia.com

New Year Resolutions For Sales Leaders

Pick one or more of the resolutions below.  Commit, execute, enjoy the results.

1. I’ll never hire another sales rep who can’t get the sales job done. First, completely understand the position and the skills and traits required to be successful.  Evaluating whether a candidate meets those requirements requires a series of two to three structured interviews.  There are no perfect candidates, but if you understand gaps between what capabilities the candidate possesses and what is required for the job, you can train, coach or support that new rep to success.
   

   ---

2. I won’t spend another dime on technology for my sales team without knowing specifically how it will help my reps win business. In general, what companies receive in return for their investment in CRM technology is significantly short of expectations.  Before you make any investments in CRM, Sales 2.0 or other emerging technologies make sure the primary recipient of value is the salesperson. There has to be a direct, proven connection between the software application and the salesperson winning more business.
   

   ---

3. I will teach and then continue to encourage my reps to look at selling strategically. Many salespeople don’t think past the next meeting or phone call.  You will be doing them (and yourself) a big favor if you can coach them into seeing the big picture—the next five steps in the sales cycle or what the customer’s situation might be in six months when they expect to make a buying decision.
   

   ---

4. I will look at sales performance improvement strategically. You should know by now that tactical, event-based sales training doesn’t really provide any long-term value.  So why are you still wasting time and money on it?
   

   ---

5. I will implement a formal coaching function to support my sales reps’ growth. Coaching is not a sales manager closing a deal for a rep or telling them what to do in a tough competitive situation.   Coaching is a mission-critical, formal, ongoing activity that is required for significant sales performance improvement.  If you don’t know where to start, send me an email.  I’ll point you in the right direction.
   

   ---

6. I will run my sales organization like the business that it should be. In order to be successful, businesses require business plans, process, discipline, documented responsibilities and accountabilities, quality assurance and measurement of output.  I’m not suggesting bureaucracy here.  Just the appropriate measure of formality and seriousness.  If seat-of-the-pants ever worked in B2B selling in the past, it certainly doesn’t any longer.
   

   ---

7. I will provide my sales team with the leadership they need and deserve. A few questions for you around one area of leadership:  Is marketing not getting the job done?  Does the CEO set unrealistic revenue targets?  Are customers angry due to product problems?  Do your products or services not meet the needs of your market?   These and other challenges can stop the best sales team in its tracks.  It’s your job to get issues like these addressed and resolved.  If you don’t have the required leadership skills, get them.
   

   ---

8. I will advance my team considerably further than foundation Sales 101 skills so they can really be competitive. Winning these days requires more than just basic selling skills.  Make sure your sales process includes advanced components, such as political mapping, selling to senior executives, and competitive strategies and tactics.  Find the best approaches in those areas that fit your business requirements.  Train your people.  Sustain improvement with coaching and other post-training reinforcement.
   

   ---

9. I will elevate the importance of my team’s knowledge about our customers’ businesses. Many customers of yours are buying only what will help them survive this economic crisis.  If your salespeople can’t position your products and services in terms of contributing to your customers’ success—from your customer’s perspective—they aren’t going to sell very much.
   

   ---

10. I will commit to understanding my weaknesses and improving those capabilities as a sales leader. There is no shortage of intelligence, research, best-practices, coaches, consultants and just plain good advice.  Avail yourself of the best of them.

Photo credit: © Stefan Rajewski – Fotolia.com