By Vistage Editor
Poor sales performers crop up in nearly all organizations, and all too often they’re tolerated and permitted to continue in their jobs.
According to Vistage sales management experts John Asher, Jack Daly and Paul Goldner, this can be a costly error in policy.
“If you rank your sales force based on top performers to bottom performers, you’ll find that the bottom staff are responsible for less than six percent of sales,” Daly noted. “All in all, too much time is spent on poor performers. The sales manager should spend more time with people at the top.”
Goldner advocated a somewhat different approach.
“I believe a poor performer can’t get better unless he learns by doing. Give poor performers the opportunity to grow their own skills. If you see they’re not doing the right thing, you pursue a diagnostic path: Is it a skill problem or attitude problem? Your options are coach, counsel or terminate.”
He added: “When a manager feels compelled to jump in, it becomes a management issue. The manager is desperate to close every sale, and lacks a good pipeline for new sales.”
If the sales manager is doing a good job of ongoing recruiting, this shouldn’t be a problem. “You won’t spend inordinate amounts of time with bottom performers if they don’t demonstrate changed behavior,” Daly said.
“The sales manager must meet sales performance problems head-on,” Asher added, “but always in a positive manner. Telling a sales rep he has to meet his quota ‘or else’ is inadequate and probably self-defeating. Help him learn how to achieve this goal. Maybe he needs to improve his sales presentations or try to reach different decision makers in the customer’s company. A sales manager’s specific recommendations enhance the overall chances of success with individual sales reps.”
To help turn around a poor performer, the Vistage speakers advise these steps:
- Document the situation. Gather facts. Identify problems in the salesperson’s performance.
- Advise and counsel. Meet with the sales rep, making it very clear that your goal as sales manager is to help him become better at his job. Avoid placing blame or delivering ultimatums. Instead, demonstrate your confidence that, with coaching, the problems can be overcome.
- Look for problem behaviors. Ask the sales rep what he thinks should be done to overcome gaps in performance. Does it mean adjusting selling behavior? Making more new business calls? Find out what difficulties, if any, he anticipates in changing his behavior. Address these difficulties before they occur.
- Design a recovery plan. The plan, developed jointly by sales manager and salesperson, should be comprehensive and results-oriented. Set targets based on (1) improvements in sales with each account; (2) new business penetration; and (3) increased number of calls.
- Have a follow-up plan. Following agreement on a recovery plan, the sales rep must understand that the sales manager will closely scrutinize sales efforts and results. The follow-up plan will track results and progress, supplemented by weekly follow-up meetings.
“When salespeople don’t hit the targets, hold their feet to the fire,” Daly said. “In some cases, you may want to renegotiate the expectations. But if these were fair to begin with, you’re better off sending that person on the way to their next career opportunity.”
Praise and Reprimand
A good sales manager understands the personality of the salesperson. Most of them crave praise and reassurance. They are often motivated by something beyond a commission — the challenge and victory of making a big sale.
“How many salespeople are overly recognized for their achievements?” Daly asked. “Is there such a thing?” When he visits Vistage companies, Daly asks members what recognition systems they have in place for top performers. Surprisingly, not enough companies have any such system.
We tend to recognize people when the spirit moves us, he says, but that results in inadequate motivation. “Recognition doesn’t have to be expensive, but it should be ongoing. It can range from a handwritten note saluting a person’s performance to a luncheon or a birthday card personally signed by the CEO. These things are all easily done, and well worth the effort.”
Asher added: “Don’t just say, ‘Job well done’ to your rep. Praise them in public meetings. Describe the specific results of their sales achievements. This demonstrates your confidence in the sales team, as well as your high expectations of them. When you expect people to win, they usually do.”
In the same regard, Goldner said, criticism should always take place in private. “Make sure you fully understand the situation before criticizing,” he advised. “Start the session with a question, not an accusation. Listen to the individual’s side of the story. Then work together to correct the problem.”
Done properly, offering positive and negative feedback lets your staff know that, above all, you’re concerned with their welfare. It’s the best way to motivate individuals who flourish in an atmosphere of praise and recognition.
Non-monetary incentives to motivate salespeople must be carefully designed and implemented. A sales contest, for example, should be fun, exciting and inspirational. In general, there are three tests of contests:
- Hit the target. This contest is structured around a set goal — monthly, quarterly, yearly. The winners are those who hit the target.
- Activity-based. In this type of contest, sales reps conduct activities that garner credits leading to a reward.
- “Top dog.” Only the highest achiever takes home the prize in this “winner-takes-all” format. Prior to unveiling a sales contest, say the Vistage experts, certain elements must be in place. These include:
- Funds and resources. Do you have the time, money and support available to run an incentive program?
- Achievable targets. Contest goals should not be outlandish or inaccessible.
- Rules. Make sure that contest rules are clear and easy to follow.
- Rewards. A sales contest is only effective if the contestants regard the prize as genuinely valuable. “The duration of the contest time period is another important consideration,” Asher noted. “By and large, a short-term framework is best — usually a month or so. That way, the contest triggers a time-limited but intensive burst of productivity. Going much longer than a month only suggests to less motivated salespeople that they have time to procrastinate.”
Other tips suggested by the Vistage speakers:
- Fairness counts. “The outcome of many corporate sales contests feel decided from the start,” Goldner noted. “Every company has one or two top performers, several people in the middle, and a few just trying to make quota. Obviously, the people most in need of motivation are those in the bottom half — the same individuals who have little chance of coming out the winner in a sales contest.” To keep things fair, consider setting a contest goal that focuses on something other than total dollars or number of deals, i.e., the greatest percentage increase in sales relative to a prior time period.
- Intermediate goals. The sales cycle of your product or service must be considered when designing a sales contest. If a long cycle is involved, the contest should probably be based on something other than sales — the number of product demonstrations, for example, or number of prospect customers who agree to a free trial period. “A word of warning here,” Goldner said. “To be truly effective, any non-sales goal must be with qualified prospects. Make it clear to everyone that the contest is judged as much by quality as quantity.”
- Cash-alternative awards. “Money isn’t the only reward for high performance,” Daly said. “Some companies award professional tools such as a leather briefcase, engraved clock or inscribed plaque. These items bestow a certain prestige on the recipient, especially among her peers.” The best awards offer some intangible gratification for the winner. Among the possibilities: an all-expenses-paid night out on the town, a weekend travel getaway, tickets to a sold-out theatre production. Again, this marks the contest winner as someone special and deserving of unique treatment.
- No conflict with existing objectives. Salespeople shouldn’t be permitted to ignore ongoing responsibilities — prospecting or serving existing customers — when a contest is offered.
Originally published: Aug 28, 2011