Author: Niklas Lagerblad

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Why does my boss wants me to sell 10 times my own salary?

This discussion often comes up in our cost of sales workshops, and I believe it is good for any manager or director to have a simple and straight forward answer to the question. There are many obvious and hidden costs to consider, and by being transparent with your team about where the money goes, you will save yourself potential problems. 

 


 

Let us take the Software example: You are working for a great start up B2B SaaS company, the team is great, you believe in both the company and the idea, but  … they ask you to sell for a million, but your on-taget-pay is less than 100k. How can this be, seriously??

 

Most recent software companies don’t have California-style financing up front, you are in Europe. This means that somehow your company need to be profitable or close to profitable EBIT wise. What is your reasonable quota?

 

Cash is king. two different cases:

 

    • Software have very high grown margins, but cash comes in slow nowadays with subscription and pay-as-you-go schemes.

 

    • Traditional things, machinery etc are paid up front or at least in conjunction with the delivery, but, the internal margins after paying internal transfer – costs of goods are much lower. 

 


 

The software case

 

Back to software –  In the old days, software sales used to book sales during the same year: product/license money came up front, and training, services and installation services were invoiced during the first year. Additionally there used to be an annual fee to stay on maintenance, support and new versions etc. (20%-25% of the initial licence fee normally)

 

Now, subscription softare – SaaS, has completely changed the game plan. What used to be a 100.000 € deal, with annual maintenance of 20.000€ has now become a 3-4.000€ monthly subscription. Over time this is great, but the company needs the money now!!

 

To comlipcate the matter, in many companies, the sales department only sees the first year of revenue after signing. Next year your customer will be handled by the customer retention or “customer success” team.

 

Since your company have no external funding for the moment, what is the reasonable quota, or sales target you should carry?  Lets look at the cost of sales and the money we can expect initially. 

 

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Profitable companies cover costs

 

A rule of thumb for any SaaS company who seeks profitability, is

 

New (first year ARR) sales, should at least cover this years customer acquisition cost (CAC) with new sales (new ARR > Cost of Sales, CAC).

This means for the company any new customer must be paid for already during the first year contract (from signing). Otherwise, the company will need external financing to cover while waiting for the second and future years payments. If first year contracts cover CoS, the company can grow with limited external financing, and not be restrained by a systematic cash flow problem for its growth.  

Think about it:

 

For any new sales, you are using company resources that your activity need on a deal.. such as techsales, new features development, management and admin. (Customer services and support are handling your recurring revenue, coming years, so here both cost and future revenue is excluded), 

 

Without going into any great detail on what may the case in your company, it will probably be a good rule of thumb to think that – If you sell for about 4-5 times the average sales employee total cost to the company, you are all right.

 

The real cost of any employee is around 1,5 – 2 time the salary, this way including social security fees, indirect taxes, the office space you use up, medical insurance, meal tickets etc.

 

Example

 

As an example, if your salary is 60kEUR, your total cost is around 100kEUR, and the reasonable quota is 450kEUR-600kEUR . If your salary is 100kEUR, you should not be surprised if your quota is 800-1.000kEUR. Why?

 

Why is 4-5 times your cost, (or 10 times your salary) a good rule of thumb?

 

  • One is to cover your own cost to the company
  • One is to cover other direct new sales costs, Presales activities, free Consultancy, proofs of concept, development adaptations etc
  • One is to cover other overhead and indirect sales costs, your sales director, your marketing personnel, a part of admin, all more or less involved in new sales. 
  • Between One and Two is to ensure some margin, because during the year one or more of your colleagues will not make their quotas, they may leave, the market was not good in their territory etc. 

Needless to say, this is a very coarse estimate and way to think about quotas. In the companies I have worked I made sense for me and my team, under the circumstances I described above. If the market is bouyant, and your company is very agressive in marketing, for example, then your quota could and should be significantly higher. If the company is spending wast amounts of marketing, you job gets a lot easier, but at the same time the money you need sell to cover for the marketing team will increase.

 


 

For industrial products? 

 

The same reasoning, but here we think that the total cost of sales plus any extras  must be covered by the internal product margins, the contribution margin from your unit. 

 

Example 

 

You sell industrial equipment that is produced elsewhere. The cost when delivered to your warehouse is 65% of List Price, leaving you with 35% to pay for your teaming cost of sales. 

 

Let us assume that the sales effort is the same, one salary for you, one for Presales and other sales support, and one for management overhead and office etc. Add one for internal margin. 

Your pay is 60k€/year – or total cost 100k€ per person. That makes 300k€, plus internal extra of 1-200k€.  Total cost/internal margins from factory =  400k€/0,35 = quota of 1.143k€

The pure cost is 300k€, so if you sell for less than 300k€/0,35 = 857k€ your local unit will present losses! 

 

Focus! The dilemma of Prospecting or Growing Customers

Balancing act: Prospecting or Growing Customers

 

Finding the balance between prospecting for new customers and growing your existing customer base can be difficult. On one hand, you need to bring in new business to keep your company moving forward. On the other hand, you don’t want to sacrifice the customers you already have in order to do so. So how do you find the balance?

 

 

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Photo by Pixabay on Pexels

 

In this blog post, we’ll take a look at the benefits of prospecting and how it can help you grow your business. We’ll also explore some ways to find the balance between prospecting and growing your customer base without sacrificing one for the other.

 

Prospecting is about survival.

Prospecting is an essential part of any sales process, and there are many benefits to doing it effectively. Perhaps the most obvious benefit is that prospecting is needed to find you new customers and grow your business.

Even in a perfect world, we know that a small part of your customers will move away from you every year. Of course, this could be because of problems on your side, (then you are wise to fix those), but more often it is due to circumstances completely out of your reach, factories moving to other continents, rotation of contacts in the account, customers mergers or some even go out of business. 

Over time, we must always be at least replacing the churn, the customer that leaves. For every account that leaves you must acquire at least one new one. If you want to replace the revenue from the lost account, you need more new accounts to compensate.  

 

Prospecting keeps your ears to the ground

There are other benefits as well, such as:

  1. It helps you understand your target market better. By talking to potential customers and getting their feedback, you can learn a lot about who your target market is, what they want, and how best to reach them.
  2. It helps you improve your sales skills. The more you practice your sales pitch and learn to handle objections, the better you’ll get at selling.
  3. It keeps you motivated. The act of prospecting itself can be motivating since it’s a way of taking action towards your goal of growing your business. And when you do make a sale, it’s even more motivating!
  4. It builds relationships. Even if a particular prospect doesn’t become a customer, the relationship you build with them during the process can be valuable in its own right. Who knows, they may refer someone else to you down the line!

 

The cost of prospecting vs growing customers

How much effort does it take to sell for a million to prospects, compared to selling the same million to large repeat customers that have been with us for years? 

Let’s compare 3 scenarios, prospecting, growing an existing account, and maintaining sales in a fully penetrated account

  • Prospecting is by far the most time-consuming process among the sales processes. First, for the successful prospects that become customers, the sales cycle is longer than for well-known accounts. Secondly, for every successful prospect sale, you will have spent time on 10 -20 suspect calls with other companies, 5- 10 initial meetings, 3-4 second meetings, and a few proposals – all with those prospects that didn’t end up buying. 
  • Growing an account means that they buy something new, that the didn’t buy yesterday, either cross-selling new solutions or upselling advanced features or more seats. It can also be expanding to new departments, projects and sites, so that is also something new to somebody (to us) new. 
  • Maintaining your sales with your best customers is often considered by salespeople to be the top priority. After all, that is where the money is at! This is, however, the easiest bit, since all the hard work was already done previously so to say. And this is where salespeople add the least value. 

So how should I balance time between these? Is it even possible? A simple rule of thumb can be helpful here. Prospecting is 5-15 times more time-consuming than selling the same to the “maintain” or keep customers in the example above. 

 

The problem with the “maintain” customer is that there is no more room for growth. We can not grow, or compensate for churn, by hoping that these super-good customers will buy more from us. 

 

Growing customers require more work, but we have a working business relationship, so the cycle to introduce new things here is shorter. The hitrates are also higher than what we expect in Prospecting sales projects. This means that we can expect 2-4 times more time needed to 

 

Qualification is key 

The first thing to keep in mind is that not every prospect is a good fit for your business. It’s important to qualify prospects upfront so that you’re not wasting time pursuing leads that aren’t going to convert. There are a few key questions you can ask to help you qualify a prospect:

  • What need does this product or service address?
  • Is this need urgent?
  • Does the prospect have a budget allocated for this purchase?
  • What is the decision-making process for this type of purchase?
  • Who else is involved in the decision?

Asking these questions will help you determine whether or not a lead is worth pursuing. If they don’t meet all of the criteria, it may be best to move on.

 

How to Grow Existing Customers Without sacrificing Prospecting.

There are a few key ways to grow your existing customer base without sacrificing prospecting:

  1. Offer additional products or services to existing customers – upselling and cross-selling are great ways to do this.
  2. Get involved in referral programs – word-of-mouth marketing is still one of the most powerful forms of marketing there is.
  3. Run targeted campaigns – create targeted content and campaigns specifically for your existing customers to get them to refer friends or family members.

 

Time to balance

When you’re trying to balance prospecting with growing your customer base, time management is key. You need to make sure that you’re spending enough time on each activity, without letting one suffer at the expense of the other.

 

Tips for Time Management for Prospecting

 

Here are a few tips for managing your time when prospecting:

  • Set aside a specific amount of time each day or week for prospecting. This will help you stay focused and ensure that you’re making progress. As a rule of thumb, think 8-10 times the time for each new customer you acquire. 
  • It’s hard work to get 10 no’s for each yes, only for a meeting. Make it fun through competitions and group calling exercises. 
  • Use a CRM system to track your prospects and customers. This will help you keep organized and prioritize your time accordingly.
  • Take advantage of automation where possible. There are many tools available that can automate repetitive tasks, freeing up your time for more important activities.

 

 

Tips for Time Management for Growing Existing Customers

Similarly, when you’re trying to grow your customer base, effective time management is essential. You need to make sure that you’re spending enough time on activities that will directly impact your bottom line, without neglecting other important areas of your business.

 

Here are a few tips for managing your time when growing your customer base:

  • Invest in customer relationship management (CRM) software. This will help you keep track of your customers’ data and interactions, so you can better understand their needs and how best to serve them.
  • Segment your customers according to buying behaviour or other criteria. This will allow you to focus your attention on those who are most likely to grow your business or have the highest lifetime value.
  • Give attention to customer surveys to detect attitudes among your growth-accounts, focus on selling to those with good feedback from stakeholders, and work to improve the perception of the others 
  • Give less priority to accounts that already buy all they can from you. This may sound contradictory to many –  where most of your current money comes from, is where your sales team adds the least value. Go for an excellent customer experience here instead, and let other teams create this. 
  • Create targeted marketing campaigns based on smart customer segmentation. This will ensure that you’re using your resources efficiently and reaching those who are most likely to respond positively to your message.
  • Use data from past campaigns to inform your future marketing efforts. This will help you fine-tune your strategies and better allocate your time and resources.

 

Conclusion

 

If you’re like most business owners, you understand the importance of both prospecting and growing your customer base. However, finding the balance between the two can be difficult. Too much focus on prospecting can result in losing customers, while too much focus on existing customers can prevent you from acquiring new ones.

 

The key is to strike a balance between the two. Prospect without losing customers, and grow existing customers without sacrificing prospecting. By doing so, you’ll ensure that your business continues to thrive.

Leadership will get you really far, but only management knows where to…

A couple of weeks ago, I was asked the question about Leaders and Managers, and what you should be. The answer is both. In management models, they live side by side and must work together. Our 6 pillars of Sales Management is no exception, the 3 cornerstones of Sales Management are Management – Leadership – Development in our model.

 

 

 

 

Leader or Manager? Both!

Management and Leadership are necessary and complementary. In his 1990 Harvard Business Review article “What Leaders Really Do,” John P. Potter argues that management and leadership are both crucial for the success of executives as they advance in their careers.

 

 

The myth of the born leader

One of the most prevalent misconceptions in the business world today is that there is a competition between leadership and management, and that only leadership will take you where you want to go. Often leadership is thought to be all about charisma and vision – and that it is something you are born with and into. Leadership is different from management, but it’s not about having a certain personality or being chosen by a higher power.

 

Leadership skills are not there from birth, some personality traits may make it easier for you to develop them, but they can certainly be acquired, developed and fine-tuned by anyone!

 

It is true that many larger companies today have too much management and structures and often lack the space and energy to develop the right leadership. They need to develop their leadership skills by identifying people with potential and giving them opportunities to grow. However, it’s important to remember that strong leadership alone is not enough and needs to be balanced with strong management. Both leadership and management are necessary for success in business. A successful company needs both strong leadership and strong management to thrive.

 

Leadership is about dealing with change and being able to inspire and guide others to work towards a vision. Management, on the other hand, is about dealing with complexity and keeping the day-to-day operations running smoothly.

 

 

 

 

In essence:

 

 

 

Management skills, such as planning, organizing, and controlling, are essential for maintaining the day-to-day operations of a company. However, leadership skills, such as visioning, inspiring, and guiding, are necessary for creating and implementing a strategy that will take the company to the next level.

 

 

 

The leader vs Manager roles

The role of the leader is to provide direction and set the course for the organization, while the role of the manager is to ensure that the organization is running smoothly and efficiently.

The best leaders are those who can balance these two roles effectively, by being able to both lead and manage. Potter writes that “good leaders are good managers, but good managers are not necessarily good leaders.”

Daniel Coleman’s 2004 article “What Makes a Leader” also emphasizes the importance of both leadership and management skills for success in the business world.

 

 

 

Leadership is more needed than ever

Coleman notes that the role of the leader has become increasingly important in recent years as the business environment has become more competitive and more volatile. He states that leaders must be able to create a vision for the future and inspire others to work towards that vision. At the same time he emphasizes the importance of management skills, stating that managers must be able to plan, organize, and control the day-to-day operations of the organization, in order to ensure that it is running smoothly and efficiently.

 

What makes a leader?

The article identifies the traits and characteristics of successful leaders. He argues that effective leaders have a combination of:

  • emotional intelligence, EQ- self-awareness, self-control, motivation, empathy, and social skills, which allow leaders to connect with and inspire their employees.
  • cognitive intelligence, IQ – strategic thinking and problem-solving, which allow leaders to make effective decisions.
  • technical or subject expertise in their field – allows leaders to understand the industry and the challenges their company faces.

 

Learn from mistakes

Coleman also emphasizes the importance of adaptability and the ability to learn from failure in leadership. He states that leaders who are able to adapt to changing circumstances and learn from their mistakes are more likely to be successful.

 

 

Conclusion

Companies should actively seek out people with leadership potential, give them opportunities to grow and use both strong leadership and strong management to balance each other. As a matter of fact, there are multiple facets of management that needs continuous evaluation, development and perfection. Below you will find an image collection that points to the function of our 6 Pillars of Sales Management. Enjoy!

 

Tradeshows and conferences – 5 simple steps to double the effect

At certain times of the year, we find ourselves in a  “Trade fair season” in full bloom. After a few years of pandemic downturn to the event market, we are now back into meeting up at events again. Millions and again millions are invested in creating links between people and companies. 

 

The fact that trade fairs are still around when in theory you could do the same thing in virtual meetings and social media networking, proves that real live face to face meeting is still important and needed.   

 

5 steps to boost the return on invested time & money

 

If your company has decided to invest in your team going to a major trade fair, what should you do? As with any investment, your job is to maximise returns, go there and totally smash the audience and get the hottest prospects with you home as ever possible. Right? 

 

Events are very expensive, your company pays a lot to have you at the fair. But most of all, teh opportunity cost of having you away from your normal job and customers must pay off!

 

Here are 5 simple steps that can help you maximise your return: 

 

Set Objectives for yourselves 

Set some very concrete goals, think about what are your primary targets with the event. Are you there to canvas for new prospects? Are you there to meet up with existing prospects or are you there to deepen existing relationships? Maybe you are there to develop channel?

Write down your goals and communicate in your team. Use your sales meeting to align the team around the purpose and goal of the event

Rehearse effective responses

Go through and rehearse responses to some of the most common blockages. Make sure to write down a line that you can practice. Roleplaying is great to rehearse a standard answer that otherwise would feel awkward. 

Typical situations could be: 

  • The first opening line when someone gets close to the stand
  • The “elevator pitch” – answer to “what do you people do?“
  • Objection – figure out the most common objections and write down answers
  • Rehearse a short demo many times, make it look really smooth

Also rehearse how you interact and pass prospects between yourselves, sales to sales, sales to product specialist and back. 

Prepare contacts and meetings ahead

Prepare before the event. Ask your team to set off some time to go through the participants lists, see which potential customers are there, which of your existing customers are there, competitors, partners. Try to leverage the event to set meetings with people that otherwise would be difficult to meet. Don’t fill your calendar with meetings that are easy to get any time you like. Set targets and follow up with your team before the event. Who has the most high value meetings planned? 

Lead and support the team during the event

At the event, be present, coach and help, help your team do the right thing, and to get all encounters captured in short reports and notes to help you remember who was who after the event. Tactical tips:

  • Keep mobile phones away. Make it a rule. People who stand with their phones are not likely to make any targets, at least not at the fair. Potential prospects will not approach a booth while the reps are speaking on the phone or texting.  
  • Have prepared some tool or template that are easy to fill in and staple a business card to. Register everything!
  • Make little fun competitions out of the whole experience, on number of business cards or the number of letters of the titles of contacts or whatever. Have fun in the team. 

Follow up fast – turn into Opportunity

It cannot be stressed enough, take care of the leads within few days after the event. We are all exhausted after the event, but your leads and all those thrilling conversations start fading away from peoples memory very fast. You only have a few days before the probability to close something has fallen by at least half. Because you will be tired after the event, you may want to plan the following already before the event:

  • solid plan with assigned responsibilities for who should follow up which leads and how soon after. 
  • meeting the day after getting home to “kick off” the sales campaign on the new leads. If you do, plan this meeting already ahead of the event.

 

Conclusion

 

This is a very simple process, but as the manager of the team, your role and active leadership and coaching during the event is very important for the success of the team. There are many distractions, and leaders who leave it up to the team members to manage time and contacts by themselves are often surprised by how different people act, and many times come back home disappointed.

 

Don’t sell to those who can’t buy – Decision makers and stakeholders

Don’t sell to those who can’t buy

A golden rule and common wisdom says:

“do not sell to someone that cannot buy”. 

As one of our highly appreciated colleagues at IBM used to put it,

 

– There are a few people in the buying process that you need to say “yes,” everyone else involved can only say “no,” so go sell to the former, but make sure the latter likes you.

 

In complex B2B sales situations, when:

·        

    • you are selling at premium price,
    • implementation of your product implies major change or a transformation
    • implementation involves many users and stakeholders

.. in the customer, then it is adamant that the perceived benefits must outweigh the pain, i.e., the cost of the implementation.

 

Regardless of your price, the real perceived cost to say yes is high—much higher than your price. Therefore, we need to spend our time talking to the people who can appreciate the business benefits—those who can say yes.

 

The real cost of saying yes

 

When we are selling value, we solve business critical problems for the customer, and the customer appreciates the value of this. Often the solution is a combination of a product or technical solution, and a transformation project. This implies a change process that is far more costly than any product we could ever sell.  

 

Even if we gave the whole solution away for free, in Value Based situations, the customer may still refuse or stall the decision.

 

As we approach the purchase signature, concerns about the whole project rise. This is absolutely normal. Price is almost irrelevant at this point. Doubt and the perceived risk weigh over on the “reasons not to buy” side of the balance together with the internal cost of the change project, making your price a minor issue in comparison.

 

Never try to compensate risk and transformation concerns by lowering your price!

 

In the article about why pipeline deals slip and are delayed, we discuss what to do about this, but for the moment, we just need to understand who the key influencers and decision makers are, and that they are crucial to us to approve the project.

Otherwise, they can stop, scrap, or stall our deal at any time between now and the order. We have to make sure they don’t.

 

A major business decision is very rarely taken by one single person. If we want the customer (the company) to go ahead with the deal, we need to acknowledge this fact and make sure we know who is who in the company, and work to secure the deal in multiple fronts.

 

Decision makers and Influencers

Who should we look for?

Most companies within the same industry have similar internal structures (titles tend to vary much more between industries). This makes it a good idea to map out the typical decision chain and decision-making structures for the industry you are about to campaign or approach.  Describe the decision-making personas for the industry vertical, write them down, and then go search for them. This is helpful later when you create account plans for specific companies and put real names to the personas.

 

 

 

The influence circles

Some personas we often encounter and that you may want to start off with are listed below:

Decision maker – power sponsor

  • Has the ultimate YES/NO decision to make
  • Often merely a formal approval
  • Can go against recommendations of the team
  • Well protected and sometimes almost invisible

 

Things to consider

  • Qualify that the person is the true decision maker
  • If you can’t get direct access, what other players have the ear of this guy?

Influencer – expert

  • Sees things from a functional point of view
  • A filter in the process
  • Can say NO, but not really the YES we need

 

 

Things to consider

  • Engage influencer early in the process.
  • Is the offer presented in a way that the influencer understands and backs?
  • Do we know what their attitude towards us is?

 

The user

  • In general, very many of them in the company, professional roles.
  • They propel who will use our solution, and the support agreements that came with it. 
  • Influence decision making if asked, not always considered though. 

 

 

 

To consider

  • Reach out to at least a limited set of users and consult them.
  • Ask yourself what users will likely say about us if they are asked.
  • Consider the effort and return of engaging with them.

 

The Sponsor

  • A sponsor wants us to succeed, as this makes them look good within the organisation, or get the task done better.
  • Not necessarily in the leadership teams, can be outside the traditional contact surfaces, but should be influential enough.
  • A sponsor will support us informally with information, advice, etc.

 

To consider

  • Do you have a sponsor for the opportunity at hand? 
  • Is the sponsor powerful enough internally to drive the business forward?
  • Do we understand the sponsors pains and the benefit from our solution?

 

Beware: Just as you can find sponsors who back you, there can also be sponsors for our competitor with the same powers as the sponsor, but who will work against us – we call them anti-sponsors!

The Stakeholder map

Pains flow throughout the organisation

For both decision makers and important influencers, you need to understand the professional and/or personal motivators so that you can build an individual value-based argument for them. What keeps the these people awake at night? What would they be really enthusiastic about?

 

It is a good idea to think a little extra and try to map out the “who is who” in the company. To get you started, here are some examples – typical professional motivators associated with different roles. 

 

Some examples:

    • A CFO will have financial and cash flow considerations; he will listen to arguments focused on productivity gains, lower costs, less stocks, less CAPEX, payment terms, and subscription models.
    • The operations director will look at productivity, less risk for downtime, efficiency, less personnel rotation, job satisfaction, delivery precision, and quality.
    • A project manager will be interested in holding the deadlines, meeting requirements, strict budget control, etc.
    • Asking the right things to the right people is always important, and to do so we must understand them, who they are, and what they do and think. It is as easy as that.

 

If this is a big contract, spending time anchoring the decision with as many as we can from these people is absolutely key.

 

If the deal is smaller, perhaps we have to rely on our sponsors to do the internal selling. We have to use our common sense to judge the reasonable effort.

Example of how to use a simple stakeholder map, perhaps during your account planning

Trust is a must – Personal styles, DISC, and matching in sales

 

In other posts, we discuss sales techniques and methods on selling value. To sell value, and be able to charge extra for that value, the value must be fully perceived… felt.. by the customer. Whether we get across with our message or not is influenced by our styles, our behaviors in different situations, and how well we fit.  Sometimes this personal fit is simply referred to as the personal “chemistry” between people. Let’s have a look!

 

Trust – a must

 

When we meet new people, our brain reacts by asking two questions immediately and subconsciously. The first is about how we will communicate – considering openness, warmth, and trustworthiness, and the second is about competence and knowledge. “Is this someone I will get along with and trust?” and “Is this someone I can respect and understand?” Entering into a personal relationship with the person, the first always trumps the other. If we don’t feel we will get along with the person, the competence dimension becomes irrelevant.

 

In sales, it is generally the customer side that determines the level of trust that is needed in the relationship for the sale to take place.

 

To generate trust, we need to do the following:

  • Understand how others perceive and appreciate our behavior
  • Know how to read the behavioral style of our customer
  • Learn how to adjust our style to the customer

 

There are many models and tools that help us understand styles and behavior. But few are as simple and as well documented as the DISC model. The reason why the DISC model is so suitable to apply on sales is because DISC simplifies the reality and allows us to take quick decisions.

 

 

The DISC model

 

It is out of the scope for this manual to provide all the details of the model, but we encourage the reader to learn more about the theory and the tool to gain a good understanding of the personality styles and how to adapt our behaviours.

 

The DISC model dates all the way back to the 1930s and is based on William Moulton Marston’s findings and thinking. Although far from complete, it provides some basic insights into our ways and how it is likely that we react and behave in certain situations. It is one of the most used instruments, and while it does not really measure or evaluate personalities, it does describe basic human behaviors.

 

 

 

 

The DISC model identifies four different behaviour styles (D. I. S. and C). Too make the model simpler and more accessible, it uses individual color codes for each style, and tells us four different ways in which we usually react to a given situation.

 

D – DOMINANCE STYLE (RED) :

 

People with a dominant style in their base behavior will see themselves as strong in a non-friendly (e.g., professional) environment. This is why they tend to try to dominate the situation and the meeting. They are straight forward in their ways, not afraid to speak their mind, and find it easier than many to see how to overcome different obstacles. They are challenge driven and goal oriented. They are willing to change, but normally only if they think it can help them to get what they set their mind on. A dominant style person will perceive himself as powerful, energetic, innovative, goal oriented, and resolute. By others they are perceived as arrogant, pushy, aggressive, and insensitive.

 

I – INFLUENTIAL STYLE (YELLOW) :

 

Individuals with a strong influential style will see themselves as strong in a naturally friendly environment. In general, they feel they have nothing to fear from the environment and people around them. Therefore, they want discuss things, have others share their opinion, and try to influence them through friendly persuasion. Their primary goal in any situation is to be understood, accepted, and involved. A person with high yellow will see himself as convincing, confident, generous, inspiring, and open. By others, this person can be seen as selfish, superficial, egocentric, and unserious.

 

S – STEADY – STABLE STYLE (GREEN) :

 

People with a predominant stability style often see themselves as weaker than others, and when given the choice, they prefer to be in a friendly and conflict-free environment. They are concerned with not upsetting or changing this environment, and they want to preserve it to continue to feel safe and good about themselves. On the other hand, to change, they must first be convinced that they don’t risk losing anything at all. As a salesperson, this style is often perceived as a bit passive with difficulty getting to a close with the customer. A stability-style person will perceive themselves as loyal, a good-listener, encouraging, and calm. But at the same time, others can see them as stubborn and reluctant to change.

 

C – COMPLIANT STYLE (BLUE) :

 

A strong compliant-style person tends to think that their surroundings are generally hostile and thus they feel weaker. Because of this perceived weakness, they don’t exercise much influence. They tend to prefer working by themselves and take great care to fit into existing and predetermined structures and rules to reach their goals. To avoid risk and conflict, they will analyze each situation carefully before deciding to do anything that would change the given structure. A person with high blue will see him/herself as fact-seeking, knowledgeable, systematic, diplomatic, and reflective. On the other hand, this person can be perceived by others as pedantic, avoiding, indecisive, and reserved.

 

 

5 steps to run trainings that stick

Training – an effective tool for change

 

To be efficient and effective as sales managers, there are a number of things we need to learn and become good at ourselves. One of the 6 pillars of sales management is building and developing your team.

Every time we ask our teams to perform something that is new to them, we need to step into the develop and build area to develop the new skills and behaviors.  Sometimes you have the option to bring in professional trainers, but for most daily learning, you cannot bring in external resources.

In this article, you will find some hints and tips for how you can plan your own trainings for your teams.

 

5 steps to build a training that sticks

As you are not (and we assume you do not want to become) a full-time teacher/trainer, we advise you to use this knowledge to build only short, condensed, and interactive sessions, rather than full-day or multiday trainings.

Longer trainings are very complex to build and difficult to run. They require a rich set of competencies to achieve real learning in the team.

 

 

The 5 steps to remember when we are to build effective trainings are outlined below.

 

 

1.      ENSURE YOU KNOW THE SUBJECT

 

Gain a thorough understanding of the materials and the messages that you want to convey. You don’t need to be a black belt 5-star expert, but you need to know enough to convey the content in a credible manner and be able to answer basic questions around the subject.

 

 

2.       UNDERSTAND THE PROCESS OF LEARNING

 

There are many pedagogical models and methods available. One model that we have chosen in this context is called 4MAT. Dr. Bernice McCarthy (USA) developed the first basic structure of the 4MAT system in the late 1970s. Since then, the method has systematically and continuously been used, developed, and linked to the newest research in the field ( http://www.4mat.eu ).

 

Basically, the model stresses that people have different learning styles. This means that for ANY training we want to build, we need to accommodate for these different learning styles and build our training block so that all phases are included. Some people are focused on:

 

 

                • WHY? – “Once I understand why we need something, I’ll figure out the rest.”
                • WHAT? – Intellectually understand what is needed: “If you give me the book to read or present to me in a lecture, I will do it myself later.”
                • HOW? – Activity: “Ok, I got it, just let me try myself. Let’s see here…”
                • WHAT IF?-Finding and testing alternatives. “And why couldn’t we do it this other way?”

 

 

3. MASTER A WIDE VARIETY OF METHODS – AND LEARN WHEN TO USE THEM

 

Try to use a wide variety of techniques in your trainings. Vary your style so you can both lead the class and use more interactive methods.

 

Use the button to download our one-page quick guide.

 

 

One Page Quick Guide

4. A TRAINING SESSION HAS THREE PHASES – BEFORE, DURING AND AFTER – USE THEM

 

A common mistake is to only focus on the training session itself when we design the training. Especially since we want to build short, concentrated blocks, it will be extremely important to use before and after in a good way.

 

  1. BEFORE: Preparation by all involved
  2. DURING: A well-designed training session
  3. AFTER: Structured and active follow-up

 

As you can see in the picture below, a good way to plan your training sessions is to map the content and the technique blocks you are planning to use against a WHY?, WHAT?, HOW? And WHAT IF? timeline.

 

 

 

The preparatory tasks you send out lend themselves very well for the WHY? And to some extent WHAT?, so that you can spend more time in the classroom for WHAT? and HOW? After the session, it will be about putting the learning into practice, and therefore to the HOW? and experimenting with the WHAT IF? The experiences are ideally captured and shared in a separate follow-up session.

 

Plan the activities carefully and think through the steps, creating and writing what we call the Running Master, or Timing Plan.

 

It should contain:

  • Objective– Learning points
  • Preparations(for the teacher)
  • Before – Preparations for participant – timing/dates
  • During – Blocks, content and method/technique – timing minutes
  • After – How to put to practice and follow up.

 

 

5. MAKE WHAT YOU LEARN A PART OF DAILY WORK

Only 10% of the effect in a change effort comes from lectures, training, and reading.  20% can be attributed to tools, systems, and structure such as feedback supporting the training and the changed behaviour. Finally, 70% derives from on-the-job training and experiences.

 

 
En bild som visar text Automatiskt genererad beskrivning

 

Unless on-the-job training, experiences, and reinforcement of the tools and behaviours learnt are truly put into daily use, changed behaviours will not succeed.

If you are the manager of the team you hold the training for, you have a fantastic advantage compared to most teachers and trainers around. Most trainings fail due to lack of management support, follow-up, and integration of the matter into daily work. You, on the other hand, have all the cards in your hand to actually make it stick!

 

Athletes train activities and fine-tune behaviours, you should too!

 

Clear and challenging goals boost performance 

Studies show that by setting clear, challenging, meaningful, and agreed objectives for ourselves, our productivity increase 10-15 percent. When the goals are followed up with structured feedback methods, the positive effects are approximately doubled (!!)  (A little book on Goals, Christopher Svensson & Stefan Söderfjäll 2020).

 

Performance (Activity) and Learning objectives are not micro management

 

Setting and working with objectives on all levels is enormously effective and will almost certainly guarantee you a new boost to your growth. As the team’s manager, you need to become very good at using different types of objectives in combinations, often adapted to the capacities and experience of each individual.

 

Most companies we work with have sales targets for sales personnel in the form of quota letters, with or without financial rewards attached to them (bonuses). These are pure result goals, and the problem is that we cannot coach or improve results – they already happened! (See our article on “Leading and Lagging Indicators.”)

 

Our focus must move to performance/activity and learning. The activity, how well we perform it, and which customer we prioritiseexplains a good part of the productivity increase; the rest is explained by the increased motivation through the intrinsic sensation of empowerment and control of your own situation. 

  • The first part, how well we do customer work, depends on competence and skills, and improvement happens through learning.
  • The second part – prioritising the right customers and contacts in the right moment – improves through pro-active calendar planning and careful selection of where we invest out time. 

 

Define tactical 1-2 month objectives, plan the month together, and move focus to almost exclusively discuss the activity, not the result. Set goals for the activity: who to visit, where to present, contacts to prioritise. While the overall result objectives may stay the same for a year, your road there – the choices you make, the visits you plan, the trade fairs you attend, the calls you make – will be constantly adapted, revised, and changed! 

 

Every success story is a tale of constant adaption, revision and change.

Richard Branson 

 

As the manager, your principal goal is to make your sales rep become successful, to sell more with less effort, to spend more time with prio customers, and eventually to have a better life and more time with family.  This is important to understand: the wish to excel must be present and rooted inside our rep. As with all change management, the desire to perform must be there before you can introduce new ways of setting goals. Otherwise, you risk being perceived as a “micro manager.” (See ADKAR model, prosci.com on Desire in change management.)

 

 

The swim coach and you

 

You can compare the methodology to coaching athletes. The athlete and their coach set up a common goal: “I shall win the World Championship in 200-meter Medley.” None of us would expect a coach to just give the athlete the result objective of winning the championship and then walk away wishing them luck. Right? Yet this is what we often do as sales managers/directors.

 

What does the coach do? The coach follows the athlete through training, identifies weaknesses, uses strengths for tactics, builds individual training programs, and coaches and helps the athlete to push them to the limit and across it.

 

In Medley, the three strokes are carefully studied, and optimal individual training programs are planned and executed. Just like we need to balance our platform in sales, the swimmer needs to balance training in Butterfly, Backstroke, and Breaststroke. And it is the coach ́s job to cut the total time of the 200m distance down to a minimum (as it is our job to maximise revenue).

 

The training and exercise program that the coach builds is everything to the success of the athlete. And it is activity based – the result objective of winning championships is there at the horizon, but the daily challenge revolves around movement and behaviour – activity. The coach looks at every movement in the water. Should the left hand be a little more angled during the stroke? Is the position good in the water?

 

In the same way, we can only help our salesrep if we know where in the process they tend to get stuck, where they spend too much time, and if they are talking to the right people, saying the right things, and asking the right questions. Our job as sales director is to build these individual training programs, and by joint activities and follow-up, to coach our sales rep to excellence! 

 

Leading Indicators tell you the future

 

… and lagging indicators tell you what just happened.

 

 

Leading or lagging KPIs?

As managers, it is our job to have a good view of our business at all times. For this we look at our processes and define some key measures along the flow. The measures that tell us how much or how well we do things are referred to as KPIs, or key process indicators. Often you will see that any process is split into a sequence of process steps. This way, it is easier to isolate and consider each step separately and to study their charateristics.

When we measure things that go into a process step to predict what will come out on the other side, this is known as a leading indicator. Leading indicators are generally more difficult to measure, but they make it possible to influence the future result. Typical leading indicators will be focus around activity and capacities, e.g., number of visits, meetings, and proposals made.

When we measure on the result that comes out of a process, we talk about a lagging indicator. Results are things that already happened. They are easy to measure, but are generally very difficult or impossible to influence. Typical lagging indicators are sales revenue, profitability, and quantity sold.

 

Most sales organizations focus on the lagging indicators of the business,. i.e., orders received. These are often easier to measure and tend to be available through accounting, ERP, and CRM systems. However, it is important that we also look at the leading indicators of our business to establish that we are undertaking the right amount of activities, of sufficient quality, and in the right direction that will give us the results we need.

 

 

 

 

Activities drives sales

 

We should always look for leading Indicators when we want to see how we will be doing. Lagging indicators, such as last month’s sales numbers, tell us what already happened (was sold last month). They say nothing about our coming months. When we are looking for predictability and to plan our work, we need to look elsewhere for guidance.

 

Many companies analyse the sales pipeline to predict future results. But the sales pipeline is just a static snapshot. It tells us how many opportunities there are right now in every sales step. In other words, what work we have invested to move each opportunity to where it is now. If we do not spend a minute of work on any of the opportunities at all for a month, our sales pipeline would look exactly the same a month later. The deals would just be delayed a month, except we would probably lose some.

 

If you use pipeline data, look at the change in pipeline rather than the absolute numbers. Examples of forward looking pipeline KPIs you may want to consider are listed below:

  • New opportunities in the last 30 days (value and # of opportunities)
  • Time opportunities are in same stage (per stage)
  • Number of transitions, forward movement between sales steps

 

These are the direct results of the amount of customer interaction that is done and how well the interaction went, thus indirectly measuring quantity and effectiveness of activity. We recommend that you work with activity data in an active way to complement these more traditional views. For this, it is important that calls, video, and visits are registered. In our opinion, it is preferred that all activity gets at least a quick mention and an entry into the system. Prioritise getting at least some information about all activity, rather than asking your team to write long visit reports, as this almost guarantees that very few will be made.

Interview candidates with a purpose – free template

If you are a bit new to recruiting and interviewing, and feel you could use some basic tips and tricks, continue reading. As with most things in sales management, putting a little structure and thought behind your recruiting will enhance your chances of selecting the right person and getting off to a great start as a manager.

In this article, we have put together some general guidelines and tips to help you prepare for your interviews.

 

 

Who do I want to work with?

The first area to spend some time on is to define what is truly important for the role.

 

HARD SKILLS

We all understand the importance of understanding your advanced technology, or that the candidate has a great network, is extremely experienced, and is young, hungry, and full of energy. We can call these the “hard” skills. They are often tangible, more easily measurable, and 9 times of 10, they are what managers I talk to mention as the most important criteria when recruiting.

On the concrete or “hard” competencies, you will want to evaluate the candidates

  • market knowledge and network in the territory
  • product and technology understanding
  • sales skills/technique competencies

 

SOFT TRAITS

Very often the “soft” abilities are passed to a second plane. They are more difficult to define and measure, or even to talk about. Yet, they are key to a successful transition into your team and to reach productivity.

In the LinkedIn State of Sales Report 2020: U.S. Edition, 500 buyers and 500 salesreps/managers were asked what 10 characteristics buyers desire from salespeople compared to the characteristics sales managers look for in the sales reps they hire. Buyers ranked active listening, problem solving, confidence (trust), relationship building and communication skills as the top 5 traits. Technology understanding, years of experience, and industry expertise came lower.

During your interviews, pay special attention that the candidate:

  • will adapt to the context and support network you have in your company
  • will learn well and can adapt to ways of working
  • is open to change
  • will fit in your culture, making it easy to work together
  • shares similar values, and will subscribe to the corporate values

 

Recruiting the right person to the wrong place

 

There are only too many examples of great salespeople – absolute top performers who are recruited into a different context but selling something very similar to the same people – who still failed to succeed or even get close to the previous success. The “hard” competencies all fit. Product/technology, market/industry, contact network, and demonstrated sales methods and techniques were all “check!” yet they failed. Why?

 

What happens is that the soft abilities and cultural fit just don’t align with how your team and company work. This is everything from your internal team dynamics, culture, and jargon, but also misalignment with the expected surrounding support, HR, pre/tech sales, support, services, marketing, etc.

 

 

Two classical scenarios:

  • The medium sized company who decides to open a new sales office in a new country/market, and hires a top manager from the incumbent competitor for the job. This is always a bad idea, as the first person in the market needs to do all the work themselves initially, and there is no support network yet.
  • A large corporation that hires people from startups often finds it difficult to accommodate the new hire’s appetite for creativity and room for own decisions, and the employee often feels hindered and suffocated under all the processes.

Note that we are not saying one is better than the other, but as hiring managers, we must be conscious of our own ways, culture, and values, and we must be sensitive to which candidates will fit in our context.

 

 

The Process

 

DEFINE KEY EVALUATION CRITERIA

 

Make sure to complete the “hard” job descriptions with the most important “soft” characteristics you are looking for. Then design an interview template that helps you evaluate the candidate in all these dimensions. You can download a simple template by clicking the button below.

 

USING TESTS

The more important you deem the values, culture, and other “soft” skills for the role, the more you may want to consider a personality test. Make sure you prepare your interview well and focus on these areas. If you are using an agency, they can often set up a DISC test or something similar for you.

If the job requires technical skills, set up a test that your candidate needs to solve, or ask them to prepare a convincing sales meeting if recruiting telesales.

 

MULTIPLE INTERVIEWS

Have at least 2 people apart from yourself interview the candidate throughout the process. Let them meet with different personalities and roles to catch possible moments where non-desired behaviours come up to the surface. You will get a much more complete picture of the candidate. After each round, set up a debrief with the interviewers, and run through the evaluation criteria.

 

 

Interview template

To help you structure the interview, we propose a simple template that you can follow. It should not be a questionnaire, but list the key competencies and personal traits you will want to evaluate.

Use it as a support to help you formulate questions and conduct the conversation so that in the end, you feel confident all areas were covered to your satisfaction. The questions in all cases being:

  • “How well/badly do I think the candidate will be doing……?”
  • “Will the candidate be strong enough in ……..?”
  • “Is the candidate motivated and able to learn this ……. quickly”

 

 

Download template

 

Prepare by thinking through each area, and note what specifics you want to know, and how to formulate the question to get the answers you need.

Remember to ask for relevant references, and complete the interview by contacting those references.