Brent Adamson's Blog, page 9

Motivating Salespeople: What Really Works

It’s a commonly held trope that salespeople are coin-operated. The thinking goes that if you offer reps more money, they will sell more. Our friends at the CEB Compensation Leadership Council decided to conduct some research into this and what they found out is that, well, this is all true. Increasing incentive pay does in fact lead to improved performance from sales reps.

But this is only part of the picture.

Increasing incentive pay does improve performance, but it does so at a very high cost. What the CEB Compensation Leadership Council discovered is that in order to boost the performance of an average sales rep from 95% to 105% of goal using variable pay alone, you would have to increase his or her incentive pay 1.8 times. To improve performance by the same amount after that, you’d have to increase pay by an even greater multiple. So while increasing compensation is technically effective at improving performance, it is hardly an efficient way to do so.

Fortunately, increasing incentive pay is not the only way you can leverage compensation to drive performance. A much more effective and efficient way to improve rep performance is to improve the perception of pay. In fact, the study found that improving pay perceptions can improve performance against goal by 11 percentage points, which amounts to an increase of nearly $143 million in sales for the average large organization.

Sales reps’ perceptions of pay are influenced by three factors: the extent to which they believe their pay plans are fair, how easily understandable the plans are, and how closely they meet their risk/reward preferences.

Pay Fairness

The biggest way to improve overall pay perception is to improve the extent to which your sales reps perceive their pay to be fairly designed, allocated, and communicated by your organization. Perceptions of pay fairness can be improved by doing three things:

Sales targets should be set based on not only organizational goals, but also market potential.
Targets should be reviewed multiple times throughout the year to identify and react to changes affecting sales potential as market conditions evolve.
Target-setting criteria and target revision policies should be transparent and proactively communicated to sales reps.

See how Wyeth targets communication to reps’ most common misunderstandings of the comp plan.

Pay Complexity

Many sales reps have difficulty understanding the basic information about how their plans work, such as how much they will be paid at different performance levels. Even if the number of performance measures is limited to just a few, reps tend to overestimate the number of measures and view their pay plans as overly complex.

Beyond merely reducing the number of measures included in plans, to improve perceptions of pay plan complexity, you must determine and address the underlying reasons for this perceived complexity. Poor communication, compound measures, and multi-step processes can all add to a plan’s perceived complexity.

See how DuPont uses tools that allow reps to see how their behavior will impact payout.

Pay Risk

The selling environment in which reps must work these days is more complex than ever. Customers have more options and more buyers vetting each purchase. Sellers are engaged later in the buying process, decreasing the chance for reps to influence their decisions. This makes performance and payouts less predictable for reps. As such, reps increasingly value the extent to which pay plans can appropriately mitigate risk.

However, too small a proportion of variable pay decreases the risk of underperformance, disincentivizing reps from expending enough effort to close additional sales. On the flip side, too large a proportion of variable pay increases risk too much, distracting reps from attending to important, but less directly tied to pay, aspects of the job.

Review our 10-step process for designing effective sales compensation plans.

CEB Sales Members, to learn more visit the Compensation topic center. Also, check out our Manager Guidebook designed to help managers handle tough conversations related to compensation changes.

Ignite Your Reps’ Creative Spark

Regardless of the challenges that sales leaders are facing today, most would agree that having a more creative sales force would help, or at least it can’t hurt. Or can it? After all, selling does not require the creativity that writing or sculpting do, but as most sellers would say, it does require a certain amount of artistry.

In the past, we’ve published research on the topic of Manager Innovation, showing that top performing sales managers are skilled at ideating and finding creative ways to unlock stalled deals. But few, if any, sales organizations are focused on developing reps’ creative skills. Indeed, the fact that the sales are becoming more variable, requiring reps to engage a growing number of stakeholders and face longer sales cycles, suggests that as sales become more complex reps will have to engage with customers in more creative and new ways in order to break apart from the pack and move deals forward.

So how can sales managers encourage rep creativity, and help their teams develop the adaptability they need to cope with today’s sophisticated and informed buyers?

A body of research on the topic of creativity suggests that some commonly used techniques for inspiring innovative thinking can apply to sales:  

Stop punishing failure—painters who create great works of art often paint a few misses first. The creative process, experts say, involves making some mistakes along the way to generating great ideas. Sales organizations disproportionally reward individual rep success, but they should also encourage risk-taking by not punishing rep mistakes.


Don’t be so comfortable with rejection—when faced with rejection some people respond by experimenting in order to overcome their shortcomings. The self-awareness and change in posture that sometimes grows out of rejection can spark creativity. Sellers face rejection every day, but they are fairly good at coping with rejection. To motivate innovative thinking, make sure you  are making rejection feel uncomfortable for your reps.


Work hard, play hard—studies suggest that playful, enjoyable activities encourage creative thinking. When we play our brain edits itself less and allows thoughts to flow more freely. Many sales organizations do in fact have a “work hard, play hard” atmosphere. But to spark creativity, organizations should encourage more on-the-job play time, rather than after-work happy hours.

CEB Sales Members, review our Ideation Toolkit and see our Manager Innovativeness Self Assessment.

Share your thoughts with us, and let us know how you are inspiring creativity in your reps.

Top 10 Most Cringe-Inducing Sales Rep Phrases

I was having dinner with a group of people the other day, and I heard a phrase that is frequently uttered at dinner that always makes me cringe. While I was scooping some potatoes onto my plate, one of the guests looks at me and says “I’ll have the potatoes.”

My gut reaction to that phrase is always to think “really? You’ll have the potatoes?” Is that a request or a direct order? Am I wearing a sign that says ‘Hello, I’m your waiter?’  If you’d like me to pass you the potatoes, then maybe you should try asking me to pass them to you. And would it kill you to throw a please in there?!?

I don’t know what it is about dinner tables, but I hear that phrase uttered over and over again, and every time it just makes me cringe. And it got me thinking…if there are common cringe-inducing phrases uttered at dinner tables all over the world, then there surely are common cringe-inducing phrases uttered during sales calls.

What phrases do you hear reps say that make you cringe?  Help us complete our Top 10 Most Cringe-Inducing Phrases by adding your own in the comments below.

(Full disclosure…I may have uttered one or two of these myself over the years…)

Top 10 Most Cringe-Inducing Rep Phrases

“Let me check with my manager…”
“As I stated before…”
“Obviously…” (if it’s so obvious, why did you say it!?!)
“To be honest with you…” (have you not been being honest this whole time?)
“Let me tell you why we’re better than…”
“What’s it gonna take to get you to sign the purchase order?”
“Let me go back and sharpen my pencil.”
“What keeps you up at night?”
…
…

 

Related Posts:

10 Words to Remove From Your Vocabulary
The Most Annoying Corporate Buzzwords

Three Ways to Challenge in Indirect Sales

As discussed in an earlier post, it’s clear that selling through indirect channels is not getting any easier, especially in light of today’s empowered customers who are waiting to contact suppliers until later in the buying process than ever before, and leaving little to compete on besides price. Now, we’ve known for quite some time that the best reps are overcoming these obstacles in direct B2B sales by effectively delivering tailored commercial insights that reframe customer thinking and teach (or re-teach) today’s informed buyers into the sales funnel. But is this strategy equally as effective in indirect sales?

This is the very question that we find our members asking us on a regular basis. “Is Challenger Selling a viable option in indirect B2B sales? If so, how should we be adjusting our channel strategy to begin pursuing Challenger outcomes with customers?” While it is not the easiest endeavor, our response is always that, yes, Challenger absolutely plays in indirect selling as there are tremendous opportunities for reframing how end customers value your solution(s) and how channel partners value you as a supplier.

That said, it should not be surprising that the key to Challenging in an indirect setting (not unlike in direct sales) is a company’s ability to develop commercial insight. But with Challenger messaging in hand, companies can leverage their insights to:

Challenge channel partners to think differently about you as a supplier. To effectively Challenge channel partners, companies’ must first equip their channel managers with messaging that will reframe how distributors think about their business, and ultimately change how they assign value to your products and the unique ways you can support their business as a supplier (e.g., the supply chain or logistical expertise that you are uniquely able to share with channel partners). Obviously this will matter more when working with non-captive channel partners, but we have observed instances where suppliers have reframed captive partner thinking to value their relationship that much more.
Arm channel partners to Challenge end customers. It is imperative that suppliers arm channel partners with effective commercial insights that will lead end customers to think differently about their business and ultimately assign greater value to the supplier’s unique capabilities. While this applies more readily in captive channel partner situations (where the partner exclusively markets and sells a supplier’s products), there is often greater commercial leverage in applying this approach in non-captive settings. In these situations, arming a channel partner’s sales force with commercial insights will help boost overall rep confidence in pitching the supplier’s solution (not to mention their overall sales effectiveness), which can significantly help redirect market share amongst that partner’s customer base in the supplier’s favor. If this is the case, it is important for the supplier’s channel managers to directly challenge the channel partner’s sales team to begin using the commercial insights, and reinforce their delivery through coaching.
Challenge the end customer directly. While very important, delivering commercial insights to the end customer will most often be Marketing’s responsibility as they are better positioned to convey the insights via content marketing and other means that will help create pull through for your distributors’ reps.

With these applications in mind, companies should be aware that the most significant challenge suppliers face when Challenging through indirect partners is losing control over the commercial insight, more specifically, how it’s delivered. Admittedly it can be difficult, especially when selling through non-captive partners, to ensure high quality commercial teaching is occurring. To combat this, we’ve seen organizations create certification programs for their partners’ sales reps, and in some cases, companies are going as far as having their channel managers engage distributor reps on a rep-by-rep basis for coaching.

CEB Sales Members, to learn more about Challenging in indirect sales and how some of the most progressive sales organizations are aligning their strategic priorities to those of their channel partners, make sure to access our Indirect Sales Topic Center.

The Truth Behind University Recruiting

As the world of sales continues to evolve and become ever more complex, companies are increasingly turning to talent as a major driver of sales performance.

It’s no surprise, then, that half of CEB members around the globe told us they were anticipating an increase in university hiring volume across the year.  Budgets for university recruiting are also up – more or less double what they were last year. 1

Here’s the problem – despite placing an increased bet in attracting the best and brightest talent coming out of our universities, we’re actually doing a TERRIBLE job of it.  Over 80% of companies we surveyed said that the students coming out of universities today do NOT arrive with the skills they need to succeed in entry level sales jobs.  Over three quarters of companies do not believe that their organization is sourcing quality university talent. 2

And that’s a troubling statement.  But why the disconnect?

Turns out, our strategy for sourcing talent from universities amounts to nothing more than rolling the dice.

What most of us do is descend on university campuses prior to graduation and interview students en masse to decide which we think are the best and brightest.  We base our decision on their GPA and an overall reputation of the school.

But we don’t know much more than that.  We don’t know anything about their professors, the curriculum they went through, the skills they have (or don’t), or a sense of whether or not they’d even be a good fit for sales or our company culture.  And we hope to figure all of that out in a series of 30-60 minute interviews.

Now let’s think about it from the student’s perspective.  They come into the interview having reviewed a job description, done a little bit of research on our website, and with what little they may know of our brand or reputation.

It all amounts to a leap of faith on both parts – the students hope they’re picking the right job/company, and we hope we’re picking a student with the right skills/fit for our organization.

But as we saw in the statistics earlier, this approach isn’t working too well.

There are, however, a group of companies and universities who are partnering very differently than most to build a better talent pipeline.

Instead of waiting until graduation to start the process, a group of companies start by partnering with universities very early in a student’s career (as early as freshman or sophomore year).

This approach really has several goals in mind:

The first goal is to simply build interest in a career in sales and screen out bad fits for the profession.  These universities work hard in the formative years of a student’s career to help them understand the realities of sales.  To help overcome students’ perception that sales is a job you do at the mall or in a car dealership lot, and to help them understand that sales is about something much bigger – helping customers achieve their goals.  They also help students understand that you shouldn’t choose this as a career if you aren’t willing to relocate.

Once you have a pool of students who are sold on the profession of sales, the next goal is to prepare them with the skills they’ll need to succeed in today’s complex world of sales.  These companies and universities partner together to create realistic curriculum based on real life situations provided by the company.  They give students access to sellers and executives to get a first-hand account of what it’s like to sell.

Finally, in the later parts of the student’s career, the goal is to give students greater exposure to different companies in an effort to help them choose jobs and corporate cultures that are the best fit  for them.   Professors, armed with a more intimate knowledge of these organizations and their cultures, can make more principled recommendations about which companies they see as being best fits for a student’s skillset and personality.

The results have been staggering.  These new hires stay longer, they’re productive faster, and save companies hundreds of thousands of dollars compared to the typical university hire.

Earlier this year, we were joined by Professor Dan Strunk from DePaul University and several folks from 3M to talk about how they structure their partnership.  CEB Sales Members, click here to learn more about how this partnership is structured and to hear them share their experiences and results. Also, click here for more tips on changing your university recruiting efforts.

1 Source: CEB Recruiting’s Recruiting Forecast, 2010–2013; CEB Recruiting Forecast Survey, Q4 2012.

2 Source: CEB Sales Leadership Council Member Poll, 2013.

Arm Your Reps for Social Selling

Traditionally, suppliers controlled the flow of information and decided when to engage customers. Fast forward to the digital age, and the selling process has turned on its head—customers are using social media to source information and develop an informed opinion before engaging suppliers. In many ways, the Internet has reduced information asymmetry and leveled the selling landscape. Best-in-class companies have recognized this trend and are trying to influence the purchase decision early in the sale—arming reps to use social media to position themselves to teach where customers learn.

However, a number of hurdles make the shift to social selling difficult for sales organizations:

Social Content Management: Social messages must maintain content relevance and consistency based on pre-defined customer needs and priorities. That said, concerns about rep-generated content and message consistency diminish the scalability of social selling.
Social Channel Management: Customers seek information across a number of diverse channels—industry-specific forums, blogs, news sites, social media outlets such as Twitter, etc. Being present and managing activity on so many social channels often becomes difficult.
Continued Social Engagement: Getting the right message to the right channel is only the first step. Reps must also be able to engage with customers on social channels on an ongoing basis to generate leads and insights. However, engaging customers on social media requires both skill and time, making it difficult for reps to focus on social selling in their daily workflow.

In an effort to drive scale and consistency, and reduce the overall burden on reps, IBM pools Sales and Marketing resources to support reps’ engagement with social selling. Marketing plays a central role in providing ready-made messages and guiding reps to social networks to engage with customers. In turn, Sales individualizes these messages and engages customers and prospects on a more personal basis.

We recently spoke to Douglas Hannan, Business Unit Executive, Inside Sales Marketing, North America and Ed Linde II, Senior Marketing Manager, Web Marketing, Inside Sales at IBM, to understand how IBM has created a successful social selling eco-system. Read the key takeaways from the discussion.

CEB Sales Members, to learn more about IBM’s Social Selling strategy, review the best practice and listen to the event replay. Also, visit the Social Selling topic center for best-in-class practices and tools.

Your Reps Are Spending Less Time in Front of Customers

Sales leaders across all industries are concerned with the amount of time their reps are spending in front of customers. Some are also studying how reps use their time and identifying strategies that eliminate wasted time. And it is not surprising that sales organizations today are feeling pressured to maximize customer-facing time. After all, our research has shown that more informed buyers are engaging with suppliers later in the buying process than ever before.

Based on data from over 10,000 B2B reps that the CEB’s Sales Effectiveness Solutions team has collected over the past decade, we can confirm that sales reps today are in fact spending significantly less time performing what are strictly customer-facing sales activities than they were just a few years ago (or exactly 15% less time from 2010-2012 than they were from 2004-2006).

In fact, we also know what you may already suspect: that the amount of time reps spend in non-sales or administrative activities increased by 33% between 2004-2006 and 2010-2012. Want to guess what else has gone up? That’s right; reps today spend 16% more time in post-sales activities like activating accounts, supporting customer implementation plans, and tracking payment orders. It seems that while customer-facing time has decreased, pre-sales and post-sales activities have gone up.

But interestingly, this may be less of a concern than you may think. What our research also says is that the best reps spend less, not more, time in front of customers. Our data shows that in fact, high-performing reps spend about 10% less time in front of their customers than core reps. Star players know that at a time when customers rely less on suppliers for information, what counts is not the time spent presenting to the customer, but rather the time spent researching customers and tailoring Insights to commercially teach. The best reps also spend more time getting in early and shaping demand  by conducting non-traditional due diligence, personally owning lead generation, and using social media as a critical channel to influence customers in the places where they learn.

Importantly, the data clearly shows that star performers also spend more time than core reps lining up internal resources and working with cross-functional stakeholders to advance deals forward. Today’s rep needs to coordinate across many stakeholders internally and externally in order to win a deal, and increasingly it will be those reps that are able to build a strong network around them that will outperform the rest.

CEB Sales Members, review some of our latest work on Pre-Funnel Customer Engagement, and listen to a past webinar on Unlocking Sales Productivity.

Increase Inside Sales’ Output With Automation

We recently had a member come to us looking to improve the efficiency of their rapidly expanding inside sales force. Specifically, the member was interested in the use of automation tools and applications that would capitalize on the growth they were experiencing.

Automation can be installed at different junctures of the sales machine. From marketing and lead generation and tracking to physically dialing customers, automation can help increase the efficiency of the sales process.

We reached out to other members to find out who was using automation techniques and how it worked. Specifically, we asked about what tool they used, how it worked, how it was implemented, and how they benefitted from the use of automation tools.

All of the companies we profiled used automated lead scoring techniques but only one had fully automated both the marketing and sales sides of the equation. In general, automation systems were used to track contacts through multiple interactions with the company and help them develop into viable leads for the inside sales reps to pursue.

The benefits of automation tools were not exactly what we expected. We wanted to learn about the higher yield, more credible leads and inevitably increased revenue. As in any other complicated process, an increase or decrease in revenue cannot be tied down to one of many contributing factors. The executives we spoke to highlighted the accuracy of metric reporting as one of the most important benefits of automation. The automation systems they installed avoided both the inevitable errors in manual metric recording from lead scoring to marketing. For the company that installed automated dialing, the system helped account for reps’ dial rates.

Ultimately, automation systems cannot grow your inside sales’ revenue, but they can help better identify leads with the highest potential for conversion, allowing inside sales reps to focus on them.

CEB Sales Members, check out the full report: Automating Lead Generation for Inside Sales and use the profiles to compare your organization’s automation potential. Also, visit our Inside Sales topic center for more resources on deploying inside sales, and acquiring and developing inside sales talent.

Are Your Reps More Tiger Woods or Tom Brady?

The selling behavior of many sales reps can be likened to that of a game of golf. Your rep starts on the tee box, where he or she lines up the value proposition with a potential new customer, then drives the ball down the fairway when he or she makes the first call. Even if you don’t get a hole in one on the first try, as long as your reps keep the ball out of the rough, use the right clubs, and swing at the right time, they still have a chance of making par, delivering the value proposition to the green and closing the deal with a putt into the hole.

Like golf, sales is often seen as an individual sport. Yes, you are competing against others, but success is not determined by anyone but yourself. In this analogy, the highest performing reps will be the ones with the most accurate aim—pinpointing the right actors within the customer organization—and the strongest swing—delivering the most compelling value proposition.

However, recent research from our sister practice, CEB Corporate Leadership Council, suggests that maybe our sports analogy is wrong. Perhaps our best reps aren’t Tiger Woods, going it alone to drive the ball down the fairway and into the hole, but are instead more akin to Tom Brady or Peyton Manning, leading a group offensive to run the pigskin down the field and into the end zone. Maybe sales is instead a team sport like American football, and our sales reps are the quarterbacks.

Specifically, CEB Corporate Leadership Council studied the effect of network performance on business unit profitability. Network performance is an employee’s effectiveness at improving the performance of their peers, as well as using the contributions from peers to improve their own performance. The other side of network performance is individual task performance—an employee’s effectiveness at achieving individual tasks and assignments. Combined, these two measures of performance determine how much each employee contributes to business unit profitability.

What we found was that network performance is becoming an increasingly important aspect of an employee’s enterprise contribution. In fact, over the past decade, the relative importance of network performance compared to individual task performance increased from 22% to 49%! For sales specifically, network performance now determines 44% of an employee’s business unit profitability.

Instead of looking at reps as golfers, individual players out on the course by themselves, driving the ball down the fairway, using only the bag of clubs they came with, and the swing they’ve been perfecting, maybe we should instead see them as quarterbacks. With each play, the quarterback makes use of the team around him, each with different skills and talents, to help get the ball down the field and eventually score a touchdown.

While much of the differentiation between a good quarterback and a bad quarterback is based on a good amount of inherent skill, a great quarterback is still one that knows how to effectively play to and off of the strengths of his teammates. Similarly, high performing reps are those that are responsive to coaching and that recognize and take advantage of synergies with their peers. The quarterback rep draws from and contributes to a team to not only improve his or her own performance, but to boost the performance of the entire team.

CEB Sales Members, learn more about the sales culture you need to support Insight Selling in your sales organization. Also, review the Insight Selling Manager Competency Grid to assess your managers’ proficiency in building and leveraging network performance in their teams.

When Emotions Impact a Sale

Those familiar with CEB will know that our sister program has been addressing the changes in the buying environment with a focus on Marketing’s Role in the Challenger Sale; specifically, highly informed customers, buying in groups. A few months ago we gave you a preview of some of the insights from CEB Marketing Leadership Council and their most recent work on the rationality of groups’ buying behavior.

Today, the average buying team includes 5.4 people. This is bad news for suppliers as bigger teams are significantly less likely to buy. Teams of two are 26% less likely to buy than a single buyer, while teams of 6+ are 50% less likely to buy. The problem is consensus—buyers report that reaching team-wide agreement on a decision is 81% harder than making up their own mind.

We used to assume that demonstrating the business value of a purchase to each individual would be sufficient to drive action but it turns out that has become table stakes. Today we must also focus on the personal value achieved through the purchase. That’s right: the emotional and social benefits that a supplier or product could offer created a 65% lift over base buyer preference.  All this time, we assumed that larger purchase groups meant more rational, business-oriented purchases, when in reality, that’s not the case at all.

Individuals behave differently in groups. Even when individuals want to make a purchase, they may be reluctant to speak up or unable to agree. Indeed, half of buyers admit they won’t advocate for desired purchases—due largely to the risk and/or effort of proposing a change that others may oppose. Disparate perspectives (i.e., perceived or actual misalignment of needs) and resistance to change may also derail many group purchases Add information overload and decisions become less and less rational and more and more emotionally driven. Success means motivating advocacy.

To make individuals willing to advocate (not just willing to buy), commercial organizations must ensure the perceived value of advocacy is greater than the perceived risk and effort. Since risk and effort are personal (e.g., the risk of losing credibility), value must also be personal. To motivate advocacy it is important to demonstrate that personal value outweighs personal risk.

In addition to conveying personal value, it is possible to reduce perceived risk by demonstrating organizational support for change. This can be accomplished through highlighting shared needs to help individuals convince each other of the need to change. In other words, it is no longer enough to address individual needs; success requires attention to interpersonal dynamics. Instead of building stronger connections to each individual, we must build connections between individuals.

CEB Sales Members: Listen to a webinar replay to identify the best internal stakeholders to target, engage Mobilizers to drive internal consensus, teach reps to use constructive tension to create urgency around a sale and use our Social Selling resources to map customer networks and teach where customers learn.