Tag Archives: sales management

The Cost of Poor Performance

February 21, 2017 editor

Why failing to train your employees costs a lot more than you think

By Evan Hackel

Many people have heard this story, which has become a legend in the training industry. A CEO and department head were having a brief conversation after their monthly strategy meeting, where the focus was on employee training. The CEO said, “What if we spend all this money training our staff and they leave us? And the department head replied, “What if we don’t train them and they stay?”

A simple, but pointed, response. If you spend a lot of money on people and they leave, that’s not an optimal outcome. But if you don’t train your employees and they stay, it costs you a lot more.

A franchise group, comprised of more than 2,000 stores, experienced this training quandary first-hand. The head of sales had a simplified approach to hiring. He simply hired salespeople who had worked at other stores that sold the same kind of products as were sold at his stores. His assumption was that the experienced salespeople he hired were pretrained and that hiring them would save a lot of time and expense. Plus, there would be no need to acquire the tools that were needed to implement a training system. What if we spend all this money training our staff and they leave us? Click To Tweet

His decision to hire experienced salespeople made sense, but it was flawed. The fact that those salespeople had experience didn’t mean that they came armed with the best-selling skills or factual product knowledge. But after a few years of using his hire-the-experienced approach, he saw that he wasn’t achieving the kind of results he wanted. He sensed the size of each average transaction on the selling floor was too small. Buyers were not becoming repeat customers. Plus, his stores were receiving negative comments online about the quality of their customer service.

Because he could see that the skills of his salespeople needed improvement, he took the plunge and brought in an experienced training development firm that developed a program of e-learning for salespeople to train them to increase the size of the average ticket size, to improve their closing percentages, and to provide better customer service.

The performance of the salespeople his company trained was dramatically better than the performance of experienced sales people he simply hired. Plus, he soon realized that training was giving him another benefit: because he could hire high-energy, high-potential employees, not only those with experience, he was building a much stronger and enthusiastic salesforce.

After a year, the average annual sales made by company-trained salespeople had in many cases outperformed seasoned professional hires by $200,000 or more. When he factored in sales and contribution margin improvement, the people trained in-house produced about $80,000 a year more in profit. With an average five-year tenure for each employee, the training was worth $400,000 more in profit dollars.

That is another way of saying that the cost of not training each salesperson amounted to $80,000 a year for that company. So what really happens if you don’t train people and they stay? It means you’re going to be losing a lot of money.

Why Do Trained Salespeople Produce More Income? There are many reasons. Trained salespeople:

Close more sales
Generate larger average sales
Sell fewer products at discounted prices and more products at list price
Make fewer mistakes
Sell the right products, reducing the cost of returns and product replacements
Build customer relationships that result in more repeat business
Generate more positive reviews online
Increase your net promoter scores
Help keep morale and productivity high among all your employees, because people don’t like to work with untrained people who don’t know what they are doing.

What does poorly trained salespeople cost? Not training people costs money a lot of money.

Training Is Not Just for Salespeople: Training has a major impact on customer service practices across a variety of industries. Consider the often headache-inducing business of at-home product installation—one that would certainly benefit from customer service-focused training. The basics, such as explaining to customers the details of the installation process, an emphasis on clear communication prior to the start of the job, and of course, conveying the importance of punctuality can boost customer retention. Training staff to be cognizant of their customer service practices can also increase referral business, which can be worth extra hundreds, thousands, or even millions to your bottom line.

Every Untrained Employee Costs You Money: ROI on training is dramatically greater than most company executives believe it will be. In simple terms, if a trained worker becomes 100 percent productive and an untrained worker is only 60 percent productive, you are losing $40,000 in value on every $100,000 of business you conduct.

In Closing: Not training is hugely expensive—far more expensive than training. In your company, you should look for all the opportunities where proper training can dramatically increase profits, reduce waste, and provide an outsized ROI for every training dollar you spend. If you start to look, it’s nearly guaranteed you will find many more opportunities than you expect.

Evan Hackel is CEO of Tortal Training, a firm that specializes in developing and implementing interactive training solutions for companies in all sectors. Evan created the concept of Ingaged Leadership and is Principal and Founder of Ingage Consulting, a consulting firm headquartered in Woburn, Massachusetts. To learn more about Ingage Consulting and Evan’s book Ingaging Leadership visit www.ingage.net.

Todd Cohen

Vulnerability is Money in the Bank

July 7, 2016 editor

By Todd Cohen

Many factors can affect one’s feeling of comfort and security for their jobs and livelihoods: A shifting and unsteady economy. Tumultuous global events. The unforeseen and unpredictable can shake one’s confidence to the core.

You see the same phenomena with anyone who has something to sell—which is all of us. Regardless of what you are selling—a product, a service, and of course, yourself, there are unfortunate instances of people taking any business and not quality business. Why? Your internal fear of allowing yourself to be vulnerable and accepting the business and responsibilities you know you can deliver at 100%.

Where things begin to veer off track is when people think they are going to lose their jobs or lose a sale (which is the same thing) they hold on tighter to them or take any deal. In doing so, you stretch yourself thin and tend to accept more and more responsibility. Subsequently, when people assume more responsibility than they can realistically handle, they become inefficient and less successful. In other words, holding on tighter in an attempt to ensure job security is actually harmful and professionally destabilizing.

What this means is that you cannot and should not attempt to be everything to everybody! When you try and to do it all, you wind up making bad decisions, which leads to settling and a feeling of unhappiness and dissatisfaction with your choices. In that event, everyone suffers: the client, the employer, your colleagues, and you. All because you’re hanging on so tight that you don’t allow yourself to be vulnerable. In other words, a strong indicator of any success is your ability to be vulnerable and know your strengths, your weaknesses, and having the courage to walk away when necessary. It’s about having the bravery to embrace one simple concept—you will be more successful when you can successfully articulate your position and say “no” when you should. This is a simple concept that is in actuality very difficult to do.

Become vulnerable, improve job security, and get more at the same time. When people think of sales, the words “aggressive” and “pushy” can come to mind. It’s a product of many poor experiences dealing with sales staff. “Vulnerable” isn’t a word that you would often associate with sales—and that reason alone proves its importance. Vulnerability allows your clients and customers to view the entire sales industry through a new prism.

So how can you let go, become vulnerable, and actually improve your standing with your clients and colleagues? In a sales culture, everyone knows they play a vital role in the sales cycle. And regardless of whether their role is visible or not, it is an essential part of the sales ecosystem. In some cases an individual’s contributions may not be immediately seen, but he or she knows that their role is essential to clients ultimately saying “yes.” This is the essence of sales culture.

In organizations that are more siloed—and thus highly dysfunctional—there are people who believe that gripping very tightly to their jobs and staying beneath the radar will increase the odds that they will be “okay.” Here’s the problem with that theory. You are more likely to be seen as a valuable member of the company if you know and can communicate your specific area of expertise and stick to it. When you can communicate your value proposition in a compelling way, you make yourself vulnerable and more secure at the same time. Why? Because now people know what they are “buying” in you and you can now do a much better job.

Consider these points:

Vulnerability is Tough: Letting go is hard. But by holding on to all the responsibilities, or taking any business that comes your way, you increase the chances of becoming mediocre because you can’t do it all—and you don’t have to. Being vulnerable means that you are able to say “no” to the so-called opportunities and business that are not actually quality business.
Vulnerability is Nobility: Your ability to be vulnerable is noble. People want to deal with others who know what they do and know what they don’t do. In this way, being vulnerable earns you respect. Plus, you’ll find people will want to have you as part of their virtual team. When you are engaged to do what you do well, you increase your security, your role in the sales process, and the customer experience. Vulnerability is the desire to ask someone for feedback and be prepared to hear the answer and not be defensive. Vulnerability and defensiveness are diametrically opposed.
Vulnerability is a Professional Skill: It takes a high degree of professionalism and maturity to know that you contribute in a certain way and in other ways, you don’t. Knowing where that line is and when not to cross it is the hallmark of a true professional and someone people want to buy from or someone people want to work with.
Vulnerability is Cool: A sale is a complex series of interactions among people who all contribute some form of intellectual capital to the sales process. And it is through these interactions that clients or prospects get what they need to say “yes.” When you accept that staying focused on your own area of expertise is valuable, you’ll be at peace with being vulnerable. Most important, you’ll be confident and on your game. The sales team and the client will see this and they’ll say “yes!” Vulnerability is indeed money in the bank.
Vulnerability is Attractive: Simply put, people will buy you and from you when they know you are real. Showing your authentic self and communicating plainly and directly is the key component here. People want to know that you can identify with them and that you understand them. Being truly vulnerable means that you are not afraid to show yourself.

Allow yourself to let go and reap the rewards that vulnerability affords.

Todd Cohen, CSP is an accomplished and sought after speaker, sales culture expert and author of Everyone’s in Sales and Everyone’s in Sales; STOP Apologizing. Todd’s dynamic and motivational presentations are based on the foundation that regardless of career path or position, everyone is a salesperson. Since 1984, Todd has led sales teams to deliver more than $850 million in revenue for leading companies including Xerox and Thomson-Reuters. For more information or to book Todd Cohen for your next meeting please visit www.toddcohen.com.

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Tony Cole

How to Win Business in Any Market at Any Time

May 3, 2016 editor

By Tony Cole

Selling in any market is one of my favorite keynote speeches or workshops to deliver. When addressing a group of sales people or sales managers, I always create a stir when I loudly pronounce that the way to sell in any market is to “Stop making excuses and just sell.”

When there are disruptions/economic conditions in your industry that cause you to get out of your normal flow in business, sometimes you end up spending more time playing defense than you do playing offense.

In our primary markets – insurance brokerages, banking and investment services – disruptions have become a quarterly occurrence. In my 20+ years in this business, I have asked audiences across the country if they have ever gone through a three-year period in their business when there wasn’t some sort of the disruption in the “normal” flow of business. In short, their answer was no. In fact, disruptions in flow of business have become the norm.

In a recent discussion with one of our current client’s brokers, they described that the market is a hard market right now meaning that some prices are stable and some are going down. As a result, some of the markets/carriers were lowering prices to grab market share. When this happens, a broker’s own clients sometimes decide that it’s time to go for better premiums with the same coverage. So, when this happens, brokers (like my client) have to play some defense to protect their turf. And when that happens, brokers have a tendency to take their eyes off of prospecting – they stop playing offense.

I have several clients in the bank-owned investment brokerage business. Last week, the Department of Labor passed new fiduciary regulations that have caused and will continue to cause a major disruption in that business. Studies indicate that companies will literally spend billions of dollars to make sure they are compliant with the new regulations. Not only will this require an investment of an enormous amount of money, but it will also take millions of hours invested by many for compliance training. None of these activities are offensive in nature and so, in the end, will actually cost millions, maybe billions, more in lost productivity.

This is not necessary! Here are just a couple of things to keep in mind as you attempt to manage performance during difficult periods:

Unlike 2008 (when a substantial piece of the market did shrink), the current situation is not the same.

1. Businesses are not going out of business because insurance premiums are going down.
2. The amount of money in play in retirement and personal savings has not shrunk. If it’s a multi-billion/trillion dollar pile of money today, it will still be a multi-trillion pile of money once the Department of Labor regulations are fully implemented (January 1, 2018)

If your clients have a tendency to want to shop in a tough market, so do the clients of your competitors. Companies are in play, but you have to take the phone “off of the hook” and call them.
People that have invested their money with advisors that have not treated them in a way that is consistent with the new regulations (client focused/fiduciary responsibility) will be in the market to find an investment advisor/representative who will.
If you find that it is your smaller clients that want to shop – let them. My guess is that, if you let the bottom 20% of your insurance clients go, it will represent less than 5% of your total revenue. One new client that looks more like your top 20% will replace at least 10 of your bottom clients.
If you are a financial advisor – ditto. Frequently, my friend from CUSO management and I discuss the segmenting of books of business. Time and again, the 80/20 rule applies. Actually, based on his business intelligence, that industry looks more like 30/70. But, still let the smaller accounts work with licensed bank reps or bring in an associate that can grow by growing with smaller accounts.

The bottom line is this: as a sales leader in an organization, you have the responsibility to keep your people focused on what it takes to win in any market, any environment. Regardless of the score of the game, you have to:

Coach them to change behavior and improve skill
Motivate them like it’s a championship game
Hold them accountable – do not allow excuses for lack of effort

Just like in a sport of any kind, stuff happens. A team gets a big lead, catches a break, the wind shifts and the kick goes wide. It doesn’t matter! You cannot win just playing defense.

Sooner or later, you have to score more points than the opponent. That is offense!

Tony Cole is president of Anthony Cole Training Group.

Bob Phibbs

Motivation Beyond Commission

April 25, 2016 editor

3 Ways to Get Your Employees to Sell

By Bob Phibbs

Motivating employees. It’s always tough in any business.

Your goal is to be the go-to name in your field or industry, but you know you haven’t got a snowball’s chance in hell of seeing that level of success unless you can truly engage your customers and clients and keep them interested in your products and services.

And the only way to do that is to get your employees to engage those customers, to get them to commit to creating an exceptional experience for visitors so they do business with you, instead of buying from a competitor.

The big question is: How to get your employees to focus on the customer?

Employee motivation is an elusive creature. Motivating employees is perhaps the hardest thing any manager ever has to work toward. You worry that you’re not connecting, that your words don’t resonate deeply with your employees, and you struggle to figure out a magic formula. And that’s good…

That’s because employees don’t come hard-wired to perform well in a vacuum. Unless you can find a way to connect powerfully with your crew, your sales are doomed to failure.

It may appear easier to just pay them more. But many times, no matter how much you pay them, after a period of time, their self-motivation wanes. That’s because when you employ people, you are also taking on all of their innate hardships and challenges; the things they deal with at home, along with the things that keep them up at night.

You are taking on the whole person, for all of the good and the bad that brings. Their natural tendency is to do less and less unless someone encourages them to do more.

When it’s time to open the business and welcome your customers each day, it becomes your daily challenge to help your employees put their best face forward, focus on serving the customer, and keep their eyes on the goal of closing as many sales as possible.

For some companies, this challenge is settled by simple performance metrics: Dollars. You close X number of sales, you get more money in your paycheck. And in many high-end sales environments, a commission or performance bonus-incentive sales metric makes sense.

But if you find yourself in a position where commission-based sales don’t work for your company, you still have to find new ways to motivate your employees. Here are three ideas to help motivate your sales associates that don’t involve paying them based on the number of units they move.

1) Give Them Luxury: For your best performing associates, it is great to give them a little bit of something special. Maybe it’s a box of especially good chocolates at the end of a hard week. Maybe it’s a bottle of Scandinavian water they weren’t expecting. Maybe it’s a 30-minute massage.

Maybe it’s just a handwritten thank you note from you, the boss, who they look up to, mailed to their house. Ultimately, it doesn’t really matter what the luxury is. It only matters that you took the time to think of them and thank them for their amazing work in an impromptu fashion.

People want to feel important. If you have good people on your team, make them feel important, and they are more likely to stay on your team. To put a finer point on it, the more important or special that you make them feel, the more likely they will make your customers feel important. A caveat: don’t publish your criteria or you will have to do it each and every time much like a contest which defeats the purpose.

2) Give Them Time: Time is our most precious resource, and there is no sweeter way to reward one of your sales team than to give them a few hours of their time back. So for your top performer this month, give them a half or full extra day off—with pay. Do it without any fanfare. Just let this person stay home, sleep late, take care of their kids, or go to a movie while you cover their shift. Don’t make a big deal about it. It’s not a contest; it’s a gift that you are giving them. And when they come back, they will be refreshed.

3) Give Them Space: If you’ve seen the movie Office Space, then you understand the importance of a red stapler. It represents something that is yours. Even if it’s only a stapler, you have earned it.

Office space—literally—can feel very much the same. It is home. When you designate physical space to an employee, you are telling that person that they have a place here. A permanent place. They matter.This is not a small thing.

For your best associates, carve out a place in the back to set their photos of their kids and their dogs, a place for them to pin ridiculous things they might print out from Facebook—whatever. The ultimate goal is to let employees feel at home when they are at work.

This only works if you hire people who themselves have some internal motivation. You can’t motivate a rock to move—no matter what you try. If you feel stuck with certain unmotivated employees, don’t give up on motivation but do get rid of the rock-like employees.

When you have done the hard job of whittling down your applicants, onboarding them to your culture and giving them sales training, your number one job is to see what helps them stay motivated and change it up often. That way it keeps everyone wondering what they will get for hitting a goal, doing a good job or extending themselves for your customers’ benefit.

And that’s great motivation for everyone, not just your sales team.

Bob Phibbs is the CEO of The Retail Doctor, a New York consultancy. As a speaker, sales consultant and author of The Retail Doctor’s Guide to Growing Your Business, Bob has helped thousands of businesses since 1994. With over thirty years’ experience beginning in the trenches of retail and extending to senior management positions, his presentations are designed to provide practical information in a fun and memorable format.

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Tony Cole

2016 New Year’s Resolutions

January 22, 2016 editor

Focus on the goals for your team and what concerns you most

By Tony Cole

Here we are, once again at the start of a new year. As you look ahead, what are your goals? What are the goals for your team and what concerns you most? As a sales manager or VP of Sales, I am certain that you could come up with a long list of to-dos that, if well-executed, would bring you great success in 2016.

But, what is really different about 2016 than last year or the year before? I imagine some of the problems that existed in 2015 also existed in 2014 and 2013. Most problems don’t disappear just because we want them to disappear.

Take my health for example. Last year, I had a doctor inform me that I had a life-changing health condition. I knew that I needed to be more conscious of my diet and exercise– my wife, Linda, had been telling me that for 30 years. However, this is a tall order for me, a man who loves to cook and eat. I have never been a big drinker, I exercised somewhat regularly and, beyond the occasional cigar, I thought I was living a healthy lifestyle.

But, apparently I needed to do more. I bought a FitBit, one of those watches that monitors your steps (10,000 recommended daily- which translates into 4-5 miles depending upon your stride length) and I set up the supporting online program that allowed me to enter my food and water intake.

I immediately began to monitor my watch to see how many steps I still needed to get in before the day was over. Where, once upon a time, I would go to the gym and do a heavy workout, my lack of consistent behavior had allowed me to gain weight. After a long day at work, who wants to work out for an hour? So, I changed my mindset and my goals and took up walking the neighborhood to complete the 10,000 step per day goal. Now, I supplement my fitness program with work outs at the gym.

Surprise! Now, that I am monitoring my daily habits, I realize how unhealthy they were in the past. In the space of a couple of months, I have lost 20 pounds and I did not gain a pound through the holidays, which was no small feat for me. Needless to say, I feel better, look better and am healthier than I was prior to monitoring the things that I can control.

Here are my suggestions for New Year’s Resolutions that, if implemented properly, will eliminate many or most of your sales problems.

Focus On Those Things You Can Affect: Recognize that while you can’t control the economy or the world of selling, you can control how you approach it. Recognize that you must have salespeople who know how to prospect and reach out to find business.

Manage Your People’s Performance: Inspect what you expect. You will be amazed to discover that the very act of inspecting the right metrics will improve sales (or your health). A weekly huddle to review numbers will call attention to the under-achievers. No one wants to be at the bottom of the board. Peer pressure is a valuable tool for getting results. Use it to leverage sales.

Eliminate Excuse-Making: Stop making excuses for your salespeople and stop accepting them from your salespeople. Introduce a sense of urgency into your sales culture. Too often, we accept unnecessarily long sales cycles. Teach your people to work prospects through the pipeline efficiently. Help them learn to eliminate those who are clogging the funnel so they can focus on finding those prospects who will buy.

Coach Your People: Focus your training and coaching to improve skills and change behaviors. Make your salespeople role-play. “Have them “practice perfect performance” so that when they are under pressure, they are able to focus and sell.

Apply The 80/20 Rule To Yourself: If you perform 20 tasks week after week, there are probably 4-6 tasks that really matter. Those 4-6 tasks generate 80% of your results. Find out which 4-6 tasks are your Go-To’s. Spend 80% of your time on these Go-To tasks.

Always Be Recruiting: About 20% of your sales team is not performing adequately. This 20% is never going to perform adequately. Fire them. In order to do this, you must be able to replace them. Recruiting is one of your 4-6 tasks that really matter. Spend time finding people who will sell.

Summary: Success in selling isn’t all that different from success in fitness and health. There will always be issues that exist beyond our control—we can’t control our genetics which predispose us to certain conditions, but we can control our habits like sleep, diet and exercise.

In selling, we can’t control the economy or the consumer. But we can control our behaviors – like prospecting and number of dials, number of appointments, etc. – that contribute to our personal and company economies. We can control how we interact with customers, learning to reach out and stay consistently in touch.

In managing a sales team, your job is to control those behaviors that contribute to the company’s sales. Thus, while you can’t control John or when John makes prospecting calls, you can control your inspection of his behaviors and, ultimately, you can decide whether he is productive enough to be on your sales team.

Tony Cole is president & CEO of Anthony Cole Training Group. Download Tony’s free eBooks Hire Bankers Who Will Sell and The Extraordinary Sales Manager.