This quote is from the JustSell.com daily email.  I thought it was excellent:

“Mediocre people have an answer for everything and are astonished at nothing.”

Eugene Delacroix (1798-1863)
French Artist

Posted By Derrick Moe | Anecdotes | | Comments(0)

This Selling Power article title made me laugh – Are You Using a Funnel or a Sieve?  I laughed because my son is a hockey goalie so the word “sieve” carries a special horror.  That horror is compounded by the fact that we just returned from a hockey tournament in Winnipeg where I expected to hear some rowdy crowds and perhaps a sieve chant towards my son.

My fears were unfounded as the Canadians were extremely pleasant.

Hockey colloquialisms aside, this article makes many excellent points before turning into an advertisement.  This entire graph is valuable:

It’s an issue that makes sense from a cost standpoint as well. Karam says it costs about one-sixth the amount of money to nurture a lead that has fallen out of the funnel than it does to find a brand new one. Most sales managers know this but are so quarter-driven that funnel leakage tends to hold a low priority on their to-do lists. And until recently, that’s worked just fine. Prior to the recession, sales teams could “focus on the hot stuff and they’d make their numbers. Well, now there’s not enough hot stuff,” says Karam. In light of all this, he adds, “there’s been a lot of attention recently on recovering leakage and re-mining or re-farming leads.”

Finding qualified leads is an expensive process which is why I focus extensively on qualifying ability.  When you are hiring salespeople, there is no greater urgency then to discover the candidate’s qualifying ability.  It is the backbone of successful selling.

I couldn’t agree more with the statement that most sales managers are aware of “funnel leakage” due to their quarterly revenue responsibilities.  I would go further and say a percentage of the forecast error is funnel leakage and the other is blue-sky forecasting.  Many a rep has been known to submit an inflated forecast in the hope of keeping their job for another quarter.  I suspect the salesperson is simply buying time with the hope that they will close a large deal during that bonus time.  It rarely happens.

Re-farming leads is a valuable exercise for any sales department in any economy.  Again, the costs associated with new lead development are far greater than re-farming leads.  One question I often ask sales candidates is for them to provide me with an example of when they went back to close a “dead” lead.  This question provides some insight into the candidate’s tenacity, strategy and ability…and it is easy to spot a fabricated story.

Posted By Derrick Moe | Hiring Salespeople, Sales Techniques | | Comments(0)

Isn’t this an old marketing trick – include “surprising,” “stunned,” or “unexpected” in a headline?  It seems to me that every time an economic report comes out, we are presented with one of these words to describe the data.

The latest example comes from cnnmoney.com today:

U.S. construction spending unexpectedly posted its biggest increase in eight months in April, advancing for a second straight month as the private sector put money into both residential and nonresidential projects, according to a government report on Monday.

Oh to be able to surprise a sales manager with an unexpectedly lower sales forecast!  If the experts are consistently surprised, what credentials do they have for being experts?

Anyway, I am hopeful that the economy is turning, but I have to question if this is too early of a read.  The GM bankruptcy is going to have seismic repercussions on unemployment which is a lagging indicator to start.

Posted By Derrick Moe | Economy | | Comments(0)

SellingPower.com’s article deals with something we have seen throughout our many years of sales assessing, hiring and coaching – financial comfort zones.  Here is a good explanation of it from the article (emphasis mine):

Eker stumbled on the concept of financial blueprints while running his first company, a fitness business. In that business, his trainers often referred to a body’s “set point,” or the metabolic rate at which a body is comfortable. Eker, looking back over his financial history one day, realized that again and again he followed the same financial pattern of making a lot of money and then losing it. Up and down, up and down for fifteen years. “Wow,” he thought. “In the same way we have a set point with weight, we must have a set point with money.” His follow-on observations of others confirmed his theory, that everyone has a financial set point they unconsciously return to all their lives.

So true – this plays out time and again in the sales world.  Salespeople often get caught in a stagnant mode once they hit their financial set point.  They stop prospecting, they find busy paperwork, they fine-tune tasks…essentially their behavior goes into cruise control.

When hiring salespeople, it is important to dig for this set point.  Typically a candidate will not provide it willingly, but you can pursue their past successes.  It is perfectly legitimate to ask for a previous W2.  It is always valuable to delve into the largest deals they closed and the commission they earned.

A candidate with enough of a history will show distinct financial set points that you can then determine if they are a fit for your position.  One last thought is that this set point works 2 ways – you won’t retain a salesperson in a $75K position when their set point is $150K.  If your compensation plan is inflexible, capped or unattainable, they will leave once they realize the ceiling.

Posted By Derrick Moe | Compensation, Sales Management | | Comments(0)

An email came my way today mentioning that our little blog was placed on this list - 100 Awesome Business Blogs that are Better than an MBA.  I realize lists are good link bait and I am a sucker for them, but we definitely appreciate the recognition from The Fixer-Upper Blog.

Posted By Derrick Moe | Website | | Comments(0)

I’ve written about this phenomenon in the past and I continually encounter it in many sales areas – the allure of experience.  In fact, I just talked to a recruiter from a different part of the country who focuses on sales hiring.  We talked a bit of strategy and I was just dumbfounded.

This gentleman focuses solely on finding someone with as much industry experience as possible.  His primary motivation – find candidates who can bring accounts with them.  No discussion about skills, no behavioral-based questions, no attempt at learning their style and motivation…just simple experience.

I am not even sure if he asks if it was successful experience.

My attempt to move the discussion to skills, talent and motivations was summarily dismissed by him and we ended up having a rather short phone conversation.

This conventional wisdom for sales hiring is persistent today.  My thought is this – what happens when the candidate pool decreases dramatically?  Highly-specific industry experience will not be prevalent.  What then?

Perhaps that is the day I am waiting for.

Posted By Derrick Moe | Hiring Salespeople, Sourcing | | Comments(0)

Don’t do this:

If you have the contacts in these areas with such customers, let us know!

That line is from a sales employment ad I read this morning and it is a tremendous red flag to savvy salespeople.  The ad is also from a recruiter and not the hiring company which makes it worse.

It is this approach that makes sales recruiting so difficult.  Clearly this recruiter is less interested in ability and more interested in an existing network.  Fair enough, but having a network is one thing, getting customers to walk over to a new company is another.  It rarely works in spite of what the salesperson thinks or says.

The better approach here is to identify what skills, talents and experiences will lead to success in the position.

Posted By Derrick Moe | Employment Ads, Hiring Salespeople | | Comments(0)

SellingPower.com’s article - Help for Your Pre-Call Prep – makes a bold statement in the opening sentence:

When you get right down to it, sales are won or lost on preparation.

I would argue that sales are won or lost on execution.  Give me a salesperson who executes flawlessly any day over one who prepares flawlessly.  Again, the context is in terms of where deals are lost.  Be that as it may, the article has an interesting statistic found in one of the later graphs.

At a time when relatively few initial discussions with a client are progressing further into the sales cycle (40 percent of organizations say only 25 – 50 percent of initial discussions progress to a presentation; 30 percent say 51– 75 percent of discussions do so, according to CSO Insights), the issue of pre-call preparation deserves some attention. After all, it’s the quality of your preparation that largely determines whether or not the client agrees to a second meeting.

Ok, I take umbrage with the over-emphasis on pre-call prep.  Salespeople who show up and throw up are the main reason suspects do not move into prospects.  I thought this number was shocking – up to 50% of initial discussions progress to a presentation.  This fact could be that salespeople are better qualifiers in lean economies.  Perhaps they are qualifying suspects more thoroughly to eliminate the tirekickers from their pipeline.

In other words, a lower number moving into the pipeline could be construed as better qualifying.

Posted By Derrick Moe | Sales Techniques | | Comments(0)

Short background here is that Delta bought Northwest Airlines and now I am in the process of switching my frequent flyer program to Delta.  Being a free miles junkie, I completed Delta’s online travel profile.  I thought it was simple background info/preferences for me.  At the end of the 15 questions I receive this information:

Speed Racer

Comfort Seeker

Opportunist

Grand Planner

YOU TRAVEL IN THE FAST LANE, WITH MAXIMUM EFFICIENCY.

As one of those rare, special people who gets things done quicker when there’s more to do, you prioritize your time to your advantage. You always find a way to be more efficient, and you never met an obstacle you couldn’t circumnavigate. With such a need to get things done, anything that keeps your runways clear for takeoff is a benefit indeed!

Your mantra is SAVE TIME, BE EFFICIENT, and BE PRODUCTIVE.

Good grief – even Delta is competition in the assessment business!  I appreciate their “Speed Racer” description.  I was expecting something along the lines of “spaz” since it would have been more accurate.

Posted By Derrick Moe | Anecdotes, Assessing | | Comments(0)

That is a tough question since I think values are primarily hardwired into each of us.  We assess this trait in sales candidates – call them motivations.  Each person tends to have two of these motivators that drives their behaviors (some people have 3 primary motivators).

We have assessed salespeople who were in slumps, who were unemployed and who were candidates.  These are stressful situations that should impact their values.  When we had the opportunity to assess the same people at a later date (years later), we did not see an appreciable change in their values/motivations.  Granted, this was no scientific study, but rather a consistent observation.

BusinessWeek.com provides this article – Value-Based Motivation – that discusses how values change in a recession.

One thing that makes motivation particularly difficult to manage is that individuals differ significantly in what they value and events can change what they value. What is very rewarding for some individuals, say, a day of golf with the boss or even an all-expenses-paid vacation trip to Hawaii, may not be seen as a reward by others. The same thing goes for praise by the boss and most forms of recognition.

Recessions can have a significant impact on what people value. Not surprisingly, job security, and financial rewards tend to become more important in periods of recession. It is particularly important that organizations skillfully manage these two drivers of employee motivation during recessions. How they manage them needs to be fine-tuned to the business strategy and how a company is affected by the recession.

Interesting point in that recessions have a global impression – the recession is outside of my control so my motivations are influenced towards monetary and security rewards.  That seems like a logical assumption…perhaps a macro-level influence like a global recession can sway motivations.

As a manager, it is important to know what motivates your salespeople and what rewards them on an individual basis.  This point is valid no matter what the economy is or isn’t doing.  These two factors provide the beginning of a roadmap to gaining the most production out of your sales team.

If you haven’t discovered these motivators in your current team, may I suggest a test assessment?

Posted By Derrick Moe | Assessing, Sales Management, Team Management | | Comments(1)