Sales Culture Tune-Up

Sales Culture Tune-Up A to Z (Part 2 of 3)

This week we’re doing to dive deeper into the subject starting with another crucial sales culture component, performance management.

Performance Management:  Another key component of your sales culture is how sales performance is managed. Some companies have a low-pressure sales culture where sales performance is loosely managed. In these companies, sales managers act more like sales supervisors than sales managers and sales leaders. Little attention is paid to hitting quarterly milestones and there are very few consequences if any for not hitting annual sales goals.

At the other end of the spectrum, you have companies with high-pressure sales cultures. In these companies, weekly sales activities are tracked and measured against minimum activity standards. Sales managers track sales team activities closely via a dashboard. If a sales rep’s activities fall below minimums for two weeks in a row, the rep meets with their sales manager to diagnose and correct the situation.

Hitting quarterly milestones is important and provides real-time objective performance feedback. When weighed against a rep’s pipeline, sales managers move quickly to get a sales rep on a “performance plan.” If annual goals are not met, the sales rep is terminated at the end of the year if not before.

While I have briefly painted a picture of two sales culture extremes, the trick is to decide exactly how diligent your company is going to be concerning setting activities standards, tracking activities, goal setting, hitting quarterly milestones, and how frequent sales managers sit down with sales reps to review their year-to-date activities. My personal belief is sales managers should meet quarterly at a minimum with their most seasoned salespeople to review YTD production, pipeline, and business development activities and more frequently with all other sales personnel depending on production levels. A key function of any sales manager is as a developer of people and it is in these one-on-one meetings where sales managers can develop their people.

Most companies fall somewhere in between the two extremes presented. The key though is to decide what is the right balance of sales oversite for your organization then have a performance management system that is aligned with that approach to managing sales.

Hiring and On-Boarding:  Many employment problems can be prevented with strong and consistent hiring and onboarding process.

  • What are the criteria being used to evaluate, hire, and onboard salespeople?
  • Does your onboarding process proudly present the history of your company and the values that have driven your success?
  • Are performance expectations defined clearly upfront before an employment offer is presented so that a prospective employee understands fully all aspects of your sales culture?

Past performance does not always predict future sales success. Salespeople by nature are good at selling themselves. All too often, salespeople interview well and make impressive claims of past sales performance. I am still surprised at how rarely a hiring company follows up with a candidate’s prior employer to verify past sales performance. Seems common sense, but verification of past performance is essential. Your core values also play a critical role in the screening process, to help you identify salespeople with the habits, skills, and industry knowledge to be successful and who also fit your culture. You must have both!

Incentive Compensation:  Incentive plans are another key tool in your sales culture toolbox. Done effectively, incentive plans can increase employee productivity, cultivate employee engagement, and maximize profits. Many incentive plans just do not work. Some pay out too much (wasted money), some too little (not motivating), and some just come to be expected (an entitlement).

To design a proper incentive plan, before thinking about sales outcomes like revenue growth and increase in the number of new customers, you first better ask yourself what are the sales behaviors you are trying to drive? When a company incents for growth, salespeople focus on closing transactions, not relationships. If your company touts being “relationship-focused” as does the banking industry, yet your company incents for closing deals, there is a disconnect between what your company said it’s about and the behaviors of your sales personnel. Incenting for growth does not drive the behaviors needed to improve relationship profitability.

A balanced scorecard approach “weights” a myriad of desired outcomes such as fee income, revenue growth, portfolio growth, individual customer profitability, referrals to internal partners, referrals to external partners and links them to key sales behaviors is required.

If customer retention and improving the profitability of each customer are important, you’ll need a “balance of behaviors” reinforced by your incentives.

Have a great rest of your week,

Ray

Sales Culture Tune-Up

Sales Culture Tune-Up A to Z (Part 1 of 3)

As we begin to emerge from the pandemic-induced twilight zone of the past year, now is the perfect time to evaluate the weaknesses and strengths in your sales culture. Just as your engine is what powers your car, the sales and marketing efforts are what power the revenue growth of your business.

Working with clients, we notice two distinct types of sales organizations:

  • Sales teams that are hitting on all cylinders and the rest of the departments are struggling to keep up.
  • Sales teams that are not hitting on all cylinders ─ there are stress factors that need to be addressed.

This three-part blog was created by studying those high-functioning sales teams vs. those that are struggling. Regardless of your industry, banking, pharmaceuticals, manufacturing, transportation, or telecommunications, many companies are still grappling with the magnitude of the impact the pandemic has had on their company. The reality is for many companies to survive and prosper, their sales efforts must improve! Read more

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Finding Profits Among Increasing Margin Pressure

If you’re like most companies, making money off your spreads has only gotten tougher. Cutting expenses can only get you so far before you truly start limiting future growth. Pulling on the same ol’ tried and true financial levers only gets you so far as to improve your financial picture. To strengthen the financial outlook and future of your organization, you’ll want to look at how your organization optimizes and synchronizes all of the moving parts of your business.

Let’s Dig A Little Deeper…
If your company is like most, your managers, supervisors, and employees wrestle with the 136 issues simultaneously. For the organization not fine-tuned, “fire-fighting” and undue stress are often the organization’s modus operandi. These reoccurring issues fatigue employees, drain company resources, and chew up profit. Read more

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Preparing to Win In Advance of a Recession

While our economy is still strong, most media outlets today are talking about a looming recession.  Maybe it will happen in 2020, 2021, or 2022––no one really knows for sure. However, whenever it happens, that is not the time for your relationship managers, BDOs, and lenders to employ new strategies and tactics in an effort to adapt to a recession.  That’s too late! Read more