Category Archives: Compensation

In Sales, Promises vs. Reality

Posted on by
Reply
promises not being kept

Promises may be made, but are they kept once you are hired for a sales job.

You’re starting your new sales job. Promises were made. But soon, you discover that you have been lied to by upper management.

Maybe you didn’t get the sales territories you were promised.

Maybe you didn’t receive the compensation package that you were expecting.

Whatever the reason – do you stay, or do you go?

It depends on your situation.

My advice – stick it out for a while and see what happens. For example, there may be a change in management that could work to your advantage. Or another salesperson may leave, and you could inherit some of his large leads or accounts. Or, the compensation package may change. Or, one of your primary competitors could go belly up, and you and others on your sales team could receive more business.

Success in sales, like any profession, is due in part to hard work and smarts…but sometimes it’s mainly due to luck.

As we all know, sometimes it’s being at the right place at the right time when the stars (and dollar signs) are aligned that really matters.

For example, I knew a woman who became a sales manager and earned a lot of money because the entire sales team left. Fed up with what they considered to be the owners’ eccentric decisions and mismanagement, the whole team all walked out the door – expect her. She stuck it out.

success or failure

Don’t always rely on promises alone when determining your road to success.

Eventually, the owner realized he was over his head, and hired a business manager to run the day-to-day operations. He also hired a team of top-notch employees to help run and manage the production and shipping departments.

With the business finally growing, the owner didn’t forget that woman who stayed with him during the hard times. As I mentioned above, she not only became the sales manager but also collected about 80% of all the significant accounts and was financially successful for several years – until the owner sold his business to a competitor.  As a result, the entire sales team was sold down the river. A year later, everyone was laid off. (But that’s a different story).

Of course, it’s always a good idea to do your homework before you accept a job offer. Yes, you can read reviews on Glassdoor or Indeed. But there have been numerous times when employers will “urge” their employees to write positive reviews to order to attract gullible employees.

Can you trust your gut? Not always.

One of my friends was working as a consultant for a tech start-up. The owner offered him a full-time job with benefits. With a family to support, he accepted the job offer. After all, he had been working as a consultant for a while, and he thought he knew the business. Or, so he thought.

It turned out to be the worst decision he ever made. But he stuck it out for about six months and decided he was happier being a consultant again.

We’re all human. We all make mistakes.

Promises don’t always turn into reality.

But if you stick it out, sometimes those promises may come true.

 

Should you follow the Money or the Manager?

Posted on by
Reply

Anyone who is interested in the Watergate scandal remembers the famous phrase from the drama-documentary “All the President’s Men”. It’s that moment when Deep Throat advises Bob Woodward (played by Robert Redford) and Carl Bernstein (played by Dustin Hoffman) to “follow the money.”

But does that same advice apply to sales?

Follow the money

Following the money may not always be the best goal for accepting a job offer in sales.

We all seen them – the employment ads promising 6 figure incomes, or uncapped commissions. We see dollar signs and decide to apply to those positions. Sometimes the job postings are accurate and sometimes they are dishonest.

But should you always follow the money?

Here is the dirty little secret in sales – compensation plans change all the time. Yes, technically speaking, compensation plans should usually change about once a year, when managers adjust quotas or commission percentages. But in the real world, that’s not always the case.

I’ve known situations where compensation plans change once a quarter, or even once a month. Like it or not, the manager (or most likely the owner) is controlling the purse strings. If he feels the salespeople are earning too much money, he will “adjust” the compensation package to ensure that you’re not earning too much money. I know one owner who feels that it’s important to keep salespeople “hungry” so that they don’t become too complacent.

Why? Because hiring and retaining employees – even salespeople – can be expensive. Owners must consider an array of expenses, including rent, leases, office supplies, utilities, etc.

So what should you do? Should you follow the money?

Or, should you instead follow the manager?

You see, here’s another dirty little secret in sales – good sales managers are hard to find.

And if you find a good sales manager, chances are, you will also find a fair compensation and benefits package, equitable distribution of leads and prospects, and valuable coaching and advice.

Where do you find these good sales managers?

Word of mouth.

Networking

And sites with employer reviews like Glassdoor and Indeed.

So next time you go the job hunting, ignore the dollar signs. Instead, find a good sales manager. Because when you find a good sales manager, and you prove your worth to the company and sales team, trust me, the money will follow.

Because here’s my final dirty little secret in sales – good salespeople are hard to find.

 

Is your Sales Team Locked and Loaded?

Posted on by
2

lock and load your sales teamIf you are a fan of the movie series Resident Evil, you may have heard the phrase “It’s time to lock and load” used right before the zombie’s attack.

Or if you are a fan of the film Sands of Iwo Jima, you may have heard John Wayne’s character say “Lock and load, boy, lock, and load.”

There is some disagreement of what the term means. But according to Wiktionary, the phrase is used right “before loading the ammunition clip into the rifle, the operating rod handle is pulled to the rear until the bolt is securely locked open. According to the M1 Garand Manual, loading the clip without first locking the bolt could result in an accidental discharge of a round.”

Regardless of the definition, can the term apply to sales?

Yes, it can.

Lock – are you locking your salespeople into a reasonable and fair compensation package so that you encourage them to stay, make a decent living and avoid high turnover? Are you locking them into a reasonable quota? Are you locking them into other incentives like cash bonuses or extra vacation?

Load – are you loading your salespeople up on qualified leads and relevant prospects so that their pipelines are constantly full? Without a fully “loaded” pipeline, your salespeople could become easily bored and start seeking better jobs. Are you working closely with your marketing department to increase your company’s branding and content offerings to help drive more traffic to your website?

training and coaching your sales teamI would also add this term –

Ready to go – which means are you giving your salespeople enough independence to spread their wings and seek new business opportunities without cramping their style, hurting their morale, and crippling their judgment. Are your coaching and training them on an ongoing basis to help sharpen their skills and increase their confidence?

There you have it. If you want a successful sales team, make sure everyone is “locked, loaded and ready to go.”

 

Are Salespeople White Collar Garbage men?

Posted on by
Reply

Are salespeople white collar garbage menA Rockville, MD publishing company has all of their editors and administrators working in sun lite offices, while the sales team sits in a windowless office in a dank basement.

While being interviewed for an exhibit booth and sponsoring sales position, a job applicant is told that he will not receive health insurance like the rest of the employees because he’s going to be “earning enough money to pay for it himself.”

A newly hired salesperson accepts a job at a Washington, D.C. nonprofit trade association to sell advertising, sponsorships and other services. He quickly discovers that he is the only employee who doesn’t have an office. Instead, he finds his desk located in the hallway and his seat is actually a high stool.

A national publishing company does not pay annual bonuses to their salespeople. The bonuses are only awarded to non-commissioned salaried employees. The thought is that salespeople are “earning enough money” and don’t need the bonuses.

All of the above stories are true.

Which begs the question – are salespeople the garbage men of the white-collar world?

Now I’m not knocking garbage men. On the contrary, we need them to keep our communities clean. Without them, our neighbors would quickly be overrun by rodents and rats, and our property values would drop.

In fact, I agree with Rutger Bregman in his article “Why Garbagemen Should Earn more than Bankers” that they offer a great deal of value to our society. And yes, garbage men should earn more than bankers…as well as of other people.

But let’s face it. Garbage men are usually seen as a necessary evil – we can’t live without them, but they rarely receive any respect.

That’s the same for salespeople. Sure, most business owners intellectually realize the need for people to sell their products and services. After all, you can’t rely on word of mouth to sell alone. You have to be proactive these days. The problem comes into play when salespeople are not given the same respect as others in a company.

Why?

1). Business owners don’t always understand the sales process. Some, in fact, don’t even want to learn. They feel that selling is a grubby business. Just like enacting legislation has been compared to making sausage, the less you know about the selling process, the better off you will be.  As long as your company is earning profits, you really don’t want to learn all of the details.  But not understanding those particulars could mean the difference between keeping or losing your job. Just ask John Stumpf.

sleazy salesman2). Business owners have watched too many movies or plays depicting bad or desperate salespeople.  You know the ones – The Wolf of Wall Street, Glengarry Glen Ross, Boiler Room, and of course, everyone’s favorite, Death of a Salesman.

The underlining theme of most of these films is that all salespeople are sleazy liars or losers who would sell their own mothers to earn a commission. No wonder some salespeople don’t get any respect.

3). Business owners are too busy trying to develop their products and services, and would rather hire a consultant or sales manager then deal with the day-to-day operations of selling. There’s nothing wrong with that approach, but sometimes business owners get duped into thinking their sales manager or consultants are geniuses, when in fact, some of them are just the opposite – con artists. They say all the right words, and go through all the right motions, but in the end, they are just lining their pockets at the expense of gullible business owners and inexperienced salespeople.

The best owners that I’ve ever worked for were former salespeople. They may not have been the best salespeople in the world, but they came away from their experiences with a much better appreciation of the sales profession.  As a result, they usually paid generous compensation packages, invested in superior sales tools (e.g., CRM), and always made sure their sales team had enough qualified leads and prospects to keep them productive.

If some business owners and other employees would walk in the shoes of their sales team for a week or so, I bet most of them would come away with a much better appreciation for salespeople.

While selling is difficult, getting a little respect can sometimes be tougher.

While I’m not suggesting that you hug a salesperson today, at least take the time to thank him. After all, your livelihood depends on how much new business he’s generating for your employer.

Top photo credit: North Charleston Hurricane Matthew via photopin (license)

The Wells Fargo Scandal and Setting Quotas

Posted on by
2

What can salespeople learn from the Wells Fargo scandal?

First, a recap –

At this writing, the Wells Fargo CEO John Stumpf has resigned. His departure comes after it was revealed that the bank he managed was fined more than $185 million for allegedly opening more than 2 million bank accounts or credit cards without people’s knowledge or consent.

stressful salesperson trying to meet quotaThe fake accounts were opened because salespeople were under pressure to meet cross-sell quotas. Each salesperson had to cross-sell at least 8 accounts per customer. If they didn’t achieve their goals, they were fired.

Or, as Senator Elizabeth Warren (D-MA) said at a Senate hearing last month to Mr. Stumpf – “You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket.”

So what’s the lesson here?

Answer: Don’t create unrealistic quotas.

There is nothing wrong with quotas, per se. You want to motivate your salespeople to achieve their goals. And frankly, most salespeople want something they can shoot for. It makes the job more interesting and exciting. From a company point of view, you want to drive revenue. What better way of doing that is by putting a carrot on the stick, and encouraging salespeople to chase after it.

The problem occurs where you create quotas that are so unrealistic or aggressive, that salespeople are forced to lie in order to survive. In the short-term, salespeople will keep their jobs, but in the long-term, the scam will be discovered and people will be fired. Not to mention having your company’s reputation torn to shreds.

For example, I once worked for a publishing company that sold printed bid information to construction companies (this was before the internet was popular). In order to get a complete order, the customer had to sign a contract. So you would fax the contract to your client. Get his signature. And then that’s it – a new customer! Nothing wrong there. This is a standard practice for a lot of publishing companies that sell premium information services.

However, one new salesperson felt he couldn’t reach his quota. I’m unsure why this was the case. Maybe he didn’t receive the proper training, maybe he was lazy, maybe he wasn’t confident, maybe he felt the quota was too high, but for whatever reason, he decided to lie. He gave his manager contracts with fake signatures. Eventually, the home office caught on when they started receiving a lot of complaints from angry customers. The salesperson was terminated and his manager was reprimanded.

Setting quotas isn’t rocket science. But sometimes you feel like you have to be a rocket scientist to set quotas.

Eight is GreatThe problem with Wells Fargo was that there was no method to their madness. The “Eight is Great” goal of having customers sign up for eight products made no sense.

Why “Eight is Great” – because it rhymes? Really?!? You must be joking. But that’s how Wells Fargo decided to set their quota for low paying, overworked, stressed-out salespeople who had to grind out their numbers or get canned.

Is that any way to work?

No.

So how do you go about setting sales quotas?

Opinions vary.

Some say don’t have any quotas. But if you don’t have any quotas you’re only going to encourage laziness among your sales team. Or worse, you’re going to attract poor or mediocre salespeople who don’t have an incentive to make a good living. You know the type – they come to work late, take long lunch breaks, play computer games at their desk, and only make enough sales calls to barely break even.

The other problem with working without a quota is that salespeople have no power. Think about this for a minute. If you don’t have a quota, then it’s going to be very difficult to persuade your boss to purchase tools to help you sell better. From your boss’s point of view, why should he invest money in his sales team if they don’t have any quotas to meet. Don’t like using Excel spreadsheets to manage your accounts? Too bad. He’s not going to purchase Salesforce.com to help you.

See my point?

So if having quotas is the answer, how do you set them? Here are some suggestions –

1). Get salespeople involved. Quotas shouldn’t be handed down from Mount High by an out-of-touch CEO or the Finance or Marketing Team. You need to get input from your sales team and their management. Since salespeople are serving on the front lines every day, they usually have a better sense of the market, their customers, and their competitors.

2). Not all salespeople are created equal. Each salesperson has his own pipeline and defined territories or market segmentation when it comes to selling. As a result, not all territories or market segmentation are going to be equal. Depending on what you’re selling, some territories may have more prospects than others, and some market segmentation may have more money than others. For example, a salesperson selling to academic institutions may have a tougher and longer time to close sales vs. another salesperson selling to for-profit companies. A salesperson selling in California is going to have an easier time finding a lot of prospects compared to someone selling in Maine.

3). History is not always a good predictor of the future. Times change. Market conditions may be worse now than ever before. You are fighting against more competitors. The quality of your products or services was recently rated badly by an independent publication. The Marketing Department isn’t providing the high-quality prospects that you obtained last year. For whatever the reason, past performance doesn’t always equal better future results. Take a hard look at your data before setting quotas. Just don’t come up with an arbitrary number and expect everyone to meet it.

4). Consider using sales forecasting/quota setting software. Rather than come up with “pie in the sky” numbers, why not use software to determine quotas.

Here are some examples of what’s on the market –

Anaplan
Xactly Quota & Territories
Optymyze
eSalesTrack
IBM Quota Management

To help you further, here are some helpful articles about setting quotas –

“Tough Truth about Quotas,” by Renee Houston Zemanski
“How to Use Sales Metrics to Set More Accurate Quotas,” by Cara Hogan
“Sales Operations and Quota Setting: Use the Right Data,” by Joseph Schroeder

Whatever you do, please don’t base your sales quota on how it rhymes. Because if you do anything illegal or unethical, your next rhyme maybe —

“I’m in jail, where’s my bail?”

How to Stay Employed in Sales

Posted on by
Reply

There are hundreds of books and blogs on how to stay employed or find a sales job.

I can save you a lot of time and summarize in two sentences what you should do –

Always be learning.

Always be networking.

Always be learning in salesOne of the biggest mistakes I made early in my sales career was not learning or networking enough.

I worked for a tax software and publishing company for more than 10 years. I loved my job. I thought I would be employed at the company forever. But then something happened – our company got sold down the river to a major competitor. Within three (3) years, the competitor screwed up our research software, dropped a good CD-ROM version and replaced it with a crappy one. We also went through a series of billing, shipping and production problems that caused a lot of cancellations.  They did more, but I’m giving you the broad strokes.

Frustrated and tired of dealing with angry customers, I quit my job.

At first, I was glad and relieved. Then it dawned on me – where do I work now?

Sure, I had a plan B, but I quickly realized that I didn’t network enough or learned enough about my sales craft to land the job that I wanted. After a series of misfires and missteps, I finally landed a good job. But could I have found something sooner? Sure, if only I had networked and learned more.

Always be networkingWe all get into our comfort zone. We all get lured into thinking that we have a great job and nothing can happen to you. We all think we are on the perfect career track.  But just when you think you have the perfect job, somehow, someway, someone is going to come along and screw up your life.

Maybe it’s a merger or acquisition.

Maybe it’s a reorg. (Which is another way of saying your company is going to lay off high salaried employees or people who upper management doesn’t like).

Maybe it’s a new manager. (Who decides to give you the boot so he can hire his friends).

Maybe it’s a recession.

Whatever the reason, you have to be prepared.

The best way to be prepared is to always be learning and networking.

What do I mean?

Read books, articles and blog posts.

Watch videos on YouTube and other sites.

Become active on LinkedIn.

Attend networking events like Meet-up.

Join a local chapter of a sales organization like AA-ISP.

The more you learn and network, the better chance you have to stay employed or find a better job.

Below are some links to helpful articles about networking –

“6 Ways to Network More Effectively” by Drew Hendricks

“How to Network Effectively at Events” by Eric Samson

And here are two links to popular sales books –

“The 20 Most Highly-Rated Sales Books of All Time” by Mike Renahan

“The 9 Best Books about Sales and Selling” by Lee Bob Black