Article

February 1, 2023

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 we believe it is a great idea for any manager or director to thought through these cases so that you can provide a simple and straight forward answer to the question when it comes.

Why is it that companies ask their teams to sell for so much more money than their own salaries. One could think it would be enough just to sell to cover your own cost, couldn’t you?

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??

As you will see, 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. In this article we will take you through two different examples, one SaaS company and one traditional industrial equipment manufacturer, and compare.

You may also want to download our excel calculator that you can plug your own numbers into the two scenarios.

Cash is king. Let us consider two different cases:

Software have very high gross margins, but cash comes in slow nowadays with subscription and pay-as-you-go schemes.
Traditional things, such as industrial machinery are often paid at delivery buton the other hand the internal margins– gross margin– after costs of goods are much lower.

Many recent companies, startups and scaleups, don’t have California-style financing and unlimited resources (you are in Europe). Your company need to be profitable or close to profitable – EBIT wise. This means that your sales need to carry both your own cost and part of the rest of the company’s cost. What is your reasonable quota?
Profitable companies cover costs – a rule of thumb

A rule of thumb that often is used to keep a SaaS company profitable is to at least let the value of new contracts cover the sales cost. Or in SaaS terms, the new annual subscription revenue rate (first year ARR), should be higher than the customer acquisition cost (CAC) – (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.

A software example

So, 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.

For those of you who were in business in the 2000´s – Subscription software – SaaS, has completely changed the game plan. What used to be a 100.000 € initial deal, with annual maintenance of 20.000€ has now become a 3-4.000€ monthly subscription. Over time this is great, but Saas companies struggle to become profitable as payments are pushed int the future. How do you cover costs with subscriptions only?

Looking at the cost of sales – CAC

In a software company most cost is personnel related. To sell your product you are using company resources to close your deals .. such as techsales, new features/development, management and admin. We don’t include some parts – The customer retention or “customer success” team manages customer service and support, and drive usage of your product so they carry their own cost.

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 you carry yourself and 3 – 4 more people in the company – so If you sell for about 4-5 times the average employee cost you are all right.

The real cost for any of us employees, is around 1,5 – 2 times our salary, we end up with a reasonable quota at roughly 10x the base salary. This includes social security fees, indirect taxes, the office space you use up, medical insurance, meal tickets etc.

Example

Let’s have a look at the following 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 (1x) is to cover your own cost to the company (100k)
One (1x) is to cover other direct new sales costs, Presales activities, free Consultancy, proofs of concept, development adaptations etc
One (1x)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.
The final (1x to 2x) is to ensure some margin for the Company and to cover risk. (the risk that not all colleagues make their quota)

Needless to say, we are oversimplifying the matter. In the companies I have worked it made sense for me and my team, under the circumstances I described above. The ratios can vary.

For example, if the company is investing heavily in sales and marketing quotas are higher. If the company is spending you job gets a lot easier, but at the same time your sales need to cover a higher cost.

In your company the logical figure may be anything from 3,5 times to 9 times cost, or 7 to 18 times your salary. It is normally stable, so when you figure out what the logical ratio is for your company, then you can use that as a benchmark for the future.

An example for Industrial Products

In our traditional B2B example, we apply exactly the same reasoning. In this case the product has an internal margin that can vary, and this margin is what need to cover the CoS plus any extras.

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 team’s cost of sales.

Let us assume that the sales effort is the same, which means that for every sales person you need one Presales engineer, and on average one Backoffice position. To this we add one for management Overheadand office etc. Finally, we add one to cover for the internal margin, and risk that any territory fails.

In this example your pay remains 60k€/year – that give a total cost 100k€ per person. That makes 300k€, plus internal extra of 1-200k€.

This 500k€ must be covered by the internal margin after cost of Goods.
Total cost/internal margins from factory = 400k€/0,35 = quota of 1.143 k€
The pure cost is 300k€, so if you sell for less than 300k€/0,35 = 857k€ your local unit will present losses!

This means that you probably should have some mechanism that starts paying at 850k€, and pays full On Target Earning at 100%.

Conclusion

You have seen two examples, with similar input, but with sales expectation that become different due to the cost structure that supports sales.

When you look at the minimum quota it is helpful to use the cost perspective to discuss around when and why the company would lose money from selling, to avoid this from happening. In buoyant markets, and when you have strong financial backing your criteria and therefore the calculator may be completely different.

We have developed the two examples in the simplified calculator you are free to download here. It is provided as is, and with no guarantees, but use it and inspiration froryour own calculations and methods.

Let us know if you want help building a similar case for your own company and we will be happy to create a customized tool for you.

October 7, 2022

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.

September 16, 2022

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.

August 9, 2022

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.

BEFORE: Preparation by all involved
DURING: A well-designed training session
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!

May 24, 2022

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!

May 13, 2022

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.

May 6, 2022

Onboarding for growth

The importance of a great Onboarding

Studies show that employees give their new companies about 6 months on average before they decide whether to go all in with their new employer. At the same time, other sources point to a learning curve and time to full productivity of a year or more and at least one full sales cycle. In a culture where success often is made synonymous to revenue and sales numbers, new salespeople risk losing interest and enthusiasm long before success and hitting their numbers.

The combination of high expectations, a long ramp up/time to sales, together with short patitence of both the new employee and the organization becomes an explosive cocktail of high attrition on new hires, with stagnated growth as the most severe consequence.

The onboarding program helps mitigate the effect by

Shortening the learning curve and time to productivity.
Redefining and widening the term success, since activity metrics, competence development and personal growth are also considered successes along the way.
Keeping people interested and motivated from the first day and throughout the learning process.

A great onboarding program helps new hired individuals perceive and appreciate the company’s effort to develop and grow them so they are more likely to return the favor by staying on and being more motivated.

Defining what is important

We have prepared a template for a 12-month onboarding plan, where we have selected some standard areas for sales reps in a complex technology sales context. Use this as inspiration to create your own plan. Consider what is truly important in your company and context.

Some things you may want to include are listed below:

Market and ecosystem understanding
Contact network
Customer understanding
Product and technology
Personal traits
Values and cultural fit
Sales technique
Sales process and strategy
Tools and methods

A structured approach to competence management is helpful throughout all phases, from recruiting to the periodical evaluations. What you do the initial evaluation, already in the recruiting phase, and construct a initial training program to cover any weakness you discovered, we call it our Onboarding Program.

a simple onboarding plan based on competence areas helps providing structure

Onboarding program for a Sales Person

Below is a template to use to create your own onboarding program. Fill the boxes with the training, meetings, and activities that your new hire should plan to do within different time horizons. To help you organise your thoughts, go area by area, one by one, and fill in the boxes. You may be surprised at the end by the quantity of activities the new hire needs to do to get up to speed. Keep this is mind when you set the expectations for sales and productivity for the fist couple of months!

Many of the activities, sucha as “getting to know the company,” need to happen early on, and others will be more evenly spread out over the year. We suggest you stage the learning in the following time categries:

Immediate (< 2weeks)
1^stmonth
3 months
6 months
12 months

In each area, you may also want to add success criteria or milestones that you can check off and celebrate with your hire as they make each one. Click below to download our onboarding template.

Download template

April 6, 2022

Sales call coaching – Getting the most out of every sales minute

Sales Call Coaching – going together to customers is a great coaching tool

Sales call coaching means visiting customers together with the purpose of receiving feedback and improving sales skills. It is on-the-job-training for all of us, regardless of position or role. It is a vital part of the continuous development for the whole sales organisation. It is a tool for sales professionals to learn and develop while getting to know each other better by sharing knowledge and experiences.

As a sales manager, you need to sharpen your coaching skills to do this well, but when done well, it is an invaluable input for later when you hold more general performance evaluations. Do this live in customer situations, and not by interviewing the sales person. Discussing and coaching on activities and quality of work is not realistic nor trustworthy without continuously observing and studying behaviours in real-life situations.

Sales call coaching is your best tool to get a first-hand feel for sales behaviour. You should consider doing this with all customer facing personnel, inside sales, product specialists, and account managers. We all need to develop self-awareness and understanding of how our behaviours affect the outcome in customer situations.

Why should all managers coach on sales calls?

The first line sales organization aims to provide increased customer value. To ensure sales reps can perform in line with this and provide this increased customer value, sales management needs to change and provide added value for reps. Sales call coaching is a key tool to achieve this.

Doing sales calls with reps will help managers in the following ways:

Continuous improvement towards a world-class sales team!
Benchmark successful behaviors
Train and ensure product knowledge among sales reps and other customer-facing team members
Develop sales skills in all staff
Find out how sales reps spend their time
Obtain good ideas for benchmarking and best practice
Ensure value sales is applied professionally
Gather information from the market
Practice and improve yourself in difficult negotiations, meeting key customers, etc.
Get to know staff better and further improve teamwork

Download - How To: Sales Call Coaching

Evaluating and giving feedback on different customer interactions in the sales process require different skillsets of the manager. Sometimes we may even need to work on multiple roles at the same time, in complex multirole meetings selling as a team.

Sales directors and higher management should also make an effort to find the natural opportunities to visit customers, together with their sales reps and managers, in order to help them become better at what they do. For the manager, this is coaching the reps.

Aim to spend at least 2 working days per week in the field. Some of the visits can be virtual, but make sure you apply a mix of different types of meetings and situations so you coach and support all phases of the sales process.

Sharpen your skills evaluating reps and coaching for all situations!

If planned and executed well, this work should not take more than half our week.

Download - Sales Call Evaluation template

What to look for

You should pay attention to basic sales process situations and how different tools and sales situations and parts of the meeting (see example below) are applied.

Different steps of the pipeline sales process require different skills. See the evaluation template for inspiration. Adapt the template depending on what type of meeting it is that you coach. How is the sales rep performing in different situations? Notice when they are doing the following:

Attempting to open new parts of the business with a focus/growth customer
Cross-selling on higher levels of the management of key accounts
Applying value selling to increase share of wallet in already well established accounts

… etc. etc. The examples are infinite. Select the situations to train and coach according to your tactical needs, and go for it!

April 5, 2022

The GROW model

The GROW model is a simple sequential coaching model that allows executives to simplify the complex realities to reach the right conclusion on directions to take and decision to make. It is used by executive coaches all over the world as a framework to use with their work.

As a manager, you are wise to learn how to use it in your 1-on-1s for mentoring and coaching your team members.

GROW is an acronym that stands for:

Goal (establish objectives for the session)
Reality (how things are going right now)
Options (possibilities to consider)
Way forward (agreement and commitment going forward)

Needless to say, an open and fluent coaching session doesn’t necessarily follow a clean 4 step sequence, but it is a great tool for us as new managers to use as guidance for our conversations.

As you gain experience and confidence with the model, it becomes a natural flow for your 1-on-1s as you allow the conversation to move a bit back and forth throughout the structure.

Similar to many sales techniques, such as SPIN and solution selling, the key to using the GROW model and to coaching in general lies in asking the right question. This is central, because here we are not telling people what to do. Good coaching is about helping them find their own answers by asking the right question at the right time.

Below you find the GROW framework, and some questions that can serve as inspiration for each step in the process.

Goal

Coaching starts with establishing a goal. This enables us to focus on one specific thing to try to solve in the session. It’s helpful to consider what goals can actually be:

Result or achievement goals
Activity or performance goals
Learning and development goals
Process, problem solving, decisions to make

Formulating objectives is not easy either. To get more productive sessions (and for many other discussions as well), you may want to train and practice target setting with the SMART model.

All well-formulated objectives are:

Specific (concrete that you understand)
Measurable (can be determined if we achieve or not)
Attainable (within our realistic reach)
Relevant (matters – of real importance for us)
Timebound (agree by when it should happen)

To set the goals/objectives for the session, you may want to ask:

What do you want to achieve from this coaching session?
What goal/objectives do you want/try to achieve?
What would the benefits be if you achieved this goal?
What would you like that [someone/thing] did?
What outcome/result would be ideal?
What do you want to change?

Reality

Here we are trying to gain awareness of the reality. What is the real current situation? How far off are we from the ideal? What is going on, and how good/bad is it?

Use your soft skills and go easy with your questions. Plan the question and let the person reflect on the answer. Listen, and avoid jumping to suggestions or sharing your own opinions and experiences in this stage. Here we are defining the context and reality, not finding the answers and solution.

Here are some questions you may find inspiration in:

1. What’s the status now (who, when, and how often)? Where are you now in relation to your goal?
2. Have you already taken steps towards your goal? (What have you already tried?)
3. How would you describe what you did? What was the effect so far?
4. On a scale of one to 10, what progress did you make?
  1. What things worked out the best?
  2. What could you do better this time?
  3. What is working well right now?
5. Why haven’t you reached that goal already? What do you think is stopping you?
6. On a scale of one to 10, how bad/urgent is the situation?

Obstacles and Options

When you have agreed and established the current situation, you can move on to the solution. Start by evaluating obstacles to success, and then the available options. Let the employee lead, guided by your questions.

Here are a few samples you may find helpful:

1. What is the hardest/most challenging part of that for you?
2. What do you think would happen if someone else did/said that?
3. What is the best case? What could make that happen? What would be the worst case? What should you avoid for that not to happen?
4. What do you think you need to do next? Which option do you have?
5. What do you think you need to do to get to your goal?
6. Could you find help in anyone, anywhere?
7. What has worked for you already? How could you do more of that?
8. What would happen if you did that?
9. What options do you feel are the lowest hanging fruit?
10. How have you tackled the same situation before?
11. If there were no limitations at all, what would be the best way forward?

Way Forward

Similar to the accept phases in sales techniques, we probe for acceptance and commitment to the actions. When accepted, we establish a clear path to the end.

Finally, again, here you have a list of questions that will help you guide your coachee to commit to the right actions to achieve the goal.

1. What should you do to start? What do you need to do right now?
2. Tell me how you’re going to do that.
3. How will you know when you have done it?
4. Doing that, what is the likelihood of your plan succeeding? (Use a “on a scale 1 to 10” if you like.) Subsequently, what would it take to make it a 10?
5. What hinders do you expect, roadblocks that require planning?
6. What else do you need? Is there anything missing? What support do you need to get that done?
7. When will you start? Tell me at least two things you can get started with and done already this week.
8. How motivated do you feel to get this done now?
9. What would happen if you don’t get this done? What would the consequences be?

If you want to download the article in PDF format, click the button to the right:

March 29, 2022

Sales efficiency – the art of disqualifying in time

Efficient sales – pipeline control

If we knew from the beginning which deals we would actually win, I think all would agree that we would only be working with those deals. So, the earlier we can qualify opportunities and the better we do it, the less time we will spend on deals that will not be closed. The larger the opportunities, the fewer transactions we need to juggle simultaneously, and the better our life will be. Easy! Or…?

As the teams sales manager, one of your most important tasks is to improve and identify challenges in your team’s pipeline management and opportunity control. Pipeline efficiency should be your mantra.

Introducing pipeline efficiency

How much of your team’s time is spent on deals that will never happen?

Let’s say you get 300 online-qualified leads from marketing, and from those you close 10 deals on average. Great! But now look at the effort spent to get from 300 to 10!

Look at the picture below. All three curves start at 300 and end at 10. The conversion from lead to deal, win-rate or conversion rate is the same in all cases. The hours you and your team have spent getting there (the area under each curve), however, is very different…

You probably will have other names for your pipeline stages. These names are merely for illustration purposes.

The green rectangle in the bottom represents the work you do on the opportunities that actually become deals. If you had perfect information on who will buy from you and who will not, this is the effort you would spend. Needless to say, this will merely be your theoretical optimum cost of sale, but it will be useful to us as a reference for calculating our own ratios.

Consequence 1: Waste our time on “no-hopers”

The farther away from the green box you are, the more time is spent on deals that weren’t successful. The red curve represents a more inefficient pipeline, and the green line represents a more efficient one. The green line drops earlier in the process, because qualification is done better and earlier in the process. The red area, the difference between the curves, represents the improvement potential!

This is how much time someone at the red curve could save with better qualification.

You get the idea? Your pipeline should have the shape of a trumpet horn.

The earlier it falls off downwards, the better. For every inch above the green line you are in any part of the process, you are wasting time and resources that you could have used on more leads, more prospecting, more sales…
If your rep’s curve is very flat, only to drop off in the very late stages (the red curve), they are seeing the world though “rose-tinted glasses”, meaning they are hanging on to a bad qualification.
The time spent on following up on no-deals is obviously lost time. This has a cost for the company, direct costs through salary and other costs, indirectly through the frustration for the sales rep, who may end up leaving (or get fired) when they never reach the expected numbers.

But, even more important, is the sales YOU COULD HAVE HAD if time was spent more wisely. If you manage to liberate 1/3 of your time for productive sales, you potentially will sell 50% more!

Consequence 2: Bad qualification makes bad forecasting.

There is also another reading you can make out of this. The red curve is common, because in sales, we tend to hope that everything will close, so as salespeople, we tend to hang on to old opportunities and bring them up month after month in our forecast, especially if we have few inbound leads to work with. This tends to give us a systematic forecasting error as well, as it will be very difficult to determine exactly HOW overoptimistic we are, and on HOW MANY deals.

Ever had sales tell you they would sell so much by the end of month, only to end up selling less than half? Bet you thought you were fine until the last week…. Beware of the rose-tinted glasses!

Up next…

If you want a few ideas on how you can calculate your own pipeline efficiency, have a look at our article “How-to guide: Pipeline efficiency.“