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 5 – A BETTER WAY – CLEAR EXPECTATIONS AND CONSEQUENCES
Clear expectations for activities and compensation is almost enough, but not quite. To complete the picture ─ a task often left undone ─ there must be clear consequences for failure to meet expectations, both in terms of activities and results.
It should be said again that in a well-run sales organization getting fired should never come as a surprise to a salesperson. Performance and ethical standards should be clear, and when they are violated there should be clear consequences.
In the case of ethics, this is a Human Resources issue and beyond the scope of this book. I bring it up because a salesperson also should not be surprised for being fired for these reasons. Like sales targets, ethics policies, too, should be clear.
With respect to sales revenues and activities, a sales process based on metrics, and mutually agreed-upon activity metrics, opens up the possibility that these metrics won’t be met. When they are not met, a good sales manager needs to look at the effort being made to reach them and to come up with a plan for getting the salesperson back on track. Failure to meet the terms of this plan, and certainly failure to make efforts to do so, needs to be met with termination. Failure to do so is like poison to a sales organization.
This was crystal clear in one company that I worked with, although less clear to one salesperson in particular. This salesperson was surprised to learn just how serious the company was about this policy. Let’s call him Sam.
Sam was one of the top revenue producers at The Widget Company (not the real name, nor is Sam). At the peak of his personal performance, the company had about 90 salespeople and was hiring three to five new salespeople each month. The economy was booming, and he found a nice slice of it. He was consistently among the company’s top three monthly revenue producers.
While hiring three to five salespeople per month sounds great, it is only great if they are profitable. If not, then they are an expense ─ not a good thing for a salesperson to be when a company is bringing on more and more each month! Over time, The Widget Company had tried numerous ways to “keep the salespeople honest.” The final iteration, so called because as far as I know it is still in effect a decade later, was simply called The Rule.
The Rule went like this. After a six-month ramp-up time, salespeople were expected to hit a certain revenue number every month. The number was not particularly high; it was not a stretch goal, but how the number was derived is not pertinent. What is important here is that a sales rep missing the number three months in a row was fired. Period.
NOTE: Yes, this rule does contradict my suggestion that a company can do better than just an end-of-the-period number, but that is not the point of this particular example ─ so bear with me here.
Well, Sam was doubling and sometimes even tripling the number. That was the good news. The bad news was that he got about 90% of his revenue from one customer, and he consistently refused to follow up on his fair share of the new leads that were given to him. Each sales rep got new leads each day and each rep was supposed to follow up on them in a prescribed manner. Sam refused.
Unfortunately, the economy soured and the big customer that Sam had been living from was in an industry highly sensitive to the downturn. Widgets were considered discretionary and business for Sam came to a halt.
He could have started working on other leads right away, but he didn’t. He believed that his big client would get back into action soon enough, so he basically took a working vacation.
At the end of the first month, he was below his number. He didn’t care. He never believed that the company would fire the former superstar before his “inevitable” return to glory.
At the end of the second month, he was again below his number. He was reminded of The Rule, but to no avail.
At the end of the third month, Sam missed his number again and was fired.
The funny thing is, he seemed to be both angry and surprised by his termination.
The point of the story is this: What kind of message would the other 90 salespeople have received if Sam was given an exception? The rules were clear, the expectations were clear, and this guy did not follow them. Others before him and others after him lived (and died) by The Rule. Making an exception would have tarnished the effectiveness of a standard sales policy and turned this large and growing sales force into an unmanageable collection of exception based management.
How do you manage salespeople performance, standards, and exceptions? The Rule is pretty rigid (although enormously effective), but the opposite end of the spectrum is simply unmanageable. There is no good reason for sales management by exception. It is inefficient, ineffective, and inexcusable.
There is a much better way, and if you have read this far, you already have the tools you need to get there.
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!