The Island Called Sales: Structure of the Sales Team
Peter Drucker stated, “The purpose and function of business are to keep and create customers.” Your business success will depend on how well you find customers. This is more important than the quality of your product or service. Your business success will directly correlate with your ability to find customers.
There are many options for finding new customers. The costs will vary depending on which strategy you choose. You may be able to use social media or above-the-line advertising to find customers if you are selling in a B2C marketplace. However, if you are selling in a B2B market, you will likely use salespeople to find prospects and close deals.
Many companies have difficulty growing their client base organically, so they use a growth strategy that involves acquiring other companies to reach new customers. Finding customers organically is much cheaper than acquiring customers from other companies.
Why would companies buy customers instead of finding them? They may not have the skills to manage sales acquisition teams. Another reason could be their definition of sales.
You have probably seen a salesperson jump on the first day of a new job and be excited to start. The company provides induction training, including training on workplace safety, harassment laws, and sales skills. You will either be rewarded or cursed by the time and money you invest in helping salespeople succeed.
This is the standard level of support that new salespeople receive in most companies. There is also a common belief that because someone responded to an advertisement for a role in sales, they are competent and skilled in finding new customers. It is widely believed that the company’s CRM system contains a wealth of information that will allow the salesperson to research and understand past events to find and retain customers.
How many of these salespeople end up writing their target? And how many fail to find new clients and go on to the following interview to tell potential employers how great they are at it? They will also tell you how much it is fun to make cold calls and knock on doors. Does this sound familiar?
Who is to blame for these salespeople’s failures? Is it the salesperson for claiming they have the skills or the company for setting unrealistic sales expectations? As unpopular as it may sound, a lot of the blame for salespeople’s failures can be laid squarely at the feet of the company that employed them.
A well-run, sales-focused company will have the responsibility of defining the product, identifying the target market, gathering information about the prospects, providing marketing support, and then it will be the job of the salesperson to close new sales. Mark Hood identified five critical parts of the sales process: Planning, Opening, Quoting, and Closing. These parts are essential to running a successful sales organization. You must also understand who does what and why.
Let’s first define “Successful Sales Organization” as an organization that sets targets from a predictable, bankable pipeline. Other essential measures like sales staff turnover and sales staff engagement are also critical. However, the most crucial action is your sales team’s ability to generate revenue at a reasonable margin.
Why do so many salespeople fail? That is a simple question to answer. You need to ask, “What were the chances of the salesperson surviving given all the factors that affect sales performance?” High failure rates in sales are accompanied by the high turnover of sales staff. This means that those same companies have a low rating when it comes down to the probability of the salesperson succeeding.
The survival rate for a salesperson is high in companies that have successful salespeople. This is because the company handles many of the tasks related to sales instead of leaving it up to them. This is a very different approach than companies that are constantly looking for the best salesperson, which is usually a recipe for disaster.
It is crucial to consider all factors that affect a salesperson’s survival rate. These include their induction process, their mentoring program, buddying system, and product price: your brand, Sales Management, and lead generation activities. Because you won’t find enough of these rare individuals to fill your sales team, success can’t be measured by the few overachievers everyone is trying to recruit. Companies that take care of their salespeople and have a system that supports them will be the ones that eventually rise to the top. Your sales force’s effectiveness should be measured by the bottom performers and not the top.
The most important thing about managing a sales team, whether it is 5 or 200 people, entry-level salespeople, or 300,000 plus salespeople, is that they are not an island. They cannot be expected to manage every aspect of your business that impacts a prospect’s decision to buy.
Your company’s support for the sales team will have a more significant effect on sales results than the quality and performance of the individual salesperson you hire. Trustworthy sales organizations should be able, at minimum, to hire an average salesperson and have them succeed 8 out of 10. A failure rate greater than 80% is a sign of a severe flaw in the sales process and can lead to a loss of ROI for any sales team.
What should the company do?
A sales process can have hundreds of components. Having an outside consultant map your company’s sales process is an excellent first step. This is called a Sales Diagnostic. Be careful, however. Most mainstream consulting firms and companies that specialize in sales process reengineering will draw out the process starting after the meeting with potential customers. While this is important, it is not the only thing you should do. You must also be able to identify the main tasks and actions that will lead to your appointment.
A salesperson will be successful if they are in the right place with the right people who can buy and will buy. Making minor adjustments can make a huge difference in your productivity. It is essential to look at the sales tasks and not the salespeople.
You can refer back to the five main steps of the sales process: Planning, Opening and Quoting, Closing, Closing, and Post-Sale. You can identify the areas where salespeople are not performing well and find ways to improve.
It is foolish to let a new salesperson decide who to call and who to ignore, especially when they don’t know what your past and current salespeople have done to find new customers. It is not a good idea for a salesperson to call a prospect and tell them, “I told the last person in your company to stop calling again.” After three to four calls, how motivated do they think the new salesperson will be. It is equally important to know who to call and who not.
Some people will say, “hang on to all that information at this point.” Because salespeople are not structured, they end up being salespeople. However, companies expect them to be structured enough so that their CRM is up-to-date with accurate information. You should also consider that salespeople may have been in performance management and not keen to assist their replacements by updating the CRM with accurate and timely information. Another reality of being aware of is that the average salesperson is not able to accurately enter data.
Three things happen every time a salesperson makes a cold phone to a prospect who isn’t interested in buying.
1. Your company’s brand gets a beating
2. Your salesperson’s morale takes a pounding
3. 3. Your ROI on your sales channel is a significant shaming
What is the solution to this problem? Later, I’ll talk about creating a “Centralised Sales Intelligence Unit,” but for now, the answer is to not allow salespeople to decide who they should contact.
You should give them a prospect list. This will allow them to research companies that have a need for your product. They can then have a chance of buying your product. It is not worth arranging a meeting with someone who isn’t interested in buying your product.
Eighty percent of salespeople’s time and effort goes into finding the right prospect. This is not only a waste of time and money, but it also makes them less skilled in closing deals and quotes. Eighty percent of the cost to run your sales team is in dollars. This is how much your salespeople are paid to plan who they will call. It can cost millions, if it is not tens of millions, to waste money, but it happens almost every day in most companies.
It is possible to save massive amounts of money for companies by delegating the planning function to the sales team. However, you must first create a team to do this.
If the salesperson isn’t the best person for deciding who to call, it could also be that they are not the best person for determining what to say to a prospect when they call. Both planning and opening are connected at the hip. An excellent prospecting strategy will allow for a successful start. However, a poor prospecting program or no prospecting plan will mean that you have to rely on the salesperson’s ability to sell your product or to sell an appointment to prospects who may not be able to buy your product. A predictable and bankable pipeline cannot be built purely by the ability of each member of your sales team.
One caveat: there are professional sales organizations whose sole business is selling. These companies pride themselves in their ability to train, recruit and motivate direct salespeople to high-pressure sales. Some of them are amazing at this task. Unfortunately, even professional sales organizations don’t allow their salespeople to waste precious closing time researching, deciding who to call, and then deciding how to speak. Professional sales organizations create, test, and role-play scripts to help their salespeople.
The opening is the words or message you use to convince the prospect to listen to what you have to say. Although you may be looking for a sales opportunity or an appointment, it is unlikely that the candidate will take your call. Although you may be trying to sell a product or schedule an appointment, the prospect’s circumstances should be reflected in the opening. It should also be part of a Sales Campaign. An example of a generic space is “Hello, my name is Pete, and I am the new Account Manager in your area. I would love to meet you to discuss your requirements.”
In this tight market, who would believe that kind of spiel? And when I refer to the need for “available times” for prospective customers to meet salespeople, I mean the market of available time. Many CEOs and their Management team are not waiting for salespeople to schedule appointments. It is essential to be able to show that your meeting with you will be a worthwhile one. Time wasters are not something people like, and it is wrong to pay people for their time.
Do you really want to hand over all the decision-making to someone new with no market experience and previous attempts to find new business? The first steps in building a “Business Growth Plan” are planning and opening. The plan can be modified, reviewed, and amended by the company.
Planning is an area in which a subject matter expert can be of immense benefit. The same goes for building solid openings. These two components of the sales process are complete. You can then add value to your sales team by creating sales scripts, marketing materials, and website content.
Quoting and Closing
Now I’m sure you have taken out your job descriptions for your salespeople and are looking to determine if they really reflect what they need to do and be good at to help them succeed. Is your job description focused on someone who can quote and close, which is an actual salesperson’s role? Or does it include the additional function of “Planning” and “Opening”? If you are looking to hire the right person, your job description must reflect the true nature and function of the position. Your interview questions should be designed to test their ability to perform these functions.
Although “Planning” and “Opening” are marketing skills, we judge salespeople on their ability to execute those tasks, even though they have not been trained.
Salespeople should have the “Quoting” and “Closing” skills. If we judge them on these skills, they will be judged more on their ability to close a sales pipeline than on their ability to build one. Although an essential skill of a salesperson is the ability to lock and quote, they are only able to do so for about 10% of the time.
If salespeople are only able to spend 10% of their week in front of prospects, then they’re probably spending most of the time opening and planning. These are skills that they don’t have and should never be learning.
After a sale is made, it is the responsibility of the sales representative to make sure that all paperwork is accurate and complete. You may need to ask someone with little or no structure to ensure your system is maintained. This depends on your product/service. This is an area that can consume a lot of time and can cause angst between office staff. However, it can also be an area where salespeople cannot be flexible. Another solution is to look at the task and not at the people. Is the salesperson really the right person for the job?
Marketing and Sales need to be best friends.
If a salesperson does not generate revenue, what is the point of having them? Marketing is not about generating revenue by supporting the sales team or driving inbound campaigns. Marketing and salespeople need to be aligned. They must meet regularly and work together on the exact movements. You will get great results and be an outlier among your competition if you are able to do this.
It is easy to see why so many salespeople fail to follow the five steps that lead to a sale. People who aren’t good at something will quit doing it. This can lead to fake sales reports, fairy-tale pipelines, and increased chatter from the team about the poor market. It is better to support them than to replace them.
A centralized Sales Intelligence Unit could be created that conducts research on prospects and issues contacts to salespeople. You could also create a contact plan supported by marketing materials. This could reduce your sales headcount by as much as 50%. Your remaining salespeople would be more productive, more motivated, and make more money. You may find that your company is one where salespeople want to levitate to, rather than leave.
It’s possible, it’s possible, and it is feasible. You will go from a “plan for hope” to one that consistently exceeds your revenue forecasts and has a predictable, bankable income stream. It may even be the foundation of many careers.