The 10 Reasons Your Sales Team May Be on the Hunt

Sales Team May Be on the HuntWe recently came across an interesting LinkedIn post questioning how to keep sales team members from leaving an organization… This is an interesting question, as Sales overall tends to have some of the highest turnover rates over any other department within an organization. Each time an organization loses another sales team member, it is not just the employee loss that hurts the organization. There are many downstream issues that affect the organization from associated revenue loss, recruitment cost, on-boarding cost, and potential loss of client trust. This makes sense as to why organizations should be finding ways to ensure good sales team members stick around longer.

Engaged reps are no longer spending entire careers within one organization but hop job to job every few years in search for the next better opportunity… Why has this become the case? First, over the years, it seems that the way organizations have looked at Sales has drastically changed from strategic individuals within an organization to replaceable butts in seats. As a result, Sales feels less valued by their current employers and are lured away with the hope of finding a role where they are more valued and see more potential in the long term. Let us break it down a bit and share some of the key areas we’ve seen that can affect the sales team’s morale within an organization:

  • Number of Sales Reps = Revenue: Translation: butts in seats = bookings. We’ve lost count to how many executives we’ve seen build their revenue models based on how many reps they have in seats. Are they wrong in this approach? No. But herein lies the issue; they take this perception beyond their revenue models and begin to look at their sales team as a number vs. individuals and treat them as such.
  • Everyone is Replaceable: When management begins to look at the sales team as just a number, they start to convey the message to the sales team that everyone is replaceable. And no one wants to feel as if they are replaceable.

One example of how an organization takes this to the extreme is Oracle. As a starter, teams that have a full head count are allocated the ability to hire a +1 rep. The sole job function of this +1 is to sit on the bench waiting for a rep within the team to leave the organization so they can fill that hole as soon as humanly possible. However, it doesn’t just stop there. Over the years, Oracle has developed a “class of” program, hiring MBAs fresh out of college and spending months training and crafting their ideal reps… These new reps are kind of like the AAA of Oracle, where once they complete training, they are given positions as Business Development Reps where they hone their skills in waiting to be called up to the Big Show. Again, this makes them a lower cost and a faster replacement option as older reps leave. Nothing makes a sales team member feel less appreciated than knowing they are 100% replaceable at any moment’s notice.

  • Three Months: Three months is the average time most reps get to fix their low sales numbers before they are put on a Performance Improvement Plan to fix their numbers or be fired. Now, we agree that bad reps need to be fired; however, we find that many organizations do not take the true time to understand why a sales member is under-performing. Furthermore, we find most performance plans are configured in a way where goals are almost impossible to hit and are essentially designed to get a rep to quit or get fired. In these cases, existing reps are completely aware of these types of plans, and it always sits in the back of their minds.
  • Shrinking Commission: In twenty-plus years, we can count on one hand the commission plan changes that were actually beneficial to the reps! Regardless of the organization, we’ve found that the majority of commission changes typically have a detrimental effect on reps’ commissions. It doesn’t matter how management tries to frame these changes to the sales team; they know how they are paid and will quickly see how a plan will change their compensation. Nothing demotivates Sales more than knowing they are making less money for the same work.
  • Unattainable Quotas: We reviewed this in a past article, but it begs repeating. Sure, as a company grows, so should quotas. But if you have more than 50% of your reps missing their numbers, you have a problem. No one is going to stick with a company if their quotas are so high they are virtually impossible to hit.
  • Career Path: Typically, there isn’t one for Sales. Very few companies actually line up a career path for their sales team, and as a result, there is almost no path for career progression. It is hard to keep anyone motivated if there is no path for them to grow. This is even more painful as they see others in other departments continuously get promoted while they remain stagnant.
  • Outside Management: This is such a tough one as we see the value of bringing in a fresh set of eyes to oversee a team. However, almost nothing makes a sales team less motivated than when leadership brings in management from outside the organization. Not only does it show that management does not believe that anyone within the current team has the ability to lead, but when you couple that with the lack of career development already in place, it truly demotivates a team.
  • Outside Heavy Hitter: A new successful territory becomes available or the opportunity to sell the newest product opens up, but management brings in an outside heavy hitter to take on this new role vs. an existing team member. That’s going to piss off your existing team. Why should someone that is completely new to the organization get a new and exciting opportunity while people that have been with the company for years stay stagnant? You may not believe that, but your team certainly does.
  • Presidents Club: What is that? Nothing is more nostalgic than hearing some of the old-timers talking about “the glory days” of presidents club… Free family trips to Disney World, all-expenses-paid trips to the Caribbean, corporate sporting event buyouts… Sure, there are still some companies that offer these types of trips, but they are few and far between. Even if they do offer some type of presidents club, they almost never stack up to those in the past. Sure, does the lack of Presidents Club cause reps to leave? Of course not. But it certainly does not help with retention, especially when they are being recruited by other firms that might actually have a great Presidents Club.
  • Random Perks: Random breakfast, lunches, or an offer to pay for a night out on the town are the little things that good companies offer reps for all their hard work and time away from their families when traveling. However, many companies do not offer these perks anymore… Again, does the lack of incentives truly make a rep want to leave? The answer is still no. However, just like the Presidents Club, perks make them feel appreciated, and they are definitely being offered by companies that recruit your best reps.

At the end of the day, sales is one of the most stressful jobs in any organization. When you really think about it, each rep essentially has to start at zero at the beginning of every month, quarter, and year… The good sales reps are always focused on how to be successful and close as much business as possible. This results in them not adopting the typical 9–5 shift and working all hours of the day. They continuously sacrifice family time for email, sales calls and travel… However, companies are increasingly devaluing the position of Sales, and they have taken notice. This is why salespeople don’t stick around for entire careers anymore. You want your reps to stick around? Make them feel irreplaceable with an obtainable quota, give them a career path, and instead of finding clever ways to pay them less, find ways to pay them more! Finally, make them feel appreciated by offering perks such as a Presidents Club and little things such as breakfast or lunches (they go a really long way). When people feel appreciated and like a valued part of a team, they will not be wondering how much greener the grass is on the other side of the fence.

Want to discuss more or need help, feel free to comment below or contact us directly at 3SixtySMB@3SixtSMB.com

 

CRM The Equivalent Of A Paperweight In Small Businesses

How to Improve CRM Usage

A few months back, we wrote on the importance of a CRM in a small business, but still, we frequently come across executive leadership that is frustrated with their staff’s inability to properly use the tool (or use it at all in some cases), making CRM the software equivalent of a paperweight in many organizations. We understand the frustration, as with most software purchases, CRM comes with significant time and financial investments along with the best intentions in mind for helping a business become more efficient. Yet, regardless of how hard management pushes, usage is essentially zero for many organizations. But, why? In this article, we’ll review some of the reasons why one of the most important tools in any business goes unused and ways to increase overall adoption.

Let’s first start with a few reasons your team might not be using the system:

Lack of Management Use – That’s right: they learned it from watching you. At times, we do see various teams making an honest effort to use the CRM tools in the way they are meant to be used. However, over time, the team has begun to notice the management team’s lack of use. The question of, “Why bother?” then comes into play. As an example, a core use of CRM is around sales pipeline management, but what is the point of keeping a CRM updated when sales leadership continues to run around asking reps for pipeline updates via email, scratch sheets, or Excel spreadsheets instead of running reports with the exact same information from the CRM? Over time, they start to realize there is no value to keeping their CRMs updated because management certainly isn’t using it. Why take the time to update a system when you’re only going to be asked to provide the exact same information via Excel or some other method?

Other Departments’ Lack of Use – We’ve previously talked about the benefits of interdepartmental use of a CRM. When a CRM is not at the core of a team’s daily job function, it becomes less important, and as a result, the usage drops. We recommend that all departments integrate capabilities for their job functions inside the CRM… This means Sales, Marketing, Support, and Finance all need to have critical job functions built into the CRM. Without this integrated functionality, your team will be relying on direct interdepartmental communication for simple client information… The end result is having, for example, customer support or finance continuously pinging the sales department for simple client information… information that should already be in a CRM. Over time, teams start to realize there is almost no point to having that information in the CRM because no one is actually using it, and again, what is the point of all that extra time and effort keeping information updated?

Lack of Proper Functionality – Great CRMs that are properly set up can allow sales and any other department to complete their daily tasks effectively and efficiently. However, out-of-the-box CRMs are inherently generic, and they take some time and effort to customize to make them useful for your business. However, increasingly, we find that when organizations deploy their CRM, they are deployed with zero customization. This results in a generic setup of the tool that doesn’t match the functions of the various teams or business which makes the tool difficult to use… On the flipside, we’ve also seen when management has over-engineered their CRM instance, creating an over-complicated beast of a software solution. This typically results in what management may think of as a “work of art” but is really an extremely complex, inefficient, and painful system to use.

Lack of Usage Visibility ¬ – This kind of goes in line with some of the above, but it needs to be called out… When you have people putting time and effort into properly managing their CRM worlds, yet it goes completely unnoticed, then why bother?

Lack of Accountability – You have two reps: one has their CRM in tip-top shape and constantly up-to-date, and another one that barely uses it and management never seems to care. What do you think is going to happen over time?

Mentioned here are just a few but critical examples of why we see a lack of CRM usage in small businesses. Again, most are truly aligned around the lack of visibility and usage from the management level down to the various departments within a business, leading to the “why bother?” mentality… However, all is not lost as there are tactics that can easily be deployed in any business to increase overall usage. Here are a few:

Complete Management Usage – It starts from the top down. Management needs to start using CRM immediately and continue to use it without exception. You’ll quickly find that once management begins pulling reports and pipeline updates straight out of their CRMs during meetings, within the first few meetings, everyone’s CRMs will be up-to-date as no one wants to be the one with missing or out-of-date information when reports are being reviewed in front of management or their peers. Furthermore, it is important to continuously use it… CRM usage needs to become a habit, and there is a bit of a routine adjustment to using it regularly. All too often, we see executive leadership get on a “CRM kick” for a month or so, only to have them go back to their Excel spreadsheets shortly after. Again, going back to the points we made above, nothing will demotivate a team more than putting in effort for nothing.

Corporate-wide Usage – CRM is not just for sales anymore as it can be integrated across every department within a small business. Make your CRM a central point of departmental information and the only way team members can complete their daily job functions. Once you have complete business-wide integration, there will be zero reason not to use it at that point.

Make it Seamless ¬ Again, a tool that is painful to use will not be used in any business… Take the time to properly customize your setup. Most CRMs are fairly easy to customize, but if you are uncomfortable with customizing yourself, there are plenty of consultants on the market that can do it for you. It is also important to ensure you are taking in feedback from your end-users and constantly working to refine the system. As mentioned previously, all too often, management believes they “know” what is best for their teams, but in reality, they are so far-removed from the process, they couldn’t be more wrong. A painful-to-use tool will not be used—period.

Increase Visibility ¬ Develop and use the reporting system built into the CRM… Most CRMs have fairly comprehensive reporting capabilities out of the box and, with slight customization, can be a very powerful tool for the business and something to ensure that your team is keeping their CRMs up-to-date. Some businesses go as far to have automated reports sent out at preset times (hourly, daily, or monthly). Regardless of the frequency, it is important to remember “what gets measured, gets done”. Furthermore, we highly suggest using your reporting in meetings as well. Have a sales pipeline meeting? Pull up the pipeline in real-time during the meeting. Again, no sales rep wants to be in a pipeline meeting where their pipeline is either out-of-date or missing information… This can be done for essentially every department.

Tie in Compensation – Fairly simple… Sales, do you want to get your commission? No deal gets paid commission unless it is properly tracked within the CRM… This can be done for other departments as well. Things such as lead counts, collections, customer service calls stats and other metrics can all be tracked and tied together with compensation. Quite honestly, this is one of the easiest ways to getting a team to use a CRM as no one wants to miss out on their commission or bonus. However, let’s not forget that you want to ensure you’ve made the proper steps to making the CRM a useful tool in the first place. Let’s remember the old saying “junk in, junk out”, as you do not want your employees wasting time inputting information into the CRM just for the sake of compensation and nothing else.

CRMs are incredibly powerful tools for any small business. When properly implemented and used across all departments, they can drastically increase the efficiency of any team or organization. Efficiency can lead to increased cost savings and revenue while keeping your organization running like a well-oil machine.

What Makes Your Business Different?

The other day skimming though LinkedIn and came across a post getting a great deal ofAAEAAQAAAAAAAAzTAAAAJDUwMjIxOTFiLTAyMzMtNDUwZS04ZTI1LTQyODMxODU3ODA2Yw.png attention. It was someone complaining about a response they received from a CEO after sending three prospecting emails…. The response from this CEO was fairly blunt, telling this person to stop wasting their time and the rep was offended by this response.

While reading, I thought to myself most reps tend to forget there is big world out there and everyone is fighting for executive attention. Just think, how many times has sales management said that in order to win “you need to be at the executive level”?

As an example of the current state of the market; this article points out over 700 Sale Enablement Technology providers out there today: http://www.salesforlife.com/blog/making-sense-of-700-sales-tech-players-roundup?es_p=4684431. Let that sink in for a minute, “700+ Sales Enablement Technology Providers”. We are talking about the fact that these 700+ providers are only for one market segment. Another article points out that there are roughly 3,874 Marketing Technology Providers in market as of 2016: http://chiefmartec.com/2016/03/marketing-technology-landscape-supergraphic-2016/. As a result; executives today most likely receive prospecting emails from a majority of these two segments. Now to further compound the issue, there are other market segments also fighting for executive attention, for example: Financial Management, Supply chain, Order Management, HR, Legal and the list goes on.

To win in today’s market; you need to do more than just send prospecting e-mails, because everyone is doing the “exact same thing”… You need to think to yourself, what are you doing differently to make yourself and your company standout from everyone else?

The Morale Killing Compensation Plan

As fiscal 2017 budget planning comes to a close for most businesses, I wanted to share a AAEAAQAAAAAAAAkCAAAAJDA1ZmY1YWM1LTkwNWEtNDhhZS1hZGViLTc4YTQ5OTJhMDAzMAlittle food for thought as compensation planning comes into full swing.

Over the years, I’ve seen more than a fair share of commission and bonus structures (Some good, some bad). Historically I’ve found best plans to be ones that do not require an abacus or legal degree to comprehend. However, there is one type of compensation plan that I always urge caution around developing…. The “all or nothing” compensation plan: hit 100% of your metrics – get your bonus, miss by 5% – get nothing. Nothing can kill the morale or demotivate a team more than the feeling of working for nothing.

There are few core reasons “all or nothing” compensation plans typically fail:

–         So Far Behind: When a team member is so far behind their number, they realize mathematically it would be impossible to hit. At this point, most people take the foot off the gas or start looking for a new job. With the thinking; why put the effort in, when they are not getting the benefit on the backside?

On the flip side, you can financially motivate that same team member by just a change of the compensation plan. Creating a plan that compensates based on actual quota obtainment, will motivate someone to go just that much further. Because at the end of the day 90% vs 80% of a bonus, is a much better than knowing you’re mathematically out of a bonus completely.

–         Morale Killer: The “all or nothing” compensation plan is also a huge killer of team morale. There are always those team members that putting in a solid quarters or years’ worth of effort, to only miss a bonus by 5 or 10%. Noting makes an employee feel more unappreciated than missing out on a bonus by only a few percentage points.

Compound that by a few employees (because it’s never just one), and you now have a real morale problem throughout the team going into the next fiscal quarter or year.

–         Overachievers Get Hurt by This Model Too: Typically, with all or nothing plans you’ll have steps and or compensation caps in in place. Especially with caps, you are demotivating your best reps to only perform up to the cap, because there is no motivation to go beyond it.

One organization comes to mind, where there was a compensation cap of 125% in place, anything beyond would receive no additional compensation. Every year in November, there were a few teams that would hit their 125% ceiling and would effectively take the remainder of the year off. Great for them, however the company lost almost two full months of employee productivity.

Additionally, another aspect to consider when planning out a compensation plan, is removing all roadblocks to paying out on plans. Nothing is more demotivating to a team, than when they have to fight for the compensation they’ve already earned. It gives them a sense that the company really doesn’t have their backs.

Let’s face it that in today’s talent market, financial motivation plays a big role (of course it’s not the only reason) in why your employees want to work for your company. It’s also a big motivation factor of keeping your employee’s happy and motivated while they work for you. Choose your commission and bonus plans wisely, and ensure that your team is compensated properly when they do hit those commission or bonus triggers. Otherwise you’ll have morale issues and productivity will take a huge hit.