This week’s blog is from Michael F. Maciekowich, national director with Naviga Business Services partner Astron Solutions LLC, a consulting firm dedicated to the delivery of human resource consulting services and supportive technology.

For many organizations, cash compensation has been the primary tool for motivating sales teams and sending messages of success.  This becomes especially important in today’s depressed economy. More than ever organizations need to take advantage of the lull in the labor market to take a close look at the effectiveness of their sales compensation programs.

Of particular interest is calculating if the programs are successful at generating a positive return on investment (ROI) over administration costs, particularly in a down economy.

Many of today’s sales compensation programs may not be in line with the new economic reality. Thus, they may not be an effective motivation for sales staff.  A key indication of this is when sales staff focuses more on “high dollar” and “low ROI” services or products.

That is why, in the ever-changing economic climate, it is recommended that sales compensation programs be reviewed at least annually to catch any shift in program effectiveness early.

Step 1: Audit of Current Practices

Before you can make a change, you need to know where you are currently.  You can audit your organization’s current sales compensation programs by focusing on the following five activities:

• Analyze your plan’s primary design factors, including the overall cost of the sales compensation plan and the role and effectiveness of the plan in business strategy execution.
• Determine the success of the current plan by answering key questions, such as whether or not the organization achieved a better return on compensation dollars spent as compared to a year ago.
• Review current market trends impacting your organization’s sales force, including industry and geographic competitors’ activities.
• Conduct an internal survey and focus group discussion of the understanding of the current program by your sales force.

Step 2: Design Elements

Now that you know where you are, you can map out where you’re headed and how you’re going to get there.  With the audit complete, the next step is to focus on the key design elements of the revised program including eligibility, targeted total compensation, mix and leverage of salary to incentive payment, performance measures, and incentive formula.

Step 3: Implementation and Communication

You can have the greatest sales program in the world, but without communication the plan will be worthless.  That is why the next step is to communicate and implement the revised program.

There are two key aspects to be included in this phase.  First you’ll need to provide a written plan description to each covered employee so that they know what to expect from the new plan in the coming year. 

Second, ensure everyone is on a level playing field by providing staff training on the new system.  You should be able to convey key information to covered staff, including a discussion of the plan’s new features, within two hours.

Additionally, you should provide individual calculations for each employee of the new plan’s impact on personal compensation based on past performance.  A comparison with past compensation will bring the new plan to life, and help each employee to understand how to be successful in a dynamic sales environment.

Meeting organization goals is a top priority for sales executives today. These goals include increasing revenue, improving business efficiency, creating competitive advantage, improving customer satisfaction, controlling costs and leveraging intellectual assets. The first question asked is “How” can this be accomplished. Many organizations have struggled with this answer and very few have found an answer that is successful, until now. Business performance improvement specialist, Dennis Sommer shares: The answer lies in the development of a “High Performance Sales Team”.

* Do your salespeople make excuses instead of getting out and developing new business?
* Do your salespeople spend more time “being busy” than making contacts?
* Do you have salespeople who always seem to be “putting out fires” rather than prospecting for new business?
* Do they always have something else to do other than make prospecting calls?
* Can your salespeople give you a dozen reasons why the market is down?

If these questions rang true for you then your poor sales results may be more a problem of call reluctance® than a failing economy!  

Follow the link above to read Sales Tutor, Ian Segail’s ideas on how to combat this sales destroying roadblock.

Findings from a study recently conducted by Boston College’s Sloan Center on Aging & Work show that younger workers are most affected by the current economic crisis and older employees are better able to handle the trials of this difficult economic time.

Dave Kahle, The Growth Coach®, asks: “Why is it that some sales people are open and accepting to change while to others it seems like moving a mountain?”

That we live in a time of relentless and pervasive change is no longer news to anyone. There is one important implication of this situation that continues to be a challenge. That is that our employees need to continually change their behavior to adapt to the world around them.

In a recent posting, fellow blogger Dave Stein commented on what he views as an epidemic:  the mis-hiring of sales executives. Dave notes that too many C-level executives don’t understand what sales leadership is all about and, as a result, continue to put non-qualified people into these positions.

“That’s why sales is last on line in many companies with respect to quality, discipline, process, measurement, attrition, and productivity.  The bad news is that ineffective sales managers and their ineffective VPs of sales aren’t going to fix the situation. It’s got to be fixed from above with far more effective recruiting for those sales leadership positions,” Dave wrote.

Mis-hiring is definitely a problem plaguing the sales industry. Too many hiring managers hire sales professionals based solely on whether or not they have experience in a particular industry or with a particular product. They fail to look closely enough at candidates’ sales skills and past track records. As a result, they risk hiring people who know the industry but can’t sell.

That is why I am such a strong advocate of this statement: “The best predictor of future performance is past performance.”

Yes, industry knowledge is important. But industry knowledge cannot override actual sales skills. That is why we practice a very specialized and “sales centric” recruitment process that starts with understanding the make-up of the organization:  revenues, employees, top leadership style, product/service focus, market differentiation, strengths/weaknesses, etc. 

We also focus on revealing the sales culture/environment. Effective recruitment requires a deep understanding of the sales team, territories, product price, sales cycle, ramp up, top performer profiles, sales leadership and how the team is led, CRM/reporting requirements, candidate profile, etc.  There is a significant correlation between how a team is led and its overall performance. That is why understanding the culture is critical to determining if candidates will succeed.

Clues to whether or not a candidate is a good potential match can be found by looking at W2s, understanding past compensation programs, looking at industry, product/services, average sales cycle and deal price and evaluating whether or not there is a sales environment/culture match. Also important is asking questions around selling skills, sales knowledge, intellectual ability, personal, interpersonal, motivation, tenure and compensation.

If you take the time to evaluate candidates for more than just their industry knowledge, and to ensure that they are the right fit for your sales culture, you’ll go a long way toward preventing the mis-hires that can damage the effectiveness of even the most successful sales teams.

Not everyone decides quickly, and many, if pressed will back away or react against the sales methods being used. Decision-making is often a complex thought process where pros and cons are weighed up and the person may not decide until they have gone through this process. This is particularly common in sales which involve significant money or other commitment.

Sometimes it just takes a little time to sink in. You have given them a lot of information which they need to process it and fit it in with their current models of the world. Read about using this process to close business here.

Naviga Business Services Partner, The Brooks Group, is hosting the Webinar “Meet Your Numbers!” How to Do More with Less, July 2, 2009 3:30PM (Eastern).This month, Steve McCreedy and Richard Dickerson will take a hard look at these challenges and show you how to think outside the box to meet - or even exceed - your projections!There are companies out there that are doing very well in this economy. We will share the proven strategies that top organizations use to stay ahead of their competition, even in difficult times.Register today and you’ll discover:·         How to leverage the individual talents of your sales staff and take them to the next level·         A process for getting staff buy-in to your ‘numbers’ plan·         The secret to keeping your staff focused and on taskSpace is Very Limited - Register Today

Each generation has a unique character, and members of those generations have common attributes. The Tech Demo Guy, Dave Sohigian believes that although it is impossible to make specific claims about each individual in a generation (since they span 20 years or more), generational theory (developed by Neil Howe and William Strauss of lifecourse.com) is useful in understanding how members of a generation will likely act in a sales situation. It is also very useful when assessing the character of an organization, since when members of a generation work together they often exhibit even stronger generational qualities. Follow the link above for the 6 keys.

Naviga partner, Jill Myrick of Meeting to Win, has been talking with sales professionals and sales managers from different industries, and they are all seeing different degrees of success in this strange economic time. Whether they are succeeding or not, one thing is for sure - their business is different. From these conversations, Jill has gathered a list of 25 things sales professionals can do now to improve their sales this year. Choose one or two and change your year!