IS YOUR SALESFORCE PREPARED TO PRESENT YOUR COMPANY IN A PROFESIONAL WAY? (PART 3)

IS YOUR SALESFORCE PREPARED TO PRESENT YOUR COMPANY IN A PROFESIONAL WAY? (PART 3)

Companies that achieve total market domination often rely on a team selling approach to help them leverage all of their selling resources when they compete for major accounts.

APTITUDE, EXPERIENCE, AND MOTIVATION

To determine whether a job candidate has the requisite skills to communicate your company’s marketing story effectively and to stay in sync with your customer’s purchase process, you must test his or her communication skills, problem solving skills, and product and industry knowledge. 

The best way to evaluate these capabilities is to observe a candidate making sales calls. Unfortunately, it is rarely possible to do this during the hiring process. In most situations, the only practical way to evaluate a candidate’s selling skills is to observe them “selling” themselves during their interview. This is why it is important to structure sales interview questions in a way that enables each candidate to demonstrate his or her selling skills. 

SALES QUALIFICATION QUESTIONS

You can use these sales qualification questions to help you evaluate an individual’s sales potential.

1. Describe your last three sales jobs
2. What did you do during a typical day on your last sales job?
3. Describe the products that you used to sell.
4. Describe your sales cycle.
5. Describe your customer base.
6. How many customers did you service?
7. What percentage of your time did you spend cold calling>
8. What percentage of your time did you spend telemarketing?
9. Were you involved with team selling?
10. Did you work with a technical support team?
11. Who did you report to?
12. Did you have any direct reports?
13. What was your annual sales quote at your last job?
14. What percentage of your salary was directly tied to commissions or to quota attainment?
15. How much money did you make on your last job?
16. Role-play a customer meeting based on products you represented in your last job. (This is often the most revealing component of the interview process.)
17. What did you like about your last job?
18. Why did you think that working here will be a better opportunity for you?

If you ask each candidate that you interview the same questions, your hiring process will be more objective, and it will make it easier for you to evaluate and compare different candidates that you screen over a period of time. And if you are interviewing several candidates, you can save time by creating a form to record your impressions and by writing down your comments right after your interview, while they are fresh in your mind.

PSYCHOLOGICAL TESTING 

Many companies use psychological tests to evaluate different job candidate’s character and motivation, and to attempt to predict whether a candidate has the personality needed to be successful in a specific selling position. These tests are far from perfect, but the companies that sell these tests can provide compelling statistics that confirm that using them to screen job candidates, results in fewer hiring mistakes and greater employee retention.

When you consider the opportunity cost of hiring the wrong individual, it is easy to justify the time and expense of almost any process that can give you more insight into the qualities and motivations of the person that you are evaluating. Nevertheless, most hiring managers eschew psychological testing and rely on their “gut” instinct about each candidate that they evaluate.

BACKGROUND CHECKS

Employees with credit problems, drug dependencies, or a history of criminal behavior can impact your company’s productivity and put your company at risk of expensive legal action.  To avoid these problems, many companies hire personnel firms, credit bureaus, detective agencies, and drug screening services to run background checks on their job candidates. 

It is reasonable to give each job candidate the benefit of any doubt – but it is naïve to believe that every job candidate will be honest or reveal personal issues which may impact their job performance. At some point, your company must decide how much latitude it is willing to give job candidates who are less than truthful about who they are, what they have done in the past, or how they will perform if you offer them a job. Your company should consult with its attorney to ensure that it is in compliance with all federal and state employment laws. 

Personal Character Questions

1. What were your most important achievements in your last job?
2. Why are they important to you?
3. What was your greatest business challenge?
4. What did you learn from it?
5. What was the most difficult problem you encountered?
6. How did you handle it?
7. Who was the most difficult person to work with at your last job?
8. How did you overcome this problem?
9. What was the most important course or project that you completed in school?
10. Why was it important to you?
11. Why do you think someone with your experience should be chosen for a job that requires (fill in your own job requirement) experience?
12. What are you looking for in a new job opportunity?
13. Convince me that you have what it takes to do this job!

Step 11: Evaluate Your Sales Compensation Plan

Your company can use financial incentives to attract qualified salespeople, retain top performers, and motivate its sales force achieve its marketing objectives. 

According to a study, 5 percent of companies offer straight salary, 5 percent of companies offer straight commission, and 90 percent of companies develop a Total Target Compensation plan of TTC, based on a combination or “pay mix” of base salary and incentive payments, such as commissions and bonuses.

Incentives are any form of variable compensation, including commissions, bonuses, and nonmonetary compensation.

Commission is a percentage share or monetary amount paid based on sales revenue performance, unit sales, or the amount of profit generated. And bonus is a percentage of base pay or cash payments that are paid for achieving specific goals. A combination plan comprises a base salary plus a commission or a bonus or both a commission and a bonus. 

Total Target Compensation is based on achieving specific objectives. For example, if a company sell $1million , its sales force may earn 18 percent of sales; however, if the company sell $2million, its sales force may earn more or less than 18 percent  of sales, depending on the compensation plan that is adopted.

DETERMINE TOTAL TARGET COMPENSATION

Many sales managers believe that the only way to motivate their sales people is to tie financial incentives to specific sales objectives. But being totally results oriented can demoralize a sales force and can erode customer satisfaction. Salespeople are motivated by financial incentives, but leadership, loyalty, recognition, praise, and every positive communication that they receive during their workday will help build the positive attitude and self-esteem that they need to be top performers.

In any case, sales compensation plans can help you improve sales performance if you take the time to design a plan that reflects the expectations that you have for your sales team and that meets your sales team’s expectations for security and earning potential. 

To determine the TTC that your company is prepared to pay your salespeople, you will need to determine:

1. How much do salespeople in your industry earn?
2. How do your competitors compensate their salespeople?
3. Do you plan to implement any sales plan qualifiers such as house accounts, commission caps, or performance thresholds for bonuses?
4. Are there any factors, such as discount travel for family members that make working for your company especially attractive?
5. Will your TTC for your Salesforce cause problems with employees in other areas of your business?
6. Is your TTC appropriate for the scope and complexity b of your selling situation?
7. To determine your pay mix or salary and incentive split, your company must evaluate its TTC strategy, the needs of your company, your salespeople’s comfort with risk, and any cultural issues that may impact employee loyalty.
8. Is your company willing to pay a premium to attract the very best salespeople?

Tailor your compensation plan to meet your business objectives

The greater the influence of the salesperson in the selling process, the greater the impact will be of increasing the percentage of incentive payments to base salary. So, for example, if your company is selling commodities into a mature market, it may provide a TTC = 70% base salary + 30% variable compensation. However, if your company is selling a new type of communication system, it may hire senior sales representatives and provide a TTC = 50% base salary + 50% variable incentive.

Salary and incentive splits vary by industry. Banking typically offers a 90 per cent base salary and 10 percent incentive; food products offer 67 percent  base salary and 33 percent incentive, manufacturing businesses offer 61 percent  base salary and 39 percent incentive; and insurance companies  offer 43 percent  base salary and 57 percent incentive compensation.

INCENTIVE COMPENSATION

The most common way to compute TTC for salespeople is to use a combination of salary and incentive pay. For example, your company might provide a base salary of $3,000 per month plus commission computed monthly or quarterly based on achieving a threshold sales volume, meeting a sales quota, or selling over quota for the period.  Thresholds can be used to motivate a Salesforce to make its best effort, but most companies that achieve total market domination eschew caps on sales commission because they can decrease motivation – why play if it doesn’t pay!

Tailor your marketing plan to achieve your marketing objective.

Your compensation plan should take into account your sales representatives’ job functions. For example, if your company’s objective is to build market share by winning new accounts, rather than by selling a greater quantity of products into its existing accounts, it may need to hire aggressive salespeople who are motivated by a compensation mix that includes a greater percentage of commission pay.

Part 4 continues in the next article

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