In Part I of this article, we discussed how every company wants a more effective sales force, but few know where to start. Sales leaders often try the “throw it up and see what sticks” approach of launching a half-dozen or more initiatives simultaneously, hoping one of them is the real root of the problem.
While the specific levers differ for every company, we believe that sales effectiveness issues can most often be traced to one or more of six very common culprits. Here are the remaining three key questions to ask yourself before launching a sales effectiveness inititiative:
1. Does our compensation and incentive plan motivate the behaviors necessary to drive growth?
Compensation and incentive plans are key to driving the behaviors that produce improved revenue growth. However, too often these plans don’t adequately incentivize the right behaviors that drive growth. There are three major issues we see frequently. First, many plans do not effectively reward revenue growth or punish lack of it. Sales reps should not be paid the same amount each year for producing the same revenue each year. A company cannot grow this way. Instead, plans that disproportionately reward the reps who drive the majority of growth create an incentive for everyone else to raise their game.
Second, plans are often too complex. Many aim to drive too many behaviors and include so many components that sales reps are confused and wind up just selling what is easiest. The most effective compensation plans focus on just two or three core components – growth, margin and mix. Finally, most plans assume reps are motivated solely by financial compensation. While this is true for some reps, every team includes players who are additionally motivated by non-financial means such as recognition, peer pressure and contests. The best plans account for individual motivations by including a mix of incentives.
2. Do we have the right message for the right customer segments to win new business?
Once you get the right reps in front of the right prospects, they must be prepared to deliver the right message. Unfortunately, we often find that what appears at first glance to be a compelling and plausible message turns out to be missing the mark. Messaging that is even 10 degrees off from what customers value will have an adverse impact on generating revenue.
If the majority of your information on customer/prospect needs and buying behaviors comes from the sales force or from infrequent short customer surveys, your messaging is probably off target. Simple surveys do not provide adequate insight and sales force perspectives are often biased. Thorough, direct, frequent and probing customer interviews are often the best way to identify what customers truly value and what your messages should be. Make these interviews an ingrained part of your sales and marketing efforts. Once the messaging is on target, the sales force must then have the coaching, training and tools to communicate that message for each customer segment.
3. Do we truly understand what drives sales performance and are we tracking the most impactful metrics?
Most organizations we visit can produce notebooks full of metrics they measure regularly and provide to sales reps. The assumption is that more data will produce better results, but that is rarely the case. Instead, we find reps are overwhelmed by all the numbers, aren’t certain which are most important and therefore don’t change their behavior as a result of seeing them each month or quarter.
Effective sales organizations focus on collecting just 10-15 metrics that measure and drive key sales behaviors and they make these metrics part of their sales culture. To determine which metrics to track, identify which activities or behaviors lead directly to improved performance in your organization. Those are the numbers on which your sales team should become laser-focused. Make them a part of the salesperson’s daily life and an integral component of both organizational management processes and the coaching and review process. When reps know the metrics, know they can influence them by the actions they take and know they’ll be held accountable to them by the management team, metrics drive sales effectiveness.
By using these questions as a six-point inspection, sales executives can cut through the marginal issues and zero in on the most prevalent root causes of sales effectiveness erosion.
Brad Wilsted is Senior Managing Director and Co-Founder of Blue Ridge Partners, a firm focused on driving revenue growth. He can be reached at bwilsted@blueridgepartners.com.
Ryan Tubman is an Engagement Manager with Blue Ridge Partners. He can be reached atrtubman@blueridgepartners.com.
