Highlight the human factor

Lasting motivation: Harriet Millard of Make it Matta with her BESMA in 2018

HIGHLIGHTING THE HUMAN FACTOR

Salespeople need recognition to drive growth in a post-pandemic, post-Brexit landscape, argues Adam Warsop

As I write this article it causes me to reflect on how I plan to simultaneously reward my team, manage risk and enable growth. Hopefully my reflections will help inform some of your thinking and make you pause for thought.

As we emerge on the other side of the pandemic this year – I very much hope – and into the new world of post-Brexit Britain, there will be a need to supercharge and drive our businesses in a whole new way. We will face competition from markets we never have before, as well as hurdles in the areas of supply chain and logistics that are likely to challenge us to think of new solutions to meet our clients’ needs. HOW DO WE MOTIVATE THE TEAM? This all being said, the key challenge we will face is how do we motivate our sales teams and salespeople to maximise their talent and drive revenue growth, without breaking the bank.

My answer to this ever-present challenge is don’t think only monetarily but also laterally. We all know that everyone is motivated differently, so a one-size-fits-all approach will never work effectively – so why do we so often think a sales bonus alone will solve the problem?

In reality, salespeople inherently thrive on at least a couple of key reward factors, of which monetary reward is just one. Equally important for many is recognition among their peers. With the monetary reward element problematic at the

moment because of the economic climate, the recognition aspect becomes even more important – and probably easier to achieve. RETHINKING RECOGNITION Recognition can mean lots of different things to different individuals, so allow me to generalise my approach. Salespeople often see their bonus number as recognition, but what they actually thrive on is the public aspect of being seen by their peers to have hit and exceeded their number.

I will quite often run incentives such as “most valuable player of the month”, which highlights amazing stories of objection-handling and closing, with no real reward other than public recognition. I find that this approach drives even greater competition among sales teams than monetary rewards. But due to the fact it is more about the stories behind the numbers, it drives the right sales behaviours as well. I find that it encourages salespeople to focus on solving clients’ needs, and considering their business challenges more, to build a compelling and elevating story to on-sell and cross-sell solutions.

For the avoidance of doubt, this is not a league table approach to recognition – which I don’t believe works long term and certainly not in all sectors. I would also add that I don’t judge this for my team – it is judged and voted for by the team members themselves, and they elevate whomever they deem worthy to this title. I see this as taking recognition to another level by elevating sales to become the rudder as well as the engine room of the business. EXTERNAL AWARDS Another way to recognise sales teams and individuals beyond monetary constraints is through external awards. High profile events such as the UK’s leading sales award scheme, the ISM’s British Excellence in Sales Management Awards (BESMA), can be a huge boost and a turning point for any team or individual nominated or awarded. I have seen at first hand what this external public recognition does, and it is highly positive. It is the only chance as a profession we get to compare, contrast and build our skill outside of our direct competitor landscape and truly challenge ourselves on what it takes to be great in our profession.

I do appreciate that entering sales award schemes such as BESMA requires some investment from the business, whether it be in taking time to submit strong nominations or in taking a little time away from selling to attend the judging process and the award ceremony. But the motivation it gives sales professionals and teams far outweighs by the time and cost of entering.

I speak from personal experience in saying that, having judged or taken part in many of these awards, the skills I have learnt have served me extremely well and challenged my personal approaches for the better. BEYOND BONUSES Whether your preference be internal or external recognition via the methods I have mentioned above, I would urge you to pause and consider these the next time someone suggests a need to give salespeople bonuses to increase their motivation. Salespeople and teams are not inanimate machines, but vital human beings upon whom businesses depend to drive growth, regardless of the macroeconomic climate. The post-pandemic, post-Brexit challenges will be

vast for sure, and quite often unexpected, but one thing I am certain of is that our sales teams will drive us through and enable our businesses to adapt, grow and succeed.

I am passionate about the world of sales and have committed to becoming the best I can be in this field. To me, sales is not just another function to serve business needs. I strongly believe in sales as a profession and in my colleagues across the sales profession as true masters in their trade. We wouldn’t recognise a great engineer, medical professional or scientist simply through monetary rewards alone, but would instead look at multiple ways of valuing them, from supporting their professional development to honouring them through awards. We should do exactly the same with salespeople – after all, they perform a critical role in driving the success of the products and services that the aforementioned roles produce, so without each other the whole value chain breaks down.

EVOLVING FOR THE BETTER As I mentioned at the start of this article, I am using it to challenge my own thinking and it has done so. It has allowed me to really reflect on how I want to motivate and be motivated as a sales professional. There are more options than those I’ve mentioned that I now wish to consider, and you are sure to have your own ideas too. So, whether you are a salesperson who will now go to your sales manager with new ideas, or a sales manager challenging yourself like me, hopefully we will all evolve for the better by creating value and growth via new ways of recognition and reward in 2021.

“We wouldn’t recognise a great engineer, medical professional or scientist simply through monetary rewards alone”

ADAM WARSOP (FISM) is head of sales, marketing and business development at PwC Operate, the managed services division of PwC, where he is responsible for driving new relationship generation. Email: adam.warsop@pwc.com or visit: pwc.co.uk/operate

PLAN FOR PERFORMANCE

If you haven’t got to grips with replicable performance planning for the salesforce, there is no time like now to find out and implement what works, says JIM IRVING

non-standard contract terms and conditions? Or perhaps it might be bookings made and subsequent delivery completed (again, however defined), or is it a cash received target? Is it the headline revenue number you want measured, or just the gross profit, or the net profit? You need to consider what you want and the company needs, before laying out the complan. E veryone prefers not to be measured. It makes life so much easier, doesn’t it... All salespeople (unless they are well ahead of their target) are among the least comfortable with constant measurement. But if they 2. When do you pay commission against orders and on what basis? If salespeople have signed a contract for monthly payments do they get all of the annual revenue-based commissions up front or as it proceeds through the year? Or at some mid-point? And only for year 1 if it is a multi-year contract? 3. What is the target based on? Your core product, are ahead of goal then they want everyone to and/or supporting services? Professional services know... And more generally, people tend to not like attached to the deal? Service contracts? Define specific targets and measures. clearly what counts towards the target number you

Setting sales targets can be a daunting thing to have set. What rates are paid out against each of do at the beginning. But in any other role there is a these elements? process to setting targets and it’s really not too 4. When? If all the deals come in on the last month difficult. First, note down what you want and need of the year is that OK for you? If not, define from your salespeople for your team or business. monthly or quarterly expectations (I have seen these In a small business or a also include ups and downs corporate sales role, it is absolutely normal to set a numerical target. What “As a middle (or front-line) manager, you are in effect a for the season – lower in mid-summer when the holiday season is in full swing, revenues generated justify chief executive of an for example). their initial or continued organisation yourself; you 5. Priorities. Perhaps you employment? That’s a good can improve your group’s want a focus on a specific starting point, but is it enough? A clearly defined performance plan, tied to their compensation plan (aka performance and productivity, whether or not the rest of the company market, or on one of your offerings above the others. Maybe you need at least four new “strategic” “complan”), with everything follows suit” customers (again, define covered up front, is by far the Andy Grove, ex-CEO, Intel them) from this person, this best way to go. But what year. Lay that out and other elements, apart from the emphasise it though your headline number, should be considered and added payment scheme too. in, if appropriate? 6. Velocity. It can often be helpful to measure velocity. What does this mean? Think of your HERE ARE SOME TO CONSIDER pipeline as laid out in your CRM system or even 1. Is the overall goal to be based on bookings made on paper. You have perhaps 5 stages and maybe (and what is the definition of that to you)? Is it (hopefully) between at least 2 and 20 deals in each when a purchase order is received, or your order stage. Velocity, in this context, is simply the sum of paperwork signed – but what if the deal includes the movements further along/down the pipeline

in a given period, say a month. It is easy to create a measure and it does show clearly just how well and quickly there is progress. 7. Finally, on all that I have listed, what is the most important, what is second etc? Make sure your plan leads them to your business focus areas first and foremost. Drive their behaviour. 8. I also include a couple of “soft” measures in the complan too, to focus minds. Things like work rate, working hours, being a professional team member, mentoring more junior staff etc. 9. I often ask a salesperson to use the available ratios (see below) to figure out their own activity level requirements.

SPEND TIME ON THIS I think, from this list, you can see that there are many factors to be considered in a tight and clearly defined complan. Spend time on this – please. In

SET YOUR PRIORITIES – AND COMMUNICATE THEM

Priorities are self-evidently critical to your success. Do you actually know what your own true priorities are? Do you build your day, week, month and year around them? But you cannot have a large number of priorities. In the past decade, working closely with start-ups, I have found the need, several times, to sit down with the business leader and say to them “please tell me all your priorities”. All too often, they are on point 6 – and accelerating fast – when I have stopped them dead. Priorities are just that, the most important things, and you can’t have 6, 10 or 20 of them. So, the first step is to decide what your core, most critical priorities are.

Now, it’s not to my mind set in concrete, but I really like the idea of “the rule of 3”. This is an old – but also at the same time, very current – idea on exactly how to set your priorities. It also works in many other areas of life. The idea and theory are simple: you can’t have more than three areas of focus at one time. Three also seems to just be a maximum – and optimum – number. In storytelling, science and history, we see the three musketeers, three wise men, three little pigs, Newton’s three laws of motion, three acts in a play.

The concept can be traced all the way back to ancient Greece and has been consistently effective and applied in entertainment, writing, presenting and leading since then.

So sit down with your team and explain your three priorities for them, why you have set them and how they are defined and measured. Ask questions to make sure they understand. Then observe and tune their behaviours. Watch your team as they work towards your stated priorities. Take every opportunity to delegate. Give team members the chance to prove themselves, and stretch their skills and experience, while of course freeing you to focus even more strongly on your priorities.

It is a really simple idea. Take the time to clearly establish your priorities, both for you and for your team. Then take time yourself, every month, to measure your progress against them. Then discuss and share progress (or the lack thereof) with your team regularly. the early stages of my career, I found that complans were often hurriedly assembled. Guess what, like water, salespeople will always find the easiest route to their earnings. And it’s usually to your disadvantage if you haven’t done your job right. I have seen a company confuse revenues with net profit – now that was a disaster for everyone, except the sales team members. If you have the power to set or influence the complan, you must make sure the highest earnings come from achieving whatever is your highest business priority.

MEASURING PERFORMANCE The complans are now set and the individuals have signed it. Do you leave it for a year? Of course not, that is where ongoing performance measurement comes into play. Measuring and analysing performance is critical. It helps you to spot issues early on. They could be internal (lack of effort, product shortcomings etc.) or perhaps the market you sell to has changed under your feet as many have found with Covid-19. Your speed of response as the leader is all important here.

For new employees, take the time to clearly lay out your expectations – not just against the numeric target(s) but also work rate, behaviour, ethics etc. Make it all clear from the beginning. At the outset, get yourself a large whiteboard or similar. Put it up on the wall or in a prominent place. Then create a board recording the most critical goals your team has – most normally in sales, the deals you want to close and each person’s progress towards their monthly, quarterly or yearly target. List by salesperson and keep it simple. It’s a strong, visual reminder of success, progress and what still has to be done.

Set aside times for one-to-one reviews of progress against the targets set. Don’t let it falter. Everyone should know they will be reviewed and asked about their performance regularly. In essence, what you are doing is creating what is known as a replicable process. Something that works, is understood and accepted as required, fair and reasonable. It is always more difficult to introduce after time has passed – a structure that doesn’t yet exist is seen as a burden. Upfront, it’s just part of the job.

CONVERSION RATIOS One technique I have used consistently since the 1970s – to great effect – has been the measurement of ratios (aka conversion ratios). I have been a convert and talked about the concept for over 30 years now. They are powerful tools for the salespeople themselves, but they are also invaluable for a switched on leader. And they can be applied in whatever discipline you are managing, as long as there are measurable steps in the process you are leading a team through.

The idea is quite simple. A CRM system records

the deals and their details as they move through each step along your pipeline. And that is all well and good. But you can do so much more than just record basic facts. It’s not the basic data itself – “How many deals are there in stage 2 or stage 3, what is their £/$ value.” Far more important to me than just those raw numbers is the idea of the resulting conversion ratio between each of your sales stages.

This was the big lesson I learned all those years ago – back then it was recorded on a daily sheet of paper rather than in a CRM system. But the recording mechanism doesn’t concern me – it’s the hidden information in there that points to where the gold is sitting.

Now take a break or walk around for 2 minutes because I go into detail in the panel – but it is critically important.

Calculating ratios is a powerful but infrequently used mechanism to define exactly how to achieve success. The elements are: time available, qualified deals entering the pipeline, those ratios at each stage and the average deal value. With that historic information, or even just starting today to measure in this way, you are in a better place to start reviewing and tuning your sales process.

IMPACT ON TEAMS So, what does this concept have to do with team management? While it can make a fantastic difference to the individual that uses it, it is also a wonderful tool for guidance and early warning at the management level. Let’s say your process is actually a bit more complex than the example in the panel. Perhaps there are six clearly defined steps. If you enforce measurement of those ratios you can clearly see where there is a poor dropout rate at any given stage.

These ratios are typically viewed like this – 3:1, 2:1, 10:1 etc. Of course, you want them to be as close to 1:1 as possible. Lower means the deals are flowing along the pipe and not dropping out. Maybe you have a high number of prospects at the first stage but you lose a very large number of them before they proceed to your next formal “needs investigation” step.

Ask yourself, why? Is it a lack of skills in the team, something wrong in the sales approach, the way your current process is running, competitive activity…? Dig down, focus on any steps where the ratio is poor and work to improve them. Slight improvements in the ratios will have an enormous impact on team success.

But even more important, you can then, as time passes, compare these ratios among team members. How is it that Mary’s conversion ratio at the first two steps is twice as good as anyone else? What is she doing differently? Have her talk at the next sales meeting – detailing everything she does to HOW TO CALCULATE CONVERSION RATIOS

Start with your end result in mind (typically the annual target number). Now look at your activity records. Then look at what they mean for you. Here’s a simplified example. How many cold calls/social contacts/engagements does it take you to achieve one real conversation with a qualified new prospect? That’s Ratio 1.

How many of these identified prospects does it take you to get to the next stage – let’s say a meeting to review their needs in detail or a demonstration of your solution? That’s Ratio 2.

How many demonstrations then lead to an agreement to quote (or explore needs or whatever is your next stage). That’s Ratio 3.

Perhaps finally you ask, how many of these quotation stage deals do you need to close one sale. That’s Ratio 4.

Now using simple arithmetic and your average deal size, you can easily figure out (if your historic activity records in the CRM system are reasonably accurate) how many new, perhaps cold calls/contacts a week or month you need to make to hit your annual target, how many demonstrations a month are needed, etc.

How? Well let’s assume there are just four steps and at each only 50% of deals move forward to the next step (a constant 2:1 ratio), and your average deal size is £75k, then to get to a £500k target you will need 112 qualified deals at your first stage. Eh? Follow the process with me… You need seven deals at £75k to get over-target (7 x 75k = £525k). But that is the outcome from stage 4. With a 2:1 ratio you will need 14 deals at the final stage to close those 7; 28 at the stage before to get your 14; 56 at stage 2; and finally, 112 qualified prospects entering at the top of your funnel.

Of course, this is just a snapshot picture and it’s based on a very unrealistic set of ratios. After all, how many people have a hit rate as good as 2:1 on their first contact with prospects? Your own ratios may perhaps be something like 12:1 at the top, dropping hopefully to 2:1 or even 1.5:1 as you reach the very end and try to close the deal. The point is this: knowing what those ratios are historically tells you what has to be achieved at each step to get to your target.

perform so well. And what about Simon, why is his ratio in closing the deals that do make it to the end of the pipeline so poor? Ratios enable you to quickly review real-world, day-to-day performance and make valid, logic-based, clear cut comparisons.

THE LESSON Repetition is the mother of skill. This review, analysis and coaching discipline needs to be ingrained into your management and leadership DNA from the outset. Check often and make corrections and give advice and support each time. And yes, pull them up when you see things that are wrong. It’s easier to do that as you go along (like small corrections in a rowing boat) rather than ending up way off track at the end with no time to fix the problem. Putting off giving critical advice will only make it harder to adjust later.

JIM IRVING, an ISM Fellow, has more than 40 years in B2B selling with a number of major technology firms including Amdahl, Sequent, Silicon Graphics (SGI) and Information Builders. This article is adapted from his new book, The B2B Leaders Guidebook, available at Amazon.