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Sales Performance

Distributed in

Contributors

In association with

STEPHEN ARMSTRONG Contributor to The Sunday Times, London Evening Standard, Monocle, Wallpaper and GQ, he is also an occasional broadcaster on BBC Radio 4 and Radio 2.

NICK DE CENT Business journalist and editor, he has been covering sales performance issues in print for more than 25 years and also online.

IAIN DAVIES Former consultant with Accenture, Dr Davies lectures, consults and researches in sales and key account management at the University of Bath.

DAN MATTHEWS Journalist and author of The New Rules of Business, he writes for newspapers, magazines and websites on a wide range of business issues.

Distributed at Publisher Will Brookes

Editor Nick de Cent

Design The Surgery

Managing Editor Peter Archer

Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 3428 5230 or email info@raconteurmedia.co.uk Raconteur Media is a leading European publisher of special interest content and research. It covers a wide range of topics, including business, finance, sustainability, lifestyle and the arts. Its special reports are exclusively published within The Times, The Sunday Times and The Week. www.raconteurmedia.co.uk The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media

PAUL MYLES Editor of Sales Initiative Magazine, he has more than 30 years’ experience working on national newspapers in news and features.

100k

Sales is set to sit at the top table

average earnings for top salespeople Source: Towers Watson

67%

of UK corporate sales managers have aboveaverage potential Source: SalesAssessment.com

60k top earnings in telesales

Source: Towers Watson

Selling is on the threshold of finally being taken seriously as a legitimate profession, writes Nick de Cent

ȖȖ Multi-billion-dollar fines for misselling by pharmaceutical companies, fortunes lost by irresponsible traders in the City, attempts at market manipulation by banks and corporate bribery allegations – on the face of it professional selling’s recent track record doesn’t look good. However, could sales be about to emerge from the dark ages? Selling has always had something of a split personality, with its public image tarnished – particularly in the business-to-consumer (B2C) world – by sharp practices and customer exploitation. Yet in the business-to-business (B2B) sector, the picture has traditionally been different: one where the best salespeople are seen as providing a valuable service. Selling now stands at a crossroads. There are signs it may finally be about to gain a place at the top table. After all, sales performance

is all about delivering sustainable revenue. In the current post-credit crunch economic hangover, where mergers and acquisitions activity has dwindled, one of the few ways forward for a board of directors is to grow a company organically and that almost invariably means devising an effective sales strategy. Professor Neil Rackham, well known for pioneering research into high-value sales, sees the current period both as a renaissance for the sales profession and a period of unprecedented change. According to the Harvard Business Review, professional selling today is more about assessing multiple customer needs and motivations, analysing and forecasting market trends, using sophisticated automation tools and developing value-driven solutions in partnership with clients. Sales is no longer about schmoozing the customer and sticking your foot in the door or even providing basic information about your company and products

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OVERVIEW

because buyers are already one step ahead, thanks to the internet. As the body of knowledge about sales performance grows, it provides new opportunities for a whole spectrum of commercial, professional and academic organisations. Sales courses are proliferating in the United States and there are also signs of academic green shoots in the UK. In addition to the longer standing Institute of Sales and Marketing Management (ISMM), the industry has also recently seen the emergence of a new professional body for sales leaders, the

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Increasing professionalism in sales is being recognised at board level

Sales Leadership Alliance (SLA). Meanwhile, technology is expanding beyond the familiar, but not always fertile, ground of customer relationship management (CRM), offering the ability to manage talent and compensation strategy more effectively, to provide development exactly when and where it’s needed, and to help sales professionals interact online. We’re also seeing a blurring of traditional boundaries, most obviously between sales and marketing where there has been a lot of debate around breaking down the barriers between the two revenue-generating functions. To a certain extent this is also happening between salespeople and buyers. Perhaps most surprising of all is the notion that salespeople can these days teach buyers a thing or two. At the very top strategic level of selling that’s what happens on a routine basis: the high-achieving salespeople regularly identify and communicate issues that board

rooms didn’t even realise they had, and then find solutions to them. This is all part of an increasing professionalism in sales that will see less-capable exponents shaken out of the market as “vanilla” transactional sales continue to be automated online. Companies will increasingly invest in fewer, higher-capability salespeople adept at operating at the highest levels of business. Describing this new relationship between buyers and salespeople, Professor Rackham says: “A few years ago, if I eavesdropped on a conversation, I could tell who was selling and who was buying. Now, I’m not so sure: it’s more like listening to two high-level business equals sitting down together.” This fast-changing climate is ushering in a new-found purpose for professional selling – one that seeks to “optimise the boundary between two corporations in a way that creates new value”, as Professor Rackham would put it.

03


Sales Performance

‘Males’ and ‘sarketing’ mergers may sometimes make sense Sales Salesand andmarketing marketingare arenot notalways alwayscomfortable comfortablebedfellows, bedfellows, but butthere thereisisaagrowing growingclamour clamourfor forthe thetwo twodisciplines disciplinesto tobe be thought thoughtof ofas asone, one,as asDan DanMatthews Matthewsreports reports NEW ALLIANCES

ȖȖ Opinions differ on the exact date when marketing emerged as a stand-alone discipline, but it’s safe to say that not too long ago everything to do with convincing a customer to buy a product was lumped together under the banner of “sales”. Fast forward to the present and there’s a growing body of opinion that suggests the fragmentation of the sales process, with splinter groups of marketing and advertising, was a mistake that organisations should reverse if they want to optimise the sales process. The Chartered Institute of Marketing believes that the notion of sales and marketing as separate entities has about ten years to live, and while it allows this will require a “radical shift in thinking”, it claims there is much to recommend the merger. Sales, marketing, advertising, procurement, HR and finance are tribal entities in the workplace. Dividing lines are clear. There is mutual suspicion, even disdain for each other’s work and periods of interdepartmental co-operation are brief and regularly unsuccessful. So surely an effort to bring everyone together would be a good thing. Businesses that can find the right ingredients for combining – or at least fostering greater co-operation between – the disciplines stand to gain from increased efficiency, better communication and a joined up business where everyone can see the customer journey from beginning to end. “Businesses that align their sales and marketing departments will

04

72% of high-performing sales managers think their work processes are efficient

63% spread their time evenly across the sales team

14% more time spent by high-performing sales managers on selling

Source: Towers Watson

reap many awards,” explains Peter Weston, senior vice president, strategy and content at Strategy to Revenue. “A joined-up approach enhances the overall customer experience, ensuring you are easy to do business with.” Stephen Maher, chief executive of marketing agency MBA, says: “There would be no internal fights to mediate, no unsatisfied customers sold a product that does not deliver the promise and no sales people left to fend for themselves without a clear view of the vision they are selling. Ultimately you get more profitable customers.”

A joined-up approach enhances the overall customer experience, ensuring you are easy to do business with

Continuing with sales and marketing as an example, many argue that fusing them is even easier and more desirable in some organisations than others. In some cases they are essentially the same thing; it’s just that the first sells one-to-one and the second sells one-to-many. “I always think of sales and marketing as flip sides of the same coin,” says Angus Maciver, chief executive of McCurrach Financial Services. “In general, marketing can include product and proposition development as well as communication to large audiences, whereas sales functions tend to deal with selling and commercial propositions on a one-to-one or one-to-a-few basis.” He says they are more similar – and therefore easier to combine – in organisations with a handful of clients than those with millions. “Where marketing is focused on mass communications and proposition development as in consumer goods companies, with a full advertising, media, social

and promotional agenda, the skill sets and responsibilities are too different to operate well as one function,” he says. Deva Rangarajan, associate professor of sales and marketing at Belgium’s Vlerick Business School agrees that certain organisations will benefit more from an attempt to merge sales and marketing than others, but warns that such a move is fraught with pitfalls regardless of the business’s shape. “In a perfect world sales and marketing should work together. However, this is almost never the

case. The relative importance of marketing, when compared to sales and vice versa, always varies depending on the nature of your organisation,” he says. “In almost all entrepreneurial firms and business-to-business firms, sales usually has an upper hand and do not like to relegate

sales unit becoming too large; you may start losing your sales focus. You don’t want your salespeople to start thinking about strategy rather than going through the mechanics of the sales process. It can be far too much of a distraction from the important business development tasks.”

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responsibility or budget to marketing. But in traditional consumeroriented goods companies, marketing has the upper hand. It is when marketing and sales have to work together, with a shared budget, that tensions usually start building up.” However, for some analysts, a merger is not only impractical but undesirable too. Clive Kahn, chief executive of CardSave, says sales and marketing should be working towards the same goals without having to combine them. He explains: “If you merge the two departments, you risk the

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Sales Performance

Focus on real value

The problem stems from the differing outlook of the two disciplines: sales is seen as a profit centre; marketing a cost centre. Salespeople are focused on quick and easy-to-see results, while marketing professionals often concentrate on a longer game with less tangible goals. The solution, according to Martin Lucas, founder of sales and marketing forum Phinkit.com, is a complete cultural shift from the top to the bottom of your organisation. “If you don’t understand the issue correctly then merging them will make little difference,” he says. “It will be seen as an empty gesture; you need to make alignment changes throughout the roles, not

just change the reporting structure for the head positions. “It’s about who’s instigating the change and what is driving them. The person in charge holds the key to it all. I’ve seen exactly the same ideas implemented by two different people, one works due to charisma and presence, the other failed due to endlessly talking in clichés and corporate nonsense.” Whether sales and marketing are about to become extinct and be replaced by “males” or “sarketing” remains to be seen. One thing is clear, though, and that is organisations must take a committed and structured approach to change or risk an almighty mess.

High-flyers in sales and marketing get best results through co-operation

Agents of change

Top-down service

Richard Kenny TSA Europe managing director

Chas Moloney Ricoh UK marketing director

Jo Causon Institute of Customer Service chief executive

Marketing is responsible for knowing who the most profitable customers are and what they value. They define the brand, and communicate and enforce this to clients, customers and employees, both existing and potential. Sales is responsible for seizing these opportunities and communicating how the solution delivers the value these customers desire. But it falls to HR, learning and development, and organisational development people to deliver the strategic skills that businesses need to attain this. Look at most successful firms and you will find great business-led HR where this function has been given the latitude to deliver the promise of its value. We need to be in a situation with strategic learning where we only focus on the vital few skills and expertise that deliver true value as opposed to the trivial many things that businesses currently spend a lot of money on.  Underperforming companies are indiscriminately busy – with a work work, chop chop, busy busy approach to development and sales. We need to be more focused on our outcomes and the only way to do this is to align what we do with what the customer experiences as value.

There has been much debate around the benefits of merging sales and marketing teams, but this shouldn’t simply be an opportunity to rebrand a department. Stronger internal collaboration is needed to break down traditional silos. We operate a long-term outlook instead of the traditional hire-andfire approach, creating a sales academy where marketing metrics support the sales team allowing employees to thrive.  Salespeople should have more autonomy to pick the best suppliers for the business, which they can assess against the criteria they are expected to meet when they pitch for contracts. With a unique understanding of securing value for money, it beggars belief that some businesses still exclude salespeople from the procurement process. Agents of change within any business, salespeople proactively drive through improvements and often go well beyond their remit to solve problems. In a challenging economic climate, sales teams are the lifeblood of the organisation and should be treated as such. Their role is evolving rapidly, especially in the high-tech industries where many act as knowledge workers and mini-consultants tailoring their approach to changing customer needs.

In this difficult economic environment, many senior managers are, understandably, focused on driving sales. Yet, at the same time, we have seen customers becoming far more discerning about the service they want to receive. To differentiate from the competition and attract customers, organisations must embed the notion of world-class customer service from the top down. Excellent customer service should no longer be seen as just another “add on”. It’s crucial in driving sales and needs a personal commitment from the chief executive to ensure that people, processes, systems, strategies and underpinning culture are all focused on real customer needs. What really matters to customers is that staff are good communicators and have strong people skills, demonstrating genuine understanding and an ability to treat them as individuals. Frontline sales staff should be given regular and consistent training focused on empowering them to make the right judgement and intelligent, on-the-spot decisions that will ensure customers feel they are being treated as a person and not a potential sale.

a ‘spill and fill’ on the sales force, firing non-performers and replacing them with new people who are really no different. And they will have invested in customer relationship management (CRM) and sales training that’s proving difficult to embed,” says Mr Thompson. “Yet, despite all this money and effort, the sales organisation is still struggling to deliver, targets continue to be missed, and businesses remain frustrated by inconsistent, unpredictable and, invariably, unprofitable sales performance.” In contrast, Baker Tilly’s RPM buyer-centric approach succeeds by focusing on three simple, yet fundamental, concepts: ȖȖ Defining the problems and needs a company is able to address for its customers; ȖȖ A ligning sales methods to the process or “journey” taken by

the buyers as they try to address those problems and needs; and ȖȖ Meaningful measurement, and the ability to scale and repeat sales activity across the organisation. “ Everything which follows – through our Revenue Performance Diagnostic, Revenue School and, ultimately, the implementation of a new process and revenue model – is based around the client’s buying journey,” Mr Thompson explains. “ Why i s th i s so i m p o r t a nt ? Because seven years of researching thousands of organisations and 75 actual client engagements has taught us that that the customer’s ‘buying journey’ must inform the selling process, to ensure the seller is doing the right thing at the right time in the right way. This then becomes the basis for an end-to-end revenue process.” Does it work? It’s not often you hear hard-bitten sales directors and

seen-it-all-before chief executives raving about a revenue enhancement programme. Masao Fujita, chief executive, NTT, comments: “My objective when we began this project was to build a sales organisation worthy of the name NTT. With the help from RPM, I believe we are now moving towards achieving that.… It really helped us dodge a bullet.”

Commercial Feature

Achieve double-digit revenue growth - just change three things “Typically, every client we’ve started working with has already been on a long and frustrating journey.” So says Scott Thompson, head of revenue performance management at business advisers Baker Tilly. “And who wouldn’t be frustrated with all that waste and inefficiency – 97 per cent of sales leads don’t convert. It’s little wonder that so many sales organisations are nowhere near as effective as they could be.” Launched in response to business leaders’ growing sense of frustration at their inability to deliver sustainable top-line growth, Revenue Performance Management (RPM) methodology has helped organisations improve revenue performance by an

average of 23 per cent in the seven years since its inception, attracting clients across a variety of sectors. “By the time we start working with a client, they’ll already have appointed at least one new sales director and perhaps a sales manager or two. They’ll have conducted

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Scott Thompson, head of revenue performance management

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To find out more about RPM, please contact Scott Thompson, head of revenue performance management, Baker Tilly on +44 (0) 20 3201 8264 scott.thompson@bakertilly.co.uk

05


Sales Performance

Is it talent, skill or something else?

29%

CULTURE

ȖȖ Traditionally sales managers are wary of structured approaches to recruiting and developing talent within their organisations. Commercial people like to think they have impeccable instinct and can identify killer sales acumen in new recruits just by looking at them. Thirty years ago, suggesting to a senior salesman (because they were mostly men in those days) that he should consider evaluating staff in a way that went beyond his powers of observation would be tantamount to calling him a sissy. Today things are different, and companies spend a great deal of time and energy thinking how they can foster a culture of sales excellence in their workforce. They bring in consultants, consider the best practice of leading firms and install training programmes to create the mythical “culture of success”. But what exactly does that mean? Is it a team of highly motivated salespeople who think about nothing other than closing the deal? Or should modern salespeople contribute more to the business’s brand? “From a sales perspective, a culture of success is when you reach a point where a customer is so satisfied by your product or service that he is more than happy to testify during events on your behalf,” says Alexandre Papillaud, EMEA (Europe, the Middle East and Africa) marketing operations manager, at software firm McAfee. This is certainly a desirable outcome, just like multiple repeat sales to lots of satisfied customers,

06

Recruit and manage salespeople well, provide the right tools and training, and soon rivals will be whispering jealously about your “culture of success”, writes Dan Matthews

word-of-mouth endorsements and soaring profits. But for Dr Pushka Jha, at Newcastle University, the culture of success starts with motivated employees. “Companies can create this kind of culture by giving employees a stake in its performance,” he says. “A culture grows from the bottomup, not top-down. If employees feel partly responsible and rewarded for outcomes, like a profit increase, then they will want to replicate this success again and again.” Such an approach will reflect well on your business, he says, especially if you can contain the rampant enthusiasm of incentivised staff and channel it to create a sales strategy that mimics the best parts of your brand. “The customer experience of your brand should remain consistent. Just like you'd expect to walk into a Starbucks in London, or in Leeds, and expect to receive the same service or treatment,” says Tom Quayle, business analyst at The Chemistry Group. “The people selling your product need to sell it in a way which represents the culture of the organisation; this is about the ‘fit’. So you need to get specific about the attributes that define high performance for salespeople and sales leaders.” An obvious place to start is recruitment, but really the first area of your business to consider is management. Hiring the best is one thing, training and guiding them, while maintaining a high

more UK salespeople are in a role they are not well-suited for

33%

EXIT

more UK solution salespeople should be considered for redeployment

25% fewer highperforming solution salespeople in UK than globally

Source: SalesAssessment.com, 2012

level of morale, is quite another. According to Karim Iskandar, international vice-president of sales at OneSource Information Services, managers must identify the key requirements of sales staff at different levels of seniority. “Our managers make sure salespeople are all engaged with our range of sales information solutions to help them assess and prioritise leads,” he says. “Middle managers are fundamental to engaging a sales team,” says Mr Quayle. “Sales is all about activity – you need to be motivated at work to keep making calls, in spite of no one picking up, to keep chasing the proposal that no one ever got back to you on. “Managers in sales departments are often guilty of promoting themselves and not focusing closely on the executives they are responsible for. Managers need to get to know salespeople, help them improve with feedback, provide new challenges and pat them on the back.” Top managers have a role to play too. Charismatic leaders (think the late Steve Jobs and Larry Ellison) have a great advantage in providing a kind of focused inspiration to sales employees who are often

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hungry for both encouragement and direction. “Sales performance is certainly at least partly the responsibility of top managers,” says Mr Papillaud. “The atmosphere within the company is very important and this comes from the management team. For example, are they able to stimulate teams and motivate them to go beyond their quota?” The structure of your manage-

ment hierarchy and individual approaches to leadership come first, only after which should you turn your attention to the recruitment and development of fresh talent. Here, like in the Eighties, gut instinct will play a role, but its power is diminished as other, more statistically proven, methods of gauging and developing talent have emerged. Variables, like whether the candidate understands the business, has researched the customer base or is asking the right questions are a good start. Then there are intelligence tests, psychometric questionnaires and behavioural or competency assessments, all of which contribute evidential “data points” towards answering the question who to hire and who not to. When it comes to training and development of new recruits, The

Chemistry Group’s Mr Quayle recommends preaching the path of “good content”. “Our data tells us this is a key differentiator in high-performing salespeople. They offer an opinion to their customers and tell them things they don't know. They use insight to break away from standard and boring ‘solution selling’ frameworks.” He recommends assessment based on input rather than outcomes: who is putting in the most calls and what kinds of conversations are being offered by sales staff, and are they talking to the right people? Good outcomes are driven by source activity, he says, so focus here. It helps too if your people have the right tools for the job. The internet in general and social media in particular can play a game-changing role. “The challenge for organisations is how to arm salespeople with the intelligence that can optimise their performance,” says Andrew Yates, chief executive of Artesian Solutions. “The explosion of new channels, such as internet forums, blogs and social networks, means salespeople have access to more information than ever before, and can obtain valuable insights into brand sentiment and customer preference. “However, in order to take advantage of the information available, businesses need to introduce software that can filter through the huge amount of social interactions available to uncover relevant information,” he says.

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Building an effective salesforce Pages 08 & 09


Sales Performance

Commercial Feature

Casting light on ‘the dark art’ Many organisations are reluctant to adopt the same approach and make an investment in sales performance as they do in other critical functions. The results of this neglect can be catastrophic, says Richard Kenny, managing director of TSA Europe

There is a critical weakness in many organisations holistic attitude towards the sales directorate and sales performance. On corporate boards there is often a lack of knowledge or experience of the discipline. This is often due to director composition and a tendency to view sales as an unpredictable dark art. As a result, many fail to apply the same level of rigour to this vital part of the business as they would to production or operations. It is often viewed in the short term, which results in the failure to develop effective, longterm sales performance management strategies. There are several consequences of this: the business becomes overly reliant on the knowledge and experience of one individual,

the sales director or equivalent; and there is a growing acceptance of mediocrity driven by a view that sales performance cannot be improved, and that high performing salespeople and management will inevitably come and go. Alongside this and, on the advice of the sales directorate, boards are willing to invest in the latest panacea in a desperate bid to improve performance, lurching from one restructure to another and pinning all their hopes on the latest methodology or sales training. Organisations need to develop a structured approach to sales performance in exactly the same way that they would look at Lean Manufacturing, Six Sigma or Overall Equipment Effectiveness (OEE) and with the

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same time horizons. This planning should encompass all aspects of the revenue cycle. That isn’t to say all challenges need to be addressed immediately – often tackling the biggest 20 per cent of the issues can generate 80 per cent of the potential value – but taking the time to step back and evaluate the entire business model is the first step on the route to delivering higher sales performance. A continued focus on revenue is appropriate. But these figures are an output and a function of sales performance management, and so more attention must be applied to the inputs within this critical directorate. It is at this point, organisations can look to augment skills and individual performance. Over the last few years it became clear that most companies weren’t ready for a financial crisis in sales. They had people who were used to selling in a fat market and as Warren Buffett commented: “It is only when the tide goes out that you realise who is swimming naked.” Companies need to evaluate how they measure individual sales performance at all stages of the sales cycle. Most will tell you sales performance follows a normal distribution curve, with a few top and poor performers and a majority of average ones. The reality is that in most organisations there are a smaller number of excellent performers and the remaining performance alarmingly follows a power law (Paretian) distribution (Figure 1). In many cases efforts to change this distribution through education

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or new methodologies becomes an unruly affair with no structured “learning path” or end goal. This results in investment in the “trivial many” as opposed to the “vital few”. For many organisations following this trend, the sales directorates will become “indiscriminately busy” and then start to significantly underperform and fail to hit fiscal targets. At TSA Europe, our approach is to conduct a deep diagnostic of how organisations are structured and performing, at all points in the revenue cycle, examining their offerings, markets, systems and methodologies, processes, and – critically – the frontline sales staff and the people who manage them. Our recommendations are straightforward, achievable, cost- effective and candid. We help organisations understand the basic psychology of purchase. Clients buying a solution will make what they see as the best choice available to them at that time. Therefore if a client does not buy from your organisation, you have not given them the best choice, because the right questions were not asked and the right information not obtained to allow you

Figure 1

to shape your offer – simple really. Organisations we work with see a considerable increase in performance. For example, one business we started working with 24 months ago went through a six-month transformation of the entire operation. We re-engineered its methodologies and its route to market, then refocused the salesforce, not just on end-results, but on activity at every stage in the sales cycle. The organisation has just completed its first full financial trading year since the project and has returned to profitability for the first time in five years. Sales performance management remains a significant boardroom challenge and, with the economic horizon still murky, there has never been a more pertinent time to review your whole approach, and put in place a long-term structure that will platform your business to respond to market upturn. Sales is not a dark art, but a function that boards need to focus on and invest in, if they expect to get the returns they want. Richard Kenny can be contacted at rkenny@tsaeurope.co.uk

A normal distribution A Paretian distribution

07


Sales Performance

Building an effective salesforce is key to business success

Raconteur survey

Salesforce recruitment an Headline findings

In a special Raconteur survey, Dr Iain A. Davies of the University of Bath uncovers the practices of UK companies in the vastly under-researched areas of sourcing, selecting and retaining sales professionals

43%

67%

of respondents report a significant lack of suitable candidates in the market

of the UK companies surveyed are preparing to grow their salesforce in the next year

RACONTEUR SURVEY

ȖȖ Recruitment expenses are typically predicted to cost approximately half an annual salary per new salesperson. When training costs are added, this could amount to tens of thousands of pounds per employee. Yet according to a sales director for a £350-million company, who was one of 444 respondents to a Raconteur study on sales hiring practices: “Getting a good sales person is far harder than getting a new customer… It is by far and away the most important aspect of my job.” Recruiting the right person into a sales role has a critical impact on the overall success of a business. Conversely getting the wrong person can have disastrous effects. It is statistically proven that hiring the wrong person not only reduces revenue potential and profitability, but causes dissatisfaction throughout the rest of the workforce and increases staff turnover. However, even when the best people are recruited, evidence suggests it is these top-performing employees who will be most prone to move on to greener pastures. In the Raconteur report, Building an Effective Salesforce 2012, Dr Iain Davies, with foreword and commentary by Professor Lynette Ryals of Cranfield School of Management, reveals insightful new research. Due to its commercial sensitivity, there has been little publically available data on sales hiring practices and it is this lack of reliable information that drives us to explore such a business-critical area. What we uncover is fundamental reading for all sale managers and directors. Let’s start with some good news. Some 67 per cent of the UK companies studied are preparing to grow their salesforce in the next year. After a few slow years, most sectors, except energy, mining and utilities, and automotive, are expecting to grow their salesforce

08

by 10 per cent or more in the next 12 months, with an average growth of 21 per cent. However, with 43 per cent of respondents already identifying a significant lack of suitable candidates and a further 30 per cent struggling to acquire the services of the best candidates, good quality salespeople are already thin on the ground. So how are companies trying to attract new people into sales careers? The most popular and also most effective means of gaining new high-quality salespeople is through personal recommendation. In fact the interpersonal approaches of personal recommendation, internal waiting lists and people met through networking events are perceived as first, second and third most effective at gaining good applicants. Whereas print media social networks, such as LinkedIn and online job boards, are considered the least effective means of sourcing candidates, despite their broad popularity. Unlike closely associated jobs, such as marketing, sales jobs are unpopular with new graduates. We therefore see a relatively low level of usage of graduate job fairs or recruitment networking events. In the current economic climate this is perhaps disappointing with nearly 19 per cent of graduates unemployed and a further 36 per cent in low-skill jobs, according to The Graduates in the Labour Market 2012 report published by the Office for National

Statistics (ONS). This means there is a wide selection pool of young, intelligent and enthusiastic people out there eager to start out on a new career, but they are not choosing sales. Part of this is a complete misunderstanding of what a sales role is in a modern company. Students still have outmoded perceptions of sales based on the media’s preoccupation with a 1950s used car

55% of companies say university graduates do not have the relevant skills for customer-facing roles

Sales technology and the human touch

25%

70%

of companies have undertaken training in selection methodology

feel their companies do not train the salesforce sufficiently

Page 12

salesman stereotype of uneducated ne’er do wells, rather than the modern project managing team leader. In their minds sales is Derrick Trotter (Only Fools and Horses) and Old Gill (The Simpsons), not marketing’s Don Draper (Mad Men). Yet for those of us with an eye for sales – Mad Men tells us more about selling than marketing. Project teams, building relationships, listening to customers, understanding points of pain, creating a solid value proposition, objection handling, building trust – this is sales. Even if this stereotype could be changed, 55 per cent of companies believe graduates are not leaving university with the relevant skills to move directly into customerfacing roles. This is further complicated by the 70 per cent that feel their companies do not train the

The most popular and also most effective means of gaining new high-quality salespeople is through personal recommendation raconteuronthetimes.co.uk

Effectiveness of selection methods Ranking by method Descriptive interview ("describe and event in your past where…") Biodata (CV, application form and references, etc)

Cognitive ability tests

6th

2nd Structured interviews

7th

Situational/ 3rd hypothetical interviews

8th

Unstructured interview

4th Sales competency tests

9th

Experience

5th Psychometric tests

10th

Age

1st

salesforce sufficiently; therefore leaving the companies reliant on candidates walking through the door readymade and the selection panel choosing the “right” person, first time – every time. How companies select the “right” candidate is therefore critical. The one area of sales hiring which has received a high standard of academic inquiry is the effectiveness of selection procedures on predicting overall sales performance. The survey graphic shows a summary of the

measured effectiveness of differing selection methods on sales performance from industrial psychology. We identify four distinct approaches used by companies to select sales employees. It is particularly noticeable that overall confidence in selection procedures is significantly higher in the two groups of companies that do testing against those that do not. However, our sample companies perceive competency interviews and hypothetical (case

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Sales Performance

nd retention among 232 UK companies Reason for growing salesforce Launched business/ business line

M&A organic growth

Expanding into new territory

Organic growth

Methods of sourcing for sales roles Growing demand for existing products/ services

Expanding into new products/ services

56%

Advertising on online job boards Advertising in print

24% 45%

Social media

91%

78%

Source: Building an Effective Salesforce 2012, Raconteur

74%

70%

Personal/staff recommendations Internal waiting list Graduate job fairs

34%

Recruitment networking event

9%

73% 18% 10% 8%

Recruitment agencies Other(s)

Biggest challenge in hiring salespeople Lack of suitable candidates

Recruitment Attracting activites drain the best management time candidates

55% 10%

Companies' selection methods Accurately assessing talents and skills of Other candidates

95%

Previous employer checks

52%

Group exercises

34.6%

70%

Online background checks

24.2%

60%

Cognitive ability test

18.2% Bespoke, self-administered test

2.2%

2.2%

55%

Sales competency test

67% 65%

Psychometric test

Four broad approaches to recruitment Processors Traditionalists

Testers

Recorded candidate video

Exhaustibles

Confidence in approach

20%

35% 87%

Telephone interview

34% 24%

86%

Case study/candidate presentation

21%

Live video interview

Competency interview

44% 96%

Array of selection methods

studies) interviews as the most effective methods of selection, with cognitive ability testing considered the second least effective. Part of this perception could be the lack of companies engaging in cognitive ability testing (only 60 per cent of companies) or a lack of training in selection methodology (less than 25 per cent of companies). More likely is the urban myth that IQ is irrelevant to sales success. It is true that a candidate’s number of years in education

has about the same predictive power on sales success as someone’s handwriting. Schmidt and Hunter tested the predictive power of both graphology and years of education on sales success, and they were broadly similar – and irrelevant. But the ability to work under pressure, create solutions on the fly and handle objections are incredibly important capabilities in sales success, many of which are exposed under test conditions.

Once companies have selected their new salespeople, however, holding on to the best performers is not always easy. We actually find overall sales staff turnover rates to be much lower than expected at around 16 per cent. They are slightly elevated compared to the UK average for all job types of 14.3 per cent, but dramatically lower than the 22.5 per cent seen in the 1990s. There is a propensity for better performers to be the most likely to move

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on and, unfortunately, there does not appear to be any easy solution to keeping them, with increased compensation being rarely effective once someone has decided to move on. Measures can be taken to prevent people from wanting to move on such as providing stronger leadership, advancing peoples careers more quickly, offering more/better training and better work-life balance. But there is an overarching perception within sales companies that

employee churn is not a negative thing. Although high sales staff turnover is perceived a significant barrier to improved revenue performance, it is not something managers are worried about. It’s part of the job. The complete 40-page analysis of this study is available for purchase at £719+VAT; please email research@raconteurmedia.co.uk or call us on 020 3428 5230

09


Sales Performance

‘Doing well, but could do better’ In the global sales performance league, how well are Britain’s salespeople positioned to compete? Nick de Cent reports

France

Germany

India

How UK sales managers compare

Malaysia

Netherlands

Spain

Thailand

UK

91% 86%

76%

76% 53%

50%

67%

44%

Percentage of sales managers who are above the global average measured in performance potential Source: SalesAssessment.com, 2012

APPRAISAL

ȖȖ If there’s anything guaranteed to warm the heart of a salesperson, it is talk of higher revenue, more deals won and larger salaries. So it’s perhaps unsurprising to hear William Mills, vice president, global strategic sales engagements at international IT services giant Atos, enthusing about doubling his base salary and quadrupling his total earnings over the past four economically troubled years. Possibly more surprising is his keenness to attribute this recent success to a pioneering in-company Master’s degree programme, especially when you consider how little the worlds of sales and academia have tended to overlap down the years. Mr Mills, 54, is clear about the impact of the Middlesex Universityaccredited programme at his former company, HP. “It introduced a new era of thinking around the value of the customer and how you approach the customer,” he says. The evidence was plain to see in a direct comparison between the old and new approaches: the 12 team members who applied the new thinking closed deals worth $4.8 billion with a win rate of 73 per cent; the eight who didn’t, closed $430 million with a substantially lower success ratio of 25 per cent. Mike Hurley, 51, who used to run the HP team, is now vice-president at Logica, where he heads up five strategic sales teams winning deals valued at €100 million plus. He admits the degree programme was “almost a point of epiphany”. He adds: “It enhanced me as a professional considerably. It accelerated me from a director into a V-P role.” Money, status and career pro-

10

gression are clearly big motivators for most ambitious salespeople. Ron Burke, director, sales effectiveness and rewards, at global talent management consultancy Towers Watson, highlights the substantial jump in pay between entry-level salespeople and “experts”. In the UK, salespeople who make it to the top can expect to earn 288 per cent more in terms of salary and cash incentives compared with their most junior colleagues. So how can British salespeople reach the heady heights of the top earners and help lift the performance of UK plc? Towers Watson says one major issue is the variation in quality of sales managers responsible for managing, coaching and motivating them. Andrew Dugdale, president of salesassessment.com agrees: “Sales managers play an extremely important role. Unfortunately, internal benchmarking of talent within an organisation does not give you a clear view of where you sit in the great scheme of things. Here in the UK our report would probably say ‘pretty good but could try harder’.” Educationally, there is no question that the UK sales profession’s report card would currently read “patchy”. Phil Squire, chief executive of Consalia and the man behind the aforementioned HP programme, conducted in-depth interviews with C-suite executives when devising his approach. Some 80 per cent of bosses said that less than 10 per cent of salespeople met their expectations. One clear way of boosting performance is for individuals and

employers to take a far more active interest in sales education, as opposed to sales training, which is still the norm in the sector. There are signs that the business world is paying increasing attention to the need for sales education, led by the United States, where the number of university sales programmes increased from 45 in 2007 to 101 in 2011. In a recent Harvard Business Review article, DePaul University claimed academic study offers distinct advantages compared with the sales training industry: students develop a broad understanding of all the functional areas of business; they are exposed to multiple techniques, not just the one favoured by a particular sales training vendor; and their knowledge is engrained over many months rather than just a few days. In the UK, we are lagging behind: you can almost count the number of university sales courses on the fingers of one hand. A pioneer has been Portsmouth Business School, where Beth Rogers heads up the MA Sales Management programme. Contrasting academic study with training, she says: “The main advantage is a focus on developing thinking, creative, analytical and reflective skills. It’s about criti-

£101 k top UK sales pay

£68 k seasoned salesperson’s pay

quing what we’ve got, research and experimenting in application – can we up our game even more?” There are signs of development lower down the educational ladder, too, with a trail-blazing sixth form programme at Cranbrook School in Kent , launched in partnership with sales training company Silent Edge. The series of voluntary workshops, which began last month, was quickly oversubscribed with students keen to learn key communications and

life skills, which will stand them in good stead, irrespective of whether they choose a career in sales. Silent Edge chief executive Russell Ward explains the rationale behind the programme: “Sales is a lifetime skill, and an understanding of the theory and practice of selling could prove highly useful to students upon leaving education,” he says.

£42.5

k

experienced salesperson’s pay

£35 k junior salesperson’s pay

Source: Towers Watson General Industry Compensation Database, 2011

Top UK salespeople can expect to earn 288 per cent more than junior colleagues raconteuronthetimes.co.uk

A career in sales Unlike many people who simply “fall into selling”, Dom West has made a conscious effort to seek out a sales career. “It was something I thought I might be quite good at,” he says. “I like chatting, get on well with people and it seemed like the right sort of career path for me.” The 22-year-old University of East Anglia economics graduate has been working for the past few weeks as a recruitment consultant for Hydrogen Group, which specialises in placing technical candidates within the IT sector. Before making his decision, Dom talked to school friends about sales, some of whom liked the role and others who had dropped out. He then set about finding a solid

foundation for his chosen career. After a rigorous assessment, he was accepted by graduate recruitment and development specialist Turnstone Sales. Dom says he has already recommended sales to his friends, although he cautions that it’s “not suited for all types of people, obviously”. He also warns job seekers to choose their prospective employer carefully: in some cases, salespeople’s reputation for bending the truth is justified. “It’s not the case here; it differs from company to company,” he says. Dom sums up the qualities he feels will help him reach the top: “You need to be relatively competitive, confident, good on the phone and a good team player.”

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Sales Performance

Social media and the salesforce: problem or panacea? New research from The Chartered Institute of Marketing and the Sales Leadership Alliance explores the impact and value of social technologies on the

Impact of social media and technology on the salesforce Social media is becoming increasingly important for… 61%

Communication, collaboration and knowledge management within our salesforce

32%

Customer/client retention and relationship development

47%

Lead generation, business development and prospecting

64%

Developing market/customer insight and stimulating innovation

salesforce, writes Thomas Brown

ȖȖ Times are tough. The financial crisis of 2008-09 has evolved into a prolonged period of economic turbulence rather than, as many by now would have hoped, fading to a distant memory. These continuing global economic problems are compounded by political instability, rising raw material costs, an uncertain future for the eurozone and concerning unemployment figures across the Continent. Business leaders face unprecedented challenges to growth and, at the forefront of these, is the perennial tension to deliver improved performance with less resource to fuel it. Once a rallying cry, “doing more with less” has become a permanent feature in the business vernacular. It’s no longer a recession response, but the norm – a new mantra guiding planning and budgeting discussions for many. Adding a further twist to these macro pressures, technology has become the new “megatrend” of the last ten to fifteen years. Over this period, both form and function have advanced almost unrecognisably. Computing power has continued its rapid growth trajectory while cost, exclusivity and complexity have fallen – both for consumers (think iPhone) and businesses (think softwareas-a-service). And central to this megatrend sits a new phenomenon – social media. It is these factors combined that led The Chartered Institute of Marketing and the Sales Leadership Alliance to focus the 2012 Sales Benchmark on the impact of technology and social media on the salesforce. Most discussions about social media focus on platforms, such as Facebook, Twitter and LinkedIn,

whereas the true meaning runs far deeper. Fundamentally, social media represents a new construct for how people connect, communicate and collaborate, and it is with this definition that the business value truly lies – and opportunities to “do more with less” reside. An early review of results from our 2012 Sales Benchmark reveals increasing recognition of this potential among senior sales leaders: 61 per cent of respondents believe that social media is playing an increasingly important role in communication, collaboration and knowledge management within their salesforce; and 64 per cent agree that it is becoming an increasingly important tool for developing market/customer insight and stimulating innovation. Despite this strong acknowledgement of potential, however, a gap emerges: only 16 per cent of the same audience strongly agree that their sales processes, supporting tools and technology are optimal for business needs; and only 7 per cent of sales leaders had embraced social media in sales several years ago, embedded it into processes, and seen a positive and measurable return. Scope, we therefore conclude, to extract significant value. Some years ago, before laptops, tablets and mobile phones were considered standard equipment for an external sales team, the idea of their introduction was met with scepticism. Accusations of unproven benefits, added costs, potential vulnerabilities (such as client information/data) and the risk of distraction were levied at those proposing their use. Today, in much the same way, many are sceptical about how something so widely considered a consumer novelty can have any real value in a commercial context. Indeed, 60 per cent of our seniorlevel respondents agree that, without proper attention and management, social media risks becoming a distraction for their salesforce. But this risk can’t simply be ignored; the same number (60 per cent) of respondents agreed that social media is already permeating their business and, if they don’t harness these tools, their salespeople will use them anyway. To put concerned minds at ease, it’s essential that the introduction of social tools extends beyond the technology, and is supported by a change in sales processes and behaviours. For instance, a global

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SOCIAL TECHNOLOGY

Thomas Brown is head of insights at The Chartered Institute of Marketing

What's driving investment in social technologies?

11%

63%

Pace: we need to speed up communication with and among our salesforce

60%

Pervasiveness: social media is already permeating our business; if we don’t harness it, our salespeople will use it anyway

33%

Precedent: social media is being leveraged for similar purposes elsewhere within the business with positive results

41%

Budget: social media offers a lower-cost method of communicating with and among the salesforce

26%

Peers: other organisations like us are doing this, which suggests we ought to be also

7%

Pressure: senior leaders are pushing for greater engagement with social media

Talent: we have a talent engagement and retention problem in the salesforce which this can help improve

Leaders' perspectives on social media and sales 15%

Our efforts to leverage social media for internal communication and collaboration among our salesforce are advanced and highly effective

19%

Our senior leadership fully understand the value of social media as a communication and collaboration tool for our salesforce

48%

Social media tools offer significant value in fostering stronger communication and collaboration among our salesforce

60%

Without proper attention and management, social media risks becoming a distraction for our salesforce

19%

The competitive nature of our sales organisation is a significant barrier to exploiting social media for collaboration and internal communication

Source: CIM/SLA

drinks brand recently introduced Salesforce.com’s Chatter tool to its UK salesforce. Rather than stop at the introduction of the technology, they communicated a clear purpose: accelerate reporting, remove time spent on administrative tasks and improve “good practice” sharing. They then took this a step further by replacing a series of legacy processes with faster, “real time” equivalents enabled by the Chatter tool. For the salesforce, this moved the focus from the “new shiny gadget” they’d been equipped with, to an improvement in productivity and gave them clear, new processes to work to. It is essential to ensure that clear links are made between the proposed change in operating practice and its impact on business performance – a point at which the innate measurability of a sales

operation can be advantageous. For instance, our survey reveals that 63 per cent of senior sales leaders agree speeding up communication with and among their salesforce is a key priority, and one which can be readily translated into meaningful and measurable financial aims and benefits. For example, if a 500-person external salesforce are spending on average 20 per cent of their time completing and submitting activity reports with an average three-day lag from customer visit to submitted report, a sales leader can extrapolate: (a) the time cost of administrative activity; and (b) the opportunity cost of acting on a customer opportunity (or resolving a problem) faster. This then provides the basis for a simple, yet compelling, cost-benefit analysis in terms more likely to resonate with a

Many are sceptical about how a consumer novelty can have any real value in a commercial context twitter.com/raconteurmedia

finance director than a request for the new technology alone. One final consideration, however, is senior management buy-in. While early results from the 2012 Sales Benchmark point to a growing interest in social technologies for sales on the part of sales leaders themselves, commitment and understanding from broader senior executives remains luke warm: only 19 per cent of senior sales leaders agree that senior leadership fully understand the value of social media as a communication and collaboration tool for their sales force. “Getting the board on board”, while perhaps a somewhat trite expression, consistently arises as an essential factor of success in any change initiative. Educating senior stakeholders about the commercial potential of social technology and making the case for change may be a wise first step.

The survey for the 2012 Sales Benchmark is still in progress but can be completed later – full results will be published in late2012 – at www.global-benchmark.com/salesbenchmark

11


Sales Performance

People buy from people – not from computers The economic crash elevated technology to top priority for sales teams seeking success, as Stephen Armstrong reports

TECHNOLOGY

ȖȖ Willy Loman’s school of salesmanship teaches that “the man who makes an appearance in the business world, the man who creates personal interest, is the man who gets ahead. Be liked and you will never want”. Loman, Arthur Miller’s ill-fated salesman, trawled New England with a shoe shine and a smile, and the only technology he had to face was a tape recorder with his boss’s grandson gurgling. Today’s Willie Loman faces racks of iPads and smartphones, software that monitors his calls and his diary, and in-house social networks where he shares his contacts with the rest of the team. “There’s always been a big debate about selling – is it an art or a science?” says Sean Farrington, UK managing director of QlikTech. “These days it’s definitely becoming more and more scientific. Every

ness sales teams, and sharing their information and activity. This is important: “Some 83 per cent of sales managers got their job because they were good at selling,” explains Russell Ward, chief executive of Silent Edge. “They don’t have HR training. Technology allows them to be better team managers – spotting who needs help, who’s performing well, where the weaknesses are and how to deal with them.” It took the arrival of the 2008 financial crisis for technology to really replace the shoe shine as the key ingredient of a successful sales cycle, according to Richard Kenny, managing director of TSA Europe. “That’s when everyone had to get smarter in the way they bought and sold – and had to work out the true value of each customer.” Perhaps unsurprisingly, this sort of attention has shown up basic CRM’s weakness; it’s great at measuring what’s already happened, it’s not so good at helping people sell

Share and discuss online at theraconteur.co.uk good sales department has CRM [customer relationship management] software, which is basically adding science to the art. The question is what else have you got?” CRM software has been around in one form or another for almost 30 years. Originally known as database marketing, it’s essentially a tool for digitising and sharing as many aspects of the old school sales role as programmers can replicate, from appointments diaries to contacts books to customer loyalty rewards to leads and tips. At the hard end, it’s known as sales force automation, responsible for anything from computerised cold calls to in-house social networks knitting together business-to-busi-

12

better. “The best sales people are the ones who seek out information about customers to build a better relationship and understand what they’re going to need. The clues are out there, but finding them is a time-consuming process,” says Andrew Yates, chief executive of Artesian, a cloud-based CRM service that monitors the web and social media for sales triggers. “The info you can get from traditional business information providers is quite staid, often out of date and not useful in identifying critical points. The information is out there – blogs, social networks, thousands of newspapers… if you get that right, you can give the customer the experience of shopping

in their local family butcher where they know what you like and are eager to help.” Over on America’s West Coast, some companies are using technology to rethink the most fundamental part of selling – the commission. A study involving Goodyear Tires’ sales team, by researchers at Massachusetts Institute of Technology (MIT), shows that cold hard cash rewards tend to deliver less impressive sales performance than other rewards, from tangible incentives, like a beach holiday, to paid time working on areas of personal interest. John Whitehead, solutions manager at CallidusCloud, a cloudbased software company, argues that technology provides the solution through a process he calls “gamification of sales”. “Gamification, with its reliance on points, badges, leader boards and rewards, appeals to human desires for fun, competition, interaction and achievement,” he explains. November sees the company launch MySalesGame, which sets “levels” and “missions” in a company’s CRM software, such as sales staff adopting best practice, reaching milestones and hitting targets. Those finishing a mission or a level should get rewards from peer recognition on social collaboration platforms or dinner with the chief executive. CRM software giant Salesforce. com is taking this one step further and using technology to identify and reward socially influential staff members for their popularity. Salesforce’s internal social networking hub, Chatter, reviews how “influential” all staff are by tabulating how often and how usefully fellow employees respond to items posted on the network. To reward and learn from homegrown mavins, chief executive Marc Benioff invites the company's top 20 to the annual retreat

Will salespeople be replaced by emotional robots?

he hosts offsite for executives. If this sounds a little like an electronic Big Brother monitoring every key stroke, you shouldn’t worry, soothes Ofer Guetta, IBM’s social collaboration leader. “Social doesn’t replace human contact – it enhances it,” he says. “Think of all the replicated hours spent working on presentations, sending different reps to different departments of the same company, helping new employees

These days selling is definitely becoming more and more scientific

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find their feet and become useful, and researching leads or contacts only to find that information is lost when a top exec takes a new job with a rival.” The company’s own software, IBM Connect, even allows clients into areas of the inhouse network to share thoughts on new products. Which is something Willy Loman could have done with. The poor guy wore himself out driving store-to-store across the whole of New England. These days, he could work out what the big stores need before he sets out. He’ll still need to set out though. “At the end of the day, people buy from people,” Mr Ward, of Silent Edge, concludes. “No computer will ever replace the pleasure of a handshake sealing the deal.”

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Sales Performance

Glasses that can read emotions in a sales pitch SCIENCE

ȖȖ Just how involved in the selling process can technology get? Isaac Asimov’s Multivac and Douglas Adams’ Deep Thought were science-fiction visions of super computers with immense reasoning powers, set to answer the fundamental questions of life. To date, that’s remained the stuff of sci-fi – IBM’s Deep Blue beat Gerry Kasparov at chess in 1997 and, in 2011, Blue’s successor Watson took on and beat the two most successful players of the US TV quiz show Jeopardy. Watson is now used by US hospital chain Wellpoint to help diagnose patients and IBM is developing an equivalent for lawyers. IBM believes sales teams are a logical next step. Richard Kenny, managing director of TSA Europe, isn’t so sure. “Sales is about emotion,” he explains. “No matter how much data a computer can crunch, it’s going to struggle to respond to a

customer’s mood or spot those tiny signals on the face that a good salesperson gets instinctively. You need tech that can pick up the signs of lying, guilt and anger.” Researchers at the Massachusetts Institute of Technology's (MIT) Media Lab are making small steps along that route. They’re developing software that can read the feelings behind human facial expressions – originally designed to investigate autism. The software tracks 22 points around the mouth, eyes and nose, and notes the texture, colour, shape and movement of facial features. It can tell the difference between happiness and sadness, boredom and interest, disgust and contempt. A commercial version, called Affdex, is now being used to test adverts – developed by a company attached

In a fast-moving technological world, science fiction is fast becoming science fact, as Stephen Armstrong discovers

to MIT called Affectiva. Affectiva is taking this one step further with goggles that can read emotions – again, designed to assist autism sufferers. The sales industry is already excited at the idea of glasses that can read human emotion and tip a sales executive off about their customer’s mood midway through a pitch. Elsewhere the Kismet robot – the so-called emotional robot, also from MIT – can “feel” anger, disgust, fear, joy, sorrow, surprise, boredom, interest and calm. These emotional states can make the robot behave in certain ways – feeling fear can make it try to get away. According to futurologist Ian Pearson, Enhanced Reality will be along in the next ten years. “It’s a chip and laser combination that beams information directly into

With telepathy chips fitted into the brain, sales staff could download client information mid-conversation

a consumer’s eye – so looking at the high street and wanting a shoe shop might mean that all the shoe shops stand out in bright colours, while everything else is murky. Shops can use this for marketing so you might see shoes dancing on the pavement,” he says. Mr Pearson predicts Enhanced Reality booths cropping up – small 3D showrooms with a treadmill on the floor that allows you to walk around IKEA- sized emporia without actually stepping more than two feet. Meanwhile with telepathy chips already in production – chips fitted into the brain that can link to a computer over a wi-fi connection – sales staff could download client information mid-conversation, send follow up e-mails just by thinking about them and even complete financial transactions. Accelerated chip speeds will mean the negotiation can take place in cyberspace in the fraction of a second, so there’s no need for all that pointless small talk. Unless, of course, you actually enjoy a chat.

Find out more www.mercer.com/salesperformance/Times

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13


Sales Performance

It’s not what you do, it’s the way that you do it The Thebest bestway wayofofselling, selling,especially especiallyininananeconomic economic slump, slump,isissomething somethingsales salesdirectors directorsdo donot notalways always agree agreeon, on,writes writesPaul PaulMyles Myles SALES MODELS

ȖȖ Since the economic fall-out following 2008, the company executives’ list of buzz words has included “sales model”, a clearly defined process or methodology to boost the effectiveness of a salesforce’s penetration of the market. Finding out which model being used by business is the best and most effective is anything but objective, with vested interests within the sales recruitment, training and coaching agencies aligning themselves with different solutions. First of the modern approaches currently in use is Professor Neil

Business titles, such as SPIN Selling and The Challenger Sale, have influenced sales models

You need to probe the client to understand the pains which are causing their perceived needs

Rackham’s SPIN® model, from the UK research psychologist’s 1980s best-selling business title SPIN Selling, where he outlines the sales process of turning a perceived implied need for a product or service into an imperative need using a formula of four types of questions. His sales training company, Huthwaite International, boast an impressive list of top multinational clients, including Dell, Fujitsu, Motorola, Standard Life and UPS. His company claims SPIN® has produced a 13 per cent increase in gross profit, a 15 per cent increase in turnover during two years posttraining and a 63 per cent increase in new client acquisitions. Thomas Anjou, head of the Academy of Sales and Marketing at

Swedish telecoms giant Ericsson, says he chose the SPIN® model after considering up to 30 different alternatives, adding: “This was the best one that was research-based. Most of the others were experience-based, which, to us, was not as appealing.” The global economic slowdown has pushed business thinking towards refining processes still further and the next “step forward” gaining momentum is the US’s CEB model outlined in its tome. The initial findings from a study of more than 700 stakeholders identified five types of salespeople, but only one, “the Challenger”, was consistently effective in the face of a nervous market. CEB client, energy and utility company Cameron, saw record bookings in its Surface Sys-

tems Division for the third quarter of 2011 rise 28 per cent against the previous year. In the UK, Raj Jobanputra, capabilities manager of sales and marketing for BP, says he is about to apply the Challenger model to his sales teams to help the company’s products stand out from its competitors. “What Challenger can do is actually enhance how we articulate our offer by basing it on a really good piece of insight. So we’re looking at cases where our key customers see value of beyond just us providing a product or service,” he says. In its study of successful sales behaviours, UK training specialist Silent Edge observed 800 sales professionals in live sales meetings and discovered that three

distinctive types, accounting for 37 per cent of the study group, were consistently effective despite the economic challenges. Silent Edge claims sales boosts, including 450 per cent business growth in six months for a Cable & Wireless team lifting sales from £750,000 to £4 million, and a 20 per cent hike across 160 sales people working at MBNA’s Irish call centre. “You need to probe the client to understand the pains which are causing their perceived needs,” says chief executive Russell Ward. “Then build your value propositions which must state clear return on investment and have associated anecdotes which articulate taking the pain away.” But not all the theory makers in the sales industry are sold on sales models and methodology. Richard Kenny, managing director of the human performance management consultants TSA Europe, which lists Babcock Communications among clients, believes the lack of sales knowledge on UK boards of directors is forcing sales directors to seek a quick-fix by jumping on the latest gimmick available to buy-in as a “cure-all”. “What happens is, the poor old sales director is getting bashed over the head and what he then does is look for the panacea, such as a sales model, training or coaching,” he says.

Commercial Feature

Identifying the next generation of sales professionals – the graduate factor Immediate results and sustained long-term growth are two of the major benefits clients can expect when they partner with graduate sales recruitment and training specialists Turnstone Sales. The company works with clients to transform their sales performance, by identifying excellent graduates with the core competencies required to make an immediate impact on their sales performance. The benefit of this approach is that it avoids the traditionally high costs associated with “experienced” salespeople and simultaneously delivers a high return, thanks to the drive and high motivation exemplified by the best graduates. “Our approach ensures clients don’t waste recruitment fees, sal-

14

ary and, most importantly, time,” says managing director Nick Christian. “We know that identifying the right graduate is only half the challenge; you have to ensure they possess the skills and knowledge to excel in their sales role and, ultimately, have an immediate impact on productivity and the overall sales performance of our clients.” How does it work? Graduates attend a challenging assessment centre where they take part in a series of group and individual exercises, which gives them the platform to show they have the key competencies to excel in a sales career. If successful, the graduates are then placed with a client, where

92% of Turnstone graduates impact organisations so quickly that they pay for themselves within their first 15 weeks of employment

they go on to participate in a structured sales training programme. This is modular and flexible to suit the individual client and the actual requirements of the role the graduate is undertaking; just as importantly, it is delivered at a pace which matches the salesperson’s natural progression in their role. Staff retention Retention has always been a thorny issue for sales organisations, with employers understandably keen to minimise staff turnover. “The staff retention we have achieved is something we are extremely proud of: 95 per cent of all graduates recruited are still with the businesses where we placed them. We believe this is as a direct result of effective recruitment and the investment in talent our training provides,” says Mr Christian.

level of service provided has made the whole process effortless.”

What the clients say “At CSL DualCom, we appreciate the value that bright, enthusiastic individuals can add to our business. Turnstone has played a vital role in enabling us to find eager team players we believe will help to drive our company forward. Not only have Turnstone Sales assisted us in finding topquality graduates with the relevant skills and personalities, but the

The graduate’s view The Turnstone process also works well for candidates. One recent history graduate, who found a role with an events business, has this to say: “Turnstone helped me secure my ideal position. Having gone through what I would describe as a pretty tough assessment process, competing against equally impressive candidates, I was successfully shortlisted and given the opportunity to interview with high-profile companies.” She adds: “Without the help and continuous support from Turnstone, I would have found securing a role a lot harder. Once I started

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in my role, I received sales training that allowed me to progress quicker and outperform colleagues who started six months before me.” Mr Christian is confident of Turnstone’s approach to graduate sales recruitment. He concludes: “I believe we are ideally placed to deliver the next generation of salespeople. Backed by our sales training, I am confident they will go on to become star performers and tomorrow’s leaders.”

For further information please contact Nick Christian, managing director, Turnstone Sales on 020 7288 6670 nick@turnstone-sales.com

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Sales Performance

So you think you understand ‘sales’? Neil Rackham, visiting professor at the Cranfield School of Management and Portsmouth Business School, questions some “truths” about selling

An authority on sales and marketing, three of Neil Rackham's books have been in the New York Times best-seller list Analysis

Which of these statements is true? Selling is about persuasion.  The job of salespeople is to show customers how and why their products and services are better than those of their competitors.  The best salespeople are extraverts who are outgoing and enjoy interacting with people.  If you watch a sales call it’s easy to tell who is selling and who is buying. Salespeople are born, not made. The answer, in the year of Our Lord 2012, is that none of these five statements is true. And yet, at various times in the last 50 years,

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every one of them has been true and widely accepted. It’s a measure of how sales has changed that yesterday’s truths have become outdated and a burden on our thinking. Take “salespeople are born not made”. In the days before we had validated sales models, effective sales training

We recognise that most people can learn the skills and strategies that today’s selling requires

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and decent sales process, all the evidence suggested that people couldn’t learn to sell. Now that we know how to develop competent salespeople, we recognise that most people can learn the skills and strategies that today’s selling requires. And how about the image of sellers as outgoing and extravert? In the 1950s, one study showed that 92 per cent of salespeople were above average in terms of extraversion. In those days we thought this meant that you needed to be an extravert in order to sell, so recruiters looked for extraverts. We now know that this was a stereotype – a self-fulfilling prophesy. Many of the world’s

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best salespeople, at least in highlevel sales, are introverts. Those ideas have been discredited for a while. Now let’s look at some myths that still have wide currency. Perhaps the most pernicious is that selling is about persuasion. It may have been at one time; it certainly isn’t today. When I’m recruiting salespeople, I look for creativity, business understanding and listening skills. What has changed is the customer. Armed with more information, today’s customers neither want nor need to be persuaded. They expect salespeople to create value through problem-solving and expertise. They look for business equals who are able to hold an objective conversation.

That’s why I notice a curious change when I’m watching sales calls. Ten years ago I could tell in seconds who was selling and who was buying. Today I can’t. What I’m seeing today isn’t classic “product” or even “solution” selling. It’s a business discussion where buying and selling roles are blurred. Salespeople who see their role as showing customers why their products are better than those of their competitors are failing everywhere. Why? Partly it’s because of increasing competition and decreasing differentiation, so your mousetrap really isn’t much different from theirs. Partly it’s because customers already know all about your offering.

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delivering results delivering results Sales leaders need to accelerate, optimize, and deliver profitable results to their organization. It is more than a sprint as you can’t just be successful one quarter. A sales leader needs to juggle corporate expectations, field morale and results, customers, competitors and their own sales reputations as leaders. So with such a tight budget and such high expectations, how can you best determine where to focus your attention to gain the highest results when everything is mission critical? This is more than a sales leader challenge - the leaders of every organization need to be armed with the knowledge to ask the right questions in real time. They need to position themselves and their organization to take advantage of the tipping point to launch success.

At OpenSymmetry, We Get It…

• Sales Process Assessment Analysis of the existing sales process, people, and tools and their effectiveness in achieving company revenue goals. • Sales Optimization Defining the process, people and tools required to meet and exceed current and future revenue goals. • Sales Accountability Formulating key metrics, tracking systems and reporting tools to evaluate individual and team performance. • Sales / Change Management Implementation of optimization strategies; review and refinement over time to ensure continued effectiveness. • Sales Operations Implementation / Outsourcing Running compensation programs can be a real headache, and you’d probably rather focus your energy on other things. OpenSymmetry provides full services outsourcing solutions to meet your business requirement so you can focus on your business mission.

Challenges, pains and constantly changing market dynamics. We help companies transform Sales Performance Management into actionable results.

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Raconteur - Sales Performance 03.10.12