Those two words should make every salesperson shudder.  I remember when we first encountered the phrase about 5-6 years ago at one of our customers.  Their top salesperson’s top account is a local company that shall remain anonymous (retail giant with a bullseye for a logo).  When this salesperson first mentioned “reverse auction” to me, I had no idea what he was talking about.  Once he explained it, I was taken aback.  It is the ultimate commoditization tool.

Dave Stein posted on this topic with an example of GE’s colossal IT budget for procurement.  One of the quotes from GE’s CIO cuts right to the core of this issue:

On auctions, Reiner goes on, “The more commodity-like the part or service is, the easier it is to auction; and the more differentiated, the less easy it is to auction. By design, every year we try to make more of our business portfolio be products and services that are noncommodity – that are differentiated. So we have been fortunate not to be as auctioned on the sell side as we are on the buy side.”

The interviewer asked: ”I would presume that as much as you like to buy things through reverse auctions, you absolutely hate to sell things that way.”   To that, Reiner responded, “That is correct.”

Did you catch that last paragraph?  This exact reason is the drive behind clearly defining your value proposition.  Prospects want to turn your solution into a commodity and then drive your prices down.  Now, this is a problem if your solution lacks value.  In that instance, you best be the low-priced option or you won’t be around for long.

Dave’s summation catches the core of this topic (my editing):

Unless you’re in a commodity business, participating in reverse auctions is about as defensive as you can get from a strategy perspective.  By definition, the customer is determined to strip away any unique value from your products and services so they can buy at the lowest price.  They’re not interested in your unique value, a long-term win/win relationship with you, or anything else that will increase the cost to them.

That should suggest not approaching reverse auctions tactically from the sell side.

He provides some excellent resources if you are forced to compete in a reverse auction format.

As they say, read the entire thing.

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Great article from BusinessWeek.com titled Let’s Hear it for B Players.  I realize “B Players” is difficult to define, but these are the:

…competent, steady performers far from the limelight.

What I like about this article is the fact that B players can consistently deliver for a sales department without demanding star treatment.  Unfortunately, their approach can cut against them also as they tend to be overlooked at times.

Here is their value stated clearly from the article (my emphasis):

B players, by contrast, prize stability in their work and home lives. They seldom strive for advancement or attention—caring more about their companies‘ well-being. Infrequent job changers, they accumulate deep knowledge about company processes and history. They thus provide ballast during transitions, steadily boosting organizational resilience and performance.

Yes they do.  Some B players will move up to A player status which is a sign of good sales management.  Others are content in their role and will excel within the sales dept albeit in a quiet manner.  They are typically lower maintenance than the A players and they rarely make mistakes like the C players.  Their consistent, if not eye-catching, performance provides the foundation for a strong sales department.

One thing the article does not mention is that A players are typically well-known in your industry and often are recruited out of your company.  They can develop a prima donna complex and become as difficult to manage as an A-list celebrity.  Every sales team needs A players to drive the big deals and close the marquee accounts.  But the B in B players should stand for bedrock.

The authors close the article with 4 strong suggestions for nurturing your B players:

• Accept differences. We’re all tougher on people who differ from us. If you’re an A player, avoid the temptation to undervalue B performers. Ask what they want from their careers, then match them with mentors who’ll help them get it.

• Give the gift of time. Track your communication patterns to ensure you’re not ignoring—and thus alienating—solid performers.

• Hand out the prizes. Since B players are promoted relatively infrequently, reward them in others ways. Even handwritten notes of appreciation can make them feel valued and motivated.

• Give choices. Rather than grooming only stars, allocate scarce resources—compensation, coaching, promotions—to high-potential B players. Promoting sideways can provide appealing career alternatives.

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You ever notice what a mixed bag of economic news we receive these days?  Here is one that caught my eye from CNNMoney.com (my editing):

The private sector gained 9,000 jobs in July, primarily among small businesses and the service sector, according to a report payroll manager ADP released Wednesday.

A consensus of economists surveyed by Briefing.com had expected a loss of 60,000 non-farm jobs.

Can you imagine if the “consensus of economists” bet on football games?  They would be making their predictions from the poor house.

Nonetheless, I heard a very interesting talk from John Sumser last week in which he discussed that national employment statistics are grossly overrated (my term).  His thesis is that economies are regional, even local (look for the “Mega-Region slide).  Weakness in one area (e.g. Detroit) is far different than growth in another area (e.g. Las Vegas).  Trying to combine these two into a national number is a statistic for national newspapers to use, but it truly does not have any application locally.

I couldn’t agree more.

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I remember having a sales job (pre-computer days) where I was expected to wear a suit every day.  One day I showed up with a navy sportcoat, tie and khakis and I actually was a bit nervous about what my boss might say.  I didn’t get in trouble, but I didn’t wear a sportcoat again.

Suffice to say, the average office has become extremely casual over the past 20 years.  We get the opportunity to see many different office environments and I am beginning to think that they are evolving into even more casualness.  Jeans are becoming more common in the middle of the week, not just on Fridays.

I think this is a bit of a trap for a candidate, younger candidates especially.  Take this article from the Wall Street Journal that details young candidates using text message lingo in their job search correspondence:

After interviewing a college student in June, Tory Johnson thought she had found the qualified and enthusiastic intern she craved for her small recruiting firm. Then she received the candidate’s thank-you note, laced with words like “hiya” and “thanx,” along with three exclamation points and a smiley-face emoticon.

I hate emoticons.  The thought of including them in a thank-you note is baffling to me.  Here is where the casualness is creeping in:

Job hunters may be more inclined to use their cellphones and text lingo when thanking interviewers because the medium is gaining acceptance in a growing number of workplaces. “I definitely text my managers if I am running late,” says Jennifer Nedeau, 23, a project manager at New Media Strategies Inc., a marketing firm in Arlington, Va. “I know I’m not bothering them with a phone call, but they’re still getting the message.”

I have no doubt text messaging will become more common over the next couple years.  However, it has its place and candidate correspondence is not one of them.  I would have serious reservations if I received an email or worse a letter, that incorporated text message shorthand.  In sales this would be high risk, even in technology sales.

Far better for the candidate to display their proper writing skills in the formal setting of an interview process.

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The economy is slow right now, but to call it a recession at this point is hyperbole.  Inc.com has a quick story on a survey of small-business owners.  The survey sample is small, but the results are encouraging.

Though many in the small-business sector remain concerned with broad economy conditions, a growing number of owners and employees are upbeat about activity in their own market, a new survey finds.

Of 500 small-business owners and employees recently polled by Opinion Research Corporation, a Princeton, N.J-based database firm, 65 percent rated their firm’s business conditions as good, while less than a third described them as poor. Though 71 percent said the U.S economy was struggling, 50 percent expect it to recover in a year.

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Using social networks like Myspace and Facebook as part of a background check currently falls into a legal grey area.  Apparently this activity is lacking any precedence in the judicial system which means it is risky.  I’m not naive, I suspect most companies Google candidates to see what they discover.

Recruiting Trends provides an article that describes one area where trouble may arise:

There are anecdotes on the Internet of false postings under another person’s name – a sort of “cyber identity theft.” If anonymous information is posted, such as in a chat room, there is the new phenomena of Cyperslamming (sic), where a person can commit defamation without anyone knowing who they are.

What if some of the information you discover is incorrect?  This could be a tremendous problem with legal ramifications.

In case you are a bit skeptical (I was), read this:

One rule to remember
If a website is searched by a background screening firm on behalf of an employer, then consent and certain disclosures is mandated under the federal Fair Credit Reporting Act (FCRA).

As I mentioned, uncharted waters so be wary.

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Have you ever worked with a “glass half empty” person?  They are something to behold especially if you are a bit of an optimist.  We get the chance to interact with many leaders of both sales departments (VP of Sales) and entire companies (CEO).  One thing that always catches my ear is the leader’s level of optimism.

I find leaders who have a realistic level of optimism to be the most effective.  I’m not talking about whistling through the graveyard, but rather a measured optimism that seeks positive solutions.  The reason this is so important is that employees have a more difficult time rallying behind a pessimistic leader.  I have seen this first-hand in many different organizations.

Pessimism has a draining effect on the team.  Electrical current flows from negative to the positive terminal and employees are similar.  Leaders that consistently migrate to the potential failure side of an outcome stifle employees.  If the leader’s pessimism is extreme, employees will leave for other opportunities.

I note all of this because I am knee-deep into a pessimistic customer.  The problem here is that the pessimism flows from the ownership down to the President and into the company.  This company has the potential to be a market leader, but they continue to flounder around losing market share to less-able competitors.

And here may be the reason why.  I emailed with the owner last week about a hiring topic and received a response from him that floored me.  They have hired a strong candidate after the owner, President and VP of Sales interviewed him and thought he was a strong fit.  When I emailed the owner, here is one sentence from his response:

I’m more concerned with cutting our losses as quickly as possible as soon as we recognize that we’ve made a mistake in hiring.

I reread it and am shocked all over again.  This statement summarizes his hiring philosophy.  Could it be any more negative?  Yes, I have significant concerns about our salesperson ramping up quickly and succeeding.  How much support is the new salesperson going to receive while he onramps?  The concern is that the pessimistic leadership team has an itchy trigger finger.  I’m all for firing fast if you make a mistake, but this negative approach serves to create self-fulfilling prophesy.

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This story from Forbes.com provides a survey with a simple, but insightful structure:

To compile its list, Jobfox examined its database of about 4,000 job postings from November 2007 through July 2008 to see which professions have the most openings monthly.

Ok, so what did they find?

Sales representatives top the list–and, unlike other professions, not because there’s a shortage. Rather, in tough economic times, a good sales force is a critical way to pull a company out of a downturn.

I like to say that good salespeople are always in demand no matter what the economy is doing. 

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I know, lame title, but I couldn’t resist. ManageSmarter.com offers up this article – Compensation Complexity Hinders Sales – regarding current compensation plans.  Here are some numbers they quote within the article (my editing):

Only 41% of sales leaders were satisfied with their current compensation plans (down from 59% two years prior), and only 46% believed their plans were promoting the correct behaviors for sales success.

Nearly half (46%) of sales force leaders believe their sales compensation programs have become more complex since 2006.

I always found the compensation plans to be more “complex” when I wasn’t at quota.  Successful selling definitely alleviates many problems.

But there is this:

The survey points out that many companies are making strides toward more effective compensation plans. Among the productive steps forward are companies using three or fewer measures of performance (73%), conducting a plan review at least annually (77%) and changing metrics less often than before (58%).

Those are 3 excellent points regarding sales compensation plans.  Companies that shift the commission structure around mid-term (weekly, monthly, quarterly, etc.) are generally demotivating their sales team.  Consistency is the best policy here.  Try to change it only at preset intervals (annually).

Measuring too much can also be a demotivator.  Simple, straight-forward commission plans work best.  We are proponents of providing commission based on gross margin in as many situations as possible.  This approach keeps the salesperson honest when it comes to discounting.  If they discount, they lose money themselves – a very good structure for money-driven salespeople.

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Coaching in many organizations is an after thought at best.  What we see all too often is that the quotas are set and salespeople are expected to reach them on their own (to some extent).  These are the organizations in which we see far too little coaching by the sales managers of their teams.  Why is this?  In a post from Dave Stein’s blog he asks you to name one professional athlete that doesn’t have a coach.  Even amateur athletes have coaches, so why do organizations not require and equip sales managers to be coaches?

Dave makes some interesting points and I recommend that you go read the entire post.  He may get you to change your mind about coaching salespeople if you don’t already.  An interesting comment that he gets from managers when asked about coaching is that they are “too busy.”  His point:

It’s the old, “I don’t have time for you to show me your word processing software because I’m too busy changing the ribbon on my typewriter, plus I need to go out and by some more White-Out.”

I think that Dave is right on the money when he said that managers don’t understand the impact coaching could have on their team’s performance.  I would take this a step further and say that most organizations don’t understand the impact coaching could have on their organizations as a whole.

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