RED HOT SALES MANAGEMENT

THE SECRET OF MOTIVATING OTHERS

As CEO, one of your primary roles is to motivate people and create an environment where they want to be successful. Once you create the environment, you have to keep track of it and make sure people are moving in the right direction.

Account penetration is the key to selling success. You are much more likely to sell an old customer something else than a new customer something new. Get your salespeople focused on account penetration.

Motivation is the single biggest challenge in growing a business. You can lead a horse to water but you can’t make him drink. What you can do is change the circumstances so the horse becomes very thirsty and drinks of its own volition. Motivating others involves creating an environment where people want to succeed.

Great CEOs are very customer-focused. In order to be successful at motivating others, you have to understand what they need. Your customers and your salespeople have needs. Think of them first. Find ways to help them overcome their difficulties and you will overcome your own. When you find ways to help people become successful, you will become successful as a result of their success.

To create an environment that will motivate people to succeed by themselves, focus on what is important to the people you’re trying to motivate. It doesn’t matter what is important to you because it is probably very different than your sales people. People may want job security, interesting work, promotion opportunities, supervisor loyalty, but you can’t assume you know what they want. The only way to know is to ask. The easiest way to create a motivating environment is simply to ask. Don’t base your motivation techniques on some survey. Take the time to ask your employees what is important to them.

A very important rule of motivation is when you say you are going to do something, follow through. When you don’t follow through on your words, it destroys your credibility throughout the entire organization. If you do it often enough, you lose your ability to manage. Great CEOs are consistent in their delivery.

To motivate others:

•	Create an environment where people want to succeed by themselves.
•	Ask the people who work for you what is important to them.
•	Follow through on what you say you are going to do.
•	Remember that the single most powerful motivating force in the world is that of a worthy goal
UNIQUE SELLING POINTS

Most sales people say one thing over and over and wonder why they don’t get the sale. If you’re not getting the results you want, don’t keep doing the same thing. If you want different results, try different things. Most salespeople quit after the first call, but most sales take place after the fifth call. The fear of rejection has something to do with it, but most sales people don’t know what to say after the first call.

In sales, you need at least five “banners” because most sales take place after the fifth call. You have to be able to go back a second, third, fourth and fifth time and present the prospect with different ideas and information. Define your company’s five unique selling points, which are your five greatest strengths in the marketplace. These unique selling points answer the question, “Why should I do business with you?” in five separate ways. They give you a reason to continue the sales cycle.

Unique selling points allow your sales and marketing efforts to march to the same tune. From a marketing perspective, these five points are the message that raise the visibility of your product or service. From a sales perspective, these differentiate you from the competitors. First, decide what you stand for in the marketplace. Then drive your whole selling and marketing strategy through those five unique selling points.

Talk about these unique selling points in all your sales and marketing communications face-to-face meetings, prospecting and business development calls, proposals, letters, faxes, email, Web sites and so on. If you repeat the message enough times in the marketplace, customers will start to believe it. So think about what you stand for in the marketplace, define your five unique selling points and use them to drive your sales and marketing message.

Never quit calling on prospects/customers, but give most of your attention and energy to the ones with the most potential. Divide your accounts into A, B and C categories. Call on An accounts once a month, B accounts once a quarter and C accounts once every six months. The only time to stop calling on a customer is when their demographics change and they no longer fit your target market profile.

SALES MANAGEMENT

To manage the sales organization, you have to know four things:

1.	The kind of workday you need to be effective
2.	What you have to do to keep growing.
3.	What kind of sales reports you need.
4.	Team rules.
To be an effective salesperson you have to maximize the amount of time you spend with customers. Between 8:00 a.m. and 6:00 p.m. there are only two activities to engage in. One is talking to customers on the phone trying to set up an appointment. The other is talking to a customer face-to-face trying to sell something.

There are only three categories of sales person/account manager: new, moderate and top. A new account manager is starting out in a new territory. You can’t expect them to sell much right away. A moderate account manager performs in the middle of the bell curve. A top account manager does better than most within the industry.

A salesperson only does three basic things: customer service and account penetration, new business development and everything else (filling out sales reports, expense reports, etc.). The only question is how much time to spend on each area. In today’s world, you need to focus mainly on account penetration with existing customers, but you also need to pursue new customers because large accounts go away even though you haven’t done anything wrong in the relationship. So you always have to be looking for the next large account.

New account managers should spend 10% of their time on customer service, 80% on new business development and 10% on everything else. That equals six hours per day and 30 hours per week on new business development. The two easiest ways to get new customers are to talk on the phone or meet with them face to face. So new account managers should make 20 outbound calls per hour or have three face-to-face meetings with customers in their target markets.

Moderate account managers should spend 50% of their time on customer service, 40% on new business development and 10% on everything else. That equals three hours per day and 15 hours per week on new business development. Moderate account managers should make 60 outbound calls per day or have two face-to-face meetings with target prospects.

Top account managers should spend 80% of their time on customer service, 10% on new business development and 10% on everything else. That equals one hour (20 outbound calls) or one face-to-face meeting per day.

Don’t try to cram all your business development activities into Friday afternoon because it won’t work. Do a little bit each day.

If you don’t plan, you can’t manage the business, especially when you’re growing fast. Nothing is more demoralizing to your sales people than to sell something that the company can’t deliver on. Every company needs key sales reports to manage the business. These will vary according to the industry and the specific business.

A good sales report answers four questions:

•	What information do I need to know to manage the sales organization?
•	What information does senior management need to know to run the business?
•	How can I make it easy to review?
•	How can I make it easy to complete?

When Goidner ran a computer training company, he managed with three key sales reports:

1.	Weekly Planning Document

The weekly planning document is used to manage the short-term. It has only one purpose to make sure the salespeople are doing the right thing — and is divided into four segments. In order to make sure salespeople are on target to meet their sales goals, you have to track their performance. Goldner had his sales people track their revenues going out thee months. If your business can’t track that far out, at least track the current month.

The weekly planning document is divided into four segments:

Segment #1 measures three things for each salesperson: month-to-date revenue, current projected revenue, and their business plan projected at the beginning of the year. Conduct weekly sales meetings where the salespeople have to get up in front of their peers and report on their progress in these three areas. This becomes a self policing process. Call people on a random basis so everyone will stay prepared.

•	Segment #2 measures the actions salespeople are taking to achieve their goals. Only two sales actions count: talking to someone on the phone or sifting down with them face-to-face. With a young sales organization, start out by tracking phone calls because that’s where the sales process starts. With a mature sales organization where the people are mature self-starters, track face-to-face meetings. This minimizes your administrative time and shows more respect for the sales people. Ask your salespeople questions like, “What meetings do you have scheduled for the next two weeks? What company did you meet with? Are you meeting with the real decision makers? What category are the meetings in
—A,B, or C

•	Segment #3 tracks whether your salespeople are pursuing the right prospects. Give every company in your target market an account number, whether you are doing business with them or not. When a sales person goes on a meeting, they have to write the account number on the sales report. This allows you, to make sure your salespeople are calling only on their target market.

•	Segment #4 measures specific account activity. Ask questions like, “What big proposals are you working on? Do you need any technical subject matter expertise in order to put together the proposal?”

These four segments measure one simple thing: are your salespeople doing the right thing? If the report is fill, salespeople are doing the right things. If it is empty, you have a problem. If your sales system is automated, the contact management system should spit all this information out automatically.

2.	The Business Plan

The business plan measures intermediate activities. It is an ongoing report that needs to be updated quarterly. Ask your salespeople, “Your goal is $1 million. How are you going to accomplish that? What, specifically, are you going to do that will enable you to sell $1 million this year?”

Most salespeople’s portfolio is 80/20, meaning 80% of their business comes from 20% of their customers. New account managers sell less, mostly in small, unrelated transactions. Moderate account managers sell more and more major accounts, but they still have some small, unrelated transactions. Top account managers have mostly major accounts with very few unrelated transactions.

The goal is to get all three focused on selling more large accounts, ones you can count on month in and month out for consistent and significant revenue. List your top 10 prospects and have all your sales people/account managers selling with the 80/20 principle. Write this target market into the business plan so that every salesperson never loses sight of it. Make sure your salespeople know exactly where to focus their efforts.

Use rolling 12-month sales projections. Creating the starting point involves a certain amount of guesswork. Add up your top accounts, which represent 80% of your sales, to come up with a number. That leaves 20% that isn’t accounted for. Moderate account managers may have 50% of top accounts. New account managers may only have 20% in large accounts.

3.	Account Planning Document

The account planning document plans for the long term. Have your salespeople maintain an account planning document for all their top accounts and all top prospects, with a maximum of 20 documents. They also need to plan for the remainder of the target market, the companies that don’t fit the top 20%, but that should involve far less time and effort.

Four buying influences exist in every sale:

•	Purchasing. This is the person or group of people who facilitate a sales transaction. Their main focus is price.

•	Economic. These are the true decision makers. Anyone who can say no is an economic influence. Their focus is return on investment. They don’t worry about the cost as long as they get the results.

•	Technical. These people certi1~’ that your product or service will do what it is supposed to do within the organization. IT people are a good example. Their primary focus is, “Does it work like it should?”

•	End users. These are the folks who actually use your product or service. Their focus is ease of use.
If you want to sell large accounts effectively, you must get all four involved. My one can say no, only one can say yes. Make sure you are talking to that person.

Price comes up in almost every selling situation. Selling is the effective management of customer perceptions about what is important in the relationship. Your job is to get your customers to think right, if they think properly, they will buy from you. If they understand the offer you bring to the table and value what you offer, they will always buy from you, regardless of price.

The customer already has an idea of what is important in the relationship. They want a good price and good quality, but everyone has good quality. They also try to downplay the value-added things you bring to the marketplace. Never try to sell on price because there will always be someone who can sell cheaper than you. Always sell on value. Once you set a pricing precedent, it is very hard to negotiate your way out of it. For example, if you give 10% off the first year, it will be very hard to give less than that the next year. Think through your pricing decisions because they set a precedent that last through the entire relationship. If you don’t want to sell on price, manage customer perceptions about what is important in the relationship by raising the visibility of your strengths in the marketplace.

Behavior management is the final ingredient in sales management. Managing people requires managing their behavior. Behavior is a function of skill and attitude, Skill is the ability to do something and attitude is the desire to do it. When looking at non-performers, ask whether it is a skill or attitude issue. If it’s a skill problem, provide the training and coaching. If that doesn’t work, terminate, if it’s an attitude problem, coach and counsel. If that doesn’t work, terminate.

Set rules for team behavior. If the top salesperson can get the job done working one hour a day, let them do it. Try to motivate them to work more, but don’t argue with their results. If they make their numbers without making any outbound calls, again, let them do it. But make it clear that if their numbers fall off, you will put them into the moderate category and treat them like everyone else.

There are certain team-based activities that everyone in the business has to do, such as producing sales reports. These are not negotiable, even for top performers.

Five “must read” books on selling:

•	Sales Manager’s Desk Handbook
•	Strategic Selling
•	Don ‘t Fire Them, Fire Them Up
•	Consultative Selling
•	Red Hot Customers, How to Get Them and Keep Them for Life