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Why Great Sales People Fail

Why Great Sales People FailIt is commonly accepted that the best sales people are successful wherever and that they go don’t move jobs very often. This is certainly true, but rarely does someone have a perfect career track record in sales.  There are a lot of internal and external factors that can get in the way of consistently achieving quota and even the consistent top sales achievers have blemishes in their career history. Because of the  high level of competition for sales talent and the scarcity of sales people who can consistently produce, it is critical not to reject capable candidates for the wrong reasons.

Here are some of the reasons why great sales people fail:

Sold a Bill of Goods / Mistake in Judgement – Often times a hiring manager will oversell their open positions in order to fill them. They may imply that the job is easier than it actually is, that the compensation and commissions are higher, and/or that the product and offering are more robust than they actually are. While great sales people are good at qualifying companies where they will experience success, in some cases they fall for the hiring pitch themselves only to find out shortly after joining that they didn’t join the company that they thought they were joining or that they overlooked key details which are now a show stopper for them. Since the best people have options, they will usually admit their mistake and move on to an employer where they are set up to succeed.

Personal Changes – There may be many reasons why taking a position makes sense at a certain point in someone’s life, however things change. People get married, have kids, divorce, and/or experience changes in their health which may trigger changes in the types of work they want to perform. I have seen great reps travel 15 days a month, then have kids and resist being on the road, which ultimately affected performance. On surface this would seem like a failure, when in fact, it is simply a change of fit.

Bad Boss – Arguably the most common reason for failure is a sales manager that fails to effectively lead.  Too often the reps are not given enough of the right guidance, development and coaching, or the right structures and support systems are not put in place, which in turn increases the chances that the rep will fail no matter how great their sales DNA.

Poor Cultural Fit – While it is easy to measure sales performance to goals over time and to a lesser extent critical sales capabilities, many hiring managers have no choice but to subjectively measure cultural fit (as will the candidate being recruited). This can have an enormous impact on a sales person’s performance since a  rep is unlikely to perform well if they don’t have good chemistry with their boss or their co-workers, or simply can’t connect with the vibe and rhythm of the company.

The Company Changed – There are times, for instance a significant change in company direction or an acquisition, where a sales rep who was over achieving before the change must adapt to material changes in what they sell, who they sell to or how they sell. While some people can be successful in multiple selling environments, many cannot, and an otherwise great sales person may see a dip in performance. In most cases a sales person with a strong command of their career will quickly realize this and make a change, but we are all human and in some cases the rep stays on and suffers through the drop in performance before inevitably changing employers.

There are many tasks required when recruiting great sales people, and one of the key steps is a careful and thorough review of the candidate’s career history.

Download our free eBook: The Ten Most Costly Sales Hiring Mistakes to reduce the risk that you make a bad sales hire.

To your success!

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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.

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When Interviewing Sales People, Silence is Golden

Most sales people like to talk. So do a lot of hiring managers, which is unfortunate when it comes to hiring sales people because assessing the abilities of a potential hire is difficult if they aren’t the ones doing the talking.

Get Them to Speak

While there is a tendency for many hiring managers to do a lot of talking, particularly sales people, people who like to sell, and business owners that want to promote the career opportunity and or describe their company, interviewing sales people is a lot like peeling an onion to get to the lower layers – where the truth lies – so it is paramount that the sales person being interviewed is given the majority of the speaking time and the biggest opportunity to share information about themselves.

Asking the right questions is a big part of obtaining the right information, but many job seekers have well practiced responses to the most common sales interview questions, so it takes another tactic to effectively gather the truth from the interviewee. That tactic is using silence.

Silence is one of the most powerful techniques or gaining insight on a person in a sales interview because most people, even sales people, feel compelled to fill dead air with words.

Often in sales interviews I will ask a question to a candidate and then wait for the answer. When the candidate provides what they think is an appropriate answer, I remain silent. I don’t offer any reaction. I simply remain quiet, which usually prompts the interviewee to think that I am expecting a longer answer and 9 times out of 10 they start talking again. In some cases, they repeat themselves, but in many cases, they give additional details and new information. I will remain silent until I feel like there is no new information to be garnered and then advance with my other questions.

Remarkably the additional answers often contradict earlier statements – a sign that the candidate provided their stock answer at first and then became more candid once they went “off-script.”

Using silence in an interview might take a bit of practice, because it may well require no words and a poker face for more than 5 seconds which will feel like an eternity. It will likely feel awkward, but the discomfort is mitigated if one knows this will be the case and can brace themselves accordingly.

It does work and the additional insight it provides is invaluable in assessing whether a sales candidate has or doesn’t have the ability to perform in a sales role.

To your success!

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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.

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5 Ways to Reduce Sales Rep Turnover

Sales Rep TurnoverBuilding strong, stable and reliable sales teams is critical to sales performance, certainly in the long term. Sales rep turnover affects sales production, team morale, customer loyalty and ultimately, the bottom line, so it is incumbent on executive leadership to reduce or avoid unwanted turnover in the sales force. Here are 5 ways to reduce turnover in your sales department.

1. Hire the Right Reps

Reps who perform well typically won’t want to change jobs for fear of jeopardizing their income, so hiring reps that are uniquely suited to be successful is a critical part of avoiding turnover. This means not only committing to hiring the best reps (see The Traits of Top Sales Performers) versus the best available (see Do you hire the best sales people, or the best sales people available?) but also becoming a magnet for top sales talent (13 Mistakes That Prevent Employers From Attracting Sales Talent), knowing the profile of the rep that will excel in your organization and developing expertise at sales recruiting and hiring. For more on hiring sales people that will be top performers, see more articles on recruiting top sales people.

2. Compensate Well

According to sales people we speak with, one of the biggest factors influencing a sales rep’s decision to leave an employer is the feeling that they should be receiving higher compensation for their work or talents. In many cases a rep receives less than what they are worth because of flaws in the sales compensation plan or execution (see Three Reasons Sales Compensation Plans Fail). To ensure that your sales compensation plan and approach is not triggering unwanted turnover, reps need to feel that they are paid at least fairly, if not more, so it is critical to make sure the comp plans are simple to comprehend and result in at or above market pay for the sales person.

3. Set up to Succeed

While money may be a big factor in career choices of sales people, according to the Sales Benchmark Index (The Truth Behind Why Your Best Sales Reps Leave), “their number one complaint is lack of coaching from their boss. Reps don’t feel they get the care and feeding from their direct supervisor.” Sales reps are not self managing. In order to be successful, they need proper leadership, coaching, support and infrastructure. If a rep feels these things do not exist, and that they are not set up to be successful, they are likely to start looking at other career options.

4. Start Right From the Start

Surprisingly often, a sales rep will join a new employer with the wrong impression about what the role entails or with insufficient support and development to become productive quickly. To avoid losing great reps that are hard to find leading employers have comprehensive and structured on-boarding programs for new sales people to make sure they are successful.

5. Have Fun

Achieving superior sales is not easy. In fact it requires a lot of hard work and as the old saying goes, “all work and no play makes Jack a dull boy” which translates to being boring and then in turned, bored. People who are not enthusiastic about their work are inclined to underperform and will look to make career changes, so it is critical for sales leadership to find ways to bring a fun factor to sales work. To avoid turnover, it can’t be all grind all the time, there must be downtime and outlets for letting off steam. A smiling rep is a rep who sells more. It is also a rep who is less likely to change employers.

Read more on avoiding sales rep turnover:

19 Simple Ways to Make Your Best Reps Leave

To your success!

Photo Credit: StephenMitchell via Compfight cc

Connect:

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.

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Three Reasons Sales Compensation Plans Fail


25 years of selling, managing sales teams and building high performance sales forces has taught me many lessons, not the least of which is that sales compensation plans have an enormous impact on attracting the right sales people and maximizing their performance. Yet many organizations make key mistakes in the design and management of sales compensation. We often see employers making one or all of these sales compensation design and delivery mistakes, and in turn suffering inferior sales results.

Here are the three reasons compensation plans fail:

1. Too Complicated

Many sales comp plans have multiple rates and bonuses for various types of sales and/or activities. A correctly designed plan links the highest incentive to the activities that are most important to the employer, but if the comp plan is confusing, the reps are likely by default to focus on the activity which they think will generate the highest return on their selling time, which may not be aligned with the company’s goals. Sales reps are also likely to be frustrated by a complicated comp plan because it will not be clear to them that they are set up to succeed. Keeping things simple is the best recipe for aligning rep effort and company goals.

2. Poor Connection to Effort

Almost all comp plans put cash in the rep’s pocket after sales have been secured, but often times the rep doesn’t receive payment until long after the sale has closed. In some cases employers pay reps months or even quarters after the sale has been closed or when customers have paid for products and services. This can be frustrating for sales people who are typically motivated by immediate rewards for behavior. Ideally there is a short time lag between activity and reward, so sales reps are highly motivated to do more of the right things for their employer.

3. Compensation Gets Changed

Many organizations tend to tinker with comp plans regularly and change commission rates and payment schedules in efforts to generate higher output and/or lower overall costs of sale. Reps often don’t understand the rationale behind the changes or, more importantly, groan when they have to wrap their heads around a new compensation plan and how it affects their effort and reward quotient. Furthermore, particularly where there is a longer sales cycle and a new comp plan will negatively affect the commission payout on maturing sales, reps can feel like they are getting short changed by their employer. Compensation changes should be made with both the employer’s business objectives and the rep’s motivation in mind, made as infrequently as possible and communicated clearly so the reps understand why it is good for both them and their employer. 

Leading sales organizations avoid these sales compensation mistakes and instead make sure that comp plans meet the three cardinal rules for comp plans:  tied to the right goals, simple for reps to comprehend and resulting in at or above market total compensation.

To your success!

photo courtesy of freedigitalphotos.net | Idea go

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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.

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Language Used by Leading Sales Teams

Language Used by Leading Sales TeamsRecently I wrapped up a consulting assignment for the VP of one the country’s leading enterprise software companies. During that time, I was around the elite level sales people on his team and I got to thinking about the differences between sales forces that consistently perform at a high level and those that are consistently average. One of the key differences is the language used by top producing sales teams.

  1. Customers – Top sales teams are always talking about customers because customers are the basis of revenues and sales success.  For the highest producing teams, customer centric selling is not a buzzword.
  2. Value – Delivering superior service and value to customers leads to higher sales, so high producing sales forces talk about the ways they provide value added to customers and prospects.
  3. Work – A career should be rewarding, but achieving big things is not easy and leading sales teams never take their foot off the gas, take anything for granted or pretend for a moment that hard work is not required to be successful.
  4. Planning – The old saying “plan the work, work the plan” is often heard around top sales teams, as is the other timeless adage “a failure to plan, is a plan to fail.”
  5. Consistency – As in sports, where you can’t play half a game and expect to be successful, great sales teams talk about sustained levels of the right behavior.
  6. Honesty – Great sales teams understand that being transparent and honest with customers leads to more sales, but top reps don’t just talk about it, they act with integrity and professionalism.
  7. Perseverance – The average sales rep is not prepared to pursue deals that take various unexpected turns, however when you spend time on top sales teams, you hear reps talking about keeping on deals, “bird-dogging” prospects and not giving up until a deal is closed or dead.
  8. Brand – High producing sales teams understand the critical importance of being “leaders in their space” so they so they behave in ways that are consistent with their marquee brand and work hard to protect their reputation.

Bonus – Body Language – There is an air of confidence, intensity and urgency on top sales teams. The reps work hard and expect to succeed which is evident in not only how they speak, but how they carry themselves.

To your success!

photo courtesy of pakorn | 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.

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How to Qualify Passive Sales Candidates Without Losing Them

Qualify Passive Sales Candidates When a hiring manager meets what appears to be a perennial top producing sales person, there can be an overwhelming temptation to go into full sales mode to get this person hired – especially if this person is working somewhere else which is almost always the case with top performing sales people (we call these passive candidates as they are not actively job seeking). There tends to be a hesitance to ask the tough assessment questions that would be asked of other less accomplished candidates, for fear of turning the great candidate away.

But just because someone has achieved something in the past doesn’t mean that they will in the future, and there is no guarantee that the person will fit with the culture in every sales organization. Therefore, a full assessment is as necessary with someone that looks to be a great sales person as it is with any other sales person that might be considered for hiring.

The Delicate Balance in Courting and Assessing Passive Candidates

While it is true that top sales people and passive candidates make career choices differently than the average job seeker, it is not true that they aren’t open to being assessed. Winners are prepared to be thoroughly assessed when they interview with a new employer because they realize that the most successful companies are very careful about hiring decisions – this is how you recruit the best sales people and this is what attracts more of the best sales people.

There is a balance that must be struck between courting and selling to a passive sales candidate and questioning and qualifying the value of what they offer.  At Peak we find there are several ways to achieve this balance:

Push/Pull – There are times, particularly early in the engagement process, when the hiring manager must aggressively promote the unique benefits of the sales role they are trying to fill, and then there are other times when the candidate must be challenged to prove their worth and earn their way onto the team.

Involve the Sales Manager – Before a passive candidate will give up much information about themselves, they need be interested in the opportunity. Many companies use pre-screening tools and HR departments to handle the preliminary meetings with all candidates, but passive candidates will be more engaged if they can have a brief call with the person that will be hiring them and who can best describe the sales organization and role and answer any questions about the career opportunity.

Honesty – We are up front with candidates about how the process works. Our customers are committed to hiring great people and will make time for meetings, but at the same time they are committed to carefully assessing all potential hires. Candidates are good with this as long as they never feel like they are being taken for granted or that their time is being wasted. They realize that due diligence is good for both themselves as well as the employer.

Be Ready to Hear No – While sales people are opportunistic by nature, the best ones have a history of making good choices, so at any point in time they are more than likely working for a good employer and if this is the case, they may express disinterest in leaving to join a new employer. But if a hiring manager believes they offer a better career opportunity and fit for the sales person, then it pays to keep the lines of communication open. If someone is not ready to make a move now, they may be later on and it doesn’t hurt to get to know them better in the meantime. Urge the person to keep talking.

To your success!

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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.

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How to Make Sure Your Sales Reps Stay Balanced

Sales rep burnout is a possibility on any sales team and this is especially true if you are driving hard towards big sales goals. If your reps become exhausted, they will lose interest in their work, stop producing and/or leave your team, which will have an impact on the overall sales numbers.

Over the years, I have discovered several great ways of ensuring my sales reps have a work-life balance which increases sales output and prevents burnout:

1. Perspective

A career is a critical part of someone’s life and success, however it is not the only part of a happy life and it is certainly not more important than some things like overall health and happiness. Reps who see their job as part of a bigger vision of success will be able to pace themselves more effectively, so emphasize the importance of keeping a career in perspective. Encourage your reps to enjoy life, relationships and hobbies. Endorse volunteering for community projects as this develops the helping attitude that is critical in providing great customer service.

2. Fun

A rep who is smiling sells more than one who is frowning. Enthusiasm is contagious so a rep with a happy disposition will make more friends and have an easier time developing relationships with prospects and customers than a rep who is not in great spirits. Furthermore, a sales team that is happy is unlikely to have issues attracting or retaining great sales talent, so be sure to find ways to get people laughing and having fun while they work hard to hit tough goals. If someone is not happy, talk to them about why and if it is obvious that they belong somewhere else, help them move on.

3. Health and Fitness

Many in the business world neglect their health, but sales can be physically grueling due to long hours and travel, not to mention the fact that mental stress can also take a physical toll. Even younger sales people who take their health for granted can suffer from poor physical conditioning. These issues can be mitigated with a healthy diet and exercise regime which keep the body and mind sharp and energy high over longer periods of time. Promote the importance of health and wellness and set a good example by eating well and staying fit.

4. Rest

To be able to think clearly, be creative and work at a high level, the body and brain need to be well rested. Reps who don’t get enough sleep or don’t take vacations seldom get the rest they need and are seldom able to produce consistently. Encourage your reps to rest properly and take breaks.

I have learned through experience, that if you do these things to actively help your sales reps achieve a good balance between work and life, then you will enjoy higher overall sales.

To your success!

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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.

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Great Sales Management vs. Bad Sales Management / Micromanagement

Bad Sales ManagementMany sales managers, particularly new sales managers, have trouble striking the right balance between managing reps and letting them do their jobs. Too often there is micromanagement and not enough of the right kind of management.

Poor Sales Management and Micromanagement 

Early in my own career as a sales manager, I would spend a lot of time going over the numbers and reminding my reps where they were at in terms of the quarter. I would regularly tell them what they need to do in order to hit their numbers including making specific calls and when, and what to say to close sales. My old habits as a sales person were hard to break and I was talking to my reps as if I was talking to my former self as a sales person (see The Differences Between Hiring A Sales Manager vs. Sales Producer).  I quickly learned that I was adding little useful value, when one of my reps chastised me for telling them what they already knew.

Great Sales Management

It took a while, but over time I learned that if I hired good sales people and provided the right level of management, I could let them do their jobs and provide support where required. By this point, my main areas of focus were:

1. Accountability  – Setting goals and holding reps accountable (See more on accountability here –  Accountability – the Key to Success in Managing Sales Reps

2. Systems and Structure – Sales processes, protocols for customer and prospect engagement, and rules for tracking and reporting (See more on structure here –
7 Habits of Highly Effective Selling Orgs)

3. Coaching and Communication – Helping your reps develop and be successful requires regular interaction and constructive feedback (See more on interacting with reps –
Habits of Highly Effective Sales Leaders)

Along the way I also learned ways for our team to have fun while we were driving hard towards our sales goals – this prevented burnout and made sure that I never had a problem attracting or retaining great sales people.

To your success!

 

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.

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Finding the Perfect Sales Person – And Why You Shouldn’t Try

Unicorn in field Often times employers will approach Peak with a desire to hire sales people with very specific sales experience, who in theory will leverage this experience to produce superior sales. The approach makes a sense in theory and would be a convenient way to identify superior sales people but hiring based on experience seldom works in practice.

Looking for the Orange Striped Unicorn in China that Speaks Spanish
Many employers like to think if someone has perfect resume, then they will be the perfect sales person. As the theory goes, someone with the right industry experience, selling the exact same product to the right people will be able to quickly produce great sales results – and this may in fact be the case, but there are a couple of reasons why this approach is more likely to fail than succeed:

DNA – Behavioral traits play a larger role in the success of sales people than experience. By placing the largest emphasis on experience, a hiring manager is likely to be overlooking many highly capable sales people that are more likely to succeed than a person with the right resume.

Pool of Talent – by defining the qualifications so tightly, an employer is often vastly reducing the number of people that are eilligible, in many cases down to single digits even in larger geographies. For a variety of reasons, a very small talent pool becomes problematic (there may be no eligible AND available candidates, and/or the employer must pay a large premium due to scarcity)

Time – It is not impossible to find the person with the a highly specific combination of experiences, but it takes time. This usually means months and/or years of waiting until the right person becomes available, during which time sales are not being made. Meanwhile a competitor is making sales. An employer has to weight the opportunity cost of waiting for the perfect rep.

Finding a sales person that is the equivalent of an orange striped unicorn is sometimes possible, but it takes a considerable amount of time and effort, will likely require premium compensation, and often leads to a short circuit of the hiring process which in turn leads to an inferior sales hire.

 Settling- In many cases, an employer will begin searching for the perfect rep only to realize how long it takes and then, under the pressure to fill a vacant sales position, settle on someone who perhaps has some of the right experience, but lacks the right DNA or who has been poorly assessed and lacks even the right experiences. This is fixing a bad plan with a bad plan and a recipe for failure. Discipline in the hiring process is critical, so settling on a hire should not be an option unless the employer is settling on the right sales person for the right reasons.

Redefining Perfect- There are no perfect sales people. Even perennial overachievers have weaknesses, however they  typically share several important success traits such as an inner desire to succeed, competitiveness, confidence, sense of urgency, optimism, resilience and ability to interact and influence others.

Experience– Experience is in fact very important, but sales managers with a track record of success in hiring sales people, look for reps that have demonstrated the right behaviors and success working in similar environments (past relevant behavior is the best predictor of future behavior and success).

Putting it all Together
There is aways a balance between quality and time in sales recruiting and hiring. You need to get the right rep, but you also need someone on-board and selling as quickly as possible. By searching for the right DNA and relevant experience, and by focussing on someone that can do the job rather than someone with the right resume,  a sales hiring manager can increase their chances of quickly hiring a  sales person who will be a consistent over achiever.

To your success!

 

Image courtesy of Victor Habbick | 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.

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The use of SPIFFS in sales compensation and impact on performance

Use of SPIFFS in Sales CompensationSpiffs represent a method of incentivizing certain kinds of sales rep behaviors and outcomes. Also known as a Sales Performance Incentive Fund, the Spiff is a concept dating back to as early as the mid 1800s and used by manufacturers as sort of kickback program to retailers that sell higher volumes of certain product lines. Since then, the concept evolved into very popular sales performance tool within sales teams.

Usually Spiffs are tied to performance and outcomes such as sales revenues, contracts, accounts or units sold, but they can also be tied to activities such number of calls or meetings.

In my experience cash is king and highly motivating for sales reps, but there can be instances where non-monetary prizes are used in Spiff competitions, such as vacation, trips, and retail products and services. Cash prizes are commonly in the range of 3-5% of base salary or 5-10% of variable.

Some best practices suggest that spiffs make up a small percentage of overall compensation, should be tied to driving sales of new products only and and that they should not be used to spike performance during a period, but I have had success using Spiffs with my reps as a boost during a quarter when it seems like energy levels were dropping and reps needed an excuse to get pumped up.

They key thing is to reward outcomes that are desirable to the sales organization, so be sure not to create a Spiff that might detract energy and focus on the overall sales targets.

Other factors to consider in designing a spiff program are the specific performance criteria, measurement program, duration of contest, eligibility of reps to participate, prizes and schedule for payouts.

A contest for within a contest
While sales team members are competing to be at the top of the company leaderboard, Spiff contests can be a fun side game and in my experience, as long as spiffs are not used too often, they can have a noticeable impact on overall sales.

To your success!

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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.

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