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Compensating Our Sales Folks

Guest post by: Sharon Drew Morgen

Article Overview: Our continued fascination with making an appointment as a precursor to making a sale is based on the belief that a buyer will buy based on the strength of the presentation. And although we get extremely low closing rates, we continue to do it and often throw more sellers at the problem, doing the same activity. That’s the definition of insanity!

Compensating Our Sales Folks

A recent client is an international B2B company with a very non-optimal - but not unusual - way of compensating their sales folks. They split the sales team into an Inside Sales group that makes appointments, and Corporate and Field Sales teams to close them. The structure, as well as the compensation, promotes failure: Inside Sales is paid per appointment (with a tendency to push for an appointment with whomever they speak with, regardless of their appropriateness); the other sales functions are paid based on how many they close.

It's a perfect storm: inappropriate leads are given to sellers who spend gobs of time pushing a solution to whomever ends up agreeing to an appointment (who may not be appropriate buyers, and certainly don't represent all those who might buy), and get a very low percentage of closed sales. So the company hires more and more Inside Sales reps to get appointments, hoping that a higher percent of the appointment will result.

DO YOU WANT TO MAKE A SALE OR AN APPOINTMENT?

My clients came to me complaining of a very low close rate. It never occured to them that just maybe there is a problem with their selling model; they manage the problem by adding sales reps. They believe success is at their fingertips by playing the numbers game!

There is a very large elephant in the room here: Before a buyer can buy they must manage the behind-the-scenes change management issues that address the disruption, the people, the relationships, the rules, that must be handled behind-the-scenes to get the buy-in necessary to bring in a new solution in. Sales enters at the point of ‘need'... but that's the tail end of the buyer's buying decision path.

Our continued fascination with making an appointment as a precursor to making a sale is based on the belief that a buyer will buy based on the strength of the presentation. And although we get extremely low closing rates, we continue to do it and often throw more sellers at the problem, doing the same activity. That's the definition of insanity!

Imagine if it's possible to discover leads/prospects who can be made ready to buy without making an appointment!

Imagine if it's possible to close the buying decision path gap in a fraction of the time and closing 5x more sales without introducing your solution - or pitching, presenting, or creating a proposal.

START WITH A DIFFERENT SET OF ASSUMPTIONS

Once you begin with the assumption that buyers just need to understand your solution and how it would benefit them, you're a solution looking for a problem. Then your sales folks are order takers, or tele-sales reps, or consultants running around looking busy. But all sales - regardless of the industry - close between 2-7%. Where do the rest go? And why are you pitching, wasting time, or making appointments with, folks who will never buy?

You end up hiring more and more sales folks to close fewer and fewer sales... especially these days when Buying Decision Teams are more diverse in geography and function.

Right now you are paying your sales folks to find the low-hanging fruit: buyers who most probably would have found you and bought from you anyway.

Let's compensate our sales folks for helping buyers navigate through the entire buying decision path and help buyers where they need the most help to solve a problem - managing the buy-in of all who will touch the solution - something sales does not do at the moment, as it remains focused on needs assessment and solution placement.

Once you add Buying Facilitation® to your seller's skill set, you will be able to close much more business. Because now you're spending far, far too much time following prospects who will never close and paying your sales people for the wasted effort.

I've heard sellers tell me that they didn't need to learn BF because they earn 6 figures doing what they are doing badly. Imagine if you compensated your sales folks on an expectation that they close 40% of their leads. It's very possible - my clients do that easily. Then, there would be no reason to hire more folks just to get the numbers you're trying to get. And you would have a much higher ROI.

Stop compensating your sales folks on meager expectations. Stop having your sales folks set up appointments first. Start with the very first ‘Hello' and teach them how to buy. Would you rather sell? Or have someone buy?

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Article Tags: Buying Facilitation, closing rates, sales appointments, sales management



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