Sales Results Overnight: 4 Structural Shifts Every Small Business Leader Needs

by Dave Kahle

   “When you change the structure, you change the behavior of those people who work within that structure.”

            That observation has been a bed rock foundation to my work as a sales consultant who is charged with improving the results of a sales team.

            Conventional wisdom dictates that when a company or a sales team needs to ‘sell better’ you should focus on the people. My experience says that is the last thing to do.

            Let me explain.  We’ve all heard the ‘bus’ metaphor.  Get the right people on the bus, get them in the right seats, and then everything will take care of itself. That sounds good on the surface, but what if the bus is faulty?  What if the brakes are worn, the battery is on its last legs, the transmission skips, and the tires are bald?  If that’s the case, you can have the greatest people in the world on the bus, but that group is not going anywhere.

            From my perspective, the bus is a metaphor for the ‘structure’ of a sales system. Structure refers to every aspect of the sales system other than the people themselves.  So, the compensation plan is part of the structure, as is the sales management system, the process for creating expectations for the sales team, and so many other unspoken policies and procedures – like coming into the office on Monday morning to start the week, to how you allocate samples.

            Typically, these components of your sales system are vestiges of days gone by, put in place by a previous administration to solve problems from a distant pass. They remain and have become unconsciously codified into your system.  When I ask a client why they have some aspect of the structure that they do – the compensation plan, for example — the response is often…..” Because we do…”  In other words, there is no strategic defendable reason to have what you have.

            Much of my work as a sales consultant is to identify those fruitless and burdensome pieces of the structure and replace them with strategically designed replacements.  In a full-scale review, we look at 25 specific pieces of a company’s sales structure.  Not all of them have equal impact.  By focusing on the key components and creating strategically aligned replacements we can create significant increases in sales and gross profits while never meeting the salespeople.

            So, what are the key components?

           1. The job descriptions for the field sales force.

           2. The compensation plan for them.

           3. The sales management routines.

           4. The training and development system.

 Let’s look at each.

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            1. The job descriptions for the field sales force.

           I am not talking about that document that HR makes you create and stuff in a file drawer somewhere.  I am talking about what you realistically expect the salespeople to do, at a pretty granular level.  Now, some of you are thinking, “What I want them to do? Sell, of course.”

            But it is far more sophisticated than that. What exactly do you want them to do?  Can you identify five to seven specific, measurable KPIs?

            Here’s an example. In one client the salespeople bid on orders, and when they received a purchase order, carried it into the office, key punched it into the system and determined what was in stock and what would not be immediately delivered.  The salesperson would then try to convince the customer to wait for the back orders. 

            That’s what every salesperson thought his/her job was.  The problem was that the salespeople were busy, but with the wrong things. The cost of that sales process was driving the company out of business. (Check out Kahle’s Kalculation, a free E-book on how to measure sales productivity.)

            We changed the definition of what they were expected to do.  That meant developing criteria for defining a ‘high-potential account,” applying it to the customer base, and then instructing the salespeople to increase the penetration of those high potential accounts.  Orders were key punched in by the inside staff and the salespeople were expected to sell. The change in the company’s sales and gross profits was extraordinary.

            It was a change in the structure, in this case the job description of the field salesperson, that made all the difference.

 2. The compensation plan for the sales team.

           Once you decide what you want them to do, you need to incentivize them to do what you want them to.  It sounds so simple, yet most sales compensation plans reward the salespeople for doing something other than what the company wants them to do.  For example, I still see 100% commission compensation plans. If that’s yours and if you want specific sales behaviors, like penetrating key accounts, selling key products, or acquiring new customers, your compensation plan works against your goals. 

            Acquiring a new customer is hard, for example, and takes some time before that customer will be profitable to the company or to the salesperson.  And since you are paying him/her a percentage of every dollar, you are incentivizing the easiest sales while you are asking for the hardest.  That’s a prescription for frustration.   

            When you align a well-thought-out job description with a sales compensation plan that rewards them for doing what you want them to do, an amazing thing happens.  They do what you want them to!

 3. The sales management routines

           How do your sales managers do their... READ THE FULL ARTICLE HERE