I was talking with a prospective client yesterday about their sales growth. Julie has been in business for 5 years and her company really took off during that time. She is now doing over $1.5M in sales and has two sales reps on her team. One of the reps has been with her for 2 years and is closing more than half of the leads she gets. The second rep has been with Julie for a year, but she is closing a fraction of the leads.
Julie has worked closely with the new rep, coaching her on the sales process, ensuring she has expert knowledge of Julie’s products and providing ongoing feedback on numerous sales calls…
At the end of the day, the rep simply isn’t getting results. Julie is ready to move on and hire a new rep, but she wanted to be sure she set up the right systems to compensate and manage future sales team members. She didn’t want to spend another full year, trying to develop and manage an under-performing sales rep.
As we talked about sales management, I shared three insights I’ve learned after 20 years of sales management. These three topics come up quite a bit and I wanted to share them with you.
Provide Uncapped, Unlimited Sales Compensation Plans
If you want highly motivated, high achieving sales professionals, make sure your compensation plan provides uncapped income potential.
I’ve worked with companies who tell me, “We can’t do that! We don’t want our sales reps to make that much!” This is the worst possible philosophy if you want to develop a fast growing company.
Your sales reps are the lifeblood of your organization. If they are making money, your company should be making money. If they are making millions, your company should be making tens of millions. If not, you need to re-examine your compensation model. Your comp model should create an absolute win-win for your sales team and your company’s bottom line.
Let Your Team Create Self-Imposed Sales Goals
I once worked with a serious rock star sales executive. His name was Robert. I was in a new role and was managing a large team of sales reps. I was looking for expert advice on how to get my team to the next level. Part of my role was setting goals for my team. When I asked Robert for his insight on sales targets, he said, “Let your sales reps set their own goals.”
“What? Are you kidding?”. I was stunned. How could I possibly let my sales reps set their own goals? We had financial targets to meet. If I let the reps set the goals, how would I be able to deliver on our targets?
His response changed my whole perspective on sales management. Robert said, “You need to establish your department’s sales targets, but if your sales rep’s sales goals aren’t higher than your targets, you have the wrong sales rep.”
This changed everything for me. I had been working hard to get sales reps to commit to higher goals. The problem was, they were the wrong sales reps.
Moving forward, I followed a different process when I managed sales professionals. We would talk about their personal financial goals, I would keep them informed on how the company was doing financially and where we wanted to go. Every year, I’d ask my sales pros, “What are your goals for the year and how do you plan to get there?”
The winners always exceeded my expectations. Those that came in lower, or had excuses why they couldn’t grow, eventually found themselves in a different role with the company or simply working somewhere else.
See, it wasn’t my job to talk the sales rep into high performance. My job was to support them in any way possible as they achieved their goals.
Now, let’s be honest, sometimes sales reps don’t meet their targets, especially if they set high targets. Sometimes business conditions change. You deal with these issues as they arise. Hopefully, the performance is higher than your internal targets but simply lower than the rep’s expectations.
But the one thing I stopped doing was spending time and energy trying to get the wrong rep to commit to the right sales target.
Stay Current on Pipeline Management
Now, just because you have an uncapped commission plan and a highly motivated goal driven team, doesn’t mean you get to sit on the beach and let things run on autopilot. It’s key to keep your eye on the ball by tracking sales performance. You must break down your sales goals across key benchmarks, whether that is weekly, monthly or quarterly. More importantly, you need clear visibility on the sales pipeline.
- How many prospective clients are in the pipeline?
- Where are they in the sales process?
- What is the revenue value of the prospective client?
- How likely are they to become a client?
When you know this data for each member of your sales team, it allows you to stay focused on two important things:
- You can effectively forecast sales
- You can coach your sales reps and help them move prospects through the sales process
No more wondering, “Why didn’t we hit our sales target?” With a clear understanding of where your reps are with prospects, you can coach them to success.
These three keys have helped me lead numerous successful sales organizations and have helped my clients build high performing sales teams that drive sales and profits. I hope they will help you as you manage your sales team while growing business!
Would you like my help building a winning sales organization? To schedule a complimentary one-on-one strategy session, just click here.