Earlier this year, Sean Bredin, a consistent top grosser at Navantis Inc., a mid-sized Toronto-based technology consultancy, spent six months cultivating a $1.5-million deal with a U.S.-based utility. He thought he was close to clinching the contract when the utility fired its chief technology officer. The new CTO was less familiar with the document-management system that his predecessor had wanted to implement, and opted to shelve the project. "There it will stagnate for two to three years until he realizes they have to make the change," says Bredin, adding, "Most decisions I see made today are based solely on fear and keeping one's job."
Enzo DiMichele had a similar experience some years back while working for enterprise software developer Computer Associates (now CA Technologies). The client selected his proposal, only to turn his success into failure by cancelling the project. "The company chose to use the funds for new tires for their fleet of trucks," says DiMichele. "New tires! But they decided that would get them more bang for the money." He has heard more recent versions of this scenario from members of his team: "Losing to an out-of-category competitor happens more often than people realize."
Heartbreaking near misses are nothing new in the selling racket, but there's something new in what's behind them these days. Amid a tepid economic recovery, companies are facing multiple demands for their capital and remain wary of making major investments beyond the most pressing necessities. Big vendors that once scorned smaller contracts are now chasing them right alongside you. Access to more information, ironically, makes clients prone to more misconceptions and greater confusion. Meanwhile, the growing complexity and interconnectedness of business products and processes—especially in areas such as finance and information management—mean that multiple stakeholders get a voice in setting spending priorities.
All of which puts heightened demands on your salespeople and how they manage the sales cycle. Yet many SMEs are now discovering that their staff may not be up to the job.
"The past 18 months have shown a lot of companies that their weaker or average players who were meeting or exceeding targets are not that effective when the tide goes out," says Matthew Cook, president of SalesForce Search Ltd., a Toronto-based recruitment agency specializing in salespeople. Employers are realizing, he says, that they have "the wrong people with the wrong behaviour compensated in the wrong way."
Turning a good sales force into the ultimate brigade of deal hunters and closers starts with finding the right people. But it's just as important that you, their boss, understand their challenges and foster their productivity—and your profits—by providing the support they need today.
The new selling paradigm
The job of selling has gone through two dramatic shifts in recent decades. DiMichele, a sales executive with more than 20 years' experience who now trains sales managers through SalesWorks Systems Inc. in Vancouver, says that 50 years ago, salespeople simply enumerated a product's features: "Vendors would show up and throw up." The early 1980s ushered in "solution selling," which required sales reps to talk less and ask more questions about the prospect's business in order to craft the ideal proposal. "It presupposed that people understood what created their business problems," notes DiMichele. In today's highly computerized and integrated firms, that's no longer a safe assumption. The lack of certain website features may be costing the HR manager valuable recruits, while a new accounting system could affect how a manufacturing supervisor tracks output.
And so, within the past half decade, a new pattern has emerged in which prospects know that their businesses could perform better, but don't quite know how.
That's a tough scenario for your salespeople. "Clients go into projects with some sense of what they need, but they don't fully understand how they can get the most value," says DiMichele. That means sales reps "have to provide a solution to a problem the customer may not realize he has."
Yet many salespeople stick to the old paradigm, says Mark Stuyt, another consultant at SalesWorks. "They let the client dictate the solution and hope that if they say 'yes' enough times, they'll get the deal. But by saying 'yes' to everything, they're undermining the project's success."
Read: The 5 Most Essential Sales Skills to find out the most important—and teachable—skills that salespeople need in order to be great.
Bredin, who sells technology solutions to utilities and energy companies, finds that clients' understanding of their own needs varies with organization size. Prospects may have a limited grasp of the options that could solve their problems, but they lack the budget for outside experts—or simply don't want to look ignorant to the boss. Bredin recently spent two hours on the phone explaining to an executive at a mid-sized oil and gas company the benefits of an extranet. "That's typically a question they'd ask a consulting firm, not a salesperson, but now the sales guy gets roped into the conversation," he says.
Educating the client is critical in more ways than one. Today, the challenge isn't just to persuade the prospect to pick your offering over a competitor's but to allocate funds to the type of product or solution you sell rather than to a different area of the prospect's business. This requires a sales rep to analyze a client's operation in order to build a compelling pitch and to ensure the offering delivers on the promise. Stuyt points out a grim statistic, based on various studies as well as the SalesWorks team's personal experience: two-thirds of complex technology initiatives are unsuccessful, coming in over budget, past deadline and/or below expectations—typically ending that hard-earned client relationship.
The nature of client/vendor relationships also has changed. "Everyone's time has become compressed," says Cook. "For you to call up a client to go golfing, they'll want to know why."
Besides, salespeople now often deal not with individuals but committees because initiatives span many areas of responsibility. During one recent pitch meeting, Bredin faced members of HR, IT, customer retention and several other departments—along with a procurement specialist "whose No. 1 job was to screw me down on price."
With these pressures, new salespeople have less time to prove themselves. A recruit used to have six to nine months to land the first major deal, says Bredin: "Now, there's a natural heightened paranoia because people live by 90-day increments." Over his five years at Navantis, he says, he has seen about 10 salespeople leave, most of them because they didn't realize how quickly they had to become productive: "They didn't realize the target was on their backs within 30 days of starting."
A new skill set
In this demanding environment, traits long valued in sales—such as resilience, empathy and competitiveness—need to be augmented by additional qualities. For example, in order to challenge senior executives, sales reps require an element of fearlessness, says Stuyt.
Another key attribute is an openness to learning and coaching—especially important, says DiMichele, at SMEs where the owner is the main business driver and needs to impart that knowledge to the sales team: "The most successful salespeople are always willing to ask questions and receive input."
That willingness to learn has to extend to acquiring deep knowledge of clients' business challenges. "You need to be an expert in that sector," says Stuyt. "Decisions for any complex sale happen at a high executive level, and if you want to hold a conversation of more than 10 minutes, you need to show knowledge of the industry."
Bredin, for one, reads for an hour or two per day, mainly about the sectors into which he sells. He argues that a commission-based salesperson is a kind of entrepreneur who needs to invest in his own expertise. Yet few do. "Nine out of 10 people don't call the C-level because they don't know what to talk to them about," says Bredin.
Stuyt also prizes an aspect of emotional intelligence called "situational awareness": being able to read the vibe in a room. He recalls a pitch meeting at which the client representatives' attention began to flag noticeably. Stuyt stopped his presentation and said, "Clearly, we've missed the mark here," then asked for feedback on where he had gone wrong. It's not only about salvaging an opportunity that's slipping away but evaluating the chance of success; you don't want salespeople investing time and money pushing something that the client has already decided it won't buy.
Such situational awareness is usually acquired with experience. Bredin, who has been selling for more than 17 years, says that in the past five, "the success I'm having is because I know clients' motivations. I know the landmines before they're going to happen. I've invested so much time and have so many personal stories that my credibility far outweighs that of the guy just there selling technology."
But it's Bredin's history of success that may be most valuable to his employer. Research shows that salespeople become comfortable with their income levels and find a big jump to a higher bracket a tough psychological switch. "They incrementalize their way to success—it's pure behavioural psychology," says Stuyt. Accordingly, he advises growing companies to seek out people with at least one year of making the money they could potentially make at your firm.
Identifying the superstars
Finding the candidates with the potential to be your best performers is, of course, not easy. "There are a lot of salespeople whose best sales job was their interview, and the biggest commission cheque they've cashed was their severance," says Stuyt. You can turn to personality assessments from, say, Toronto-based consultancy Caliper Canada to identify hidden weaknesses, such as poor handling of rejection or aggressiveness rather than assertiveness. But first you need to understand the aptitudes and skills your particular staff require, based on sales cycles, product complexity or industry culture.
Sales-management specialists advise testing the skills that would be most important in the candidate's job. If you're hiring someone to generate leads by phone, have them make a call, leave a voice mail and do some phone role-playing with them. With a seasoned rep, ask for a 30- to 60-minute presentation about a recent deal. Verify how much of the person's sales record rests on her ability and how much may be due to the product or the market climate—or, as DiMichele puts it: "Are deals happening for them, or are they making the deals happen?"
You should also carefully probe frequent job changes. "Good salespeople don't want to leave their companies," says Cook, since it takes years to build a client base that will generate a stable commission stream.
Without such thorough analysis, hiring an experienced sales executive can backfire. Kevin Higgins, managing partner at Fusion Learning Inc., a Toronto-based sales-training firm, often sees SMEs make a pricey hire whom they envision as a rainmaker, only to suffer "tissue rejection"—the person's skills or approach don't translate well to the new firm. Sometimes, it's better to recruit junior people and build up their experience. "You don't have as much at risk," says Higgins. "You need to help them and they want the help, so you have the right soil."
When Stuyt helps his clients winnow down short lists of candidates, he always poses this question: what is the experience you're looking to create in this role? Compensation is the easiest thing to adjust, he says; it's intangibles that determine the long-term fit. Some people may need constant discovery or creativity. Others, especially senior executives, may be looking for stability or ownership potential.
The bottom line, says Stuyt, is to hire slowly and fire quickly. "Don't settle," he says. "It's better to have fewer salespeople than fill a role with mediocre people who will cost your company money. Adds DiMichele: "Making the wrong hire is like a staph infection: you deal with it for a long time, even after that person is gone, because of the resentment it creates with others that you had spent more time with him."
Raising the team's game
This, in fact, is one of the most common mistakes sales managers make: doting on the underperformers, trying to improve them, while giving the high achievers little time. Higgins says you should carefully manage your stars, especially in their first year. "You can't overestimate how much onboarding, training, coaching and feedback a person needs in that year," he says. "The tendency is that the less experienced person will get it—they'll probably ask for it. Neither will happen with the more experienced."
During recessionary belt-tightening, many SMEs also have skimped on the sales-support infrastructure—a self-defeating move, say sales specialists. One of Cook's clients recently fired two sales reps—yet the company had no sales manager, no onboarding program and no marketing materials or customer relationship management system.
"That's a big recent trend among entrepreneurial companies: they expect salespeople to come in and be rainmakers—without giving them support or guidance," says Cook. "But no matter how great the person is, they'll fail if these things are not in place. A lot of companies place too much emphasis on prior experience because they don't have internal processes in place and expect someone to come in with a massive Rolodex to create that for them."
Bredin agrees that salespeople at SMEs are forced to be very independent, noting that he develops his own channel strategy, marketing literature and contact lists: "You have to be a bit of a lawyer to figure out what you're comfortable with from the contract end, and a bit of an accountant so you can do a statement of work." Bredin would love to get help with mundane administrivia. "You want to remove all the obstacles from those 20% of guys who bring in most of the business, to keep them selling," he says. "But it's a bit of communism—everybody wants to be treated the same."
Sales force support must go beyond the logistics. You should know what motivates each staffer—be it recognition, responsibility, money, close oversight or independence. Yet sales managers, increasingly bogged down with paperwork rather than being out in the field, often fail to notice problems or offer consistent guidance. "We have a saying: 'Salespeople don't leave companies, they leave sales managers,'" says Cook—who, during his time as a sales recruiter, has found the boss to be the reason behind 90% of departures.
To get the most out of your sales force, Higgins urges paying close attention not just to results—reaching quotas—but to activity levels: how many calls employees make, how many proposals they send out. "At some point, a person may demotivate and you won't know it. It's like not looking at the scoreboard until the game is over," says Higgins. "The ultimate salesperson is at all times keeping their pipeline flourishing, and that's fundamentally about activity level."
As well, Higgins recommends paying close attention to the participation rate: the percentage of reps making their quota. Most firms have a 20% to 30% participation rate, he says; another 40% to 50% may be close. Higgins argues that sales managers should focus on raising the game of the latter group: "If you have one or two ultimate salespeople, you're highly at risk if one of them goes. Taking the good to great may be better than the great to the ultimate."
And if the good should fail to rise? Before you reach for the pink-slip pad, be sure to take a look in the mirror. "Selling is a skill," says Cook. "Salespeople are not born; they're made."