Throughout this series, I have continually emphasized that each phase of development for your company’s future must be rooted and aligned to your key business objectives and market strategy. This is absolutely true for designing a proper sales team model. Sales organizations of today are not unlike those of the 80’s or 90’s, where their entire strategy is to place an outside sales rep on a piece of real estate with the assumption that more reps mean more sales. Seldom do organizations do much more than that, however. It’s hard enough to find one that has built out a plan, much less find continuity between their company’s key business objectives and the design of their current sales team model.
So what is the formula for creating the right sales team model, and how do you ensure you’ve built one that will deliver sales?
This illustration shares my belief in how the right sales team model is created. Its design begins back at the key business objectives and market strategy stages. Add to that a very thorough marketing execution plan, and designing the right sales team model becomes a no brainer. There are many starting points and timelines when a company decides to rework their market strategies. Some argue you can keep an existing sales team and mold a new market strategy around them. I believe keeping the wrong sales reps and pushing them into a new direction seldom works. In most of my engagements, I find 60 to 80 percent of the existing sales reps are already failing (for many reasons). Take the time to design and build a successful sales team model with the right team members onboard.
Let’s take a look at some issues that typically fail to deliver the best possible sales results when the wrong team model is in play.
The Right Person for the Job
Take a long, hard look at your sales leader to ensure he or she truly has the ability to guide your company into the future. I find many sales organizations headed nowhere because of the lack of appropriate leadership. As with everything else, your sales leader’s skillset and capability must align with your KBOs and market strategy. One fatal mistake I often see, usually in a medium to small dealership, is when the dealer principal promotes their best sales rep to the sales leadership role without properly vetting their skillset, including the ability to manage others. While there are many reasons for doing this, one of the most prominent I see is trying to keep their top sales rep from leaving the company; they believe a promotion is the answer. The problem is that the sales rep’s focus becomes distracted with leadership responsibilities, and their sales results will likely be affected.
I’m often asked, “What is the proper profile or qualifications for a top-shelf sales leader?” The obvious answer is someone who can completely and successfully secure or capture the company’s monthly and yearly sales budget without having to lean on anyone else – someone with a proven history of successful sales leadership. Did you get that? A proven history of successfully managing a sales organization to success!
It’s important to build the right profile and compensation plan to attract higher quality candidates. Once they’re onboard, deliver your vision, business objectives, and market strategy, and let them execute. Set up a complete understanding of how you’ll measure their success and how they’ll be held accountable for the results. If you’ve hired the right person, this will allow you to work “on the business” while they handle the daily pressures of driving successful sales attainment. One thing is for sure, a successful sales leader is hard to find and most are already employed, earning a great living, so an attractive compensation and upside program is needed to get their attention. You won’t attract anyone with weak offers, and the value for your company will be ten-fold if you get the right person. Prepare an offer that interests high-talent candidates.
There is so much wasted payroll in today’s sales organizations—I typically find all of the money needed to build the appropriate hiring package for a proper sales leader. It’s not uncommon for a high quality sales leader candidate to want a piece of the company as well. Think of that old saying: “100% of nothing is nothing, but 90% of something valuable is a great thing!” Hiring less than the best is a waste of money and slows the ultimate growth of the company.
Streamline Your Sales Team Model
When building a proper sales team model, define the attributes and results that you want the team model to deliver. Look at the differences in these two models. Based on the way they’re structured, the strength and affordability of the new sales team model becomes clear. In the traditional sales team model, it’s obvious the sales leader would be divided by 7 different relationships and must engage, nurture, and manage each of them differently. Additionally, there are 7 different sales funnels to manage. If the typical ratios exist, each individual’s forecast skillset and accuracy will be all over the board and will probably carry less than 30 percent overall forecast accuracy. There won’t be enough existing business or lease renewals to give to everyone, so they’ll be on their own and most won’t survive.
My research shares that the average dealer will waste 8 months (minimum) of payroll trying to nurture a single rep to success. What’s 8 months of payroll times 7 reps equal? A LOT of money! This team model is based on one rep per territory (real estate) or one rep on a named account list, and the two choices the sales leader has are:
1. Train and nurture those who are failing. (An extreme distraction and a great amount of time)
2. Replace failing reps, which then starts the cycle over again. (Remember there’s not enough existing business to share)
So how do you fix this? This new sales team model isn’t magic, it simply takes into consideration all of the failure points that the traditional model has and eliminates them. Its design delivers better results because it’s more manageable, and the manager can stay focused on the sales funnel versus individual development. To give you a good understanding of how this works, let’s identify a few of the attributes that would repair the points of failure of the traditional sales team model. (Not in any particular order):
Attribute 1 – Protect the account base and increase client retention – I’m told often that “my account base is under attack,” and yet, when I look at the traditional sales team model and the compensation plans that go with it, sales reps are not paid to manage accounts, they’re paid to find new opportunities and renew leases (if they have any). I believe this is a significant disconnect, and it’s not addressed by placing admin staff to manage your accounts and best client relationships! This is a sales function and is best addressed by creating a sales position compensated on client retention and longevity. There should also be a requirement to convert a certain percentage of business to managed services throughout the year.
In the picture, the female sales rep standing on the right holds the position of “Account Retention Sales Rep.” She is completely responsible for the entire account base and all of the lease renewals (or whatever number of accounts would be reasonable) and driving the account retention and transformation process into the base. All lease renewals are now hers, and I have a great compensation plan that drives her income toward the key business objective for retaining and transforming the account base. Refer to the sidebar on Compensation Model and email me if you would like to chat about it.
Attribute 2– Grow the business – When I lift the hood and review growth trends, I typically find a fair amount of business shrinkage going on, even when reps renew existing leases and client relationships. One of the strongest attributes you’ll need from your new sales team model is someone who’s completely dedicated to the growth of the company. In the new sales team model picture, the gentleman standing on the left holds the position of “New Market Growth Sales Rep” and is completely responsible for growth and new business. He only earns income from new inbound accounts. This in itself is not a new thought; however, he has a business development team (2 of the 3 people at the desk) behind him that spends 16 hours a day (between 2 Business Development Reps) setting up C-Level first time appointments for him. He becomes a master at presenting and winning new business.
Additionally – I would augment these two BDRs with a guaranteed C-Level appointment setting service to ensure that proper momentum is achieved for the front end of your business. I would keep this service versus hiring another rep until I overwhelmed this team and had to add help. There is nothing like the energy of a sales team that is working hard and making lots of money; you won’t be able to stop them! Remember their compensation plan is built and aligned with the KBO’s and never pays for “same ole, same ole” sales activity or results.
Attribute 3 – Forecast Accuracy – Because the sales leader (standing in the front of the picture) isn’t divided by 7 reps, and he or she is really only managing two sales pipelines (new business and existing business), there is more time to ensure opportunities are built with the correct strategies and that their forecast is accurate. Business owners LOVE THIS, and I’ve seen forecast accuracy percentage move from below 15% to over 70% accuracy. Isn’t that what it’s all about? On the front side, the sales leader manages the business development team to ensure enough appointments are set with the appropriate targets. Guys, it’s a numbers game. After that, how many appointments drive how many deals? Manage and adjust!
Attribute 4 – Communication – In the traditional sales team model, almost everyone is unfocused and extremely busy in a chaotic execution of so-called sales activity. The sales leader is so busy with non-sales activity there is little time left to develop a solid process for nonstop communication to the marketplace and account base. The gentleman sitting at the desk on the right side in the picture of the new sales team model is our Communications & Campaign Director. His sole purpose eight hours a day is to strategize, design, and dispatch communication outbound and to offer support to sales positions. Funnelmaker.com is a highly recommended tool for this purpose. When your company’s communication shares solutions that help your clients’ companies, even when you’re not selling them something, they’ll remember and appreciate it, especially with an engaged account retention sales rep loving them to renewal!
Attribute 5 – Balance – When I interview most dealer principals, their requests are usually focused and tend to surround the topics of growing their company and retaining accounts. Obviously, the company must deliver valuable products and services to the marketplace, but once that’s established one has to assure themselves that the design of their sales team model delivers both the growth and retention results needed for success. Throughout this entire series, I believe you’ve heard me reference your business objectives and market strategy. I tie everything back to those foundational components because in most engagements, they are completely non-existent. When you drive that purpose through a well-designed sales team model, you’ll experience what I call that “once in a lifetime growth experience,” and that alone will absolutely make your company stand ahead of competitors.
I assure you that the new sales team model displayed in the second illustration delivers much more non-stop opportunity to your company than the 7 individual reps shown in the first illustration. That is exactly where you want your sales reps spending their time – at bat versus walking to and from the dugout. As everyone knows, it’s a bunch of “at bat” events that drive the batting average! Build your team model to keep your sales team out of the dugout, and instead, at home plate swinging the bat!