What is a Sales PIP?

A Sales PIP —(otherwise known as) a Sales Performance Improvement Plan—outlines the steps an employee can take to obtain high levels of performance. 

Sales PIPs use very clear metrics to define success within a predetermined time frame. PIPs are not intended to fix behavioral issues like inappropriate actions or attitude. Sales PIPs address chronic performance problems such as poor quality of work, missed targets, or a general failure to execute. 

When a PIP is executed, it removes any element of surprise should a termination, demotion, or lateral move prove necessary. However, if executed properly, a sales PIP can increase employee productivity and performance.

Not all PIPs are created equal, so this article will examine some of the ways that managers can set them up for success. After all, a well-developed and executed PIP can save a business money and keep morale high.

Benefits of an Effective Sales PIP

When sales representatives consistently underperform, the quickest fix might be termination and a fast replacement. But putting them on a sales PIP is an important intervention that should come first.

So, for managers who want to do as much as they can to improve performance before replacing an underperformer, a PIP is a helpful tool. Here are some benefits:

 1. The improvement of an employee’s performance. Subsequently, an improved performance could lead to increased productivity, revenue, and overall morale.

2. Transparency. A sales PIP, if done properly, will ensure that the employee and manager are on the same page and will hopefully result in improved performance. When the PIP’s timeline ends, the manager and employee must assess whether the specific success metrics have been met. If they have not, the manager has two options.

a) Either they can formally close the PIP and enact a termination, demotion, lateral move, or whichever other consequences were decided upon. Since such eventualities were clearly laid out during the PIP’s development phase, the outcome should not come as a surprise to the employee. 

b) Or, if the employee seems to be making excellent progress despite missing overall milestones, the manager might choose to extend the PIP’s timeline. 

3. Investment from the manager in the employee. Managers must ask themselves whether they are truly invested in an employee’s success, otherwise the PIP may be ineffective from the start. There’s a risk that the employee may conclude that the manager has already decided on termination, and that the PIP is the first step in the process, so they’ll begin looking for other jobs. The PIP is a team effort, so managers also need to put in effort to ensure its successful completion.

Note that misconduct, inappropriate behavior, and poor attitude are not what PIPs address. These issues should be corrected via other avenues, such as disciplinary action or termination.

It is important to fire salespeople with a record of underperforming, to safeguard the overall health of an organization, protect the brand, and limit revenue loss. But it’s important to balance the need for termination with opportunities for improving performance. Especially if the employee is eager to do so.

What Makes a Good Sales PIP

At a high level, sales PIPs must have clear metrics for success and include a timeline. A good starting point for managers is to consider the reasons for an employee’s underperformance. Thinking through the possible issues will help in understanding the employee’s potential, and guide what metrics should be used for the PIP. Once a PIP is signed, both the manager and the employee must work together to execute it. They should have regular meetings to discuss progress, monitor performance, and provide a chance for the employee to request support.

The employee’s role in the success of a PIP includes:

• Working to deliver on the PIP goals.
• Taking the lead to schedule progress meetings with the manager.
• Providing insights on the reason for poor performance, which may suggest the type of managerial support required for successful completion of the PIP.

The manager’s role includes:

• Understanding and addressing the root cause of poor performance. For example, if a decline in performance stems from lack of training, managers can investigate the possibility of providing official training opportunities as part of the PIP, or assigning a mentor to the employee. If unclear commission and/or bonus structure—or insufficient compensation—are at the heart of the problem, a manager should also investigate this, because it may have implications for the larger team.
• Keeping morale high. No one enjoys being put on a PIP. The manager should understand that the employee’s morale may suffer, and therefore managers should provide the necessary encouragement. Confidentiality is also critical and the employee must trust the manager to keep the process between just the two of them.

Beyond manager and employee teamwork, PIPS must be S.M.A.R.T: specific, measurable, achievable, relevant, and time-based. An effective sales PIP will be a detailed sales PIP and S.M.A.R.T goals will help you achieve that. 

How to Write/Create a Sales PIP

When an employee has been identified as underperforming, you can begin creating your sales PIP. Before any writing occurs, it is best practice to give your employee a verbal warning. 

Verbal Warning

Schedule a meeting to discuss the nature of the performance issues. Managers should provide specific examples of when the issues occurred and the actions needed to improve performance. In the spirit of working together, the employee should be given an opportunity to respond and provide additional information they believe relevant to help explain the issues. Perhaps the employee is having a personal crisis leading to their underperformance. Any employee information should be taken into consideration. Verbal warnings will be documented together with the employee’s input and kept in the employment file. 

Written Warning

If performance does not improve or is not sustained after the verbal warning, employees will be given a written warning. This will reiterate and specify the nature of the issues, the actions necessary to improve the issues, the timeline to correct the issues and potential consequences if no improvement is achieved.

Written warnings may be of a 30, 60 or 90 day duration depending on the nature of the issues. A copy of the written warning will be maintained in the employment file. Employees should not be eligible for position transfers, promotions or compensation changes while under a written warning.

All written warnings will follow a standard template and be prepared or reviewed by HR before being communicated with an employee.

Sales PIP

The sales PIP will be a formal written document that will be approved by the manager, employee, and HR. The sales PIP can be delivered alongside the written warning, or after depending on the previous employee/manager discussions. The sales PIP should reference the original job description and company quotas and KPIs. No new goals should be introduced on the sales PIP with the exception of any training metrics which will be discussed during the verbal/written warning stages. 

Some important sections to include on your sales PIP include:

• Role expectations: what is the expected performance of an individual in this role?
• Areas of concern: in what areas has the employee not met expectations and what is the root cause of the issue?
• Improvement goals: include a clear description of the goal and what the milestone will look like when achieved.

You can check out a detailed example here. One of the most important parts of a sales PIP is that you assign a timeline. Don’t be vague, “late next week” is not good enough, set an actual date. Be transparent about the repercussions if the goals of the sales PIP are not achieved. 

Templates and Example

Download your sales PIP template here: https://www.peaksalesrecruiting.com/wp-content/uploads/2019/08/Sales-PIP-Template.pdf

Conclusion

PIPs work well for sales teams because sales as a function is highly measurable and has clear targets. This leaves little room for surprise in perceived performance and helps in the development of milestones and sub-milestones for an employee who wishes to improve their results.

Still, PIPs are a team effort. Sales leaders should be invested in the employee’s success and investigate ways to support them.

Firing an employee can be difficult, but when all other avenues are exhausted, managers may need to seek a replacement. Managers can also take the opportunity to reexamine their hiring process, which led to the poor hire in the first place. While the cost of training an employee can be cheaper than replacing one, the most cost-effective course of action is getting the hire right the first time.

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Eliot Burdett

Latest posts by Eliot Burdett (see all)

• 31 Must-Know Sales Follow-Up Statistics for 2024 Success – December 21, 2023
• 7 Success Characteristics That Define Top Performers – December 19, 2023
• 5 Reasons Your Top Employees Quit (Stop Doing This to Stop Them Leaving) – December 14, 2023

Many sales people – and some sales leaders – will admit they struggle to get access to senior decision makers within ‘Must Win Accounts’.

The Mindset and Skills to reach out effectively to these executives are often assumed to be in place, and sales reps often won’t bring it up as they don’t want their leaders to know they need help.

Sales organizations believe this skill is “magically” developed in-house by osmosis, or that they are already getting these skills by employing experienced sales people.

Based on 20+ years of field work and hundreds of client engagements, I have come to the conclusion that there are 3 Issues that sabotage your sales force’s new business prospecting efforts:

#1: Your messaging is 180 degrees backwards

You’ve hired some great sales people. Experienced sellers with proven track records, or energetic inside salespeople in their first or second job. And yet for some reason, they’re taking a long time to ramp. They aren’t able to get enough meetings with senior decision makers, so a lot of your opportunities and proposals don’t convert into wins.

Here’s why your sales people are wasting their time talking with people who aren’t Executive Decision Makers. Your messaging and value proposition is backwards, perhaps even broken.

Here’s how this plays out in most sales organizations.

What you do is put your salespeople through an on-boarding program – if they’re lucky.

The onboarding program is often headed up by product marketing who talk about ‘us’. Our products, our solutions, our target market, our value proposition. It sounds like this;

WE help companies to…

WE are the most effective/cost efficient/fast…

WE are the market leader…

STOP “weeweeing” on potential customers. They don’t like it!

Your company and salespeople are not the hero. The customer is. Your customer is looking for an expert, a guide. Rarely will true Decision Makers respond to this kind of message, it’s mostly the tire kickers with no authority to buy.

What you and your salespeople should be focused on is talking about THEM – your buyer, your customer, what trends and challenges impact them, how others like them have solved these challenges and achieved their goals. It’s not about your company, product, service or solution… it’s about them.

Most sales people have never done the job of the person they’re expected to sell to. They don’t know what a VP or a CEO’s job is, or what their buying motivations are.

And yet, you’re telling them to go prospect and sell to those people, armed with nothing more than internally focused product marketing information, an Ideal Customer Profile (ICP) and a value prop that’s all about you.

If they’re experienced sales people, you expect them to know how to write messages and prospect to senior executives. It’s kind of an unwritten rule that nobody asks about, isn’t it?

And if they’re new to sales? Well, you expect them to ‘figure it out’. Learn by osmosis.

Lack of a customer focused value proposition is one of the greatest inhibitors of prospecting success.

What you need to do is “be intentional” about this critical part of the sales cycle – teach them about your prospective customers first. Most sales organizations aren’t and don’t.

What concerns does a Senior Executive vs a Line of Business leader have? What’s a ‘day in their life’ look like? How are they measured, what are the trends impacting their market, what challenges do they face, how are they currently addressing those challenges? What opportunities could they be taking advantage of…but they’re not? They’re doing this, when they could or should be doing that.

When your salespeople really grasp and understand your customers, then tell them how your products, services or solution links back to your customers’ issues and helps them improve their business.

And then show and teach your salespeople “how” to communicate this in writing AND in conversation to decision making executives at your prospects.

Unfortunately, most companies never do this.
And that’s why time to ramp is so slow, sales cycles are long and why 58% of opportunities end in no decision or are lost.

Sales people are spending their precious prospecting and selling time, writing and talking about your company to mid-ranking managers who defend the status quo.

So, do your salespeople and yourself a favour.

Go beyond “drinking the kool aid” and only exposing your sellers to your product marketing information.

On board them with messaging created from your buyers’ perspective.

And arm them with the written and conversational mindset and skills to sell “beyond their pay grade.”

You’ll be glad you did. Transformational sales results will be achieved.

#2 Your salespeople are prospecting and selling too low

Your greatest threat to sales success isn’t your competition.

It’s the status quo.

Status quo is the internal inertia your sales people face with your potential clients. It’s the way potential customers are running and doing business today. Business as usual vs introducing a change (your offering).

Are your salespeople prospecting and talking to people who can say “yes”? The people who can mobilize internal resources and create or have access to budget?

According to The Chasm Group, 85% of budgets are already spoken for on existing initiatives

Too often sales people waste their time prospecting and trying to sell to mid-ranking executives who are “invested in the status quo, can’t say yes, but can say no.”

And, even if they are working with a mid-ranking exec who wants to drive change/improvements, the mid-ranking executive probably can’t push the deal up the chain of command.

This graphic summarizes the core motivations of functional and strategic executives and their ability to spend/buy.

When I show this graphic to salespeople I get groans as they have an “aha” moment.

Many realize that they are wasting their lives – as they spend most of their time prospecting into and trying to sell to mid-ranking functional executives.

Quite simply, the motivations of the mid-ranking executive is to operationalize and execute – not to introduce change or buy (unless triggered/directed to by a senior executive).

If, as research shows, as much as 95% of buyers are in status quo and mid-ranking executives’ motivations are to execute/operationalize and not introduce new behaviour and process change (aka your offering) – then why do most sales leaders and their sellers focus their time and energy on such low probability activity? This shows up as lots of activity…but few opportunities in the pipeline.

What difference would it make to your business if your salespeople were prospecting and speaking to executives who are open to and interested in new ways of growing and running their business…and who create budgets?

In order to loosen the grip of the status quo, sales people need to prospect into people who are motivated to change, to impact top and bottom line – because that is what selling is – it’s changing from one state to another.

Who is motivated to make improvements to their business and open to change?

The executives of the company. The C-Suite’s role is to look for new ways of doing things that will give them a competitive edge.

This is where top sales performers start their engagements. The top down approach.

Here’s the proof of this approach.

If you’re a CEO or Sales Leader reading this, ask yourself this…

If you wanted to do business with another company, would you reach out to a mid-ranking executive with a Manager, Director or even a VP title?

The answer I get from most leaders is because they know that decisions to do ‘new’ and ‘different’ are made at the C-Suite level, and those decisions are made fast.

If that’s the case, then why are you letting your salespeople prospect into mid-ranking execs where they have low probability of success?

Research from SBI shows that as much as 58% of deals end in ‘no decision’. You’re wasting your salespeople’s lives and putting your company’s growth at risk if you allow them to prospect and sell too low.

#3 Your salespeople (and sales leader) have never been taught how to WRITE prospecting messages to C Level executives

How many of your salespeople can start a sales cycle with the CEO or another C Level executive? If you are an executive or sales leader reading this, think back in your own career.

Did anybody ever teach you how to WRITE a letter, email or LinkedIn Inmail to a CEO, President or C Level executive – that compelled them to begin a conversation with you?

I only ever get a few hands raised to that question…This is an ‘‘invisible elephant” in most companies I’ve ever spoken to or worked with.

Most sales people have never been taught how to write executive level prospecting emails, letters or LinkedIn Inmails…they are left to figure it out on their own.

Nor do they have the mindset or confidence to write and ‘go high.’ And yet, that’s where decisions to change are made – as executives are focused on new initiatives that drive growth or efficiencies.

The ability to write effective prospecting messages helps salespeople get appointments with the right people, at the right level at target accounts in minutes, hours and days…not weeks, months or never! Consistently.

And this delivers transformational increases in pipeline and sales results.

To learn more about Matt Conway’s methodology, visit his website at https://www.matthewconway.com/

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• About
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Eliot Burdett

Latest posts by Eliot Burdett (see all)

• 31 Must-Know Sales Follow-Up Statistics for 2024 Success – December 21, 2023
• 7 Success Characteristics That Define Top Performers – December 19, 2023
• 5 Reasons Your Top Employees Quit (Stop Doing This to Stop Them Leaving) – December 14, 2023

The economy is creeping along.  Revenue is down, the pressure is on to reduce overhead and the CFO is looking at the way you sell. You can choose from a variety of job candidates: full time staff, freelancers, independent contractors, temps and consultants.  Now the big question, do you continue with a full time sales staff or outsource for sales agents?

Full Time Sales

Control.  That’s what you get with a full time employee.  You recruit, train and manage the staff.  You can supervise their work environment, hours and production.

Unfortunately control comes with a hefty price tag.  Recruiting and training is a significant investment.  Managing a full time team also means the expense of benefits and HR management.  It may be costly to hold on to exceptional talent, and legalities may make it impossible to dump the underachiever.

Sounds expensive and challenging to manage your own staff, so why do it?  A seasoned full-timer is deeply rooted with the company.  Long-term relationships with customers are developed and revenue is strong and steady.  Company employees know your value story and can easily solve problems.  A full time employee is vested with your organization, and is loyal to the cause.

Sales Agents

Sales outsourcing is the strategy of using an outside agency to staff your sales department.  You have an abundance of talent to choose from without the typical recruiting time and expense. With a contracted sales staff, significant overhead is transferred outside of the company and you have the option of a short-term commitment when the long term is uncertain. Outsourcing allows companies to cut back spending without cutting back on productivity. Love your company but hate selling? Lack sales skills?  Are you a start-up or entering a new market? Free up time to focus on mission-critical core business functions while your experienced sales agents increase revenue.

Downside?  Well, sales agents work for themselves or an agency. Since sales professionals tend to concentrate on those sales with the highest commission structure, the sales agent may choose to invest more time to the client with higher compensation, not your business. It’s much easier to ensure that your own sales team is trained properly, consistently pursuing every opportunity and closing deals, than it is with an outsourced firm.  In order to be successful, resources are needed to find the right outsourcing vendor and you’ll need to manage expectations around results. If not administered properly, contracting your sales department could end up costing more than what you’d spend on an in-house team.

Which Strategy is Right

The decision of hiring vs outsourcing sales really depends on your sales strategy, goals, what your customers want and ultimately, the availability of the right sales resources. Either way, make the choice carefully as it will have an enormous impact on your results.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

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Eliot Burdett

CEO at Peak Sales Recruiting

Before Peak, Eliot spent more than 20 years building and leading companies, where he took the lead in recruiting and managing high performance sales teams. He co-founded Ventrada Systems (mobile applications) and GlobalX (e-commerce software). He was also Vice President of Sales for PointShot Wireless.Eliot received his B. Comm. from Carleton University and has been honored as a Top 40 Under 40 Award winner.

He co-authored Sales Recruiting 2.0, How to Find Top Performing Sales People, Fast and provides regular insights on sales team management and hiring on the Peak Sales Recruiting Blog.

Connect:

Latest posts by Eliot Burdett (see all)

• 20 Of Our Favorite Books About Sales Management and Sales Leadership – October 20, 2023
• How To Make Progress On Your Sales Goal Without A Sales Leader – September 15, 2021
• Augment Your Recruiting Strategy During “The Great Resignation” – July 26, 2021