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6 Sales Compensation Secrets That Lead to Great Sales Hires

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Great salespeople are comfortable dealing with money matters, but negotiating compensation is also a very personal matter, and since egos are involved it can be an emotional experience. After having spent many years hiring and recruiting salespeople and negotiating sales compensation plans, I offer these tips to help you land the sales person that will contribute to your sales goals.

Here are 6 compensation secrets that lead to great hires:

1. Don’t Be Shy

Salepeople are money driven. So it is important to address compensation expectations early when engaging any candidate, to make sure that their comp goals are in line is with your budget and/or to find out what it will cost to add that sales person to your team. Without making the conversation purely about money (because that is only one component of assessing fit), ask the rep what they are currently making and what base and commission at target would be required for them to consider a move.

2. Focus on the Target Income

Great salespeople do not work for their base. They meet or exceed their sales goals and in turn take home considerable compensation in the form of commissions. While it might be easier to focus on the base salary when making an offer to a prospective sales hire, the assumption is that you have properly vetted the candidate, that they will be achieving their quota and that they will be earning their full commissions at target, so the conversation during the compensation negotiation should revolve around the Total Target Income (TTI).

3. Offer Proof

It is one thing to tell a prospective sales hire about the high income they will make selling on your team, but the potential TTI has more credibility when you can show that other reps already on your team are making the same level of income. This sends a strong message to the sales person that you are trying to recruit.

4. Never Lowball

We were recently recruiting a high performing sales person who was fielding employment offers from two competing employers, one of which was our customer. During the compensation negotiations, the other employer offered the candidate a base salary of $75k, which was $45k lower than their current base! The employer justified their offer on the grounds that the target income was in line with the candidate’s expectations. I am not sure how the employer expected their offer to be received, but predictably, the candidate was incensed by the offer, feeling that it was an insult and that they had been misled by the other employer who claimed to offer “market” compensation.  Fortunately for us, the candidate accepted our offer almost immediately after receiving the other offer.

5. Don’t Go Quiet

Some employers will make employment offers and then not be available for questions afterwards. During any compensation negotiation, particularly after the first presentation of the offer, there will be questions. And since the negotiation can be emotional it makes sense to be available and responsive in providing answers. This keeps the negotiation positive and moving forward. And don’t forget the adage – “time kills deals.”

6. Negotiate Live

As the old saying goes “you can’t close in an email” yet many employers send an employment offer with compensation details by email. The downside of not negotiating compensation either in person or on the phone is that there is limited opportunity to gauge the candidate’s response to the offer. And it could be disastrous if the response is negative since there is no opportunity for recovery. The candidate may simply go silent, so it is always better to negotiate live, answer any questions in real time and confront any show stoppers before they become show stoppers.

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.

Connect:

Latest posts by Eliot Burdett (see all)

How to Conduct a 90 Day Review with a New Sales Hire to Improve Sales Performance

new sales hiresWith busy schedules and many competing priorities, 90 days passes in the blink of an eye for a sales manager. It is easy to forget to pay attention to how a new sales hire is doing – especially if the rep seems to be doing well – but after making a large investment in recruiting a great sales person, it is important to maximize the chances that they will be successful. No period has a bigger impact on sales performance than the first 90 days which is a critical period in setting up a new sales hire to succeed. A structured on-boarding program contributes to ensuring that a new member of the sales team is not only successful, but productive as quickly as possible.

In some companies, particularly those with a shorter sales cycle, it is immediately obvious that a new sales hire is contributing, while in others it takes longer to evaluate the sales person’s value to the sales organization, and the on-boarding process may effectively extend beyond 90 days. Whatever the case, it is important to do an in-depth review at the 90 day stage once there has been a decent run of activity and production to evaluate.

A 90 day review is a formal review that will achieve several goals:

  1. holds the rep accountable for what they promised to deliver
  2. allows the manager to correct behavioral weaknesses that stand in the way of optimal performance
  3. creates a context for the rep to be successful on an ongoing basis
  4. allows the sales manager to formally re-emphasize the company’s sales goals and agenda
  5. provides input into the sales manager’s forecast

See also The First Week With Your New Sales Hire

By the 90 day mark in a sales person’s tenure with an employer, a sales manager has monitored the sales person’s actions for more than 12 weeks and will have many observations to compare against the plan that was created when the sales person was first hired. Over the course of managing several successful sales teams, my 90 day reviews involved the components identified below.  Ideally a structured template is used so that areas for improvement are clearly identified and the rep has a guide that identifies the best practices and behaviors they are expected to exhibit.

  1. Metrics – How did the sales person perform against the key performance metrics and goals that were set when they were hired?
  2. Pipeline Review – Has the sales representative created a pipeline that is large enough to support future sales goals? Spend time investigating opportunities that are key to achieving targets and determine risk associated with the forecast.
  3. Communication and Reporting – Has the rep communicate regularly and openly? Have they maintained accurate reports and opportunity details in the CRM?
  4. Conduct – Has the rep carried themselves professionally and displayed the discipline and behaviors that contribute to success? In some cases, there will be a long list of critical behaviors and capabilities, such as account and call planning, prospecting, qualifying, closing, and negotiating.
  5. Customer Feedback – What constructive feedback has been provided by prospects and customers? How have customers reacted to the introduction of the sales person into accounts?
  6. Team Feedback – Has the new sales rep had a positive member of the sales team? What actionable feedback has been obtained from the new sales person’s peers on the sales team.

Once the 90 day review is complete, have the rep put together another 90 day plan and/or one for the balance of the year that will be used in future reviews.

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.

Connect:

Latest posts by Eliot Burdett (see all)

The Most Controversial Sales Management Strategies and Tactics

 Over the years I have been exposed to many sales management theories and strategies, some of them conventional and some of them less so. I have also seen many unconventional ideas evolve into mainstream practices as the times change, with varying degrees of success. Ultimately, challenging conventional wisdom is a smart move, if it results in taking a step back and looking at what approaches are really working or not working versus passively maintaining old habits or following popular trends.

In this article, we take a look at sales management ideas and approaches that spark vigorous debate over efficacy.

Sales Commissions Don’t Work – Arguably the most sacred of sales management thoughts is that commission systems are explicitly tied to sales results. In recent years, however, perhaps an outcome of the “everyone is a winner” cultural shift, there is a small but not significant and growing movement towards eliminating commissions from the incentive mix for sales people. Many pundits argue that commission systems prevent sales, including Harvard Business Review contributor and bestselling author Dan Pink who has written about sales teams that have increased production after dropping sales commissions. Norm Brodsky, a seasoned entrepreneur, Inc. contributor and author, has also been very vocal about the fact that commissions systems don’t work. Still there is much research to indicate that sales commission systems absolutely do influence the behavior of sales people and if designed and applied properly will result in increased sales. Whether this continues to be the case over future generations remains to be seen, however the balance of evidence today seems to support the usefulness of commissions in driving sales results.

For more from Peak on money motivation in sales people, see Money and its Influence on Sales Behaviour

Sales People Shouldn’t Cold Call – Another increasingly held belief is that sales people should not cold call. Driven in part by the Internet’s impact on buying behaviors (see Have we reached the death of the salesperson? Well, not quite) and by the general dislike for cold calling, there is a growing number of advocates that champion the notion that sales team should abandon cold calling. I have always been a big fan of cold calling, but the reality is that few buyers answer their phones anymore. It therefore takes  a high degree of persistence and creativity to generate sales leads these days and there are many more effective ways to develop these relationships. Former Salesforce.com sales leader and author of Predictable Revenue, Aaron Ross, argues that sales people should not do their own prospecting and sales results are better served by dedicated teams of highly trained outbound sales teams that identify and qualify new sales opportunities, but do not close deals and instead hand them off to Account Execs to close. As the sales landscape evolves and sales teams become more sophisticated, I expect we will see more of this (see more on how cold calling is evolving here Cold Calling 2.0).

Fire The Worst Performers Regularly – Arguably the most contentious sales management practice is to automatically turnover a certain portion of the sales team each year. High profile leaders like Jack Welch and Andy Grove, led with an iron fist and were very vocal about the need to turnover the bottom 10% of performers annually. Recently business owner, investor and Shark Tank star Barbara Corcoran, talked about how she grew sales by dismissing the bottom 25% of her sales force each year. Critics argue that this practice is not good for morale and/or can negatively impact team work. Regardless of whether this practice is effective or not, in our experience it is the minority of companies that systematically terminate the weakest sales reps. It is intuitive, however, to think that the fear of being fired would have a positive impact on sales performance, and there is a multiplier effect of adding high performers to a sales team (see Building a Culture of Success in Your Sales Team).

Marketing is a Waste of Time – There is an insignificant contingent of sales leaders that don’t perceive value in marketing efforts. Some of this may stem from old school thinking when marketing did not play such a huge role in the shaping of buyer perceptions and behaviors. While I have been on sales teams where a common complaint was that the leads from marketing are useless, I have also been a member of teams where the reps stopped prospecting because the leads were so good. Marketing departments that are properly focussed on contributing to sales results can be extremely powerful and I think that as sales becomes increasingly sophisticated, we will continue to see better marriages between sales and marketing.

Leave Your Ethics at the Door – Perhaps most egregious of all sales theories, but surprisingly common, is the notion that to be successful in sales requires the absence of integrity. There is a reason why sales has a bad reputation in some circles and I have heard of more than one sales leader who told his reps to forget ethics when they arrived at work or to purposely lie to customers. Unfortunately, it is not entirely uncommon for reps to fudge on features that don’t exist, secretly channel kickbacks to customers, or even sell used products as new. To be fair, sales and all business interactions for that matter, involve a degree of manipulation by one or all involved parties, but while being dishonest might work in the short term, I have yet to see a sales leader promote shady practices and achieve long term success. As a top national sales trainer and Honesty Sells author, Colleen Francis points out that “top sales performers know that the real way to win a customer’s heart (and loyalty) is by building open, honest relationships with them.” Read more about sales and ethics here – Three Ways to Make Ethics a Key Part of Your Sales Effort.

What are some of the controversial sales management practices you are seeing? Add your comments below.

To your success!

References

Image by Craig Garner

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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)

Job Description of an Account Executive / Sales Hunter / New Business Developer

Account ExecutivePeak Sales Recruiting is often asked by customers to provide input on sales job descriptions. One of the most important roles on a sales team is the Account Executive, which across various companies and sectors is known by other names such as AE, Account Exec, Sales Hunter, or New Business Development Manager.

While the role of Account Executive is almost always focused primarily on the acquisition of new customers, in some sectors, for instance, advertising and new media, the role also includes elements of ongoing customer service delivery and even collections.

Many job descriptions include both a list of duties and qualifications, however Peak endorses job descriptions that are more focused on key metrics, goals, and quantifiable objectives. With that in mind, the following job description can be used as a guide for any Account Executive:

  • Establish relationships with new customers and secure contracts with new customers that achieve assigned sales quotas and targets (this should be quantified against a calendar schedule)
  • Drive the entire sales cycle from initial customer engagement to closed sales (and in some cases through delivery and cash receipt as mentioned above)
  • Prospect for potential customers using various direct methods such as calling and face to face meetings, and indirect methods such as networking (this is often accompanied by an identification of the territory in which the AE will prospect)
  • Qualify prospects against company criteria for ideal customers and sales
  • Consult with prospect about business challenges and requirements, as well as the range of options and cost benefits of each.
  • Maintain a high level of relevant domain knowledge in order to have meaningful conversations with prospects.
  • Make presentations to senior managers and decision makers
  • Draft and deliver proposals
  • Work with technical staff and product specialists where required to address customer requirements
  • Develop and maintain territory plans which outline how sales targets will be met on an ongoing basis
  • Develop and maintain key account plans that identify opportunities for company to deliver value, strategic motivators, main stakeholders, buying processes and forecasted sales
  • Report on sales activity (include desired frequency – daily is ideal for accuracy)
  • Keep detailed notes on prospect and customer interactions (include frequency – daily is ideal for accuracy)
  • Provide forecasts on best case and most likely sales volumes over relevant time periods
  • Work with delivery teams to proactively address problems
  • Cultivate strong relationships with third party and partner companies that may be required to deliver full solutions to customers
  • Work with marketing to plan and execute lead generation campaigns
  • Provide feedback to sales management on ways to decrease the sales cycle, enhance sales, and improve company brand and reputation
  • Provide feedback to company management on market trends, competitive threats, unmet needs, and opportunities to deliver greater value to customers by extending company offerings
  • Identify sales support requirements and work with marketing to develop improve sales tools
  • Be a positive representative of the company and its brand in the marketplace
  • Conduct all sales activities with the highest degree of professionalism and integrity

For insight on compensation plans for account executives, see Sales Compensation – Hunters vs. Farmers

Looking for an easy-to-use Account Executive job description template? Fill out the form below and get instant access:

Image courtesy of  2nix | 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)

Why Great Sales People Fail

Why Great Sales People Fail

It 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!

Image courtesy of  ratch0013 | freedigitalphotos.net  

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.

Connect:

Latest posts by Eliot Burdett (see all)

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!

Image courtesy of nongpimmy | 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)

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

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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.

Connect:

Latest posts by Eliot Burdett (see all)

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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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.

Connect:

Latest posts by Eliot Burdett (see all)

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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Latest posts by Eliot Burdett (see all)

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!

Image courtesy of  jesadaphorn | freedigitalphotos.net

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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.

Connect:

Latest posts by Eliot Burdett (see all)