A few weeks ago, I jumped into the compensation discussion with a post about commissions.  My opinion is that heavily and solely incentivizing a sales professional for their selling results might not be the most effective compensation model.  There are aspects of the sales process that involve the expertise, support, and follow-through of others in bringing new business and retaining existing business.  Providing a large portion of the rewards to the sales professional for these results diminishes the significant and valued contributions of others in supporting these outcomes.

The purpose of this post is to offer a follow-up to the commission conversation.  And, provide a little more perspective into what is rapidly becoming the organizational and process trend for most businesses.

While there are still businesses where the sales person is solely responsible for finding, identifying, qualifying, positioning, closing and supporting a client, that model is likely the exception, not the rule.  In today’s business environment marketing, telemarketing, inside sales, account management, professional resources, etc. are all actively involved in the process of attracting, closing, retaining, and expanding client relationships.  Today’s sales professionals cannot and do not engage in the sales process alone.  They are completely dependent upon the support and expertise of others.  The compensation model and the organizational model is outdated, to the point of broken, if the sales person is viewed as solely or primarily responsible for growing or increasing revenues.

Clearly the sales process is touched and supported by many aspects of an organization.  Understanding the sales process, leveraging the necessary expertise at the ideal time in the process, and creating, implementing a strategy that positions the value of the team –knowledge, experience, commitment — in relationship to the client is where business opportunities turn into revenue.

Sales is not the simple, single act of one person simply selling, it is a comprehensive, organizational commitment to:

1. Relationship building: Connecting into existing at future client organizations at multiple, valued levels throughout the organization.

2. Leveraged expertise: Introducing subject matter experts to the clients, as needed, to fulfill needs, meet expectations, and solve problems.

3. Delivering solutions: Providing answers and solutions to the challenges presented and being proactively engaged in adding value and expertise to the relationship in an ongoing fashion.

4. Great customer experience: From the beginning of the sales process through to the maintenance of an ongoing relationship delivering a consistently positive and unified commitment to delighting and engaging the customer.

It is the effective management of both behavioral and strategic components that drives growth.   These components cannot and do not simply exist completely in the functional arena of the sales department.  These outcomes are dependent upon the coordinated cross-functional expertise and support of the entire organization.  The process of executing a selling strategy involves and requires the engagement of more than a sales team or an individual sales professional.

When defining the process and structure for your sales activities, one can look at the sales professional as the quarterback responsible for coordinating and directing a comprehensive, strategic team effort.  However, the sales person is not the only person involved in the process, the primary resource for success, or the person who deserves the most accolades for success in the growth process.

Sales is a team sport and the organizations that builds strong, collaborative, strategically organized teams committed to the growth initiative will win more often than those who work in their functional, old school silos.

More from The Sales Cooke

• Successful Selling is Not in Your Head
• The “Solution” is a Matter of Perspective
• The Selling Professional — 2010 Version

The Sales Cooke Recommends

• Dave and the Art Of Commission Only Sales  (michaeldgoodman)
• Freedom is not a state of employment, it is a state of mind  (PamSlim)
• Sales Is A Performance Game!  (michaeldgoodman)

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I have long been a passionate proponent of commission only sales programs (including draw against commissions).  While revisiting the wide ranging reality of the sales professionals’ role and interactions with their organizations as they produce and help grow the business, I have had a significant change of heart.

The notion that most sales professionals are solely responsible for their growth efforts is, in many cases, outdated and misapplied.  In most businesses, the salesperson now relies on a team of resources to assist them with the client acquisition and management.  That they act in concert with the commitment, support, and dependence of a team does not make them solely responsible for, or deserving of, a compensation system that rewards merely one aspect of their role — results.

This is not to say that all commission only or commission intensive compensation programs are inherently outdated.  I am merely articulating an altered philosophical and business perspective that recognizes that sales professionals are not the only people participating in the growth process.  Further, their role is often merely not dependent upon or limited solely to new business activities or results.  If that is the case in your sales model, exclusively or significantly rewarding them for bringing in new business is financially inappropriate.  Hence, your compensation model is likely giving undue credit or overemphasizing a desired behavior  or expected outcome.

Defining what the compensation model is for a sales professional in your organization, I would examine and understand the following first:

1. What the sales process is:  Map out the entire sales process from lead generation through qualification activities to proposal generation to strategic development and planning to close.

2. Who else gets involved:  Understanding those people that have become part of the process is a required informational piece.  Before you can reward anyone for the results of the organization, you need to know what their specific roles, accountabilities, contributions were in relationship to the sales process.

3. What the post-sales relationship looks like: After a prospect becomes a client how does the organization supports and nurtures that relationship.   Again, take a close look at roles and process to understand the responsibilities and contributions of the various individuals or groups are in association with that process.

4. Define the financial allocation for new business and retention: In other words, assign the variable compensation the organization is willing to allocate to the results associated with both growth and retention. This figure is usually derived from a component of the percentage of gross profits associated with growth and retention.

5. Create a financial model that provides incentives to everyone: I am a firm and passionate advocate for the highly interactive, engaged and empowered team.  Compensating a lone-wolf sales professional solely on production that is dependent upon others does not bring strategies and teams together — it divides them.  Offer performance-based, performance-related compensation models to the team and reward the team for their outcomes.  This puts the sales professional in a leadership role to manage strategy, process, and the internal/external relationships necessary to steadily grow revenues.

While some compensation models may be perfectly suited for a commission only program, I do not embrace the notion that one-style fits all in the ever-changing sales arena.  Before you start drawing up a compensation plan understand your process, know who plays a critical roles in your growth model, and reward your team for the successful contributions for both growth and retention.

You know your sales machine is working in the right direction when you have people coming to your business more than you are  reaching out to them to bring them into your business.  Once the demand cycle swings your way and most of your growth related activity is spent following up on leads you now are in the enviable position of responding to demand, not creating it.  Unfortunately, until your business reaches this exciting level of nirvana, your sales machine is responsible for driving and creating demand.  And, once you successfully create demand, the other challenge is maintaining and developing it.

At its fundamental core, the most important component of the demand process is knowledge.  For it is through the application of knowledge from our successful experiences that we are able to examine, understand, duplicate, and repeat those accomplishments.

Every single successful sales engagement is a lesson.

If you do not treat each of your selling successes as an isolated incident, you miss out on the opportunity to identify and understand the components of the sales process that worked; and, when laid out next to your other successes, recognize the repeating patterns in your successful experiences.  Though some success may, in fact, be an accident or blind luck; repeatable success defined by a process that has been designed through experience and knowledge.

As you begin to explore the question of what do we need to do to create demand and build a stable, reliable growth machine there are several components that you must examine and understand in order to create something that systematically drives demand and improves revenues:

1. Know who buys from you and why.
2. Know the process that was followed to turn people from cold prospect to passionate client.
3. Know what your best clients value and what they continue to expect and look for.
4. Know where other businesses like your best clients are.
5. Know how to connect into that market or group.
6. Know what tools, tactics, and resources are necessary to generate information and awareness with those future clients.
7. Know how to communicate in a consistent manner with your market using the language of the lessons of your successful experiences.
8. Know your clients’ story – what they loved, why they value your business, why they value the relationship.
9. Know how to share your clients’ story with others.
10. Know how to integrate your functional activities of sales and marketing into a collaborative, supportive process.
11. Know how to continually measure and track your success.
12. Know how to modify your strategy to reflect new and valid knowledge.
13. Know how to educate your sales team and incorporate into their daily activities the behaviors that reflects and supports success.

The success of your growth strategy requires the necessary information, knowledge, feedback, and understanding to make your accomplishments repeatable.  The challenge for most organizations is instilling the discipline to learn, understand and indentify what works, why it works, and how to make it repeatable.  The next step is incorporating this knowledge into a management and educational philosophy and process that puts into practice.

Driving demand is not rocket science.  There is no fancy formula or secret.  All it really takes is a fundamental commitment to discovering the most efficient way to be productively successful and convert that into a process that empowers the organization to be repeatedly successful.

In several presentations I have talked about impact of the shift in our economy on business relationships.  To that end, there are three aspects of the business relationship that are critical in the formation of them: personalization, authenticity, and community.  

Virtually no one has the time, the desire, or the patience to be pitched, sold, manipulated, or coerced into making purchasing decisions.  Most every organization, and the people in them, have serious issues and challenges that they are working on solving or fixing.  They only have enough time or energy to discover those reliable and committed professionals who can provide the resources to helping them with these issues.

While many organizations continue to push their sales teams to hit their numbers by meeting more people in an attempt to get them to buy and close more deals, let me be the first to say — STOP IT!

I have been reading a great deal about the commentary of many sales trainers and sales educators. There are a lot of creative terms and phrases and styles out there that emphasize relationships based and solutions oriented selling.  And, while many of the values in these programs start out in the direction of demonstrating these commitments; in the end, they really teach sales professionals how to act and play the roles of a relationship and solution based professional — they do not educate them on effective behaviors to actually be committed to that behavior.

Sincerely engaging in a relationship where you are interested in helping a client with their issues, challenges, goals, and problems mean that you cannot be thinking about how to “get them to buy from you.”  That is disingenuous behavior.  If that is your goal, you are merely an actor on stage pretending to care.

In a previous post, I talk about the behaviors associated with Selfless Listening™.  Selfless Listening™ is a commitment to your client or prospective client that you are listening for opportunities to be a resource to them in dealing with their issues without inserting your wants, needs, desires, or goals into the conversation.  You are selflessly discovering how to be a reliable, committed and professional resource to them without an agenda to sell your stuff.

In an age where people are looking to discover personal, authentic and connected (community) resource to readily and effectively fix what’s broken or enhance what needs improving, walking in acting like you care as long they can buy from you is insincere and “salesy.”

Think about this in a different light.  This is an age of word-of-mouth marketing and the power of referrals and relationship based leads.  How many times have people said,

“You need to meet…He did a really great job of selling me XYZ.”

Or, do you desire to have people say,

“You would really enjoy connecting with…He has been a valuable resource to me and my organization.  Every time we meet, he provides great insights and ideas and he has helped with many of my business issues.”

Think about this:  When your prospective clients are singing your praises and introducing you to their valued contacts as a professional and trusted resource, you are going to have a lot more meetings than if they introduced you as a great sales guy.

To get there, you have to make the commitment to be authentically and sincerely committed to the relationship without regard to what is in it for you (read selfless).  First step in the process — shoot the actor — you are not winning any awards playing that insincere role.

“I cannot figure out why they wouldn’t go with our program, when I know it will help them.”

What is obvious to you is not obvious to your client.  You cannot solve a problem for your clients until your client has discovered they have a problem or a need, first.

This is the failing of far too many sales professionals—pitching, presenting, or offering a program that their prospective clients do not believe or understand they need.  There have been a great deal of training programs that embrace the process of creating a need, even where there isn’t one – I am proudly not one of them.  I do not believe in creating a need, simply because I believe should be one.

I am a bigger proponent of first understanding why the client doesn’t see the need, then proceeding with a course of conversation that works towards offering the client an opportunity to discover a need.  Once I have gone through this process, if there is no agreement that there is a problem to solve or a need to fulfill, there is no opportunity to solve.

Here is how I approach this process:

1. Understand what I don’t know:  There is likely a reason the prospective client doesn’t see the problem or believe there is a need.  It is not my job to tell him all the reasons why he should be interested—it is my job to understand why he isn’t interested.  I need to know and understand his world, his experiences, and his drivers from his perspective – not mine.  When I understand what drives, inspires, and blocks him, only then do I have the knowledge of his perspective.  Remember, I am there to help him, not me.  I cannot help him. If I don’t understand.
2. Explore the situation with the client:  There are many great benefits in our products and services that would solve or avoid a problem.  Whether we can help our client manage their business better, be in better regulatory compliance, etc. doesn’t matter.  We can pound on the table and share all the ways we can help; but, until your client wants it, he won’t buy it – and you need not try to make him.  Go through the process of developing a series of great, exploratory questions that engage your client in a conversation around the issues that the features and benefits of your product help with.  Learn to ask open ended questions about the solutions you might provide and get your clients perspectives on the importance, value, interest, and opportunity in those offerings.  It is a much better approach than advocating why they need to be interested in them.  The more creative, probing, and intelligent the questions, the more likely your prospective client will realize they don’t know as much about this subject as they would like.  And, they may discover an interest in learning more; or, uncover an issue they didn’t realize they were inadvertently ignoring.
3. Offer to help: Once your client expresses interest in learning more, you are now in a position to share, enlighten and help.  Instead of pitching or advocating, you are educating, advising, and solving. Having gone through this discovery and learning process with your ears and your mind open, you are now communicating from a common ground of knowledge and understanding.  This is where powerful and productive deals are made.

Next time you find yourself saying, “I just don’t understand why he isn’t interested” you are probably right – you don’t.

“How do I respond to a client’s request for free services on his account?”

First of all, there is no such thing as “free.”  It may look free, appear free, be advertised as free, or conceded as free — if it a service is being offered by a business, they are making money on that service somewhere, somehow.  Anyone who is honest about their business relationships and business experiences are only kidding themselves when they it is “free.”  It is never free.  If it was free, they would be out of business.

1. If it is such a good deal, why are they asking you? Instead of getting sucked into the expectation that they want something for free, ask them why they are coming to you if they can get the same service from someone else for free.  They are coming to you for a reason — likely, they know that “free” comes at a hidden cost, a different type of risk, or that their “free” isn’t worth it.  Until you know why they want you, there is no need to talk with them about “free.”
2. What are they looking for in the relationship with you besides “cost” or “free”?  If you want to start out your business relationship with a client who only buys on price, enjoy.  Not me.  Now that they have unsuccessfully sucked me into talking about price, I am going to find out what types of business relationships they value and what type of relationship they expect or need in me.  If they are merely price shopping–there is not much to discuss.  If they are looking for a trusted and valued business relationship, they will be able to engage in a very productive, informative conversation.
3. How long is this relationship going to last? If the conditions of this business relationship are founded on the premise of “something for nothing” how well does this prospective client understand, discern, or appreciate value.  If you land them offering free, how long will it take before they ask for something else at a discount or free.

There is no such thing as free.  Your products and services all have a cost associated with them.  They also have a value or a benefit to them.  If they don’t, then you have nothing to offer your customers anyway.

There is no such thing as free.  Clients know that you are in the business to offer programs that serve their needs, solve their problems, or provide improvements and efficiency in their life or business.  They know that the key to your business thriving and growing is your ability to be compensated for what you do best.  Anything you offer as free, demonstrates it has no value and wasn’t worth paying for in the first place.

There is no such thing as free.  When you do not have a clear understanding of the needs, interests, challenges, or expectations of you clients all you can offer is a discounted product.  There is a cost associated with that failing in terms of relationship, profits, and loyalty.  It is best to help our prospective client discover the path to paying for the services they need or keep shopping for that “free” program that will cost them something soon.

There is no such thing a free.  Somebody pays eventually.