No business, big or small, can function without a well-run salesforce. But getting the right people, giving the right training and keeping them can be difficult.
Recruiting and retaining sales staff is one of the single biggest challenges that companies face. For large companies it's hard enough, but for small and medium-sized companies it can prove to be their costliest burden in terms of both time and money.
Mike Hawthorne, director of training firm TMT Europe, believes the days of the 'job-hopping salesmen of the 1980s' are over. But turnover among salespeople remains high - in Britain it averages 30% a year. This means, as Graham Roberts Phelps, training director of 80/20 Training in Milton Keynes, points out, 'sales staff turnover can be as high as 50-60% in some companies'. In some telesales posts, he adds, staff stay an average of just 12 weeks - two weeks of training and 10 weeks of work.
One method of stemming this costly exodus is to ensure that only the right people are recruited into sales in the first place. Ian Tinsley, UK marketing director for Hay Management Consultants, says salespeople require competencies in key areas such as tenacity and customer orientation.
Honing the recruitment process to ensure new recruits have the appropriate competencies clearly pays dividends. A pharmaceutical company, for example, which began recruiting using the techniques outlined in the box (right), saw staff turnover drop from 41% to 15%. A furniture company adopting the same approach enjoyed an almost immediate increase in productivity of 20%.
Once the recruitment process is right, the next priority is to boost sales team morale. Unfortunately the 'barrow boy' image of the salesperson still persists, but if organisations want to retain staff and make the best use of them, they must first build a different relationship with their sales people. As Gary Gilligan, director of management development for European Information Services Group at computer giant Unisys, points out: 'Sales people often feel as though they are treated like mercenaries - a necessary evil in a firm.'
The trick, he suggests, is to make them feel more valued. The first step in that process is to understand fully what motivates your people.
Contrary to popular belief, sales staff are rarely motivated by money alone. Money is merely a 'condition for being in the game', judges Gilligan.
Dissatisfaction over pay is not the reason sales people generally give for leaving - in fact, in exit interview surveys employees usually put money only third or fourth on their list of complaints. More significant, however, is the fact that money can act as a demotivator if people feel they are not getting a fair salary for the work they do or if someone in a similar position is earning more. One idea gaining credibility in the US, therefore, is to link pay more closely to performance. Instead of salary increases based on the annual inflation rate, the answer may lie in dynamic pay increases based on the achievement of specific objectives.
But linking pay to performance raises questions concerning how sales performance should be measured. Traditional performance measures such as revenue gained or sales calls made are clearly flawed. Measuring performance on revenue alone is described by Hawthorne as 'the rough end of the stick'. And if individuals feel that they are measured against criteria which are either unfair or loaded against them, they generally vote with their feet. Moreover, measuring performance according to the number of sales calls made can prove detrimental when too-frequent contact annoys customers. Hawthorne suggests instead that organisations adopt methods of performance measurement based on factors like account penetration - the range of solutions sold to a client, or number of contacts within an account.
But if pay is a poor motivator, do better methods exist? Yes, say the experts. In general, organisations should place more emphasis on non-monetary methods of incentive. Phelps believes that salespeople have a need for recognition and are more likely to be inspired by respect and a sense of involvement than money. Small companies are better placed to give their employees a sense of personal involvement than larger firms. 'Feelings of personal involvement are generally easier to foster when working in an SME,' he says. People have more understanding of what is going on and feel their contribution is more valued.
For more general clues on non-monetary means to motivate staff, Phelps turns to the current passion for computer games. 'Generally you don't have to motivate people to play computer games,' he says. 'So it's worth considering what attracts people to these games and then apply those lessons to their work situation.' The lure of computer games, he believes, is based on four critical factors. First, non-judgmental feedback; second, competition against yourself, other people and goals; third, increasing levels of difficulty; and fourth a sense of fun. Introducing those same factors into the sales situation will have a positive effect on staff morale. Toby Joseph, vice president of sales for corporate travel company Carlson Wagonlit believes that the key to staff retention lies in discovering what motivates the individual. Carlson Wagonlit conducts in-depth quarterly and annual appraisals during which staff themselves are asked what would inspire them to go the extra mile or two. For sales-people in this industry, airline tickets are a popular carrot.
The important point, Joseph says, is to make incentive schemes easy to understand, creative and simple to implement. Phelps agrees. Far too many companies, he says, rely simply on increasing commission - which may prove little incentive at all. 'If you just give money it goes straight into the bank account,' he says. Two tickets to Paris, on the other hand, provide a memorable experience and something that can be enjoyed with a partner. If, however, cash-flow is a problem in your company, recognition need not come in a traditional incentive form. Phelps believes that giving someone new responsibility or making them a team leader can serve just as well. The opportunity for further training is another non-monetary motivator. Phelps holds no truck with the commonly held view that training is a waste of money because staff are quick to benefit from training but even quicker to leave. Employees will, he admits, inevitably move on, but the benefits of training are too important to ignore. Not only does technical training ensure greater product knowledge, but it can also make sales staff 'feel part of the company's strategy'. By increasing awareness of the company and the potential opportunities within it, employee commitment to the organisation grows. It is important to remember, however, that different kinds of training bring different benefits. For salespeople coaching is invaluable, but Hawthorne stresses it should be a continuous rather than one-off endeavour. Many companies, he says, coach only when sales staff are not performing well.
This has two effects. First, staff actively mask underperformance and second, it ignores the fact that a 5% improvement in the top people is better than a 5% improvement in the poor performers. Hawthorne believes that coaching is not used more widely because of the time pressures sales managers face. Generally sales managers are loath to tie up a large proportion of their time in coaching. Therefore they concentrate their efforts only on the poor performers. Hawthorne, however, points out that all members of staff benefit from individual attention and employees other than the sales manager can act as coaches. Top performing sales staff, for example, can lend a hand as well.
The final component in the motivation mix is an effective sales organisation structure. The ideal sales structure varies according to organisation, but the following four basic principles have universal application. First, says Gilligan, free sales people up to sell. Too often the best sales people end up in management positions bogged down in bureaucracy. One study, for example, showed that in a typical week Unisys salespeople met clients face to face only two or three times. Most of their time was spent on non-sales activities such as chasing up deliveries. Gilligan recommends that companies organise extra support staff to carry out administrative tasks and leave salespeople to concentrate on what they do best - selling. Second, Gilligan advises employing a balance of people. Sales people can be divided into two types: farmers and hunters. Some like to manage accounts while others are only happy roaring up the motorway at 90mph. The wise organisation employs a mix of both. The third ingredient of a successful sales team is the value it places on skills and experience. When organisations cut staff they often fire those with essential knowledge and expertise. But a company must be able to answer the question: Who is next after our star salesperson leaves? And finally, says Tinsley, management must build a close relationship with its sales team. This relationship is vital, not just because salespeople work best when they feel valued, but because of the changing nature of the sales function itself. Today selling is increasingly a matter not of product-based but relationship-based sales.
In this new selling world, good feedback between salespeople and the rest of the organisation becomes key to corporate success.
HOW TO HIRE GOOD SALES STAFF
For a small company, recruitment and training can be both expensive and time-consuming. Graham Roberts Phelps, training director of 80/20 Training in Milton Keynes, suggests 'turning common sense into common practice'.
Use performance-based interviewing.
Give interviewees a calculator and ask them to sell it to you. Or get candidates to prepare a short presentation on what the company should be doing. 'When recruiting for telesales posts, interview them on the telephone,' he advises, to test how candidates will perform on the job.
Recruit by word-of-mouth.
If you have a sales team of 10-20 people, tell them you are looking for a new marketing manager. If anyone suggests a candidate who is ultimately hired, reward them with the amount it would have cost to advertise or use a head-hunter. 'People don't recommend poor candidates as it reflects badly on them,' he says.
Hire on attitude and train skills.
Rarely will you find candidates that fulfil all your skill requirements. 'You can't train attitude,' says Phelps, 'but you can train telephone and computer skills. Through training you can effectively grow the right person.' Consider a broader range of people.
Companies often don't consider taking on fit, energetic, 50-year-olds with experience in fields like banking or insurance. However their prior experience gains client confidence and helps make customers feel comfortable.
Older hands often show an attractively high level of loyalty to their employer compared to younger sales turks.