This is an excerpt from my second book, Managing the Sales Process, available on Amazon.com. You can find a series of these excerpts in a dedicated blog category to get a broad overview, post-by-post, of the book (they are listed in reverse order in the category, so start with the oldest).
From Chapter 6 – Continuous Recruiting
So here we are at the last chapter. We’ve come a long way since the start of the book:
- We learned what to look for in a good salesperson and what to avoid in a bad one.
- We learned how to use a customized sales process to manage the sales force and each salesperson on the sales team.
- We learned what a sales manager is supposed to be doing and how he or she can use the sales metrics that fall out of our sales process to help do that.
- We learned how important it is to hold salespeople accountable
- We learned the even greater importance of taking action on the accountability.
When you manage your sales force in this way, you defy the seemingly inescapable gravitational pull of the Pareto Principle and the mediocrity it implies for your sales organization. Here is the graphic again to remind you of the fundamental problem inherent in the Pareto approach to sales management.
I don’t deny the validity of the 80/20 Rule; it does apply to a lot of situations. Pareto was not wrong. But he was not Newton and his principle is not as ubiquitous and undeniable as gravity. Without care, our sales organizations can slip into the complacent path of least resistance that this rule seems to carry us towards, but the 80/20 Rule is not inevitable.
There is no reason to fear hiring new salespeople, but managers do anyway.
Managers who don’t know how to quickly identify and deal with poor performing salespeople are reluctant to hire or fire. Conversely, when managers have built systems to identify great salespeople, and to define, measure, and manage their performance, there is no reason to keep people around who are not doing their jobs and getting results.
The ideal sales growth machine brings in new talent when it is found and is always looking. This talent is trained, managed, and measured. When things work out, the salesperson is a profit center. When they don’t, that is known quickly and the salesperson is helped to improve or fired before becoming too much of a “loss center.”
Let’s present that idea graphically now to illustrate the mechanics of the kind of selling machine that can defy mediocrity.
In this graphic, there are three groups of salespeople. From the bottom up we see:
- Those generating less than enough revenue to cover the expenses of their employment
- Those generating more than enough revenue to cover the expenses of their employment
- Those generating a lot more than enough revenue to cover the expenses of their employment (some multiple of the base profitability revenue or profit number)
As the captions of the graphic imply, those generating less than enough revenue than is required to cover the expenses of their employment need to be moved into one of the other categories or moved out of the organization. Period. In a good sales organization, management will work with those in this bottom group to get them up, but if that doesn’t happen, they need to be let go.
This leaves empty desks in the sales organization, but this alone is not the reason for continuous recruitment. In fact, this kind of thinking is completely backwards, yet common, and fully supported by the Pareto model.
In the Pareto model, the sales department has a certain number of desks, and the fact that some of the salespeople are profitable and some are not is accepted as the mediocre reality. The sales team has 10 desks, and that is the right number.
In the “Masover Model,” every desk is occupied by someone who is profitable, soon to be profitable, or soon to be gone.
The operative word here is “soon.” Stop and reread this last paragraph. What does this mean, really?
What this means is that you want as many salespeople as possible and as many desks as possible. Hire as many good ones as you can find. Then train them to follow your process, measure them as they work through it, and support them to be successful. If they are not successful, let them go.
- When you find good candidates, hire them. Don’t count desks first.
- Bring them in, bring them up to speed, make the sales process, metrics, and consequences very clear to them, and let them get to work.
- Let go of the slackers as soon as it is clear that’s what they are.
- Always be looking.
Over time, your sales organization will grow, and each salesperson will be profitable. What if your market gets saturated? You will know because your new salespeople will not make it. The same system still works. In theory, it is a no-lose situation.
You now have a culture of accountability, a sales force that is easy to manage, and reps who are profitable or not around long enough to drain your precious cash.
CHAPTER 6 CONCLUSION
It will take time to work out the exact details of the right numbers, the right metrics, the right balances across your organization as a whole. This is the kind of work that sales management should be doing. When you find the right recipe, it is the recipe for success rather than the recipe for getting by and wondering how to change.
- When you know what the right people look like, it is easier to make sure that you hire the right people.
- When you know what they should be doing to generate revenue, it is easier to manage those efforts.
- When someone is holding them accountable to specific sales activities, it is more likely that you will learn who is doing their job and who is not.
- When you learn early on who is working towards success and who is not, it is easier to let go of the losers before they become a huge cash and spirit drain on your company and on the environment of your organization.
- When you let the superstars lead by example and gain their due reward, you boost the entire team’s morale and generate internal motivation.
When you recruit continuously, keep the winners and fire the losers, your sales organization grows ─ in size and revenue, according to a manageable and predictable model.
How’s that for a happy ending!
Authors note (AKA shameless plugs)
So, this 7-step sales process and associated topics…. Yup, I write about that a lot. I’ve been working with it since I developed it about 25 years ago – in my own diverse work experiences, with my teams when I had them, and with clients ever since.
If you would like to develop you own personalized and customized, highly effective and efficient B2B selling system, here are some further steps you can take:
The Salesman’s Guide to Dating is a free or very cheap (depending on Amazon) Kindle book that walks you through the sales process using the familiar analogy of dating. It’s a good, fun and quick way to get your mind around the whole process and how the pieces fit together.
Building Your Sales Process (BYSP) is a free and very thorough exploration of the same 7-step process that will walk you through the development of your own customized, personal B2B selling system. When you are done, you will know exactly what to do to get new business.
The Momentum Selling System® is an inexpensive but very robust online sales training course that is similar to BYSP, but goes deeper into the concepts behind each of the steps, and also helps you develop a plan not only for the 7-step process but also addresses mindset, repeat business and client base management.
If none of that sounds right, I do personal coaching and offer a free 30-minute intake session so that we can both learn if it makes sense to work together 1-on-1. If this sounds interesting, click over to the coaching page on this site and sign up for the free session.
Here’s to your success!