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An Incentive to Change!

July 14, 2012 8 comments

Part – 2 of the Case Study

Tom and his colleagues wondered why they had to change the way they worked; it seemed like more work, definitely different from how they did things earlier! These thoughts occurred to them as they walked out of the briefing by the new Business Manager. It really wasn’t new or different, just stuff they should have been doing and had either forgotten or ignored to lapse into the haphazard way of selling.

The Business Manager was not going to set them adrift in the market; he had crafted a plan and wanted to work with the team to show how they would benefit from it.

Part-1 had ended with the decision by the Business Manager to implement the following:

–          Adopt a Sales Process

–          Speed up the Sales Cycle

–          Enhance Sales Productivity

–          Increase the average Sale Price

1. Adopt a Sales Process

Sales is a process, from Contact to Contract there is a logical sequence of actions that need to be followed. When that is done the chance of success is increased manifold and the customer is fully satisfied with the solution she/he acquires.  It happens because the customer understands with great clarity what is being offered and all doubts regarding features, usage and support are cleared upfront. Nothing is left to chance.

Tom and colleagues were not able to acquire enough customers or were taking more time to close the sales due their haphazard style – enough thought was not being put into each sale.

2. Speed up the Sales Cycle

The Business Manager realized while studying the sales data that one of the reasons for poor or low sales was the time taken to close each contract. On an average Tom was taking 7–8 visits to the customer to get business and it got worse in the case of prospects who didn’t buy – 8-10 visits were being taken before deciding whether to pursue or not.

Imagine the amount of time that can be freed if there was a reduction of 2 in each case and to be honest Tom should be able to say much sooner whether it’s going to be a dead-end.

And this delay is mainly on account of the lack of a process – Tom and his colleagues were not thinking through each case. The right questions were not being asked, the response received from the prospect were not being analysed to derive the messages and they probably were not speaking to the right people – hence sales call were being wasted to reach the right person and even the calls made to the decision-makers were having the desired impact due to the lack of understanding of the requirements.

3. Enhance Sales Productivity

Reducing the number of visits needed to close each deal would help to improve productivity, but Tom and colleagues were also missing the chance to sell more in each sale. There were no interest in pushing for more – they were simply accepting whatever the customer offered.

A Sales team needs to thing about maximizing the returns from each contract – how much more can be sold? Can we ask the customer to club a future requirement with this one? Have they considered the needs of the new set of recruits would be joining soon? Has the customer considered the benefit that accrues from adding a feature or by buying the higher model?

As Sales Professional it is for us to put these thoughts in the clients mind – show them the benefit that accrues from buying earlier or by buying a model that is slightly more expensive but will pay back by way of simplifying processes or by reducing overall costs or by freeing time for them.

4. Increase the average Sales Price

The Business Manager had pushed the forward the idea of improving Sales Cycle and Productivity numbers because it meant more revenue. Another idea to extract revenue from a depressed market is to close each sale at a higher price.

The biggest crib heard from Sales Teams across the world –“ The customer likes our product but they say it is very expensive” or “the customer says that our rival is offering the same at a lower price”.

And this would start a discount war if the Business Manager isn’t careful – the winner would be the customer who managed to play two or more vendors against each other and extracted the best deal.

But the idea is to call the team’s and the client’s bluff. Tom’s Manager did just that; instead of given in he asked the team to study each requirement in greater detail and also to understand fully what the competitor was offering. By doing the analysis they were able to respond to each prospect with greater clarity and they could counter the bogies thrown at them by the prospect with a lot of confidence. Although they still ended up giving discounts in order to win sales they could increase the overall value extracted per sale by being selective in the way discounts were offered and by showing greater value in their solutions.

The Business Manager was able to convert Tom and his colleagues into sharper and smarter Sales Professionals. He used Sales Coaching to do this. Working with the team in the field he was able to observe them in action and back at the office he would give them constructive inputs on various elements of Professional Selling.

In future articles we will look at some of those elements – such as Synchronizing with client’s Buying Cycle, building relationship with the decision maker / buyer, Up-selling, Cross-sell, Value Selling and so on. We can discuss coaching too in greater detail.

Tom and team obviously had to shake off their bad ways and work much harder, and smarter – but in return they got better results, recognition and money too (By way of higher incentives and bonuses)

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Go get it!

June 29, 2012 4 comments

Yesterday we put our emotions into overdrive while discussing legacies and impressions that last a lifetime; today let us take a practical look at planning incentive schemes that push Sales teams to higher levels of performance.

Incentives schemes that work!

A few years back the telecom company that I worked with ran an incentive scheme for the entire channel sales team.  They were given number targets for the entire year, with quarterly expectations clearly specified – seasonality in sales was taken into consideration while dividing the target across the year. Every Sales Executive was given a Record-book to note his Sales data and it had to be signed each month by his boss (usually the owner of the dealership) and a representative from our organization (the local Operations Head).

Cash prizes and gifts were on offer for people who met expectations. The prizes were given away by the Regional Business Head at a gala function – the program was a runaway success. Story over.

No!! I am not done yet. The gifts and cash prizes were not the highlights of the program! A year-long series of Sales Training programs were announced along with the scheme. In order to win the highest level of incentives the Executives had to attend all the training programs proposed in the series – which happened once every quarter. Participation and performance in the training program were also recorded in the Record-book. All those who got through the post-training assessments with good grades got certificates and at the end of the year all Sales Executives who had successfully completed the entire series of training, and achieved the Sales Targets, were given Credentials which stated that they are Certified Sales Professionals.

More than the cash, the medals and the material incentives the Certificates were valued by the achievers. I am sure even today they are displayed at the Executives’ homes with pride.

The idea is to hit upon winning formulae, like this one, to make your incentive programs effective.

What is the purpose of the program?

–          To achieve a number target (number or revenue)

–          To promote a specific product or service

–          To promote business in a targeted area

–          To promote business in a defined segment

Design:

The scheme needs to be exciting; it should stretch the players to the limit, and still be achievable. The program design should ensure that the desired goals are met by the organization.

The reward could be items of everyday use, scholarships, a vehicle, a holiday package or just cash (but it is best to avoid giving cash in such schemes – these schemes are over and above salaries and bonuses). The intent of such programs is to drive specific goals that need special focus.

The schemes can be created on themes too – one organization I worked with had an all-male sales team. So our incentive programs would have a shirt in one month, a tie the next month and another accessory like a trouser-belt in the 3rd month. Or there would be a portfolio bag one month, a high-quality pen-set and a mobile phone the month after that. There would also be Gold Coins and home appliances on offer at other times. The idea is to provide something useful, something that keeps the team interested.

Education, training and certificates were the big draw all the time.

Timing:

Incentive Programs can be of varying durations – the one I described earlier was a year-long program. But you can run shorter ones that could be anywhere from a day to a month long; it’s best to run the scheme when sales are hard to come by – the first week of the month or in a lean season. The scheme is run to prompt additional activity that would bring in business.

Process:

The requirements and the conditions are to be specified – what constitutes achievement needs to be clear to avoid disputes. The deadlines and the documentation need to be mentioned with great clarity. I have had to respond to angry team-members who thought they had met requirements and were being unfairly disqualified – the ambiguity in the terms drawn up for the scheme being the reason for their wrath.

A smartly designed scheme run at the right time can help the organization achieve its goal and keep the Sales Team motivated. Excellence all around!

Save it for another day

January 26, 2012 2 comments

Don’t waste ammo …

An important skill for Sales Professionals is to be able to assess what the customer wants and offer just that … nothing more, nothing less!!

In the Indian tale Mahabharath we read about heroes and warriors who sit in penance to acquire powerful weapons – Lord Indra (the ruler of Heaven) would reward his devotee an Indrastra (Astra means weapon) and Brahma (The Creator according to Hinduism) would give his devotee a Brahmastra if buttered –up suitably!

These are powerful weapons and can vaporise the rival, but not if this guy has acquired the suitable counter-measure (which too is possible through penance … how convenient!!). So the trick is to be aware of the weapon to be used against a particular rival in the battlefield … you just need a single arrow to finish your opponent if you know WHICH ONE!!

The same is true in sales.

In the early days of mobile telephony in India the Sales Representative for the company I represented, like most of their counterparts, were over eager to reach this incredible product to the stunned market. The only deterrents were the price of acquisition and usage charges.

So the Sales Reps built value much like the street hawkers – “Good Quality Plastic Comb, long lasting, excellent plastic handle, stylish looks, can be used by ladies and gents, six colour options, only Rs. 10/-“. This guy on the street is selling a low cost product and has to shout out everything upfront to attract the customer because nobody is going to stop and give him time to make a pitch.

My Sales Reps, in their enthusiasm, would rattle off feature after feature the moment they meet the customer and since we were selling the concept of mobility he would go on and on about the possibility of using the phone at home, at the office and in other cities.

After patiently listening to the rant from one representative for five minutes one customer replied in a measured tone –  “I have a shop just 1o minute drive away from my house and at my age I hardly move out of my office. I have assistants who do my running around and I have not travelled outside this city in the last 7 years. I don’t think there is any emergency that can’t wait for the 10 minutes I take to reach home from office or vice versa and I had landline phones at both places.”

The Rep was stunned by the response and didn’t know what to say next. He thanked the man and left, deeply dejected – he thought it was a killer pitch that he had made.

I wish like to believe that we sell solutions, not boxes. Hence it is important for us to understand what the customer concerns are. Those concerns in turn are amplified into the need for a better solution – better than the one he currently has.

So if my Sales Rep had curbed his enthusiasm and had spent more time in understanding the customer he probably would have unearthed one or more need that could have been fulfilled with the solution he was offering.

And he would have come away with many of his valuable weapons still in the quiver … waiting to find the ideal target!

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