|When the numbers aren’t there, the sales guy for the territory or the account tends to get the heat. That's understandable, some sales just don't push it hard enogh. However, in the majority of the cases I get to see, things aren't quite that easy.|
Pointing fingers at the sales person might be easy, however, replacing them with someone ‘better’ might not be so easy, since good sales people always come at a premium when hunted.
Forget the fact that you create unrest at the customer interface, lose tons of tacit account or territory knowledge, even forget the fact that the new person needs 6 months before even knowing where to go for help in your own organisation, learn your flavor of salesforce or whatever CRM from hell you might be using. Not even mention the fact that you personally will spend days and weeks to get them up to speed. Here's what the problem is: At the end of the day the new person might not actually do any better than their predecessor, because the problem might never have been a representation problem in the first place.
When looking for causes, I for one can tell you that every single organisation I worked with had their internal issues. I am talking major global IT firms, household names. It might be that service delivery is slow and error-prone, it might be products are dated and no longer competitive. You simply get used to your own shortfalls over time and tend to accept them as a fact of life. Frog in the cooking pot.
When searching for causes of poor sales performance, the danger is that you develop a blind spot for the true but uncomfortable reasons and fix stuff that is fixable but unfortunately isn’t the root cause of your problem:
Any one item on the above map is capable of blowing your performance single-handedly, so before you change horses in the middle of the street it appears the incentive is huge to make sure that all the other determinants are properly set up, so that a decent sales person can go and do his or her thing.
Let me give you an example of where an organization got the incentive scheme wrong and kept wondering why sales weren't coming on-board with their service strategy:
I worked with a major vendor with a large installed base of a product that was slowly becoming obsolete. A bigger competitor had taken their core market and they were no longer big enough to fight back with innovation. So they figured they needed to flank the market by going after maintenance and outsourcing revenues. A perfectly valid strategy I thought. They spent lots of money on various sales pushes for their services. The top team was determined to make it happen. The communication to sales was very clear: "Sell services!"
On reviewing this company’s incentive structure however, I found that an account manager would receive commission for the first year of a 5-year service contract, but zero after that. Sales would make a lot more money shooting for hardware RFPs than they would selling outsourcing deals. And that's obviously what they did - sell hardware systems, THEN try to sell some service on the back of that. Their sales managers would only be concerned with their own targets and wouldn't care what sales sold as long as they sold something and halfway made their targets. And so a great strategy slowly fizzled out, resulting in the company losing more market share and eroding service revenues on top.
Sales people aren't complicated. You hire them to make money and that is what they come to you to do. If you want them to make lots of money for you, enable them to make lots of money with you when doing the right thing. Everything else is mechanics.
It was blatantly obvious to me as an outsider and it is probably to you as a reader that the issue here was bad management of the sales function on behalf of the management team. Still they were unwilling to face the facts and went chasing the wrong goose for a long time, fixing things that weren't broken.
If you feel something isn't going the way you'd like it to in the sales function, we're happy to take a look from the outside.We'll provide an independent perspective of what seems to work and what doesn't and and we'll also develop a strategy on what to do about it - if you'd like us to.
As a VP or Director of Sales, why don't you simply take us up on our free 45-minute Directors Sparring offering!