The Equilateral Triangle Model For Developing Sales Compensation Plans

There are few more critical decisions that business leaders make than how to compensate their sales organization. Unfortunately, many look at this issue from a single vantage point. How much do we want our sellers to earn if they hit quota? While that is an important and relevant question, it should not be the only director of sales compensation. Unlike any other position in the company, the sales person has two job descriptions, the one called a job description and the compensation plan. While HR may have the job description on file, the one that drives the sales person's activities is the compensation plan.

There are multiple considerations for business leaders to review when developing sales compensation plans because the plan doubles as a job description. Since it directs their sales behaviors, you need to look at how it impacts the service the client experiences. It also impacts the overall results for the company. Thus, there are three entities to consider when formulating the sales compensation plan: the sales people, the clients, and the company (employer).

The equilateral triangle serves as the perfect model when designing sales compensation as it ensures none of those three entities is over/under recognized by the plan. Each side of the triangle represents an entity affected by the sales compensation plan. If any of the sides of the triangle are out of proportion from the others, the result is the law of unintended consequences. Things happen that are not intended, but are consistent with the message communicated by the plan. Here are some examples of compensation plans gone awry.

Case Study: Health Club. A large health club chain offered a program that provided employees of certain companies discounts on memberships. The way the program was structured was that the health club sales person would generate a lead for the corporate sales person. The corporate sales person would call the company and offer the employees a 20% discount on memberships if they would post a flyer for 30 days to communicate the offer to the employees.

Coming back to the equilateral triangle model for sales compensation, this program was a colossal failure. The company paid full commissions to both the health club sales person and the corporate sales person on a 20% discounted membership. Needless to say, the sales people were happy and invested countless hours pushing this program instead of the other programs offered by the company.

The other two entities were much less satisfied with this offer. The company, because the membership was heavily discounted and were paying double commissions (not only to the sales people, but their leaders), came to realize that they had a near non existent margin on every sale made. They also found that their corporate sales team dedicated all of their selling time to this program instead of other programs that were of higher margin to the company, but paid lower commission rates.

When looking at the third side of the equilateral triangle, the clients saw no value on the program. The companies simply stuck a flyer on a bulletin board and saw no tangible benefits. Further, when those employees who joined the health club through this program were interviewed, most said that they were planning to join any way at list price.

Thus, the program failed two of the sides of the sales compensation equilateral triangle model.

Case Study: Human Resources Outsourcing (HRO) Service Provider: A firm offering outsourced services to Human Resources Departments of large companies structured their compensation plan to pay commissions to their sellers at the highest percentage for the first 18-months following the commencement of the contract. After that period, the commission rate dropped to a fraction of a percentage. While at the surface the plan does not look perilous, there were some underlying components that caused issues.

The 18-month clock never restarted with a company. This means that if a sales person added other locations or regions, they only received the commission rate commensurate with the moment in time of the client lifecycle. If the sales person added a new client location in month 19, the commission they were paid wasn't enough to buy a cup of coffee at Starbuck's. If the client purchased additional services, the same compensation issue occurred.

The plan told the sales person to sell whatever you could in the first contract and not to bother with upselling/cross-selling as the compensation level did not justify the work. The clients suffered as a result of this program as well. Since the commission rate for the sales person dropped after month 18, they noticed that the attentiveness of their sales person dropped too. The plan unintentionally directed that to happen, yet attentiveness of the sales person is critical as the nature of these buying relationships is such that there are hourly transactions. They need their sales person to remain engaged.

The HRO provider wasn't happy either. They came to realize that their sales people were not focused on conquering accounts. The sales person would sell once and move on to some other opportunity. The sales people were not focused on adding locations or on selling new products/services to the account. They also found they would lose many of their clients in year 2 and 3 as the attentiveness of the sales person had dropped.

Unlike in the health club example where the sales people were happy with the plan, but the clients and company were not, no one was happy with this plan. After two painful years, the plan was scrapped in favor of one that met the criteria of the equilateral triangle model.

Thus as you develop your compensation plan, ask yourself the following questions to ensure you are following the equilateral triangle model.

1. What message does the plan convey to the sales person about where to focus their selling time?

2. How does the plan impact the client experience?

3. If the sales person follows the plan exactly as it is written, how is the company impacted?

Remember, the compensation plan you put in the hands of the sales organization are the marching orders for the force. The equilateral triangle model helps to ensure every action taken by your sales team is intended.

Lee B. Salz is a sales management guru who helps companies hire the right sales people, on-board them, and focus their sales activity using his sales architecture® methodology. He is the President of Sales Architects, the C.E.O. of Business Expert Webinars and author of "Soar Despite Your Dodo Sales Manager." Lee is an online columnist for Sales and Marketing Management Magazine, a print columnist for SalesforceXP Magazine, and the host of the Internet radio show, "Secrets of Business Gurus." Look for Lee's new book in 2009 titled, "The Sales Marriage" where he shares the secrets to hiring the right sales people. He is a passionate, dynamic speaker and a business consultant. Lee can be reached at lsalz@SalesArchitecture.com or 763.416.4321.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Stop Hiring Under-Performing Experienced Sales People and Start Developing Competent Ones

Mark has just finished his day interviewing his 20th potential sales recruit of the day. Being the Sales Director of the company, he is also responsible to make the final round of interviews of the shortlisted candidates to make sure only the "high-potentials" are being hired.

Being the Sales Director, Mark has a lot of other things to do besides interviewing sales candidates. However, due to the extremely high sales staff turnover, Mark has been getting a lot more involved in the sales staff hiring process, sometimes getting involved even in the preliminary interviews.

Still, despite his best efforts to make sure only the sales people with the relevant experience, the best track records and whom had made the most impressive impression during the sales interviews are hired. 6 months later, most if not all sales hires have failed to deliver according to expectations.

When Mark asked his Sales Managers why the new sales hires are not performing, the answers somehow centre around the following:

• "These young people are simply not motivated to work hard enough"

• "They just don't have the 'sense' to do business with the customers"

• "They just cannot fit into our kind of business", etc.

Somehow, Mark feels rather helpless as no matter what he did, his new sales hires are just not performing. Now Mark needs to find some ways that will give him some indications of future success, or he might as well implement a hiring freeze since his company has been wasting a lot of resources hiring under-performing sales people.

Mark is not alone in his predicament. Many companies are making a lot hiring mistakes when hiring new sales people. If these mistakes can be rectified, these companies can see significant improvements in their sales results.

The Fallacy of Hiring Experienced Sales People

When most companies hire sales people, the major criteria usually includes having some years of experience selling in the same or a similar industry, and a good track record of good sales results.

However, if you were to look closer, these are not the critical success factors that will determine if the sales person will deliver results for you.

One key reason is that the market place that we are operating in is constantly changing. You will notice that:

• Customers are getting more and more demanding and knowledgeable;

• Competition is getting more and more intense;

• The things you sell are getting more and more complex, etc.

In some markets, the changes within a 5-year period can be so drastic that it's beyond recognition.

So if you are hiring based on past experience, how do you know that what worked in the past is going to work in the future? The same factors that gave you success in the past are getting less and less relevant for today's and the future's challenges.

What about a good sales track record, you might ask. Surely, if a sales person has been consistently producing great results will still continue to produce great results.

Unfortunately, unlike many other professions, the sales profession is one where dealing with failures is essential to becoming a successful sales person. No successful sales person can claim that he or she has never been rejected by customers, or has never lost deals in an ongoing basis. In fact, just like in many negotiations, the better sales person knows when to "walk away" and seek other better prospective customers, while the weaker sales person hangs on too long to customers that are never going to buy.

Hence, if you see sales people who seem to have "perfect" track records in the sense that they always reach or exceed sales targets could be:

• Selling in a monopoly where customers have no choice but to buy from them;

• Entering the market in an early stage so that they got the biggest customers in that market;

• Selling for a well-established brand to loyal existing customers that really need little persuasion to buy

This is not to say that having the relevant experience and a good track record is not important to a sales person. It just means that having some years of sales experience and a track record is no indicator of future performance.

The Critical Behaviours that Drive Sales

While companies are always looking at sales figures to determine the success of their sales force, most of the time it is the sales process (i.e. how you sell) that determines the results you get. How well the sales process is being executed depends largely the habits and behaviours of each sales person.

Different companies will have different sales processes for different customers in different regions who are buying different product lines. Hence, the critical behaviours that drive sales success will vary from case to case. The sales processes that companies have can include:

1. Selling only to a few Strategic Accounts, and sales people will have to work through complex relationships so as to gain buy-in from all levels in the customer's organisation;

2. Constantly generating new leads and getting new customers to buy frequently; or

3. Having a balance of new business development and key accounts management so that sales people are getting both new and existing customers to buy from them with varying complexity, etc.

In reality, sales processes can get a lot more complicated as different customers in different markets have different needs that have to be satisfied in different ways. So what if you aren't quite sure what is the sales process for the next sales person, here are some "generic" critical behaviours that apply to most sales processes (and which are found lacking in most sales people too):

• Constant prospecting to make sure the sales person fills up the pipeline. Most sales people, no matter how experienced, will prefer to deal with existing customers than to look for new ones. However, if the sales person shows the disciplined behaviour to keep on prospecting for new prospects, that is a sign of a good hire;

• Constantly exploring what are the customers' "pain" or problem areas, and pro-actively seeking to provide solutions or suggestions to customers to help them overcome those challenges;

• Making sure that the relationship with the customer are developed with all major key influencers in the customer's organisations, rather than relying on one single contact. Such sales people are also usually good developing relationships with less influential "informants" who can provide critical information

• Learning from mistakes and customer rejections so as to do better next time. In a similar vein, knowing when NOT to pursue a customer when it's not worth the time or effort, AND spend time looking for new and better customers instead, etc.

Hence, during your interviews with candidates, you can ask the following questions:

• "If I were a prospective customer, and you want to do business with me, how would you go about making that first contact?" (Do a role play, and also ask the candidate what is his usual modus operandi)

• "What makes your customers buy from you instead of anybody else? Why have some other customers chosen NOT to buy from you?" (Note: if the candidate gives general answers like "because I provide good service", probe in deeper by asking "what is good service")

• "Typically, how many people do you have to communicate with before you can get your sale? Can you cite an example where you need to work through many contacts before getting the sale?" (Get the candidate to draw his customer's organisation chart if need be)

• "Are there any instances that you thought you probably have won the sale, but somehow lost it in the end? What do you think you can learn from such cases?" (Beware the candidate who's very confident and tells you he knows his customer real well)

• "Are there times when you need to give up on a specific sale? What happened and what did you do then?" (Watch out for the candidate who claims "I never give up any sale!" It is a sign of poor priority management and qualifying skills)

Developing Competent Sales People

It may not be surprising that most if not all of your candidates fail in ALL of the above questions. It could well possible that even some of your existing experienced sales people fail some of those questions too. (Or else sales consultancies like us will be out of business very soon!)

The next question will be: if we then set such high standards that no candidates actually display the required critical behaviours, does that mean we don't hire anyone?

The good news is that such critical sales behaviours can be taught and learnt. In fact, high-performing sales people learnt to become high-performers throughout their careers. Only a handful few high-performers are "naturals".

Hence, while most candidates are unlikely to display the critical behaviours that will drive sales for you, you can pick those who display some of those behaviours, AND are willing to learn some new ways to make more sales, you then may have a winner in the near future.

Some companies are unwilling to invest time, effort and money to develop their new sales hires because of the following reasons:

1. "We expect the new sales hire to perform immediately, that's why we hire them for their experience!";

2. "We don't have the time and resources to hand-hold these sales people who can't perform";

3. "If we teach them too much, they may turn around and work for our competitors."

What these companies have to realise is that if they could hire the sales people who can produce immediate results, and don't need any form of training or coaching, that's great. However, such sales people are rare, and those few who are available will probably ask for a very high pay package. In any case, since prior experience and track records are never guarantee of success, companies might just have to train and develop their new sales hires so that they form critical sales habits and behaviours.

by c.j. Ng

c.j. is the trusted sales advisor who have helped international companies achieve quantum improvements in sales profits in China and beyond. He is also the 1st-ever sales trainer and consltant to speak at the American Society for Training & Development (ASTD) International Convention. So far, c.j. has helped:

* A leading international hotel to produce the equivalent of an additional 5,000 room nights in China in the lull summer months of 2007
* A global leading architectural hardware company to increase the sales revenue of a key account in Shanghai by 10 times within 3 weeks
* The world leader in PC sales to transform their sales force to be more collaborative and solution-focused, and helping them to regain worldwide pole position from their nearest competitor.

Prior to this, c.j. was Asia Marketing Manager for a Fortune 500 logistics company, as well as Corporate Training Manager for Ringier AG, Switzerland's largest media group, in China, where he was responsible for sales team development, and helped increase the percentage of new hires to close their first sales within 2 months by 30%, as well as increase overall sales targets by more than 50%. Visit http://www.psycheselling.com/page4.html for more details.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Teaching Strategies For Developing World Literature Appreciation

There are many wonderful teaching strategies educators can use to cultivate and develop an appreciation of world literature within their students. Initially, developing an appreciation for world literature in high school students requires that teachers select reading material with themes that are relevant to the modern era in which we live.

Interest and appreciation for the book To Kill A Mockingbird for example could be generated by having a brief class discussion on race relations. The teacher and students could collaborate to create a detailed timeline of 15 to 20 social, cultural, and political events that occurred in the 1930s. The activity would familiarize students with the attitudes and issues of the Depression era in the deep South, while simultaneously teaching students how African-Americans overcame such prejudicial attitudes.

Following the class discussion on race relations, teachers could ask students to keep reading journals and document their reactions to the book as they read it. Reading journals allow students to enjoy literature and make remarks about points of interest as they come to them during the reading.

Next teachers can assign students free writing exercises in which they can respond to elements of the story, as well as prompt driven responses. Important elements of the story, aspects crucial to the theme, and anything of unique interest to a student should be encouraged to be reflected upon during the reading. The story's main conflict, it's level of importance, and possible solutions are all worthy topics for students to evaluate and discuss.

Evaluations containing students' assertions and assumptions should cite supportive textual evidence. This will clearly demonstrate students' mental comprehension processes.

Worthy of recognition in Harper Lee's novel To Kill A Mockingbird is the author's observations of her family and neighbors. The events which occurred in her hometown in 1936, made a profound impression upon the ten-year-old Scout. The issues of rape, race relations, gender bias, and class conflict all were found throughout the text. These issues are seemingly universal in nature and therefore effect every generation. The primary themes of racial injustice and the destruction of innocence are both disheartening and enlightening. These themes provide students with a sufficient amount to think about, when posed in the form of meaningful and probing questions.

The noble lessons within the novel emphasizing tolerance and decrying prejudice are instructional for students, while giving them much to discuss and write about.

The character Atticus stated, "You never really know a man until you stand in his shoes and walk around in them." This heartfelt instruction to his children awakened compassion in them to not be so quick to prematurely judge a man, nor a matter. Teachers can ask students when if ever they prematurely judged a person or situation. Students should also be asked how they remedied the wrong and made it right.

Jem, Scout, and Dil all attended the court hearing of Tom Robinson, a negro gentleman who had been falsely accused. As a sign of solidarity and racial unity, the children sat upstairs in the courthouse with the black Pastor and folks. Questions about the role of each character, what their temperament portrayed and revealed, along with the possibility of what that person might be doing today all are excellent and thought provoking questions for students.

Tying the literature together with modern day events will also enable the students to apply what they are learning. A discussion about what Atticus would have said and done had he been alive in our day would be a stimulating conversation for students.

Paul F. Davis is a highly sought after worldwide professional speaker, prophetic minister, purpose coach, and change master transforming organizations and empowering individuals to live their dreams.

Paul is the author of several books including United States of Arrogance; Poems that Propel the Planet; Update Your Identity; Breakthrough for a Broken Heart; Adultery: 101 Reasons Not to Cheat; Are You Ready for True Love; Stop Lusting & Start Living; Waves of God; Supernatural Fire; God vs. Religion; and many more!

Paul's compassion for people & passion to travel has taken him to over 50 countries of the world where he has had a tremendous impact. Paul's organization Dream-Maker Inc. builds dreams, transcends limitations, & reconciles nations.

Contact Paul to speak at your event or for consulting:

RevivingNations@yahoo.com
407-284-1705

http://www.PaulFDavis.com

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Developing Self-Awareness by Enriching It From Literature

Self-awareness is based on reflection and in knowing one's capabilities. Self is in constant change and never appears equally as the same as it has been. We can also reflect upon our self from a variety of sources such as other persons, movies, series, horoscopes and literature, wherein the latter has been created by men and women with deep insight with the possibilities of language and human characteristics.

When we consider the differences with the artistic expression of literature and movies, we find that one of the key differences is in that the literature explores the internal experiences of the characters with words, giving also the dialogue which the characters use to express those internal experiences in response, where in contrast the person watching a movie must deduce the internal experiences from a variety of external postures, thus focusing the individual's perception to study those postures. When we then think movies as a source for self-reflection, we can find deep existential themes and such, but when it for example comes to embody what is reflected in relativity with movies or television series, we find its orientation to be more on appearances, postures and emotional landscapes created through facial expressions, music, rapidly exceeding chain of events and tones of voice.

Literature leans more on the content rather than on its expression through postures. They are at their best in the field of the deepest existential questions and truths that fabricate the human experience such as the internal dialogue over the issues of mortality, the life and thoughts of deeply rooted wisdom of the ancient religious characters, and in such constructs of thought that together, although not expressed by the characters to each other, produces the chain of causality that leads to the end of the story, creating more detailed representations of the characters while doing so.

When we now compare these two different forms of artistic expressions, we find that the literature creates more a posteriori reflections from the characters than what must be deduced as the internal experiences of the characters postures in a priori. Thus, the use of literature in the creation of self-awareness can be considered as giving more firsthand knowledge of the human experience to live through with. What we read or watch is what we become aware of, including the exploration of the unknown sides of our own self. In literature we thus develop our own self-awareness in relativity with a posteriori knowledge created to the characters, wherein we develop with movies and television series our deductive skills of the internal experiences of characters and how we can display portraits of our own self, as the sub-conscious hardly makes distinction between fiction and reality.

Copyright © 2010 Henry M. Piironen

Henry M. Piironen is the author of "The Power of Transiency (How Thoughts Can Harness the Power of Life, the Universe and Everything)." To purchase this definitive book, visit Amazon Kindle Store now! Already read it? To purchase his other books, click here.

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.