An Emerging Metric in New Hire Consideration

Many firms rely on historical performance and interviewing ability as their primary vetting criteria. The dominate considerations for many seem to be, “did everybody they interviewed with like them and did they do well at their last firm.” While these may play a role, they rarely by themselves, accurately determine future performance. Employing available sophisticated assessments that show aptitudes, capabilities and behavioral traits are additional critically important elements of any decision process, and can dramatically lower the “failure” rate so many experience. And there is a new element that may play a role as large as any of these other critical elements. The ability to demonstrate effective networking skills! It may rank right up there with IQ. NS, (networking skills) includes demonstrating the ability to meet, bond, form non-organizational teams, be visible in the marketplace, adept at social media applications, and maintain and grow an ever larger set of connections. This should likely be an important part of any hiring consideration.

Marketing at its Best

Marketing at Its Best We recently spent about a month touring India, our first visit to this exotic country. At the wonderful Taj Hotel on the beach in Goa we witnessed a wedding -- quite an event in the Indian culture and Hindu religion! These weddings can last three days. Inviting many hundreds, even thousands, to a sit down reception dinner is common. One person we spent a fair amount of time with told us he had 3,000 at his wedding reception dinner! We were told these extraordinary events, at least by American standards, occur for several reasons. In the Hindu tradition, as it was explained to us, there is no formal marriage document, so they want as many to witness the union as possible. The Indian government outlawed dowries, so families now spend an extraordinary amount on the wedding and wedding gifts, which replaces what they have historically gave as a dowry. Upon our return to the states I had an occasion to book an event for about 600 people and I chose the Hyatt Regency Bellevue as our venue. While talking with my terrific sales person, she told me they had just hosted an Indian wedding the evening before our meeting. Remembering our experience in India, I asked her about it. She explained that Hyatt corporate marketing realized this could be a valuable market niche. They surmised that it could be good for many of their hotels that are located where many people of Indian heritage live. They researched and documented carefully. The Hyatt staff learned details like what kind of alcoholic beverages Indians tend to favor and what kinds of foods are traditionally served at weddings. They event researched special things brides and their parents would expect. After Hyatt did a thorough research job, they developed presentation materials, brochures and all of the “marketing” materials you might expect from a quality marketing department. What is particularly interesting is that they went even further. They organized webinars for the sales staff to learn the language and discuss the nuances of what their target audience would expect and respond to favorably. They even found local chefs who specialized in Indian food and could prepare a traditional Indian wedding feast! They literally left “no stone unturned” as they prepared their sales people to be knowledgeable “experts” and pursue what they thought might be a viable market. Notice that they did not focus on expertise in the features and benefits of their hotel chain, but rather developed their own expertise in how to successfully talk to this market segment in a way that would give their prospects confidence in their ability to deliver a quality event. The result? They dominate the market in the Pacific Northwest and I assume many other markets as well. They’ve created a highly differentiated product, although it’s just their normal capability re-defined for a unique audience! And they have an annuity that comes from a strong personal referral base! Doing the job the way it should be done It’s exactly what all marketing departments should do, but so few rise to this level of excellence. It wasn’t a huge investment on their part. They just did good, solid research and a thorough job of adapting their materials to a special market segment. Then they equipped their sales people by identifying resources their sales people could leverage, and followed up with an excellent job of educating/arming their sales people for the task. It’s a model anybody can adopt, from the largest firms to sole proprietors, and it’ll work wonders!

The India Analogy

The India Analogy
Effective Sales Compensation Plans

On a recent trip to India, which some say stands for “I’ll Never Do It Again” I was struck by the confusion that was on the first road we drove. The drive was from Jodhpur to Jaisalmer, which is just a few miles from the Pakistani border. I discovered that there are very few street signs in all of India. People navigate by asking another “local” and receive directions based on landmarks and monuments. Many of the roads connecting cities and villages are little more than one lane, making driving a constant challenge, and passing a breathtaking experience! On this drive of about 2½ hours, we shared the road with dogs, sheep, goats, monkeys, donkeys, camels, elephants, tuk-tuks, cars, buses, trucks and people walking with major loads on their heads.

As I thought about this unique day, it reminded me of the sales plan compensation confusion that many firms face.

First, many companies also navigate by inquiry rather than available empirical knowledge. They ask friends and associates what they do, just like we asked directions in India. And they proceed to develop plans based on what they think they heard.

Occasionally they think to ask a professional organization that samples incomes, but this isn’t the same as a compensation plan, it’s in the “expected earnings” category and serves to help recruit versus designing a plan that is optimally effective for their firm.

Like the roads in India, there are myriad confusing variables to be taken into consideration, including:
• Does the firm have a transaction or an annuity model?
• If it’s an annuity, what is the trigger that causes the next purchase?
• Is it a direct sale or a channel sale?
• What actual influence does the sales rep have?
• How are leads developed and distributed?
• Is it a geographical sale or a market sale?
• If it’s market, is it also vertically oriented?
• What does the competition do?
• What kind of sales person is the best recruit?
• Is longevity in the position important?
• What is a reasonable time to become proficient in the company’s products?
• Does the “on-boarding” process work, and result in quickly effective sales people?
• Is there an expected performance level, and is it defendable/rational?
• Is income tied to an expected quota?
• Is the quota “seasonalized” so it matters periodically, not just at year-end?
• What is the right mix of base and incentive compensation?
• Does the incentive actually motivate desired performance?
• Does the sale typically require additional support people to conclude it?
• Is there a personal connection with the customer developed during the sales process?

These are typical questions I ask when I review and/or develop a compensation plan for sales teams. The answers aren’t always easy to discern but, they do matter!

Visiting India

We just returned from a month in India. We visited a number of cities and towns including Jodhpur, Jaiselmer, Jaipur, Udaipur, Agra, Goa, Rathanborgh, Delhi and Mumbai. It was an amazing “bucket list” trip. I was told India stands for “I’ll Never Do It Again.” I’m not sure I totally agree although it was among the most “exotic” places we’ve ever been. There are fascinating issues to explore and stories to tell, which I intend to do, but I thought I’d comment on a few of the lighter surprises today. There are really no street signs in India; they navigate by monuments and landmarks and by asking nearly anyone and everyone for directions. “Go to the clock tower and take the second turn after that” kind of thing! Interestingly enough, everyone was willing to stop what they were doing to give directions, every time we asked. We had a driver for the four of us, but few people venture far enough away to be comfortable and familiar with each of the locations so they just stop and ask, and invariably get accurate directions willingly given. On one stretch of road, from Jodhpur to Jaiselmer, which is on the historically significant “silk road” and close the Pakistani border (close meaning about 15 miles) we drove on the typically slightly expanded one lane road, which is predominant in the country with only a few exceptions. On the several hour drive we shared the road with: goats, sheep, dogs, donkey’s, monkey’s, cows, water buffaloes, camels, elephants, camels pulling carts, people walking , tuk-tuk’s, other cars, buses and trucks. Wow! There was no discernable speed limit although we rarely went very fast because we’d honk at a cow who was largely disinterested in moving at all, so we’d steer around him and continue on--

Open Water Cruising and Sales

Open Water Cruising and Sales
Do They Share Attributes

I had the privilege of piloting my friends 60' Ocean Alexander again recently, and it reminded me of many of the fundamental tenants of successful selling!

1. We discussed our trip and knew where we hoped and wanted to go, what we wanted to see, how long we expected it would take, and then planned the details necessary to support those “trip” goals.
a. We all need an “account plan” which reminds us of our goal, timeframe, expected mileposts in the process and the like so our “call” plans reflect the strategy documented in the account plan which, of course, can be changed as it needs to be, just as we’d change the cruise plan for adverse weather.

2. Before leaving the dock we checked each system, made sure the boat was ready for the large body of water we were about to undertake
a. Exactly as all truly great salespeople do—review everything they’ll need on a sales call before the sales call to be sure they are prepared and ready

3. Then we checked our planned routing and developed an alternative
a. precisely as we should all know where we expect/want the call to go, and be ready for the deviations that might get thrown at us

4. As we navigated the waters, one was the pilot and one stayed steadfastly on lookout for deadheads and other “flotsam and jetsam” that can cause havoc with a boat/rudder/propeller, ruining what could be a great day or worse.
a. It takes a team to effectively sell. All too often we either expect sales people to be entirely independent and /or they choose to be “lone rangers.” Neither works. Smart successful salespeople know when and how to engage others with skills and experience that can help avoid those “deadheads” that can derail the sale. Just as important, while the sale is progressing nicely, it’s wise to stay ever vigilant; is competition just around the corner; will they surprise us when they show up; are we ready for them; have we anticipated they might present themselves and have we planned for that occasion?

5. When we arrived we carefully and thoroughly documented the trip in the log book including comments on interesting things we saw, how the boat preformed, things we wanted to remember about that days cruise, maintenance issues, etc
a. The great salespeople know to immediately log the call in their CRM for ready reference and for using to help plan the next call. They include the results of the call versus their plan for the call, issues they want to recall, subtleties that occurred they want to remember and account for, like a new person of influence they hadn't met before, or how involved/distracted the prospect was and how to manage/account for unique behaviors in the next call. They don’t rely on their memory!

6. And the next day we started over again, invoking the same disciplines and to the same level of detail
a. Too often we all fall victim to believing we know the customer/prospect well and don’t really need the same attention to detail we might use with another, but when we do, we put the sale at risk!

I wondered how we can successfully transfer the need for a disciplined approach when we’re cruising the open water, to the sales process, and why it seems so hard for so many. Those that get it, are wildly successful and we refer to them as “natural” salespeople—not the case at all—we can all be “naturally” great if we adopt and stick to the same disciplines necessary to have a safe and enjoyable cruise!

Creating Jobs and Fixing Social Security

We are in the midst of great debates and profound changes to the very fabric of our nation. While I rarely write regarding political issues, this one seems to strike at the very heart of who we are as a nation so I thought I’d share my suggestion for stabilizing the Social Security system, stimulating the economy, and reducing the general angst that exits.

It’s a four-part program with the following attributes:

• Immediately enroll all workers in the system that means everybody including Congress and anybody else who is exempted today!
• Immediately raise the age needed to begin benefits to 67 for everyone under the age of 50. Then begin to add one month every three months until we reach 70.
• Change the system of payroll deductions immediately. Rather then contributing until one reaches a predetermined level, today I believe around $106,000 in wages, take the contribution level today and consider it the base line. Then everyone earning less than $25,000 is exempted, they are fully part of the system, but not required to contribute. They need every dime just to live and every dime goes immediately back into the economy! From $25,000 to $75,000 they pay ½ of today’s base line; from $75,000 to $200,000 they pay today’s base line, and from $200,000 and over they pay 2X today’s base rate, and there is no upper limit any more. This is a “fair share” approach and it’ll work!
• Finally, immediately begin means testing. It is ridiculous to pay someone with millions of retirement $2000 a month in Social Security —they don’t even know what to do with the money. Believe me, I know some of them! And they won’t revolt if they lose their $2000 a month, they’ll applaud our rational thinking!

5 Common Barriers Inhibiting Revenue Performance






I was playing golf recently at Bandon Dunes with the CEO of a major Chicago based firm. During our match, he asked me if I could name a few of the common issues I see in my engagements. Maybe he was just trying to distract me, it was match play after all, but I thought he was truly interested, so I told him I had seen barriers that seemed to be present frequently, usually fixable but all causing many issues for many firms, Among them were:

1. The Alignment Problem:
The alignment between the goals/expectations and compensation plans. Often CEO’s tell me their sales force just isn’t firing on all eight cylinders, and could I help them by replacing them with better, more capable people, or maybe get them on track with more focused training or perhaps more discipline. When I get engaged I see a significant misalignment between what the sales force is being asked to do and how they are being paid. Compensation plan design is not often a core competency for senior management for a number of reasons, but infrequently do those without the experience and ability to design a good plan call on those who have the skill for guidance. It’s not an especially difficult issue to solve, but far more often than not it needs solving!

2. The Collaborative Model:
The failure of management to lead, thinking they need to manage and often confusing the two. Far too many salespeople feel like they’re in the vast blue ocean of competition all by themselves and have nobody to turn to for collaboration. Sales meetings are “account reviews” with a senior manager whose perceived goal is to ask all the tough questions and uncover their failures and shortcomings. It’s rarely a pretty sight nor is it an especially productive session. Management needs to contribute their skills, experience and position, forming a team with the sales staff, who have an obligation to keep the rest of the organization informed and involved. This collaborative model has a much better chance of success then the hierarchical model so many of us grew up under. Management needs to accept the responsibility of helping move the account forward to a close, rather than just passing judgment on performance.

3. The “Like” Factor:
People have for too long espoused the theory that people buy from those they “like” -- little could be further from the truth. People buy from people they have confidence in and in whose judgment they trust and in whom
they believe can add value to their requirements, offering them a solution that is better than they originally expected. It’s the real role of an expert salesperson -- to deliver a solution that exceeds the customers’ expectations and provides them with a solution better then they knew existed. It really doesn’t matter if it’s a retail environment or a sophisticated commercial transaction, the goal of sales should be the same, to provide a solution that exceeds the customers’ expectations/requirements .The “like” thing may very well happen, but a professional is what the customer wants, not a friend! Salespeople get the “like” message that their organization is delivering and begins focusing on getting the customer to like them, and then the lunches and golfing and all those activities that have little to do with closing the deal start.
The corollary is true as well, the customer finally comes to believe he has a special “friendship” with the salesperson, and when the rules change for whatever reason, he feels he’s been abandoned or worse, and that creates even more issues. I see this frequently in the banking world, as an example, and when the terms of the loan are changed, or new covenants are imposed, the customer can’t figure out why his “good friends” bank did that to him.

4. Much Too Focused On Features & Benefits:
Another common problem is organizations that focus nearly entirely on training on the features and benefits of their products, with a smattering of competitive reviews. The result is salespeople who are automatons when it comes to reciting the attributes of their products, what they haven’t done is learn how to listen, develop and solution that surpasses the customers’ expectations, build a plan that serves the customer and wins the deal. It’s really rarely about features, they are important, to be sure, but important only as one component in meeting the customers’ needs.

5. The Failure of Technology:
And finally, I mention the failure of technology. People who have experience, and with it a bit of age, seem to rely on their “tried and true” methods, not realizing the world has largely passed them by and they can no longer win business on the sheer force of their personality. They seem to take a perverse pleasure in rejecting the advantage technology brings them. They are staring at their own obsolesce and don’t even know it. Just is bad is the younger salespeople who rely too heavily on technology, thinking an email is all that is necessary. Largely, it seems, using available technology to “put the ball in somebody else’s court” as they say. Apparently thinking that once they’ve launched an email, their task is essentially done. Both are failing because of their perception of the value of technology. One undervalues it; one places too much value on it.

So, there you have it, the five most common hurdles I see that act as barriers to achieving great performance. All can be fixed, but they must first be recognized, and then dealt with.