Tomicide Solutions September 2009: Seven Mistakes IT Companies Make Regarding Their Selling Processes And Sales Staff
By Tom "Bald Dog" Varjan
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While for most companies business development simply means brainless hunting for new prospects and forceful peddling, even the many of the ones that understand and practise strategic business development, make some typical mistakes regarding their sales processes and salespeople.
On their own, these mistakes don't seem to be serious, but as they pile up and inflict their compound harm on the company, the devastation can be pretty serious.
One of the most interesting ideas I've seen is that instead of advertising for salespeople, many IT companies advertise for business development managers or account executives.
The job is the same though: Brainless cold-prospecting grunt work and trying to turn every living and breathing body into invoice numbers.
And these salespeople may have fancy titles, but their companies still require them to act as street peddlers and bazaar huckster.
Well, if we look at it from a new perspective, even the cute squirrel is just an overdressed rat.
And no matter what salespeople are called, based on their behaviours, they are still perceived as dreaded peddlers.
Well, you can dress up rats as squirrels, but the tree-climbing contest reveals the naked truth, and the judges are unlikely to buy an excuse like...
"Well, I'm a real squirrel but I have vertigo. Here is my doctor's certificate to prove it."
In this article we discuss some harmful mistakes about hiring and retaining salespeople. And as you see, these treatments originate from some organisational misconceptions and they have nothing to do with the salespeople themselves.
Mistake #1. "We Hire Only Highly Experienced Salespeople"
Caused by: "We fly by the seats of our pants. We don't have a sales system our people can follow. We're shooting with our eyes shut and hope that every now and someone bumps into our stray bullets. But we don't care because there is an endless supply of cheap, substandard peddlers who are willing to tolerate our incompetence and primitive operations."
It's your responsibility to develop great salespeople with commitment and dedication. There are no experienced people out there. That is, they are not experienced in your business. A lot depends on the environment you create. Just because you're successful working in Donald Trump's highly stressful and cutthroat environment, you may be a dismal failure in Richard Branson's offbeat, maverick business culture.
People become valuable to your company when they master three topics.
1. Knowledge: This is a body of knowledge including selling skills knowledge of your offer, people skills and the essence of your company. People can have sales skills and people skills, but you have to teach them your business specifics, like your company's values, beliefs, mission and vision.
2. Systems: This is the [Your Company Name] Business Development System, and no one is supposed to know this until and unless worked for your company. Using military language, your business development system is valuable intel material, and the less "the enemy" knows about it the better. I certainly wouldn't want my competitors to copy my clients' or my own sales letters, case studies and white papers.
3. Disciplines: This is actually the emotional fortitude of doing what you're supposed to do in a way you're expected to do it. This is based both on your own core values and the company's values. Before Lou Gerstner, IBM was peddling boxes, and the solution to every problem was a new and bloody expensive IBM box. Gerstner introduced and institutionalised the concept of "objective and unbiased advice" whatever the solution may be. IBM started selling fewer boxes but added some $27 billion to the bottom line using this objective advice concept.
The other problem here is that most people are experienced in the wrong type of selling. Here is an example:
You can be the best fighter pilot in the RAF (Royal Air Force in the UK) but when you transfer to the US Air Force, you have to forget to fly and fight the "RAF way", and you have to learn it all the "US Air Force way".
I could even say that just because you are excellent with the toilet brush, you don't necessarily know how to excel with a toothbrush, although they both are brushes. Your salespeople may be excellent at commodity selling, using the typical "chase, hunt, hound and pound" approach, but you can't use this method to sell 6-figure solutions.
Mistake #2. "Our Business Is Complex. It Takes A Long Time To Learn It"
Caused by: "Since we don't know what we're doing anyway, we can't teach our people how to do it either. New people come on board, bounce from wall to wall desperately trying to learn what even we don't know, then they get pissed off and leave. Then we hire some more."
Business development in most IT companies is far too haphazard instead of being systematic. People are flying by the seats of their pants, miss a whole lot of opportunities and hit a few here and there. Everything is inconsistent and unpredictable, which is an amazing way of destroying a brand.
The reality is that this business is in serious mess, so it cannot be taught methodically. People have amazing capacity to learn. The question is whether or not the company has matching amazing capacity to teach. And this is where the problem lies. Most IT businesses are in serious chaos to teach their people how to do things. That's why they are looking for "highly experienced" people.
But just look at the most effective organisation that teaches laypeople about how to do things in a specific way: The military. You don't need any experience upon joining. All you need is inspiration to grow as a person. If you have that, the military has a pretty good system to teach you the technical skills like driving a submarine or firing a missile.
Sitting down with a colleague to practise a presentation or a speech is almost unthinkable in the world of commerce. Rehearsal is simply an unknown concept. And it would be regarded as waste of time anyway.
So, relax. Your business is not complex at all. And it can be learnt fairly quickly provided you know how to teach it and the students actually want to learn it. And as long as you have excited, enthusiastic people to teach it to, you have a pretty good chance to end up with a damn good team of professionals who both intellectually and emotionally tuned into what you're doing.
Mistake #3. "Our Salespeople Have Lots Of Things On The Go."
Caused by: "We don't have a strategic focus. We do some odds and ends, then we hope and pray that some of that turn into revenue. We're not really good at what we do, so we make up for that deficiency by doing lots of stuff. Essentially, we're like whores doing anything for anyone for money."
This is just a euphemism for saying...
"We have no idea about what our salespeople are doing."This is a company suffering from the "rocking chair" syndrome: Lots of activity but no measurable progress. Hyper-busy boondoggling from one appointment to the next. The other group of people are frenetically preparing proposals to buyers, 97% of which are tyre-kickers, so some 35-60% of proposals end up in the "no decision" pile.
And the other problem is that where there are lots of irons in the fire, there's a lot of smoke. Sooner or later there is a massive, impenetrable smoke screen between sales staff and the sales manager, and communication between them goes down the toilet.
The sales manager no longer knows what's going on in the sales team, and that's when sales direction is totally lost. The team breaks up and individuals do whatever they feel like doing using the protection of the smoke screen to keep their operation undisturbed by the sales manager who may dare to hold them accountable.
Mistake #4. "It's Impossible To Find Good Salespeople Nowadays"
Caused by: "We don't know how to attract great salespeople. I reckon, we're just not worth working for."
There are several considerations here. You can't find good salespeople for commission-only work. You simply can't expect people to put in 100% effort and dedication when they know that they get only a small fraction of the reward.
They are expected to take 100% of the risk - Salespeople are the only people who are almost never given a learning period. They are expected to produce from day one or they don't get paid. The sad fact that most IT companies are brilliant at demanding results from their salespeople but are pathetically useless at helping them to produce those results.
Salespeople get only a small percent of the reward - Considering that the company's future depends on its salespeople, I find it strange how tiny portion of the reward they receive. Most companies even limit how much their salespeople are paid, so the more salespeople sell, the lower the percentage they receive in commissions.
I've seen agreements that say, "You get paid X or Y, whichever is the lower amount." So, where is the incentive for salespeople to sell more? They have one incentive: To sell just enough to stay alive until a better job comes along. Have you ever wondered why most salespeople are in a constant job search? Yes, even yours.
No, money doesn't motivate, but taking it away so blatantly certainly demotivates.
They are treated as expendable commodities - The average annual turnover of sales folks is 43%. You simply can't build a company on this kind of attrition. This high attrition damages client retention and undermines referral and repeat business.
They can't expect almost any help from the company - I know companies that refuse "to waste expensive collateral materials" on salespeople. There are fancy brochures in the office but salespeople are not allowed to hand them out to prospects because those brochures are too expensive. So, they are sitting unopened in neat boxes in the office.
There are good people out there. But the good people are looking for good opportunities with good companies, and they refuse to waste their talents on the mediocre bunch.
Mistake #5. "Our Sales Force Consists Of Creative And Independent People."
Caused by: "We don't have a sales team. Our salespeople are individualist prima donnas with their own personal agendas, working for themselves, that is, often against each other, and indirectly, against the company with no regard for achieving a common objective."
This is the standard scenario in most companies but it's good for the sales manager, who can sit in his office all day, and all he has to do is to bark at his salespeople when they don't make quota. According to surveys, in most companies 47% of the salespeople regularly don't make quota.
Having a great sales force is a double-edged sword. Managers must be ready and willing to coach and mentor their people, and salespeople must be ready and willing to be coached and mentored. They must recognise that there is always space for improvement.
No, the key is not to control your sales staff. The key is to lead them, and lead them by example. The sales manager must become an exemplar, an embodiment of the change he wants to see in his people.
Mistake #6. "We Expect Our Salespeople To Hit The Ground Running"
Caused by: "We don't have time and energy to teach our new people. We expect them to produce right away. If they swim, they can stay. If they sink, we'll replace them. This is the world of the self-starter."
The problem is that when your new people hit the ground running, they soon fall flat on their faces over and over again, and eventually leave your company for your fiercest competitor. Imagine that you're a commercial pilot for Lufthansa. Then you immigrate to the US and fly for South West Airlines.
Rest assured that you don't start your employment by flying a plane. First you have to learn how to fly the "South West way". Every company has its own way of doing things, including selling. Every company, except imitators, which most of the companies really are. Hence, this retarded expectation.
The problem with hitting the ground running is that it's a temporary measure before your people permanently hit the ground failing. They break their noses and bruise their faces so badly that won't have the courage to even stand up. You have to build your people for performance from the ground up. Just like building skyscrapers. You can't start building one by collecting the rent on the penthouse. That comes a bit later.
Building great salespeople doesn't start by making money on them.
A friend of mine is a salesman for Saturn in Vancouver. His employment started with a two-week training programme in the US at the Saturn plant. It was fully paid by the company. The company expected him to make a commitment to Saturn, but only after Saturn demonstrated its commitment to him by teaching him the "Saturn way of selling".
In his second month he became the number one salesman, and he has stayed in that position in the last four years. He's proved to be a huge return on investment. But it all started with an investment, the sales training programme.
Other car dealerships expect their salespeople to hit the ground running. And they do. Most of them fail and move on within six months costing the company a small fortune. But these companies are so everlastingly stupid that they don't even notice this loss. The car industry seems to attract some of the stupidest managers. Hm.
They just ignorantly hire some more "hit the ground running" type salespeople. And the cycle starts all over again. And what is the result? I met a guy at a networking event. He is in his mid forties and has worked for 37 car dealerships. He keeps hitting the ground running. Then he stumbles, falls, leaves the company and starts again.
Neck and neck with realtors and insurance peddlers, car salespeople are the most disrespected and resented "professionals" on the planet. Why? Think of their methods. Any surprise?
A friend of mine works for Clarica. He desperately wants to be an honest, ethical financial professional, but the company doesn't let him. He's expected to practise manipulative scumbaggy sales methods just to sell more insurance policies. Sadly most financial institutions are pretty much the same.
Mistake #7. "To Sell More, We Hire More Salespeople"
Caused by: "We're so everlastingly stupid that we don't even understand the relationship between revenue and profit. We're willing to discount our prices but make up for it in volume. We're not willing to invest in marketing to aid our sales force, but increase our sales force and whip them to work harder and sell more at discounted prices, and we don't even realise that our cost of sales is going up."
It's not really about selling more and making more, but actually keeping more. What is the difference? Selling more is about volume. Increasing sales volume. Keeping more is about margins. Selling at higher margins. Wal-Mart is the world's largest retailer with the highest sales volume. Great. Harrods in London is one of the world's highest margin retailers. They don't go for volume. They go for margin.
General Motors beats Ferrari on the sales volume game, but Ferrari beats General Motors in the profit margin game. And in spite of all the volume, some experts even predict that the forever-troubled General Motors is likely to go bankrupt by 2020. Do you expect Ferrari to go to the wall? Unlikely story.
The key is not about hiring more peddlers but developing an integrated business development system that is executed by a group of highly-skilled, dedicated, passionate and enthusiastic people who focus on margins not merely on volume.
On Summary
So, think about which mistake(s) your company is making and what you plan to do about remedying the situation. The fact is there are good and even great salespeople out there. But they act and behave drastically differently from ordinary salespeople, and you're most likely looking for the behaviours exhibited by ordinary salespeople. People who are aggressive, don't take "no" for an answer, etc. Using Blair Singer's Sales Dogs terminology, the Pit Bulls.
Great salespeople are not the aggressive pushers but the quiet diagnosticians. They can ask deep meaningful questions and help people to see their predicaments. The proverbial used car salesman with the "Hey man, give me an offer and I'll cut you a deal" is just not enough.
So, revisit these seven mistakes and put together a plan to eradicate them from your own sales team. Best of luck.
Attribution: "This article was written by Tom "Bald Dog" Varjan who helps privately held information technology companies to develop high leverage client acquisition systems and business development teams in order to sell their products and services to premium clients at premium fees and prices. Visit Tom's website at http://www.varjan.com.
