Sales Expectations Vs. Goals


Expectations vs. GoalsSales goals are carrots created by salespeople and organization that everyone strives to meet. Typically goals are set higher than expectations.

Expectations are a list of measurable criteria and behavior policies creating a basic performance benchmark.

Goals and Expectations are unique from each other, they are not the same.

Expectations

One of the best actions an organization can take to is to create a clear list of basic sales expectations.
This list should include the following:

  • Sales revenue
  • Start and Stop date to achieve revenue
  • Record keeping practices
  • Marketing actions
    • Calling
    • Partner development
    • Meetings
    • Sales presentations.

By implementing expectations everyone in the sales group has a clear benchmark of performance. Because sales management can be a fire drill new hires are often left to wonder. “Am I falling short, meeting, or exceeding expectations?”  Your list of expectation will allow them to see for themselves how they measure up.

Goals

Goal setting is an action for salespeople to look internally, placing the “bar” higher than the company expectations. Salespeople should set their goals so that they move well beyond basic company expectations. In addition to setting individual salesperson goals every sales group should develop an overall sales goal. Management needs to view goals as upside and expectations as must have levels of performance.

Company budgets should work off of expectations!

This means that you should never set goals and expectations at the same level. I look at expectations as my “Good Enough” watermark. When a salesperson meets expectations they earn the right to stay on the team! When a salesperson achieves their goal they receive a bonus.

When setting quotas (budgets) should you look at expectations or goals?

The only quota that matters to salespeople is the one they carry around in their head. This is the one which holds the amount of money and recognition they want to achieve in their own lives and is completely independent from anything the company publishes.

I find a good policy is to set sales quotas at your “Good enough” expectation level and then implement a commission plan that highly rewards salespeople that help your service bureau achieve the overall sales goals. Here is an example for a retail salesperson (50 and under employees focus.)

Sales Quota:

  • 120,000 Annual payroll sales
  • Quarterly quota 30 – 45K depending on quarter
  • Base Salary + XX% annual payroll revenue

Sales Goals  Bonus considerations: Quarterly Bonus Considerations

  • $100 for every  five opportunities developed by one business partner
  • $250 bonus for every $5000.00 sold above quarterly quota
  • $500 for adding five work comp clients
  • $500 for adding 10 HRanswerlink clients
  • $50 dollars for each demonstration hosted in our office

In developing a sales bonus program look beyond revenue and bring in overall business goals. The more services you deliver to customers the more likely it is they will not leave your service bureau. So, you should tie your sales expectations and bonus structure to drive sales habits which deliver more than just payroll business.

In summary expectations will keep everyone on task and leave no mistake as to who needs to “up” their game. Goals guide your team past expectations helping salespeople reach their full potential. Sales budgets should be set according to your service bureaus expectations with bonus gates/programs clearly defined rewarding salespeople that perform at a high level and deliver on company sales goals.

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Always Recruit


It’s completely possible to find great salespeople. All you really need is a commitment to always recruit.

Just as your salespeople need to be out and about to create sales, management needs to always be on the lookout for sales talent. You never should be caught flat-footed in the new salesperson adventure.

The wonderful thing about an always recruit mindset is that it’s not hard. In our everyday business lives there are tons of opportunities to recruit. Here is a list of daily activities where you can find and see salespeople as they really are.

  1. Your desk
  2. Your vendors
  3. Chamber of Commerce
  4. Networking groups
  5. Business peers
  6. LinkedIn

Your desk:

This is by far the easiest place to check on your local talent. All you need to do is commit to taking a few incoming sales calls every day. This is a wonderful way to hear how a potential new hire sells. As payroll is a business to business profession, we get the opportunity to interact with recruits as we watch them try and sell to us. This allows us to make a decision whether these recruits have the skills we want.

Your vendors:

Look to your vendors and ask them if they know of any good salespeople. If a vendor is getting worked over by a competitor’s salesperson, a good strategy for them might be to direct you to the salesperson they compete with the most. In this, you might also be able to do some baseline checking on your vendor’s performance.

Another way to handle this is to contact your vendor’s competition and bring them in to see how the salesperson tries to win your business. If you like what you see, move into recruiting mode.

Chamber of Commerce & Associations:

The real world of local Chamber of Commerce is that 90% of the people who attend events are salespeople! Once again, by getting out in the crowd we can look for people that fit our ideal profile.

The same scenario exists at Association Trade Shows. As an owner, you attend shows for information, but you should also be on the lookout for outstanding talent. Every booth is full of salespeople looking to earn your business. By walking up to a booth, you are getting firsthand knowledge of how a person sells.

Networking groups

When we regularly attend these groups we are allowed to see the many layers of a salesperson in action. Businesses to business sales require a “get after it” mentality. Look for the people that show a solid commitment to their position.

Business Peers

As a business grows, the group of people we gain access to also grow. We should constantly reach out to our peers for support and advice. Ask your business peers about the people from whom they have recently purchased. If you hear about an outstanding salesperson, see if your associate can get you connected with them.

LinkedIn

Of all the social networks today, LinkedIn is the best at connecting people in business. By using groups, you gain the ability to see an unlimited number of salespeople whom you can monitor as a group member and learn more about their selling skills or you can reach out to them for a simple phone interview.

Why traditional hiring practices lead to poor hires:

Does this sound familiar? Your business is doing well; you want to accelerate the growth. So you make the decision to add another salesperson.

To get started you place an ad in monster.com, on your website, and in your local paper. Then you wait for the resumes to come flying in the door. Sometimes the resumes fly in the door, while other times nothing happens.

If you are lucky, you end up with a nice group of people to put through your interview process. At the end of the process, you make a hire and see what happens. Unfortunately, oftentimes what happens is that the new person falls short of everyone’s expectations. Sometimes this is the salespersons fault, sometimes it is a training issue, yet most of the time it is a hiring issue. Primarily, in our desire to grow our sales team, we hire based on short-term need and don’t spend the proper amount of time evaluating talent.

The opportunity for sales success increases when the new salesperson is recruited out of a sales position with average to above-average performance. Even in a down economy, a producing salesperson won’t be out on the street. Look at your team. If times are tough, would you get rid of one your producers to save cost?

The best method to improve your hiring is to always recruit! It should be management’s goal to conduct at least one new sales interview in your office every week. You will become a much better evaluator of sales talent, improve your hiring process, and be in a position to spend more time interacting with potential hires. Anyone can look good in a 40 minute interview. The cracks start to appear in the second and third interaction.

The reason I recommend conducting interviews in your office is you gain a slight team incentive. Salespeople know who is on the team and where they stand; sometimes all a person needs to get motivated is to see someone being interviewed. I’m not advocating managing by fear, which is the worst way to run a sales team. What I am promoting is an environment in which production is the norm and the rules of employment are clear and fair. Some salespeople have an internal fire while others need external influence to get moving.

The Owner and Sales Manager have a responsibility to maintain a healthy and productive team. Always recruit is just one step to maintain and improve overall sales team health.

Do you have a sales hiring process?

Once you have a group of candidates, what is your hiring process? Since most people still hire on gut instinct, a set process can help ensure your gut makes a good decision.

When looking to hire a new salesperson, be clear in what your expectations are before you begin the process. This will place you in a strong position when it comes to landing your ideal candidate. Most salespeople prefer to work in environments where expectations are clear and simple to understand.

The best method to ensure a good hire is to spend time with the candidate. It’s often impossible to spend days with potential hires, but you can maximize time with candidates by seeking multiple opinions within the office. Here is a process I have used in the past and one that might help you on your next sales hire.

First interview should always be on the phone:

Sales is a communication position. Salespeople spend a lot of time on the phone. Because of this, you should incorporate this communication medium into at least one part of the interview process. I prefer to conduct a phone interview first for the following reason: if they can’t talk on the phone, they can’t sell on my team; I want to discover this before inviting them into my office. A second benefit is that on the phone, you are more likely to not allow physical appearance to cloud your judgment. The prettiest salesperson is rarely the best.

Baseline questions:

You need to use a standard list of questions so that you can fairly compare one candidate to another. Free-flowing conversations are important, but at some point you will need to make a decision; using a baseline list of questions will help with that decision.

Repeat questions with hiring team:

When involving other people in the interview process, they should ask some of the same questions so that you can compare notes. If you have a critical characteristic that you always want within your sales team, create questions that help you evaluate this trait and ask it more than once. All of us can get fooled once.

Personality or Sales Profiles:

These are a must. You can get a high quality profile for a few hundred dollars. I use profiles to help me confirm my gut feelings and plan additional questions for the third or fourth interviews. Today I use the Caliper Profile and find that it gives me more than enough information to help guide the selection process. The expense of putting 3 – 5 candidates through a profile is minimal when compared to what a poor sales hire costs your business in hard dollars and missed opportunity.

Profiles are not a magic bullet. They offer additional insight that you can use to make better hiring decisions. Many people can be good in sales, but are employed in the wrong type of sales. A profile can help you see which type of people can be successful in a rigid sales environment and which salespeople will be successful in a flexible environment. Profiles will also give you great insight in how to properly manage and coach the successful candidate.

To give yourself a proper reading of a sales profile, have your existing team, including yourself, take the profile you chose to use. This will only help you better understand the numbers and give you a better idea of the sales personalities identified by the profile.

Work history:

When I look at and talk with salespeople about their work history, I find it best to start at their first jobs and work toward today. In doing this, you will go outside the candidates’ prepared response zones. In doing this, I find it easier to spot personality problems while also discovering the people that have the “IT” factor to be successful in sales. Always explore why they took each job and their reasons for moving on.

Only hire the right candidate:

My worst hiring decisions have one thing in common –my gut said no, my arrogance said yes.

Only hire when your gut says YES!!! If someone can’t get you to that point, do you really think they can make potential customers leave their current provider? Seriously look at that last sentence because that is what you are hiring. We only want YES; anything less will be a time-consuming-slow-money-sucking-time-wasting lesson in business. As I said, many people can sell; they just need to be in the right position to leverage their talents.

How and Where does Your Team Sell?


So, here I was two years ago: My number one salesperson was selling a ton of business — GREAT! The issue was that most of the deals were small. For the life of me, I couldn’t quite see what was happening in our larger opportunities that were causing us to not win. So, I looked to the great answer machine for help . . . Salesforce.com.

I had hundreds of Opportunities to review — you know an ideal set of data. After running a few reports, I realized to get to the bottom of things we needed to implement a better system of classifying our business. A friend once told me, “Even the most complex problems are simple once broken down into chunks.” Taking this advice, I broke our business into 5 Segments based on annual revenue. Once defined, this allowed me to split out Wins and Losses by salesperson and Segment.

BAM!

I now have great information that helps my salespeople sell. Going back to the data, I found that our teams Segment One wins happen within 12 days while Segment Five wins happen within 120 days of Opportunity creation.

How did this information help us?

If a sales person excels at Segments One and Two deals, they also excel in very short sell cycles. Typically, these kinds of sales compact a long sales cycle into one face-to-face meeting and 2-3 phone calls.

Taking this farther, if a salesperson is in the habit of selling Segments One and Two deals, she is in BIG trouble rolling into Segments Three, Four, and Five deals. The reason is her sales habits aren’t aligned with the larger buying teams of bigger accounts.
Instead of splitting the team into Retail and Major Accounts, I used this information to help the sales team see when they needed to change their sales process. The data helped to demonstrate the salesperson’s historical Payroll Sales Segmentssales processes and made it much easier to coach the sales group.

Today, I advocate two sales processes: 1) the Simple Sales process; and 2) the OnePlus process.

Segments help to see your business in smaller chunks that are easier to grasp. On the marketing side, you can more accurately direct actions to specific Segments and get more impact out of your teams’ efforts. Once you break your business into Segments for sales, you can also use them to analyze operational efficiency for each group. Segments help organizations see things in manageable chucks!

Are you really losing on price?


Are you really losing on price?The truth is, price is ALWAYS a major part of the buying decision. Some buyers understand market price; they do their homework or have purchased your service/product in the past. This group also knows what to expect at certain price points. Other buyers have no clear idea about price and expect salespeople to educate them (frightening, but true). So why do you or your salespeople always seem to be selling on price?

The answers, listed in no particular order:

  • Poor selling skills
  • “Me too” selling by all competitors

Most price issues are generated by the people selling the services. If no one is good at selling or differentiating how she is the best provider, the only thing left to talk about is price. This reality is hard for most salespeople to accept because what it really means is:

  1. You suck at sales
  2. Your company sucks
  3. Your industry is full of hacks

You can correct or take advantage of two of these. If your company sucks, leave!

A simple action to add so that you don’t totally suck at sales is to become skilled at identifying how much a buyer expects to pay. Looking at their current expense is NO indication of the buyer’s real price expectation.

Have you ever tried to get out of a bad relationship? Think of it in these somewhat strange terms:

Say this current bad relationship costs you $85.00 in happiness dollars. In return, you get:

  • A dinner companion
  • Someone to hang out with
  • His annoying habit #1
  • His annoying habit #2
  • His annoying habit #3
  • Etc.

Now someone else comes along and is willing to get in a relationship with you at a cost to you of $125.00 happiness dollars. In return, you get:

  • A dinner companion
  • Someone to hang out with
  • A friend you enjoy
  • Going to movies you want to see
  • Freedom to be yourself

Would you rather pay about the same just to be in any relationship so long as it’s not your current one or invest an additional $40.00 to be in your ideal relationship?

Sales is about gaining an understanding of buyers’ needs and helping them achieve their goals with YOU! A first step in not totally sucking is to ask a simple question or two early so that everyone can focus on the buying process.

Identify an initial budget or price point:

“What are you expecting to invest on this project?”

The buyer will either tell you a monetary range or twist in her seat before saying “I can’t or would rather not give you that information.”

If he twists, be simple and help him out. Take your rough idea of price and give him a range to consider.

If your widget costs $100.00 month, you might say:

“Most clients expect to pay between $100.00-$150.00 a month. Does that fit within your budget?”

Notice that you should place your expected number on the low end. At this point, you want to see if you can even participate in the buying process. The buyer will either agree to the budget or explain that your numbers are low, high, or come clean and tell you he has no idea what to pay. Regardless, you now have a number to work with and can place pricing aside and help the buyer identify his ideal relationship. If you are high, don’t worry; find out what type of relationship they are looking for. When all is said and done, if you can deliver the relationship he really wants, he’ll find a way to invest in you.

If your sales team is selling price first, immediate and dramatic action should be taken to help them all earn more money. The following information should be considered.

How to bring your sales team around to sell first and align price later

  • Ask this question first: Is your company actually priced within market? I define this as being 20% either side of the market leader’s price.
  • Don’t let your team adjust price on any new business for one quarter. This may be kind of hard for some managers. Don’t worry about the short term. You need to be thinking of future team health. If a manager can hold firm on price concessions, the sales team will spend more time helping buyers BUY from them and less time giving price. Once they get it, they get it!
  • Create a great SPIF program focused on holding price.

What to do if your main competitor is 20-40% less on every deal and they’re actually winning the deals

  • Verify that the competitor is actually winning. Call lost accounts to make sure a change or deal occurred.
    • Survey these accounts
    • What did they like most about the winner?
    • Is the purchase working out as expected?
    • If price wasn’t an issue, would they have chosen you?
  • As a sales team, do a Differentiation Worksheet
    • “Ben Franklin” each company
      • Where are you the same?
      • Where does your team say the same thing?
      • Where do you do the same things?
      • What can you change to stand above this competitor?
      • How can you demonstrate value to these clients against this competitor?

Work as a team to develop a simple sales approach to use when competing against this competitor. By being prepared, your team will instantly bring a better buying experience and more likability to the sale.

Cartoon Sales Managers should review before every One on One!


What People Say by Hugh MacLeod

Why implement a quota system.


Quota. The word alone can send shivers down the spines of salespeople. The bad feelings associated with quotas are unfortunate. A quota should be a salesperson’s best friend. When created properly, a quota helps define the sales journey.

Quotas are a means to motivate salespeople, provide clear direction, and help salespeople self manage their performance. When sales expectations are broken down into simple manageable pieces, it’s easier for everyone to achieve overall sales team objectives. A well thought out quota system will shorten new hire ramp-up, deliver sales earlier in the quarter, reduce slumps and increase management efficiency.

Shorten the ramp-up:

For a new hire, the quota should extend beyond closed sales. If you are really trying to help a new salesperson, be very clear in performance expectations. Define simple goals/quotas in key ares of performance. These need to be measured in short periods of time. By doing this, you and the new hire can better see development.

The bottom line in sales is production. The sales quota is what will drive the internal fire of a new hire.  Create a quota system for your new hires that drives performance and is based on the reality of your company and market.

Deliver sales earlier:

Sales quotas aren’t just for new hires. They should be a means to increase performance for tenured and producing salespeople. When you establish quotas, your business now has a simple metric in place to build incentives. Creating incentives from your quota system can help drive sales earlier in a business cycle.

My quotas are developed on past company performance, current market conditions and long term company goals. Using these factors, it’s rather simple to create incentives to highlight areas of need in the short term that help meet long term company objectives. I usually define my team quotas to meet average industry sales and develop short term Sales Promotion Incentive Fund’s (SPIF’s) to reward outstanding production. Why? Let’s face it,  producers don’t care about quota —  they care about income. It’s through quota based SPIF’s that you can influence their production. Create SPIF’s that rewards early deals and above average quarterly performance.

Reduce Slumps:

The great thing about slumps is they can only occur on a team with producers. The bad thing about slumps is if you catch them late in the game, that can end a sales career or a good sales year. Proper quota management will allow you to see slumps before they destroy a quarter and help to recover lost sales once identified.

It’s not the quota itself that will reduce slumps. It’s the tools used to manage a quota that will help reduce slumps. Proper quota management requires using a set of business drivers that can be easily viewed on short notice. The metrics should be available not just to management, but also to frontline sales. Most slumps today are the direct result of inaction or too much production at an earlier point in time.

A quota system will implement the system required to identify slumps at the cause level so they can be acted upon before reducing sales. While this may sound complex, it is easy once your metric system is implemented.

Increase management efficiency:

When quotas are in place, salespeople and managers gain a better understanding of where they are and where they need to go. This is not to say all we need to do is stick a number on the board and sales will happen.

A sales quota is something that can be easily managed. Once a quota is established, the salesperson and manager need to work together to get there. Getting there is done through forecasting, task management and day-to-day conversation with salespeople. A quota and its parts should hold everything in format so that after you put out the fires of the day, everyone can see what happened and what needs to happen.

To gain this efficiency, a system of measurement needs to be in place. The measurement tools should be globally available so that the salesperson and management are always aware of what is happening.