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.

CEO SalesAssessment.com

As an expert in assessing sales people I get asked this very often. The answer is simple.

If your team is not populated with top performing sales people – you will get outsold! That means at best you need more prospects per sale, with all the costs that incurs; or worst case – if your competitor has people who are a league better that yours, maybe you never win another deal.

Reality for most companies probably lies today somewhere in between these two extremes – pipelines slipping worse than ever; sales ‘disappearing’ at a higher rate than ever; win ratios becoming progressively worse; costs increasing…. yes, we are all familiar with this scenario by now. So what can be done to reverse this?

Just cloning your top performers, assuming you can achieve this without a rigorous assessment tool, is no longer enough. Think about this – what if your top performer is just not good enough to outsell those sales people in all the new competition springing up everyday. What if the skills required today to be a top performer have changed – and in most areas they have! Customer expectations are changing faster than the skill sets in most sales forces – but it needn’t be so.

The value of SalesAssessment.com’s Fit-4 offering is that it uniquely measures the 4 key areas that determine a sales person’s ability to create revenue, not generically, but for the specific role they are required to perform. Even better, all 4 areas are benchmarked against world class top performers. This means that uniquely with Fit-4, you are dramatically reducing the risk of being outsold by your competition; and since we are continuously aligning the benchmarks as the needs of the market changes, you can be sure that you will always have a team of top performing sales people.

We have all at various times had good, poor and average members of our teams.  It is easy to know what to do with the first two groups; the challenge has always been to manage and develop the average performers so that they improve.  This is the group that can be the difference,  that can take you over the numbers.  They will have the biggest impact on the bottom line.  So the question has always been what would unlock that potential and make them have an impact? I come back to the carrot and the stick.

As the Directors and Managers of sales teams, the temptation is to react in a one-dimensional way when we really know we need to use all the tools at our disposal to drive revenue.

In today’s market it is even more important to find the way to have every member of the team make that impact.  A 10% – 15% improvement will go straight to the bottom line.  However, even if we think we found ways of making that impact in the past, are we sure it will work now?

Customers’ expectations are changing and we must change to meet them.

Customers are no longer interested in the pain game.  They don’t have time to tell us about their business and its challenges. 

They expect us to know what drives them, to understand their market and to offer them solutions that will positively impact their bottom line.  More and more, customers expect the sales person to know their business, to have done the research and to be proactive in using that knowledge to their advantage. 

To any sales person in 2009, knowledge truly is KING.

Knowledge of your customers’ market, of your customers’ customer and the options and solutions you can offer that will positively impact your customers’ bottom line.Customers face the same challenges that we do. They are looking for value, just as their customers are looking for value from them and if that is what they want, we as sales people must respond to their demands if we expect them to do business with us.

In order to meet these demands and have an impact we must be able to open that door to the customer so that they will listen.

To do that sales people need to be able to pitch three things to get that audience:

• Does it meet the CEO’s “keeps me up at night” threshold? If it does, does this problem seriously jeopardize the organization’s ability to compete?
• Is it being ignored, neglected, or ineffectively addressed by existing processes, systems, or services?
• Are you a credible source of advice on the issue? Is your organization’s track record better than your competitors’ when it comes to helping others in the customer’s industry solve related problems? Or, if your company is a start-up, do you have employees with prior experience doing this?

If you have done your research and have the knowledge and can confidently pitch how you manage these key criteria, congratulations, you are on the way to making a sale.

Stan K Ridgley, VP Americas, SalesAssessment.com

In sales and marketing, when it comes to growing revenue and cutting costs, we usually separate our thinking. Either we do one . . . or we do the other.

But not both. Right?

But why not both?

This concept of simultaneous cost-cutting and revenue growth requires us to stretch our minds a bit and to understand the dynamic that drives corporate-level decision-making with regard to a firm’s sales force.

The McKinsey Quarterly research report of March 17th 2009 contends that companies fear experimenting with the sales force for one big reason – your sales force is the engine that drives revenue. The thought of overhauling that engine fills senior executives with dread, even if the engine barely chugs along. Rather than take the bold step of restructuring, companies make patchwork repairs as often and for as long as they can.

But times have changed extraordinarily. And extraordinary times demand extraordinary measures to cut costs and to stop declining revenues and margins, and that cost-cutting includes the sales force.

Often, the decision process is driven by fear and disbelief. Surely you can’t be both fast and precise. McKinsey notes that fear and disbelief results in two common mistakes: trimming only back-office staff and functions or sledgehammering cost cuts that deplete the frontline sales team.

Both actions will likely yield disappointing results.

So companies engage in precisely the wrong kind of behavior at a critical time in the business cycle. They are common self-destructive errors, and the decisions are logically arrived-at. And that’s the paradox.

But it’s possible to short-circuit this cycle of corporate self-mutilation. It takes boldness, fresh thinking, and the proper perspective with regard to the meshing of the company’s strategy, process, and people. Strategy, Process, and People constitute the triad of Sales Effectiveness:

1. Strategy. McKinsey rightly proposes that companies do more research to identify the most suitable and most profitable customers and craft their strategy to attract, service, and retain these best customers.

2. Process. Even top tier companies don’t all need or want the same service levels. Some may be satisfied with telesales engagement; another may want face-to-face. Some may want technical engagement, others not. So McKinsey proposes that companies set out their process for engagement based on the needs of each customer segment. They say this approach alone has been shown to reduce sales costs by between 10 and 30 percent – with no negative impact on revenue. And these savings are sustainable.

3. People. Beyond a vague goal of reducing costs, companies often cut staff without really understanding who they should cut or why they should cut them. And without a clear understanding that cuts will transform the company’s very structure. This leads to three problems: 1) Do you know enough about how your customers want to be serviced to know who to cut; 2) Having decided to cut, do you know who to keep; and 3) Do you know what you want your company to look like after your cuts, with regard to new structure, new role requirements, and new sales functions?

We know that having top performers in all the right roles delivers 67 percent more revenue than having average performers, so when making these major transformational changes in the midst of harsh economic times, it’s crucial to get it right. (McKinsey 2000)

Getting it right means “Focus resources where they make a difference . . . Small changes can have large unintended consequences, so companies must walk a fine line between reducing expenses and maintaining resources sufficient to protect current revenue and future growth.”

SalesAssessment.com’s Fit-4 Reports ensure that you focus your human capital – your sales people – where they make a difference. You put the right people in the right roles. This means that once you have your strategy and process design defined, you can now be certain that you have the right people available to perform each of your roles to maximum effectiveness.

The result? You either increase revenue for no additional fixed costs; or you reduce fixed costs for no reduction in revenue.

The benefits can be huge – 10-30 percent cost savings for better customer engagement processes; 10-30 percent savings for employing top performers in the right role (or 67 percent revenue growth per head). You get the same return when you develop existing staff into top performers, provided that they are capable of filling the role.

So you can cut costs and grow revenue simultaneously. It’s a matter of embracing change.

McKinsey sums it nicely: “Sales teams typically resist change; they not only worry that it will imperil relationships with clients and revenue but also wonder why a company would risk tinkering with a sales force that gets the job done, even imperfectly.

“These teams fear the unknown rather than change itself. And the unknown is particularly frightening today: the order books of many sales reps are drying up, and their bonuses – and sometimes jobs – are on the line.

“What if sales teams knew that change would improve customer satisfaction and retention or that profit margin would widen, sales costs fall, and compensation increase?”

Simultaneous cost-cutting and revenue growth is attainable. It requires the ability to motivate sales teams to embrace change. It also means recognizing that the last great frontier of cost-cutting and revenue enhancement resides in the human capital segment of your value chain. It requires equal parts boldness, creativity, and vision to mesh strategy, processes, and people to achieve Sales Effectiveness. And when you do, you improve your customer satisfaction, your top performer selection and retention, and your profit margin.