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Live: Non-Traditional Sales Team

Yes, that's right. Only weeks after posting "Sales Commissions Must Die" I am building my first-ever non-traditional sales team for a client.

Here's a brief review of how this came about.

In the sales call when I was discussing the team with Matthew Porter, founder and CEO of Contegix, I asked: "Why don't you build this team yourself?"

Matthew replied, "I can hire engineers with almost 100 percent accuracy, because that's a technical conversation and they can't BS me about technology." Then he added, "But hiring salespeople scares me to death."

I am not afraid of hiring salespeople, because that's a conversation where my expertise generally outshines theirs. However, even if I waved a magic wand and poofed a great sales team for Matthew, he would be left to manage the team and be in pretty much the same boat -- unsure of everything they're telling him and no real expertise to spot the BS.

So as we began the project to design his team, I asked Matthew to describe the types of engineers he has on board now.

"We have two main teams," Matthew replied. "One team -- our Ramp-Up Team -- is highly experienced at helping our clients in their transition to our servers, because there are a ton of one-off problems that must be solved during the switch. The second team -- our Maintenance Team -- is adept at anticipating problems before they occur, and diagnosing and fixing problems quickly when they do happen."

I asked Matthew how he keeps his people focused, and he replied with exactly the attitude I was hoping to see -- "They all know their primary goal is to absolutely thrill every customer."

You should have seen Matthew's eyes light up when I asked, "Then instead of building a sales team that gets paid to close deals, why don't we build a pre-customer engineering team that is paid a salary, just like your other guys, and tasked with the same objective, to thrill every prospect who calls Contegix? If we did that, wouldn't you end up with exactly the customers you want, and only the customers you want?"

Of course, Matthew had to make the leap of faith that simply taking great care of all prospects -- even those his team helps to choose other providers -- will produce sales, but that was a leap he was easily willing to make. Especially after letting me listen in as he managed a few in-bound sales inquiries himself, because that's exactly how Matthew naturally sells.

Here's the job description if you're interested in seeing how to word one: http://www.contegix.com/company/careers.

Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

Sales Commissions Must Die

The only way the world will ever achieve honesty and ethics in sales is to completely eliminate sales commissions from the equation.

And you can quote me on that.

I've been trying to capture this concept in writing for six months, but I kept hitting roadblocks, deleting what I wrote and shelving it for a while. I think I figured out why -- making the full case is too complex for a short blog entry. Instead, I need to convey the concept in basic form and hope a few people who agree and disagree pick up the banner, start a debate and flesh it out together.

So following will be a disjointed train of thought that I hope makes the basic point.

• I believe that all salespeople should be honest with their prospects and strive to be moral and ethical in all aspects of their jobs. Just like all executives, department heads, managers, employees, etc. in every other department at all companies. And I think those who don't -- meaning the career liars -- should be drawn and quartered in the town square. (Okay, maybe torture is a tad strong. How about we just line them up for the firing squad instead?)
• One of the things my father taught me in my youth came in the form of a casual comment he made while snapping a lock closed on his tool trailer. "Locks keep honest people honest," he said. "They won't stop the career criminals, but they will keep the honest folks from succumbing to easy temptation."
• There is no "make sure my employees are honest" process you can invent that a dishonest employee can't get around. (See Dad's lesson about locks.)
• In my experience, the top people on a sales team -- the 20 percent that close 80 percent of the business -- would not be happy without the bottom 80 percent, because they truly enjoy being recognized as the best. And without the bottom people to sit in wide-eyed awe, your ego gets no strokes.
• On every sales team with which I have ever been involved, I have found most dishonesty resides in the tier-two salespeople -- the folks who are driven to be the best but who just can't seem to get there. (Interestingly, it's usually honesty that will get them to the top, but they just don't "get it.")
• Assuming your company is larger than one person, and successful, it is surely built of people working together for a common cause. To illustrate this point, let's talk about a 100-person manufacturer with a standard corporate structure. It has operations teams, manufacturing teams, accounting teams, HR teams, marketing teams, PR teams, delivery teams, maintenance teams -- you get the idea. All the people on these teams draw salaries or an hourly wage -- none get base pay for individual accomplishment. Sure, the company uses a profit-sharing model or bonus structure to reward growth and individual achievement, but its employees' base pay is fixed -- and everyone thrives.
• I believe it is contrary to company culture, sound business practices and common sense to pay your sales team differently than all these other teams at your company. And I believe this pay difference is the root cause of all conflicts generated within the sales department itself, and between the sales department and all other departments.
• Suppose for a moment you paid each person on your accounting team a small salary plus a portion of any bottom-line dollar he or she could generate for the company every day. Further suppose you put a chart on the wall of all accountants' status -- showing their rankings of best to worse in their ability to generate those dollars. What kind of people would be attracted to this team? Would they be competitive or collaborative? Would they be money-driven or team-oriented? Would those with bills to pay -- like the guy with the gambling problem -- be tempted to cook the books a bit, "spin" results or exaggerate "all the money we're about to save"? Would they get along as well with the other departments -- the ones spending the money they're trying to save? Would egos clash? Would bottom-tier accountants come and go every year? Would top-tier accountants strut just a bit?

Whenever you have a situation where one team -- a company, for example -- is made up of two groups -- employees drawing salary and salespeople earning commissions -- you will have constant conflict between the two groups. And no locks will ever cease the conflict.

Sales commissions reward competitiveness over collaboration. Sales commissions reward individuality and chest-beating over teamwork. Sales commissions reward trickery over honesty.

If you want your sales team to exhibit the same collaboration, teamwork and honesty demonstrated by the rest of the people at your company, sales commissions must die.

Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

Free Sales Training To U.S. Veterans

Starting with a three-day course on December 27 through 29, 2007, and repeating once a quarter, I will personally provide the full Honest Selling Masters Course for free to any U.S. veterans who want to take it.

The course is a three-day boot camp where attendees will learn:

• The Honest Selling mindset, methodology, approach, attitude -- call it what you want.
• Prospecting via phone and mail.
• A half-dozen tried-and-true personal marketing strategies and how to organize their entire marketing plan for maximum success.
• How to organize their entire sales system, from setting the appointment to closing the sale, and achieve 80 percent or higher closing rates.
• How to sell quality products and services at quality prices and get paid for the value of what they provide.
• How to build a massive database of people who know them, like them, trust them and will gladly help them whenever they need it.

I'll have four specific versions:

1. December 27 through 29, 2007: For people who sell home-improvement products and services to homeowners. (Think siding, gutters, windows, remodeling, landscaping, and so forth.)
2. March 27 through 29, 2008: For service providers who sell business-to-business. (Think attorneys, accountants, consultants, trainers, coaches, mentors and a wide variety of entrepreneurs.)
3. June 26 through 28, 2008: For the agents and brokers of the world. (Think financial advisors, real estate agents, insurance brokers, bankers and so on.)
4. September 25 through 27, 2008: For people who sell to engineers and whose sales process is incredibly technical and usually very long. (Think of selling lighting, highly complex computers or services, engineering services, etc.)

The above four courses will be held in St. Louis Missouri at the Grand Prix Speedways Conference Center in Earth City. (They're sponsoring by giving us the room free.) The training, breakfast, snacks and lunches all three days are free. Your travel expenses, if you have them, are on you.

All courses will be canceled if fewer than 15 people sign up and limited to 25 people at the most.

I'll also do this on the off months if a person, company or group outside of St. Louis picks up the banner and runs with it by:

• Securing a room
• Supplying the food for everyone
• Finding the ex-military participants
• Paying travel expenses for me and one assistant for the three days.

If you know ex-military personnel who want to learn a comprehensive selling system for free, please tell them to call me on my cell phone at 314-416-1440. (Use that same number if you want to sponsor this course in your city.)

Thanks,

Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

Sales & Marketing Management Magazine

In the October 2006 issue of Sales & Marketing Management magazine, Holly Dolezalek writes:

Four billion dollars. That's how much enterprises spend every year to train their sales professionals, according to ES Research Group, a sales training advisory firm in West Tisbury, Mass. And fully half of that goes to third-party training firms. The investment should be worth it, because a more effective sales force can translate into the kind of bottom-line results that would make any vice president giddy.

But more training, if it's the wrong training, can lead to nothing much. If you promise to increase effectiveness and revenue through training, you'd better make a good choice—and the odds are against you.

In the rest of her article, "Sales Training: Making the Buy so They Can Sell," Holly goes on to explain the ins and outs of chosing:

1. Whether you need sales training at all
2. If so, how to choose the sales training you need

I think it's a great article, but then again, I'm quoted in several places so it stands to reason I'd be a teenie bit biased. So instead of taking my word for it, you might want to read the article yourself.

You can read the on-line version at: http://www.salesandmarketing.com/msg/search/article_display.jsp?vnu_content_id=1003155739

--
Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

Two Things In St. Louis

If you're in St. Louis on either of these October dates, and you think attending the events would help you increase sales, I'd like to invite you either or both of them.

Hard Hats And Steel Toes

My new referral network (lead-sharing group) is having an open meeting this Friday, Oct. 20, 2006, from 8 to 9 a.m. at First Watch in Clayton. If you sell construction-related products or services, sell to construction companies, and/or provide any type of service related to the buying and selling of commercial and residential property, and if you are seriously considering joining a referral-trading group, you are welcome to join us for a conversation about the group's goals, strategies, etc. (It's a free meeting, but you'll buy your own breakfast if you decide to eat.)

Please register so I know how big a space to reserve. Details and contact (registration) form are here.

Presentation: The Four Things Every Salesperson Should Know

I am the speaker at Yellow-Tie St. Louis' Skills-Enhancement Workshop on Tuesday, Oct. 31, 2006. While this particular session is for members only, as the speaker, I can invite non-members to attend, and offer them the member's rate ($25 down from $35).

If you want to take this two-hour workshop and learn the four things every salesperson should know,  you must register. Event details and registration instructions are here.

Numbers Don't Lie

Almost every time I tell a story that involves my chastising a salesperson who won't listen to the boss, won't get busy selling, won't try something new, won't keep learning, won't measure his or her sales funnel objectively, won't show his or her activity to the rest of the team, and so forth, somebody asks, "Why are you so hard on salespeople?"

I'm not hard on salespeople. In fact, there are few things about my day I enjoy more than getting shoulder to shoulder with the ones who want to succeed and are willing to work at it.

What I am hard on is salespeople who talk a good game but can't or won't do anything else.

The only thing worse than no salesperson is a crappy salesperson. Let's take a look at a real sales team (the names have been changed to protect the guilty), and I'll show you what I mean.

Joan's Team

Joan is the chief executive officer of Three Tiers Creative, where she manages 15 salespeople who have each been with the company at least 18 months.

During the past 12 months, these salespeople sold exactly this much business:

 
• Livia - $1,200,000 
• David - $950,000 
• George - $925,000 
• Muthu - $712,000 
• Doug - $651,000 
• Darlene - $401,000 
• Tiffany - $385,000 
• Bassam - $384,000 
• Eric - $290,000 
• Kim - $183,000 
• Jo - $125,000 
• Vince - $112,000 
• Manish - $107,000 
• Jeff - $98,000 
• Eli - $33,000

Performance Groups

To determine the negative impact of her under-performing salespeople, Joan must first break them into performance groups, then compare their numbers. There are many complex formulas for accomplishing this, but we like to keep things as simple as possible, so we'll use the formula provided by Dr. Wendell Williams, of Scientific Selection LLC.

If you total the production from Joan's team and divide by three, you'll get a cut-point that allows you to divide her team into three meaningful production levels, or "tiers."

Total sales of $6,556,000 divided by 3 equals a cut-point of $2,185,333 per production tier.

Determining Tiers

Now we must determine into which tier each salesperson falls. Starting at the top, we'll calculate a running total of our team's results, until the total exceeds our cut-point of $2,185,333.

Livia ($1,200,000) + David ($950,000) + George ($925,000) = $3,075,000. This is our Tier 1 group.

Starting with the next person in our list, we'll begin again until we hit our cut-point with Tier 2: Muthu ($712,000) + Doug ($651,000) + Darlene ($401,000) + Tiffany ($385,000) + Bassam ($384,000) = $2,533,000.

Our remaining people compose our Tier 3 group: Eric ($290,000) + Kim ($183,000) + Jo ($125,000) + Vince ($112,000) + Manish ($107,000) + Jeff ($98,000) + Eli ($33,000) = $948,000.

Difference In Production

Now we must determine the difference in production between the tiers. While I would prefer to hold Tier 3 people to the Tier 1 standard, Dr. Williams advises we use a more conservative model, and compare them to Tier 2 instead.

To compare these tiers, simply determine the average production within each tier, then calculate the difference between the two:

Tier 2: $2,533,000 divided by 5 = $506,600 average sales.
Tier 3: $948,000 divided by 7 = $135,429 average sales.

To get the average lost-opportunity cost of a Tier 3 salesperson, subtract the Tier 3 average from the Tier 2 average: $506,600 - $135,429 = $371,171.

Cost To The Company

Every salesperson in Tier 3 is costing Joan's company an average of $371,171 in lost opportunities per year. Multiply this by the number of people in Tier 3 to get Joan's total lost-opportunity cost: $371,171 x 7 = $2,598,197.

These seven bad salespeople are costing Joan's company $2,598,197 in lost opportunities every 12 months, yet they eat up just as much in company resources as the Tier 1 and Tier 2 salespeople.

All of these people have been with the company long enough to justify comparing them to one another. Every one of them looked good enough to hire. All have had the same chance to excel.

At this moment, Joan has more than 2.5 million reasons to fire Eric, Kim, Jo, Vince, Manish, Jeff and Eli, and replace them with one Livia, or a Muthu and a Doug. And I'm hard on salespeople, because the fist step toward helping the Tier 3 folks is to tell them the brutal truth -- to be as hard on them as is needed to wake them up.

Do you know into which sales tier you fall at your company?

You should.

--
Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

Deer In Headlights

Since late November, I've traded about a dozen e-mails and met twice with a prospect (I'll call him "Joe") who sells high-dollar computer software. During that time, we've discussed the many problems he's having closing deals, his relationship with his boss ("Mr. Smith"), his quotas that are not being met, the likelihood that he'll get fired soon, his options for taking charge of his life and changing things, and the ways I can help him.

This week, Joe and I traded a few more e-mails, and the puzzle fell into place in my head -- I finally figured out his biggest problem. Since I've seen this problem in a lot of salespeople, I thought I'd share with you the advice I sent Joe today.

Perhaps you know someone like Joe who can use the advice.

--------Original Message--------
Subject: Re: Status
Date: Wed, 22 Feb 2006 09:39:39 -0600
From: Gill E. Wagner
To: Joe Jones

Joe,

I have a piece of unsolicited advice for you. After that, I'll force you to a choice.

If you don't want my opinion, then exercise your delete option before you read this message.

I just read over all the e-mails we've traded and thought through our previous discussions, and what I'm seeing is a deer-in-headlights pattern. Bottom line, you're running scared, and it's destroying your ability to get anywhere with anyone (Mr. Smith or your prospects), because people, like dogs, can smell fear.

You're great at identifying prospects who are interested and willing to talk, but the moment they show their first signs of hesitation, you let your fears control your actions. Once that happens, you switch from helping your prospects make smart choices to trying to get them to buy no matter what. This causes you to not listen to your prospects and to hang on for dear life, which only increases their desire to push you away and find someone else from whom to buy.

You are creating your own worst problem by letting your fears guide your actions. And this goes beyond your interactions with prospects, too. (You won't even ask Mr. Smith for help, because you're terrified that he'll fire you instead of helping you.)

You will never succeed in your current role unless you first let go of your fear. Then, and only then, will you be able to change your behavior, build better relationships and start closing all those deals you're lining up.

The moment you can truly not care whether any single prospect buys is the moment the prospects with whom you are talking will start buying.

The moment you know you can survive getting fired is the moment you can change your relationship with Mr. Smith to one of mutual trust and respect.

Joe, you have what it takes to be successful. You just have to get out of your way and find the confidence I know you have.

As for the choice I mentioned, I'm going to force you into an absolute yes/no decision, because, if I continue to allow you to waffle about your career, I am doing you a gross disservice. Besides, I want to work with you only when you are 100 percent committed to change, and the first step to changing is deciding.

If you want my help turning the corner, you have until 5 p.m. this Friday to hand me a check. At 5:01 p.m., you will permanently lose your choice of ever getting my assistance.

Your call,

Gill
--------End of Original Message--------

It is my sincere hope that Joe will commit to taking charge of his life so he can succeed. Based on my experience and best guess, however, I'll give the following odds:

1. There's a 70 percent chance Joe won't write me a check, won't fix his problems and won't last more than another month or so at his current company. (It's sad how many salespeople have to get fired to finally wake up.)
2. There's a 20 percent chance I goosed him enough that he'll decide to fix his own problems.
3. There's a 10 percent chance he'll write me the check.

Think long and hard about your next sales appointment, and decide how badly you need the sale. If you need it badly, then instead of fretting over that sales appointment, fret over how you'll avoid ever again being in this position.

If you want the best price on a car, you must be willing to walk out of the showroom. If you want the best relationships with your prospects, and a hugely successful sales career, you must be able to walk away from any one sale.

--
Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association