| What if your doctors' hit rates were as good as | | | | forecast - the fixed selling expenses - salaries, |
| your sales team's? You'd fire him - or die most | | | | benefits, offices, travel, etc. and the variable selling |
| likely. | | | | expense - commissions. Let's say you pay on |
| Think of the consequences of losing a sale to a | | | | average 5% - more to reps and less to direct |
| competitor. You have just given your competitor | | | | people. You sell $100 million a year. That's $ 5 |
| growth hormones for market share. It's like a 2 | | | | million dollars in variable selling expense, and you'd |
| stroke turn around. They gain share while you | | | | be happy to pay more as long as sales are going |
| lose share. Yet, what happens to the sales person | | | | up. |
| or sales team - virtually nothing. There may be a | | | | Now the sales person get's 5% if he makes the |
| few words of anger expressed, but all is | | | | sale. That's call incentive. However, if he loses the |
| forgotten in a few days. Then, believe it or not, | | | | sale, well, he get's nothing - other than his car, |
| once a sale is made, this same culprit is now a | | | | insurance, office, and salary. There is no |
| hero. Go figure. | | | | consequence for losing. Getting no commission is |
| How come lost sales are tolerated so easily by | | | | not a consequence. He says, "Oh well." and moves |
| CEOs, General Managers and Sr. VPs? If a doctor | | | | on. What's more depressing is management |
| loses a few patients, there's an all out | | | | tolerates it, which reinforces the status quo. Why |
| investigation and if it continues, he can kiss his | | | | do anything different if there is unlimited upside |
| doctorship good-by. Same with an engineer - | | | | with no downside. |
| crash a few buildings, blow-up some circuit boards | | | | Here's a thought. Change the commission so the |
| or route the sewage into the wrong outlets and | | | | sales person get's 10% (or some big number) |
| there would be lots of grief. However, sales | | | | when he makes a sale he forecasted, and gets a |
| people lose sales all the time and there are no | | | | commission deduction of 2-1/2% (or some tough |
| consequences, other than a huff and a puff of | | | | number) when he loses anything he forecasted. If |
| dissatisfaction. | | | | something is not forecast, then there is no |
| Consider this, how many sales were lost where | | | | commission paid or deducted. If I've done the |
| your company didn't have the capability or | | | | math right, this will cost no more or you can |
| technology to do the job - probably very few. | | | | change the numbers. But look what it does. It |
| How many were lost on price? Probably many - | | | | rewards sales and lays consequences on loses. Do |
| as your sales person said, but was it really price? | | | | this and I guarantee you will upgrade the |
| My experience consulting thousands of sales | | | | performance of your selling team. |
| people on a zillion sales suggests B2B sales are | | | | Establishing a penalty will force smart sales people |
| lost because the sales team didn't know what the | | | | to get a lot of critical, relevant information before |
| criteria for winning was - especially the criteria of | | | | they forecast an opportunity. Information |
| the high level influential decision makers. Even on | | | | gathering will improve their chance of closing or |
| the price sensitive deals, winners know what price | | | | indicate that the opportunity should be taken off |
| to get close to and what can be left off to get it | | | | the table so no more resources are wasted. If |
| there. | | | | they don't forecast, they don't get anything, so |
| Losing sales is the sales team's fault - no excuses. | | | | they will have to keep digging for good things to |
| If it wasn't doable, it shouldn't have been pursued, | | | | forecast. Opportunities that are way out or |
| bid or forecasted. As for the lack of internal | | | | "possibles" can go into a separate prospecting |
| resource excuse, the sales team should have | | | | funnel that the sales manager monitors diligently |
| figured out how to get them or no bid. I could go | | | | with the sales person to move them forward or |
| on, but the explanations are rationalizations. As | | | | out. Deals that are missed or not forecasted, yet |
| my football coach always said, "I don't want | | | | sold by competition should carry some other type |
| excuses. I want results," or you'll sit on the bench. | | | | of penalty. We could do a lot of what if's, but |
| How come senior management doesn't do that? | | | | they can be worked out. The point is that the |
| If a senior sales manager misses his forecast a | | | | professionalism and success of your selling team |
| couple of times he's history. How come sales | | | | will rise exponentially. |
| people don't suffer the same punishment? | | | | To make this work, however, senior |
| Let's look at some numbers. 1/3 of the sales that | | | | management will have to provide great training, |
| the average sales person forecasts he makes. | | | | and great supervision. Sales people will need |
| Again, suppose that was the hit rate for your | | | | coaching, reinforcement, and lots of attention. But |
| doctors or engineers? Don't answer. 1/3 of the | | | | isn't that what sales management is suppose to |
| sales forecasted never happen. That's called "long | | | | do? |
| sales cycles" or dying slowly. Finally, 1/3 of the | | | | Try it or let me know what excuses you have. |
| forecasted sales are lost to competitors. That's | | | | Otherwise, work through the details. |
| scary. | | | | And now I invite you to learn more. |
| Look at what you pay for getting only 1/3 of the | | | | |