:: Words of sales test wisdom from those who know ::

A US subsidiary of a FTSE 250 company in the engineering sector was suffering a disproportionately high drop off in revenue during the early days of the recent recession. It’s now back on track after analysis of its sales organisation identified major skills gaps and the company replaced incumbents with fewer, more effective salespeople.

This is the story of a US subsidiary of a well known FTSE 250 company whose order book took an unexpected and very steep dive at the start of the recent recession.

In the past, the company had grown primarily by acquisition of competitors or businesses in new technology areas and inherited a large number of long-standing customers.

However, during the recession, business dropped away dramatically, causing significant issues for the organisation by seriously affecting profitability. Yet, the same picture was not repeated at its major competitors.

The new VP of Human Resources decided to take a close look at the sales team to try to understand what role they may have played in this decline.

Following Fit-4 assessments and other analysis, it emerged that the organisation’s sales force consisted largely of former customer technical liaison contacts who had been moved into sales – ie the ‘salespeople’ found themselves selling by accident. This situation was compounded as the organisation acquired additional businesses with a similar way of operating.

The recession brought with it increased buyer pressure and dealings with customers began to change from friendly technical relationships to hard-nosed commercial interactions. The buyers were being asked to provide evidence of their choice of supplier based on ‘business value’ and so the company began to lose deals to competitors when its salespeople were unable to respond. The situation was made worse when a major competitor put in a new sales force itself and began to steal substantial market share.

Comprehensive analysis of the sales force found that most individuals had low sales confidence, low sales drive, low sale resilience and didn’t listen. Furthermore, they were poor at numeric and verbal reasoning, and so formed a group of people who were not suited to be in sales at this level.

A detailed picture of the sales force’s skills, competencies, intellect and motivation suggested that existing members of the team would never become good salespeople. What’s more, the company could not make a business case for the potential cost of training them up to become even average salespeople.

So the organisation took the potentially risky decision to fire the whole sales team, because it was cheaper to make the incumbents redundant and recruit new blood at a ratio of one new salesperson for every three fired.

This action delivered immediate benefits:

• it instantly ‘raised the bar’ for the whole sales force with new recruits hired using Fit-4 to ensure they matched the right profile;
• the competitive slide was reversed;
• profitability was dramatically improved thanks to resulting higher revenue and reduced sales costs because of the smaller team; and
• the team is now on course to be above target for profit and revenue in the next financial year.

A Latin-American subsidiary of a Fortune 500 company found that, although opportunities were going through the sales pipeline, a very high number of bids were being lost right at the end of the process.

This is the story of a certain LatAm subsidiary of a well-known Fortune 500 company which was losing an unacceptable number of bids right at the last minute.

Each bid was large in value and hence expensive to prepare and manage through the sales/bid process. This was causing significant issues for the business by seriously impacting on profitability.

New Country manager
The business had brought in a new Country Manager to turn the situation around.

Investigations confirmed that the company’s rigorous process for ensuring that each bid is of the highest quality was working well, and that the bids were indeed of a good quality

This company is world-renowned for the quality of its training programs, yet, prior to seeing the results of the Fit-4 assessment, the Learning & Development team had determined they should invest even more in negotiating and closing skills.

However, the situation changed as a result of deploying the Fit-4 assessment test which is sales-role specific and measures:

• behaviour;
• critical reasoning;
• functional job skills; and
• motivators.

These are all criteria specifically relevant to the role being assessed. The Fit-4 test compares the results of each individual against a pre-configured High Performer benchmark for that role – in this case the role of Sales Account Manager.

People in this role typically need to be able to:

• proactively identify customer needs;
• based on customer benefit analysis;
• deploy strong engagement skills;
• feel comfortable working with some of the main board; and
• sell ‘need amortization’/ROI (return on investment).

The test discovered that although the salespeople had many strong skills there was a major problem with a lack of Critical Reasoning skills within the team. This previously unidentified skills gap was proving to be a major negative in terms of winning business because the bids developed by the organisation are quite complex in their ROI analysis and require complex final round financial discussions and negotiations.

With Critical Reasoning levels so low, the sales people were being easily outmanoeuvred by their competitors and ‘blindsided’ by even quite reasonable questions from the customer.

This inability to hold their own in such discussions could also easily account for the fact that a typical sales team member also exhibited low Sales Confidence and poor Listening behaviours as well.

The organisation was able to get a long way down the bid process thanks to its position as the ‘big brand’ and so the customer was using the organisation’s bids as benchmarks for ‘beating up’ alternative suppliers.

Solution
To alleviate the problem and as an immediate fix, the company created a ‘buddy system’ with Finance, who now accompany the sales people to all significant customer meetings.

The result? Revenue is moving up again – significantly!

April 2010 – the results of the Fit-4 test were presented to the client.
May 2010 – the buddy system was put in place and the financial development needs had been identified.
July 2010 – revenue and profit had increased to a point where ALL costs (assessment & development) had been covered.
Payback – including additional training – 3 months!
Result – Fit-4 is now being introduced throughout the business for development & recruitment.

We’re proud to say that Fit-4 is the most rigorous sales assessment tool on the market, which is reason enough to become a SalesAssessment.com reseller.

Other organisations which operate in a similar space have a different approach to its re-sellers compared with our own. SalesAssessment.com offers what we like to think is the best possible support to our re-seller community.

For instance, we don’t demand that you commit to upfront costs for licence fees: instead, these are charged by the unit as you sell to your clients.

Additionally, training is provided free.

We also like to think that we don’t actually have any direct competitors because, as director Andrew Dugdale says: ‘They have nothing like the depth of assessment.’

Other offerings can also be ‘judgmental’. This is a clear differentiator in the marketplace.

Andrew explains: ‘We provide clear information to enable the customer to use to make a decision with.’ Others approach this somewhat differently: ‘They red flag/amber flag/green flag people, which is probably illegal under European Employment Legislation as this is discriminatory – although as yet, no one has challenged this and I’m not sure why.’

SalesAssessment.com offers a better product which leads to more opportunities and we offer better terms too.

We all know that many targets are set in the wrong way and so are meaningless….

An effective sales assessment programme can help sales leaders find answers to questions like: ‘How do I know what revenue it is reasonable that I should expect from each member of my sales force?’ This can be achieved by understanding the revenue impact of the competency gaps within your team – at the individual level – and even more so, the revenue impact of having the wrong person in the wrong role.

As global management consultants McKinsey said some time ago, a High Performer will deliver 67% more revenue each and every year than an average performer.

Back in the sixth Century BC a famous Chinese General called Sun Tzu said: ‘Know you enemy as you know yourself.’ The problem for many businesses today is that, whist the may know their ‘enemy’, very few actually know themselves – at least not the people element, their sales talent.

Yet what is the most critical part of business success? Of course, it’s the people in the field who day-in-day-out have to persuade the customers to buy from them.

Far too often an organisation can lose a deal even when the bid was good.

This is where an effective sales assessment tool comes in: it enables a company to understand whether there is an underlying ‘people problem’ when a bid is unexpectedly lost, or whether there has been a structural or bid mis-match issue.

According to Dow Jones, 33% of bids are lost through the incompetence of the salesperson – that adds up to trillions of dollars of lost business.

Just as importantly in today’s tough economic environment, 24% of all bids end up with no decision being made, while only 52% of salespeople are meeting target.

With business harder and harder to win, it is imperative to ensure that the right people are in the right roles and there are no gaps in essential skills and competencies.