How Good is Your Sales Team
Posted Saturday, October 31st, 2015
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Sales Team

Top 3 Questions CEO’s should ask to determine – How good is your sales team?

As business is constantly changing, the success of business continues to depend on having the right talent. Having the right talent means asking “Does my business have the critical talent who can get us to where we are going?”

While the various departments that include finance, administration, operations, support and engineering are vital, most leaders agree that nothing makes a more favorable impact than revenue and revenue growth.

For many businesses, the sales producers are the outward facing part of the company. They are your business’s face to the company’s most critical audience….your customers and clients.

Clearly, this makes it a high priority for every business to have a highly productive, revenue delivering sales team.

Here are three “tire checking” questions the CEO should ask to determine: How good is our sales team?

1) If one of the sales producers were to earn an extremely large performance based bonus, would you the CEO, your leadership team and the sales leadership be head over heels happy?

If the answer isn’t an immediate YES ! then further analysis is needed.

– Perhaps, the business doesn’t have a performance based bonus program. If not, then you don’t have as good a sales team as you could.

– Perhaps, the business has not developed and defined an aligned focus where; when significant sales are produced, the leadership directly benefits along with the sales producer. With an aligned business, leadership has defined and charted a path forwarded. With an aligned business, when sales producers achieve or exceed the goals that move the business toward the charted path, the sales producer is rewarded along with the CEO’s team. With an aligned business, the total output is greater than the output of each member as an individual.

2) Are members of your sales team being approached for recruitment?

Assuming they are good at what they do, members of your sales team are also very visible to industry in general. If they are truly good, the marketplace should want to hire them. Put another way, if no one would want to hire them, why would you want them working for your business?

– Remember, business is changing. In general employees don’t retired after 25-30 years at the same job. 3-5 years is about the average. If you have good talent, it is likely their career path and career development will take them away from your company.

– Since it is bad if they stay forever and it is bad for you when great sales producers leave, what do you do? This is not an easy one. First, as the CEO you already know about planning for growth and change. On one side of the answer, your company needs to anticipate change and hire critical talent proactively when possible. On the other side of the answer, has your company developed a Best Practices Pay for Performance Sales Compensation Program? For more details, please continue to #3.

3) Do you have a Best Practices Pay for Performance Sales Compensation Plan?

In my experience, many of the top sales producers leave their employer due to compensation related issues. One of the hardest things to do in business is making a sale; which is defined by the customer paying in full on an invoice and a desire for the customer to buy more in the future. Lots of people talk selling. Few can really do it.

The best sales compensation plans are:

– The compensation plan must be able to pass the “Simple Test”. By the time your sales producer has blinked his or her eyes after waking up in the morning, they should have in their mind, their goal and the immediate reward. Good sales teams have clearly defined, simple goals; so they can be clearly executed. Then, they spend the remainder of the day doing their job instead of trying to refigure a complex, confusing series of formulas in a compensation model.

– Pay the sales producer when the business is paid by the customer. Bonuses should be timely. I have seen them paid 3-4 months into the new year for the prior year. By then, the sales producer is already delivering for new targets and new goals. The excitement of the reward from achieving the goal has been lost. Furthermore, the company has been holding earnings that belong to the producer. In time, this creates friction and it will drive away the best talent.

– The best sales compensation models reward individually. If every member of the sales team exceeds their goal, the business should be enjoying a great day and each of the producers should be rewarded. Many of the weaker compensation plans have been designed to limit the payout so a fixed bonus is paid, regardless of how exceptional individuals have produced. Unfortunately the bell curve type models promote mediocrity. The best talent leaves and the weakest talent is dismissed, leaving the average or mediocre employees remaining. If the entire team consists of great producers, then pay them what they have earned. If not, then you need to find a way to upgrade the performance and remain completive.

Are you thinking about where your business has been or are you thinking about where your business is going?

Are the constant changes in business today your path to growth?

What are you doing to embrace CHANGE?