Another Take on Sales Management -1 September 3, 2015Posted by David Dirks in Building A Sales Organization.
Tags: sales management, sales strategy, time management
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What is the biggest ally and also the biggest enemy of the professional sales person? In my view, it’s time. Time is that precious commodity which is used up at a constant rate and can never be reversed. Sales professionals have two choices: Either maximize the time they have every day or squander the time. Let’s first look at the ways time is squandered:
- Natural procrastination. We all have inside of us some level of procrastination with some people endowed with more if it than others. As sales managers, we have to realize that some level of procrastination is necessary – it’s a tool we humans often use to give ourselves a break between assignments or stressful events. Other times it’s just a way for some to give way to their natural level of laziness. Either way, recognize that it exists and cannot be wished away.
- Focusing on what we like to do. But not spending much time on those elements of our sales profession that perhaps we like less. In other words, what comes easier to us is often a joy to do – what doesn’t come easy feels like a drag – even if we know it’s the path to sales success.
- No ability to prioritize effectively. Prioritizing by itself isn’t hard – anyone can randomly prioritize. Are they prioritizing their sales process in the order that gets them closing more deals?
- No consistent sales process. Some sales people develop their own sales process that allows them to maximize their time and efforts. Then again, some don’t and seemingly flit around doing things differently every time. As sales managers, we have to be able to understand how each of our sales team members sells and why they do it the way they do. This applies mostly to those who are average or sub par in their sales results. The peak sales performers have their sales process and work it consistently.
- Little or no sales coaching or training. Consistent sales performance is honed over time and requires and investment of time on the part of the sales manager. Just letting them go off into the distance without regular coaching equals opportunity lost and time squandered.
- Sales compensation that doesn’t motivate in the optimal ways. You have to ask yourself: Is our sales compensation plan calibrated to get our sales teams focused on the best practices that result in the best sales results? Great sales organizations are those that understand that they have unique “best practices” – those habits that have proven themselves successful over time. And they find ways to train and compensate their sales teams to following along and implement what works best.
- Round peg, square hole. Some people just aren’t suited to sales. Help them move on and find a satisfying career field somewhere else. You are squandering their time and yours.
On Building A Sales Organization – 3 August 26, 2013Posted by David Dirks in Sales Compensation.
Tags: David Dirks, dirks on strategy, sales compensation, sales incentives, sales management, sales strategy, Sales Tactics
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If all else goes well, compensation is usually the part that falls off the map. The majority of small business owners that I’ve seen over many years try to find a way to pay the least they can. They create so-called sales compensation plans that seemingly have a “path to make a lot of money” as one small businessman told me once. The math is usually some blown up algorithm that has no relationship to the time it takes to really sell the product or service. It assumes that the “sky is the limit” and that the product or service is so beloved that it will fly off the shelves. Reality meets fantasy and no one wins.
As I said in the beginning of this series on the subject of sales compensation:
Willing to create a sales compensation plan that truly rewards people for their efforts but doesn’t leave them wondering how they are going to eat while they ramp up & beyond. Whether you hire experienced or entry-level sale people, be prepared to compensate them within the range of what is at least the standard for you industry. Going cheap on the compensation plan equals consistently high turnover. At best, you’ll be a good place for someone to get some training and experience before they go off and find a real sales organization to make a living off of.
Years of sales compensation planning provides me with several takeaways:
- A great compensation plan rewards sales behaviors that lead to tangible improvements towards meeting or exceeding specific objectives.
- A one-size-fits-all sales compensation plan does not exist. The best plans are customized to your specific industry and needs.
- Spend some time looking at how compensation plans both are similar and where they vary. This is time well spent. What you will learn will save you time and headaches.
- Stress-test your compensation plan first before finalizing it. Do the math and run some realistic scenarios through it to ensure it rewards the behaviors that you want to reward.
- All data that is used for calculating compensation must be verifiable.
- Make sure your compensation plan cannot be manipulated. If there is a weakness in your plan that could favor the pockets of your sales force with little benefit to your business – sales people will find it pretty quickly.
- Base your plan on realistic sales income scenarios. I love the way most multi-level marketing (MLM) programs can develop multiple scenarios that look and sound like you to can make $5000 a month in extra income by only do X, Y or Z.
- Sales compensation plans should be reviewed at once per year at a minimum or whenever major changes in your business (changes in product pricing, profitability, competitive changes, etc.) make it necessary to adjust your plans.
Overall: Avoid the extremes: paying too little or paying too much for little real results. When in doubt, hire a sales compensation expert to help you craft a plan that fits your business needs.
On Building A Sales Organization – 2 July 24, 2013Posted by David Dirks in Building A Sales Organization, Sales Management, Sales Strategy/Tactics.
Tags: sales, sales growth, sales management, sales organization, sales strategy
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So you want to build your sales organization…make it strong…faster…better…at finding and creating new business for you? No problem – as long as you recognize, acknowledge and are able to execute with the ability meet several criteria. I’ll deal with the first in this post: targeting, hiring and training the right sales people.
Here’s how I laid it out in the first post on this subject:
Willing to either hire experienced sales talent or willing to invest in the sales training required to help entry-level sales personnel become productive in a reasonably short time period. Doesn’t much matter how great your sales opportunity is if you aren’t willing to either hire successful, experienced talent or hire the best & brightest entry-level talent – and then be willing to support them with the best-in-class sales and product training you can afford.
- Develop a list of job responsibilities – the tasks they would need to implement day-in-day out to accomplish their sales mission. Then you need to articulate exactly what they are accountable for in the sales job. Making sure you have thought through exactly what you need this person to do and what they are being held accountable isn’t as obvious as it sounds.
Example of a job responsibility:
Research and target potential prospects that fit our customer profile within the sales territory assigned.
Example of a job accountability:
Meets monthly, quarterly and annual sales targets for specific product categories as assigned.
Job responsibilities lead to the fulfillment of job accountabilities – those measurable end results that count. They add real value to the business…in sales and revenues.
Now let’s talk about the minimum amount of sales experience you need. You may only need a college graduate – fresh from the ceremony – for the kind of business and industry you’re in. Or you may need someone with specific kinds of industry experience.
For example, a John Deere dealer will most definitely need a sales staff that understands agriculture, farming and the machinery that makes it all work. A company that sells specialty software to banks and other financial institutions will want someone with banking industry experience that relates well to their product line.
Be clear about the minimum amount of bonafide sales and industry experience you need for their success and yours.
- Well before you think of placing an ad (based on your well thought-out job description), think through what kind of initial and follow-on training will be necessary to give your new sales hire the best chance of a strong start.
Setting anyone…experienced or not…on their own without much attention to the amount of initial product, service and sales training they’ll need to become productive, is not effective. The first 30 to 60 days of any sales persons life in your business is critical. So it’s worth the time and effort it takes to prepare and initial your sales hire with the right amount of product and sales training that will boost their initial productivity.
Target the right hire. Train them well. Watch them grow.
On Building A Sales Organization – 1 July 20, 2013Posted by David Dirks in Building A Sales Organization, Sales Management, Sales Strategy/Tactics.
Tags: business strategy, increasing revenues, sales, sales growth, sales management, sales strategy
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Note: This is the first in an ongoing series on building an effective sales organization/team for a small business.
There comes a time that some successful small businesses find themselves in. It’s the time to consider the need to build more revenue by engineering a sales organization. What does a vibrant, dynamic and proactive sales force give you? How about the ability to scale your revenues by adding more boots on the ground? Now I’m NOT talking about going from 1 or 2 sales people to 20 overnight. The first step is recognizing that the only way you can scale revenues in a northerly direction is by building a sales organization starting from ground zero.
But let me save you the money, time and resources it takes to build a sales organization and culture in your small business. It’s simple from my experience. If you are willing to do ALL of the following, you have the right stuff to really create a viable and revenue contributing sales organization whether with 1 or 20 people:
- Willing to either hire experienced sales talent or willing to invest in the sales training required to help entry-level sales personnel become productive in a reasonably short time period. Doesn’t much matter how great your sales opportunity is if you aren’t willing to either hire successful, experienced talent or hire the best & brightest entry-level talent – and then be willing to support them with the best-in-class sales and product training you can afford.
- Willing to create a sales compensation plan that truly rewards people for their efforts but doesn’t leave them wondering how they are going to eat while they ramp up & beyond. Whether you hire experienced or entry-level sale people, be prepared to compensate them within the range of what is at least the standard for you industry. Going cheap on the compensation plan equals consistently high turnover. At best, you’ll be a good place for someone to get some training and experience before they go off and find a real sales organization to make a living off of.
- Willing to support your sales team with the resources they will need to get the job done. That includes providing them with professionally created sales collateral (brochures, catalogs, product info sheets, etc.) – and not material created by your niece or nephew who calls themselves a “graphic designer”. Sure, they’ll work on the cheap for you but more often than not, their work is substandard. Hire professionals with a bonafide track record.
So, if you’re truly committed to hiring quality, providing compensation that motivates and allows someone to earn a better than average living, and support them with the sales tools they’ll need to be successful – you can entertain building a real sales organization.
Betterment…Is A Strategy July 12, 2013Posted by David Dirks in business strategy, marketing, Marketing Buzz, Sales Strategy/Tactics, Sales Tactics.
Tags: business strategy, David Dirks, differentiation, market differentiation, market strategy, marketing, marketing strategy, sales strategy, small business strategy, strategy
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Why do people buy your products or services? Are they forced to buy them out of necessity? Do you have a monopoly? Probably not. But understanding why people buy – and it’s often not on price – is one key to business longevity.
If you sell products or services that can easily be obtained elsewhere, why should they buy from you? Think about yourself as a consumer for moment. When you make a purchase – are you making it to contribute to a life of mediocrity? No. We buy things because of one basic reason: betterment. I buy milk as a staple but the place I buy my milk is the place that offers me the best tasting milk at a fair price. I don’t buy my milk anywhere else because I feel the milk I buy there is better for me and my family.
Betterment. It’s a word…a noun to be exact. Websters defines it as “becoming better” and “an improvement that adds value to property…” Consider yourself “property” as a consumer.
As a business owner, your job is to convince the rest of the world (or at least your wedge of it) that your product or service offers someone a way to better themselves…their lives…their families. In a world where everything seems like a commodity, your edge is communicating how your company delivers on improving something in the life of your customer and, most importantly, your prospective customers. The success of your business model depends on it.
That said, if betterment was easy to define, everyone would be doing it but few are – just look around you. Most business owners are stuck on price or try to differentiate based on product or service features or benefits.
Apple has long been a master at parlaying great technology and wrapping it around betterment. Apple marketing and sales messaging is almost centrally focused on how Apple products enhance or better a life. And they are able to deliver on that promise to (if you are a pc head, you don’t get this but we’re ok with that).
If you follow a blog, perhaps this one – you have the expectation that spending time here will better your life or business in some way, shape or form. Otherwise, you wouldn’t spend you time on any blog that didn’t offer and deliver on that. The most popular blogs are followed because people get something out of them (entertainment value, economic value, etc.) that they can’t find easily elsewhere.
The first step on the path of a message of betterment is to translate what your product or service does to get a customer there. The destination is betterment. For example, a landscaper cuts the grass and makes the property look great each week. Where’s the betterment? How about the time it frees you from having to do it and spend more time on things you want to do instead – like spending more time with family. By making your property look like an estate, you feel that your property and the quality of your life are enhanced (as opposed to looking at tall grass and weeds).
In other words, a betterment message is thinking of your product beyond the standard features and benefits it offers. How does it translate – tangibly or intangibly – into a path to making some aspects of a customers life better?
The second step is making sure all of your marketing and sales messaging is zeroed in on the elements of betterment…clearly…concisely…and consistently. You have to be able to draw a picture in the mind of the customer so they don’t need an algorithm to figure out why your product is the one they should buy. They should “get” betterment.
Never easy to do but clearly worth the investment of time and effort to get there. Betterment – it’s a strategy.
Driving Foot Traffic: Woolworth’s Style December 14, 2012Posted by David Dirks in Driving Store Traffic, Retailer Store Strategies, Sales Strategy/Tactics, Solving Business Problems, Strategy.
Tags: business strategy, David Dirks, David E Dirks, dirks on strategy, driving store traffic, market differentiation, sales strategy, store traffic
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It took the latest issue of Businessweek to remind of that oftentimes what is new is old. Case in point: the Woolworth’s food counter. Remember (for those of you who are old enough to) the days when you local Woolworth’s store had a lunch counter where great, cheap hamburgers, fries and a great milkshake where just across from those square product bins that checkered the store? Woolworth’s was a pioneer in creating a way to drive foot traffic with something that had nothing directly connected to the products they sold. By having a soda fountain style lunch counter, there sales per square foot where for a long time better than average.
The lunch counter couldn’t save Woolworth’s from going out of business after decades of success but the idea of driving traffic by providing food lives on. Nordstrom operates about 200 restaurants of one kind or another, including coffee bars. Barnes & Noble developed its coffee bar concept to drive traffic and create a reason for people to hang around the store longer. You’ll also notice that the coffee bar is a place where people meet to socialize. They know what Woolworth’s long understood: The longer they stay, the more chance they will buy.
So am I suggesting that brick & mortar store owner rig up the BBQ and serve up some burgers? Not exactly. What I am suggesting is that in the battle of driving foot traffic it might be that food or drink (coffee bar?) might just do the trick. As I always say, there is no magic bullet for creating foot traffic – only hard work and great execution wins the day.
What can you do to create ways for people to want to come to your store and stay a bit longer? Think about it.
Seth Godin Gets It September 27, 2012Posted by David Dirks in business strategy, Sales Strategy/Tactics, Strategy.
Tags: business growth, business strategy, David Dirks, marketing, revenue, revenue growth, sales, sales strategy, Seth Godin
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As I write this post, I’m sitting in a classroom here at the Googleplex in NYC. Just heard Seth Godin (sethgodin.com) and as he was speaking, I wrote down several things (in paraphrase) that stuck with me. This is all in the context of how we become more successful in our business to help other businesses succeed:
What story are you telling?
Are you trusted?
The more you specialize, the more likely you are to solve problems.
What is your brand promise?
Are you selling scarcity or abundance?
Get it? Think about it.
The Greatest Lie in Sales January 11, 2012Posted by David Dirks in Sales Management.
Tags: branch marketing, branch sales, David Dirks, dirks on strategy, marketing performance, marketing tracking, sales, sales management, sales performance, sales strategy
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Did you close business from this (print ad, direct mail piece, radio ad, TV ad, etc.) we ran?
Now, the savvy salesperson who’s been around awhile will probably (not in all cases but most) say a resounding “YES” to that question…even though it’s probably not true. Yup. Happens more often than you think.
Case in point. Many years ago when I arrived at JPMorgan Chase, I took inventory of the kinds of marketing efforts that were underway when I arrived. The print ad spend was very high and sales managers went out of their way to tell me how highly effective the print campaign was. The results were so good that they needed more of it.
My first question of course was centered on how they were tracking the results from the ads. Tracking? What tracking? We know the ads are working because our guys say so, would be the common response. The phone numbers in the ads were the sales branch phone numbers. There was no way to electronically track the ads. And asking the branch office to track the calls manually from the ads was in my experience giving the fox the keys to the hen house. Manual tracking never works.
I’m always willing to give anyone the benefit of the doubt the first time out. However, I recall my favorite Ronald Reagan line during his presidency: Trust But Verify.
I wanted to believe that the current advertising campaign was working too. All I did was create tracking so that we could see just how many times the phone would ring at any branch office due to an ad.
Guess what? The phone was not ringing much at all. In fact, the ad campaign I was evaluating was bust. The senior sales managers were surprised. “How could this be? Such a wide variance between what our sales guys were telling us?”
How does this happen? It’s simple really. There are more than a few sales professionals who have learned never turned down marketing support – even when it isn’t effective. There’s a fear that if they told the truth, the valuable marketing investment on them would go away.
So next time you hear a sales person tell you that the marketing campaign is “working” or “we’re closing business with it”, trust but verify.
Congratulations. You’ve been promoted. December 20, 2011Posted by David Dirks in marketing, Strategy.
Tags: advertising, advertising strategy, dirks on strategy, marketing, marketing strategy, sales, sales strategy
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The title of my post today is not mine really. It’s from an ad that really caught my attention. As I go through my daily reading routine, I am intent on finding information that suits my interests, needs, or wants at the time. Of course, I scan the ads and am rarely stopped by them. However, this ad drew me in. Here’s the rest of the copy of this ad:
You’re now the boss of your own life. That’s right, today you officially become your own Chief Life Officer. At Lincoln Financial, we’re here to help all Chief Life Officers take charge no matter where you are in life. So here’s to long weekends and longer retirements, 14-year-olds and 401(k)s, and to passing on wisdom and opportunities. Of course, this job doesn’t require you to punch any clock, or fill out any time sheets, because life isn’t just about what you make, but what you make of it. And while your boardroom is more likely filled with family photos than mahogany, we’d be honored to join your inner circle to help you make important decisions with confidence. After all, the future success of any organization comes down to the one making decisions today. Let Lincoln Financial help you take charge.
Calling all Chief Life Officers.
I don’t know about you but that call to “all Chief Life Officers” really appealed to me. Born at the tail end of the baby boom generation, I can appreciate the appeal to my deeply rooted “need to achieve”.
I’m sure if I was in the room at the time this ad campaign was conceived, I’m sure they were aiming for baby boomers just like me. Chief Life Officer…yup…that’s me (and many of my fellow baby boomers too).
Great strategy. Great ad.
Premiums as a Branding Strategy? January 17, 2011Posted by David Dirks in business strategy, Local Brand Development.
Tags: advertising, beating a recession, business premiums, business strategy, buzz marketing, David Dirks, differentiation, dirks on strategy, market differentiation, marketing strategy, premiums, promotional premiums, sales strategy
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I have the same dream often. I’m at a tradeshow and as I go to each booth, I find that there are no premiums for me to scarf up. Nobody has any of those glo pens or squeezable stress balls that come in every shape imagined by mankind. Nobody trying to shove another bag at me so I can carry all the plastic promotional items I suck up at each booth. I wonder. Is this a nightmare or is this a dream come true? It depends on which side of the premium business your on.
Let me be the first here to say that I’m not against the use of premium items for tradeshows. If you can afford it, go for it. If you expect that a premium is going to help you get more business or, as the premium sellers will tell you, it can extend your brand, you’ll be sorely disappointed. You’ll be staring at the phone, hoping one of your thousands of premiums you’ve distributed makes the phone ring. It could happen but the odds are against you.
When was the last time you heard anyone say, “Oh my God. Those premiums are making the phone ring off the hook!” or “Thanks to my premiums, my small business is now a huge brand in my market!”. The answer is, you haven’t. And there’s good reason for that.
In the context of small business enterprises, premiums are a luxury item. And it doesn’t matter how inexpensive they are either. It isn’t inexpensive if it doesn’t directly drive business. When was the last time you called a business using the phone number on their premium pencil.
The problem is, we’ve been so brainwashed that premiums are a ‘must have’ item when you’re looking to promote your business. If your booth doesn’t offer a premium, you look, well, lame. How could we have a tradeshow booth without some kind of premium with our name slapped on it?
Large companies, which drive the entire premium market with their huge, annual premium purchases, have the ‘fat’ available to burn. Small business are generally not in that category.
The other challenge is that the premium industry as created a who army of people who are nothing less than premium freaks. They come to tradeshows with the goal of getting every free premium they can fit into their premium bags. I call them ‘tradeshow groupies’. They visit your booth, not even remotely interested in your product or service, only to open their bag wide enough so they can fit your premiums in it.
Do you know where most of those premiums end up after a time? Shoved in some drawer or thrown out with the trash.
I received a note from a premium vendor the other day who called the use of premiums as a strategy for extending a brand. Are you serious? Sure, if you sell premiums, you have to say that.
Here’s another strategy: Invest your time and money instead on improving your website/blog SEO…that will do much more to further you business than buying inexpensive premiums.
So, the premiums industry goes on its merry way. Tradeshows will continue to shovel out tons of premiums. Booth vendors will be pleased, if only because they got rid of the final box of premiums, avoiding having to schlep them back to the office.
Of course, the happiest people are the tradeshow groupies. They continue to collect their share of the loot. They’ll get their fix every time. It’s guaranteed.
In the meantime, the real winners are the vendors who sell premium items.
Do what you will. Bow to the pressure, either self-inflicted or peer-driven, and buy them if it makes you feel better. Premiums are in most cases, a ‘nice-to-do’ but when it comes down to it, rarely drive business or branding.