A key differentiator between Sales Engineers and other roles within the organization is that a Sales Engineer is usually compensated by salary plus commission as most Account Representatives are. This commission is usually paid out when the Account Representative is paid. Far less common is the case where a Sales Engineer is compensated with a base salary plus bonus. The bonus can be based upon the revenue generated within an assigned territory, set up as a Management By Objective(MBO) bonus, or a combination of the two. Either way, a Sales Engineer will make a base salary that is proportionally higher than their Account Representative counterparts, and much more than the traditional engineers in an organization.
Sales Engineers can spend 20-70% of their time traveling and work a flexible schedule due to the needs of the Sales organization they support. Most Sales Engineers telecommute or spend a limited amount of time in the office. Skills with teleconferencing, videoconferencing, and web conferencing (Webex, Live Meeting, etc.) are put to good use both on and off the road.
Sales Engineers, like their Account Representative counterparts, are hired based on their geographic location rather than their proximity to the corporate, or even regional, office. Working in another part of the country, or even outside the country, where the corporate offices are, a Sales Engineer may only make it to corporate once or twice each year
Monday, 2 March 2009
What is a Technical Sales Engineer
Many products and services, especially those purchased by large companies and institutions, are highly complex. Sales engineers—who also may be called manufacturers’ agents, sales representatives, or technical sales support workers—work with the production, engineering, or research and development departments of their companies, or with independent sales firms, to determine how products and services could be designed or modified to suit customers’ needs. They also may advise customers on how best to use the products or services provided.
Sales engineers sell and consult on technologically and scientifically advanced products. They should possess extensive knowledge of these products, including their components and processes. Sales engineers then use their technical skills to demonstrate to potential customers how and why the products or services they are selling would suit the customer better than competitors’ products. Often, there may not be a directly competitive product. In these cases, the job of the sales engineer is to demonstrate to the customer the usefulness of the product or service—for example, how much money new production machinery would save.
Engineers apply the theories and principles of science and mathematics to technical problems. Their work is the link between scientific discoveries and commercial applications. Many sales engineers specialize in products that are related to their engineering specialty. For example, sales engineers selling chemical products may have chemical engineering backgrounds, while those selling business software or information systems may have degrees in computer engineering. (Information on engineers, including 17 engineering specialties, appears elsewhere in the Handbook.)
Many of the duties of sales engineers are similar to those of other salespersons. They must interest the client in purchasing their products, many of which are durable manufactured products such as turbines. Sales engineers often are teamed with other salespersons who concentrate on the marketing and sales, enabling the sales engineer to concentrate on the technical aspects of the job. By working on a sales team, each member is able to focus on his or her strengths and expertise. (Information on other sales occupations, including sales representatives, appears elsewhere in the Handbook.)
Sales engineers tend to employ selling techniques that are different from those used by most other sales workers. They generally use a “consultative” style; that is, they focus on the client’s problem and show how it could be solved or mitigated with their product or service. This selling style differs from the “benefits and features” method, whereby the salesperson describes the product and leaves the customer to decide how it would be useful.
In addition to maintaining current clients and attracting new ones, sales engineers help clients solve any problems that arise when the product is installed. Afterward, they may continue to serve as a liaison between the client and their company. Increasingly, sales engineers are asked to undertake tasks related to sales, such as market research, because of their familiarity with clients’ purchasing needs. Drawing on this same familiarity, sales engineers may help identify and develop new products.
Work environment. Sales engineers may work directly for manufacturers or service providers, or they may work in small independent sales firms. In an independent firm, they may sell complementary products from several different suppliers.
Workers in this occupation can encounter pressure and stress because their income and job security often depend directly on their success in sales and customer service. Many sales engineers work more than 40 hours per week to meet sales goals and client needs. Although the hours may be long and often irregular, many sales engineers have the freedom to determine their own schedules. Consequently, they often can arrange their appointments so that they can have time off when they want it.
Some sales engineers have large territories and travel extensively. Because sales regions may cover several States, sales engineers may be away from home for several days or even weeks at a time. Others work near their home base and travel mostly by car. International travel to secure contracts with foreign clients is becoming more common.
Sales engineers sell and consult on technologically and scientifically advanced products. They should possess extensive knowledge of these products, including their components and processes. Sales engineers then use their technical skills to demonstrate to potential customers how and why the products or services they are selling would suit the customer better than competitors’ products. Often, there may not be a directly competitive product. In these cases, the job of the sales engineer is to demonstrate to the customer the usefulness of the product or service—for example, how much money new production machinery would save.
Engineers apply the theories and principles of science and mathematics to technical problems. Their work is the link between scientific discoveries and commercial applications. Many sales engineers specialize in products that are related to their engineering specialty. For example, sales engineers selling chemical products may have chemical engineering backgrounds, while those selling business software or information systems may have degrees in computer engineering. (Information on engineers, including 17 engineering specialties, appears elsewhere in the Handbook.)
Many of the duties of sales engineers are similar to those of other salespersons. They must interest the client in purchasing their products, many of which are durable manufactured products such as turbines. Sales engineers often are teamed with other salespersons who concentrate on the marketing and sales, enabling the sales engineer to concentrate on the technical aspects of the job. By working on a sales team, each member is able to focus on his or her strengths and expertise. (Information on other sales occupations, including sales representatives, appears elsewhere in the Handbook.)
Sales engineers tend to employ selling techniques that are different from those used by most other sales workers. They generally use a “consultative” style; that is, they focus on the client’s problem and show how it could be solved or mitigated with their product or service. This selling style differs from the “benefits and features” method, whereby the salesperson describes the product and leaves the customer to decide how it would be useful.
In addition to maintaining current clients and attracting new ones, sales engineers help clients solve any problems that arise when the product is installed. Afterward, they may continue to serve as a liaison between the client and their company. Increasingly, sales engineers are asked to undertake tasks related to sales, such as market research, because of their familiarity with clients’ purchasing needs. Drawing on this same familiarity, sales engineers may help identify and develop new products.
Work environment. Sales engineers may work directly for manufacturers or service providers, or they may work in small independent sales firms. In an independent firm, they may sell complementary products from several different suppliers.
Workers in this occupation can encounter pressure and stress because their income and job security often depend directly on their success in sales and customer service. Many sales engineers work more than 40 hours per week to meet sales goals and client needs. Although the hours may be long and often irregular, many sales engineers have the freedom to determine their own schedules. Consequently, they often can arrange their appointments so that they can have time off when they want it.
Some sales engineers have large territories and travel extensively. Because sales regions may cover several States, sales engineers may be away from home for several days or even weeks at a time. Others work near their home base and travel mostly by car. International travel to secure contracts with foreign clients is becoming more common.
Cold Calling v Tele Marketing
What really is the difference between B2B Cold Calling and Traditional Telemarketing, anyway? In truth, the basic fundamentals are identical. But, there are certainly differences.
Clients who hire VSA or create their own internal VSA-type B2B cold calling teams want a prospecting arm - a group who finds potential gems in a pile of names and gives these potential gems to someone who will close the sale. Typically, clients who hire a traditional telemarketing firm are looking for a sales arm - a group who finds new clients and sells them directly over the phone, eliminating the extra step of using a sales person.
There is a need for both kinds of calling, but the two categories do not have identical skills, processes or technology. I am intent on defining the difference between the two categories because l want to help our readers find the calling team that best fits their companies' needs.
Similarities: There are tremendous similarities between VSA-type Cold Calling programs and the kind of telemarketing calls you receive at work (from a long distance company) or at dinner (from your local newspaper). Ability to get on the phone with complete strangers and talk! Hours and hours of telephone calls to find individuals who are interested in your product or service.
Belief that your product or service can truly help your prospect. Thick skin and ability to take rejection. Telephone sales skills to keep someone on the phone long enough.
Ability to overcome specific objections. Endurance, knowing when someone is interested and moving them into the next phase of the sales process Tracking results of each call. Make modifications during the program, as needed to ensure success.
Differences: The differences are subtle, but they are critical. Many firms who perform traditional telemarketing work also perform VSA-type B2B Cold Calling programs.
Represent complex products or services, which require sophistication to explain quickly over the phone, and a sales person to truly close the sale. Typically call for high-margin or repeat-purchase products or services. Never read from a script, even when answering objections.
Ask open ended questions. Become knowledgeable about the product or service to answer simple questions and sound as though you're sitting right in your client's office. "Navigate" a prospective company's calling system to find the right decision maker - normally this means not using an automatic dialer because callers might make 3 dials for every record to find your decision maker.
Update your record with the correct decision maker. Excellent notes so the next time you (or a colleague) call(s) the company you can reference previous conversations. Lead an interested prospect to a sales appointment - at some future date - and keep the sales momentum! Get off the phone as soon as you sense there is no need or no interest. This might be after one objection. Do not call a prospect again (by you or a colleague) - EVER - if he or she asks to be removed from future calls.
Never jeopardize your client's reputation by being perceived as a pest. Don't sell over the phone, only identify potential sales/leads. Your job is to know enough not to be dangerous, since products or services are typically quite complex and require a sales person to close the sale. The program's overall success depends delivering qualified leads AND on the sales person's ability to close your appointments. Making a lot of appointments is NOT ENOUGH!!
This list can help any company identify the technical capabilities, caller-skills, and process requirements to make a phone campaign successful. VSA is happy to answer questions, regardless of whether you make calls in-house, are looking for traditional telemarketing, or want to outsource a B2B cold calling campaign.
Clients who hire VSA or create their own internal VSA-type B2B cold calling teams want a prospecting arm - a group who finds potential gems in a pile of names and gives these potential gems to someone who will close the sale. Typically, clients who hire a traditional telemarketing firm are looking for a sales arm - a group who finds new clients and sells them directly over the phone, eliminating the extra step of using a sales person.
There is a need for both kinds of calling, but the two categories do not have identical skills, processes or technology. I am intent on defining the difference between the two categories because l want to help our readers find the calling team that best fits their companies' needs.
Similarities: There are tremendous similarities between VSA-type Cold Calling programs and the kind of telemarketing calls you receive at work (from a long distance company) or at dinner (from your local newspaper). Ability to get on the phone with complete strangers and talk! Hours and hours of telephone calls to find individuals who are interested in your product or service.
Belief that your product or service can truly help your prospect. Thick skin and ability to take rejection. Telephone sales skills to keep someone on the phone long enough.
Ability to overcome specific objections. Endurance, knowing when someone is interested and moving them into the next phase of the sales process Tracking results of each call. Make modifications during the program, as needed to ensure success.
Differences: The differences are subtle, but they are critical. Many firms who perform traditional telemarketing work also perform VSA-type B2B Cold Calling programs.
Represent complex products or services, which require sophistication to explain quickly over the phone, and a sales person to truly close the sale. Typically call for high-margin or repeat-purchase products or services. Never read from a script, even when answering objections.
Ask open ended questions. Become knowledgeable about the product or service to answer simple questions and sound as though you're sitting right in your client's office. "Navigate" a prospective company's calling system to find the right decision maker - normally this means not using an automatic dialer because callers might make 3 dials for every record to find your decision maker.
Update your record with the correct decision maker. Excellent notes so the next time you (or a colleague) call(s) the company you can reference previous conversations. Lead an interested prospect to a sales appointment - at some future date - and keep the sales momentum! Get off the phone as soon as you sense there is no need or no interest. This might be after one objection. Do not call a prospect again (by you or a colleague) - EVER - if he or she asks to be removed from future calls.
Never jeopardize your client's reputation by being perceived as a pest. Don't sell over the phone, only identify potential sales/leads. Your job is to know enough not to be dangerous, since products or services are typically quite complex and require a sales person to close the sale. The program's overall success depends delivering qualified leads AND on the sales person's ability to close your appointments. Making a lot of appointments is NOT ENOUGH!!
This list can help any company identify the technical capabilities, caller-skills, and process requirements to make a phone campaign successful. VSA is happy to answer questions, regardless of whether you make calls in-house, are looking for traditional telemarketing, or want to outsource a B2B cold calling campaign.
Principle of Technical Sales
'Nobody can buy your product or service if they don't know you exist'
That's pretty obvious isn't it? There is a bit more depth to the corollary; 'The more people who know of your company the more business you will get'
The principle is easy to see with websites. Suppose you have an attractive offer, the product is in demand and the price is right, but no traffic. You won't sell a thing.
But, to go to the opposite extreme, if you can make most of the population aware of who you are, what you do and how to contact you, you'll get a massive amount of business.
Pizza Hut advertises, before and during The Simpsons - peak time TV, with an audience of millions. That is exploiting this principle to the maximum.
Now let's consider how this relates to the typical entrepreneur, inventor or small business owner. If that's you, how many of your potential customers know that you are ready, willing and able to help them?
I've put this question to hundreds of delegates at my 'Selling for Engineers' seminar. It can take a fair bit of consciousness-raising before the true scale of the opportunities becomes apparent.
For a bit of fun, I introduce the concept across like this:
'Here's a number, 6,700,000,000. That's how many people there are on planet earth'. Then I ask, 'How many of those people have heard of Coca Cola - or Microsoft, Nike, Honda?
And then I enquire, 'How many of them have heard of your business?'
This generally gets a laugh and someone is bound to hold up their hand making the zero gesture. For most of the other participants their customers number only a handful.
Since you can't sell to people who don't know you exist, task one for increasing sales is to let your market know what you do and how to contact you.
At this point I sometimes get the comment, 'Our customers know where we are if they need something'.
But things never stay the same, new organisations are born, old ones become dissatisfied with their existing suppliers, personnel change. The market place isn't static there are always new opportunities.
Besides, we exist in a global village these days. Nowhere on the planet is more than 24 hours away by plane. With phone and email it's only seconds.
So we can proceed in two ways; first look hard to find more prospects in your local area. Second, consider where else in the world you can service. You may not need any local office, agent or staff; for many organisations the internet makes them redundant.
Make a start like this; where are your main customers? In that geographic location, how many other organisations are there which could potentially use your products or service?
There are many sources of information. In the past, you'd take a huge directory and pore over it to extract prospects. Now you can do all that on-line with little effort and usually free of charge.
Simply use your favourite search engine and enter the name of a location and a relevant product or service. Example, This is what Google gave me today: Results 1 - 100 of about 656,000 for Electric motors Yorkshire.
Or look for a directory of your product and the area <(your product)(area) directory>. If you find one, compared with the first method, you will save time going through the listings.
Either way, you'll have plenty to get started with. Then you can consider if there are other districts / cities / regions / countries where there are users of what you supply.
If you are serious about wanting more business. Here is a very simple method which always, repeat, ALWAYS works.
Every day, contact a few new prospects, briefly introduce yourself and tell them what your business does and send them some information.
Suppose you called 5 new people a day, which could be done in half an hour, and you kept this up for a month. 5 X 20 days equals 100 new contacts. If there is even a little demand for what you do, a percentage of the people you reach will be interested. Let's assume it's only 5%. Now you have got 5 extra customers after a month.
Apply some self-discipline, keep the program going, and after a second month you have 10 customers you wouldn't have had before. Pretty soon you are going to need some help to deal with all the jobs that are coming in and your turnover will be climbing.
And on the subject of money, what has this process cost? Apart from phone calls and perhaps the printing of flyers, there has probably been no other expense. You haven't paid for advertisements or a marketing consultant.
Sounds good doesn't it, a lot more customers at little or no cost? Then why don't more business people follow this simple plan?
There is a collection of answers - 'don't have the time', 'you can't do that in our industry', 'it's unprofessional', 'it wouldn't work', 'people hate unsolicited calls'. But in reality, what these protests amount to more than anything is fear of the unfamiliar.
Anybody who has done sales the hard way, door-knocking around houses, industrial estates or cold-calling on the phone for a really tough sale, such as advertising space, insurance or real-estate listings knows that even if it's not always fun, it works. And that is with difficult products.
But if you offer something that is not widely promoted, you'll be surprised at how interested and welcoming prospects are.
They don't say 'go away and stop bothering me', typically they want to know more, and ask for information to be sent or for someone to call and see them.
You don't need to talk anyone into anything, just let them know you exist.
That's all it takes.
That's pretty obvious isn't it? There is a bit more depth to the corollary; 'The more people who know of your company the more business you will get'
The principle is easy to see with websites. Suppose you have an attractive offer, the product is in demand and the price is right, but no traffic. You won't sell a thing.
But, to go to the opposite extreme, if you can make most of the population aware of who you are, what you do and how to contact you, you'll get a massive amount of business.
Pizza Hut advertises, before and during The Simpsons - peak time TV, with an audience of millions. That is exploiting this principle to the maximum.
Now let's consider how this relates to the typical entrepreneur, inventor or small business owner. If that's you, how many of your potential customers know that you are ready, willing and able to help them?
I've put this question to hundreds of delegates at my 'Selling for Engineers' seminar. It can take a fair bit of consciousness-raising before the true scale of the opportunities becomes apparent.
For a bit of fun, I introduce the concept across like this:
'Here's a number, 6,700,000,000. That's how many people there are on planet earth'. Then I ask, 'How many of those people have heard of Coca Cola - or Microsoft, Nike, Honda?
And then I enquire, 'How many of them have heard of your business?'
This generally gets a laugh and someone is bound to hold up their hand making the zero gesture. For most of the other participants their customers number only a handful.
Since you can't sell to people who don't know you exist, task one for increasing sales is to let your market know what you do and how to contact you.
At this point I sometimes get the comment, 'Our customers know where we are if they need something'.
But things never stay the same, new organisations are born, old ones become dissatisfied with their existing suppliers, personnel change. The market place isn't static there are always new opportunities.
Besides, we exist in a global village these days. Nowhere on the planet is more than 24 hours away by plane. With phone and email it's only seconds.
So we can proceed in two ways; first look hard to find more prospects in your local area. Second, consider where else in the world you can service. You may not need any local office, agent or staff; for many organisations the internet makes them redundant.
Make a start like this; where are your main customers? In that geographic location, how many other organisations are there which could potentially use your products or service?
There are many sources of information. In the past, you'd take a huge directory and pore over it to extract prospects. Now you can do all that on-line with little effort and usually free of charge.
Simply use your favourite search engine and enter the name of a location and a relevant product or service. Example, This is what Google gave me today: Results 1 - 100 of about 656,000 for Electric motors Yorkshire.
Or look for a directory of your product and the area <(your product)(area) directory>. If you find one, compared with the first method, you will save time going through the listings.
Either way, you'll have plenty to get started with. Then you can consider if there are other districts / cities / regions / countries where there are users of what you supply.
If you are serious about wanting more business. Here is a very simple method which always, repeat, ALWAYS works.
Every day, contact a few new prospects, briefly introduce yourself and tell them what your business does and send them some information.
Suppose you called 5 new people a day, which could be done in half an hour, and you kept this up for a month. 5 X 20 days equals 100 new contacts. If there is even a little demand for what you do, a percentage of the people you reach will be interested. Let's assume it's only 5%. Now you have got 5 extra customers after a month.
Apply some self-discipline, keep the program going, and after a second month you have 10 customers you wouldn't have had before. Pretty soon you are going to need some help to deal with all the jobs that are coming in and your turnover will be climbing.
And on the subject of money, what has this process cost? Apart from phone calls and perhaps the printing of flyers, there has probably been no other expense. You haven't paid for advertisements or a marketing consultant.
Sounds good doesn't it, a lot more customers at little or no cost? Then why don't more business people follow this simple plan?
There is a collection of answers - 'don't have the time', 'you can't do that in our industry', 'it's unprofessional', 'it wouldn't work', 'people hate unsolicited calls'. But in reality, what these protests amount to more than anything is fear of the unfamiliar.
Anybody who has done sales the hard way, door-knocking around houses, industrial estates or cold-calling on the phone for a really tough sale, such as advertising space, insurance or real-estate listings knows that even if it's not always fun, it works. And that is with difficult products.
But if you offer something that is not widely promoted, you'll be surprised at how interested and welcoming prospects are.
They don't say 'go away and stop bothering me', typically they want to know more, and ask for information to be sent or for someone to call and see them.
You don't need to talk anyone into anything, just let them know you exist.
That's all it takes.
Motivating Sales People
It is common knowledge that many sales people can calculate how much commission they have earned faster and more accurate than any super computer. Indeed, money is a key driving force that motivates most, and certainly for the more successful ones.
However, is money then the ONLY motivator, or are there anything else?
If you were to ask anyone why they want to be one, there will usually be 3 answers:
1. For the money (of course); 2. Being able to directly link their efforts to tangible results; and 3. Having the (relative) independence and flexibility in their jobs
As such, while money may be the key driver for most, it certainly is not the only one. They are also motivated by a sense of achievement, and the more successful ones usually have large egos as well.
If we were to look deep into what motivates people, here are 2 factors that we need to consider:
1. Are the rewards attractive (or punishment severe) enough? 2. Am I able to achieve it?
Avoiding Pain vs. Seeking Pleasure
While making money is a great pleasure for many people, including sales people, some are first motivated by avoiding the punishment of NOT achieving their monthly, quarterly or annual sales targets. Hence, it's a very common practice for sales people to "hide" potential contracts to "save them for the next financial period", rather than to risk NOT meeting the sales targets for that period.
Sales people are indeed masters of work flow optimization in this sense. However, this does not help you in getting results from your sales team, and sometimes deals may be lost due to the delays caused when sales people want to "save them for the next quarter".
When companies use money as the only motivator, it is also a riskier proposition. There's nothing to prevent competitors to use the same motivator to entice your best people (along with your best customers) to defect. While there may be some non-competitive clauses in employment contracts, these are seldom enforceable, especially in Asia.
As mentioned earlier, successful sales people usually have large (sometimes over-sized) egos. Nothing feeds the ego other than believing (correctly or otherwise) that you had singlehandedly contributed millions of dollars to your company's sales revenue. However, massaging the sales person's ego (either by making them superstars when they succeed, or "humiliating" them when they don't deliver the intended results) is a double-edged sword. On one hand, it will drive people to achieve super-human results. On the other hand, they may be so focused on their self-achievement that they become insensitive to issues such as:
Serving customer needs, Maintaining healthy margins, Ensuring cross department support and other factors that will impact business results.
When the egos become over-sized, some people can have a false sense of "invincibility". Some live on past glories, even when current sales results are not as good or outstanding as before. To overcome this, Dell Computers have made sure that their egos are in check by just focusing on the present and future. Past performance mean nothing to Dell's sales managers, and a top performer is only as good as the next sale. They are as such motivated to maintain their "successful" status every single day.
Eventually, sales people get burnt out. Depending on the industry, they usually achieve their peak about 1 to 1.5 years after joining a company. How they perform beyond the peak period is a matter of how you motivate and nurture them.
Besides dishing out ever better incentives (usually money-related), many companies chose to promote their top sales to be sales managers. Unfortunately, both motivational strategies are not effective. When they feel burnt out, it's not an issue that can be resolved with money (or most incentives). In addition, only 15% of top sales people can be competent managers.
When they feel burnt out, it is usually they found that they are not further developing themselves or learning anything new anymore. Usually, they found they have reached some kind of plateau in getting better sales results, and the repetition of doing the same old thing is becoming boring to them as well.
This is also the phase when good people are the most vulnerable to defecting to your competitors. To overcome this, we will have to looking into other overlooked motivators.
Can I Do It?
As mentioned earlier, the other aspect of motivation is whether you feel you are able to do your job well.
In some industries where sales management practices tend to be Neanderthal (email me to find out which ones), the attrition of new sales hires are astonishingly high. These new hires are motivated by making more money, just like any successful sales person will be. However, due to the lack of proper training, coaching and guidance, as much as 90% of these new hires leave within 1 month. If they don't see brightness of the future, they'll just go.
While such companies do provide some level of sales training, as much as 87% of all sales training evaporates within 1 month of the training. And this statistic refer to companies with better sales management practices in place. For companies with weaker sales management, most of these training are outdated and don't really prepare the sales person to handle customers in the real world. Without a post-training supporting environment, the new hires feel overwhelmed and and helpless, and then they just leave.
When sales people find that they are not able to achieve better results, or net bigger deals, or improve margins, what they need now is support from management on how they can achieve breakthroughs. They know that if they can do better, the monetary incentives are all there waiting for them. What they really need is the right guidance and support them how they can do so.
Besides providing the usual training, here are other ways that managers can get their people proceed to the next level of performance:
Align sales strategies to market realities. Sometimes, due to rapid market changes, sales strategies mapped out 6 months ago may have already be outdated. A sales strategy re-alignment may help close more sales;
Provide recognition of improvements in sales process. While people are rewarded (or punished) based on results (sales targets), few sales managers actually recognize the improvements that sales people made in their sales process. If sales people made sales process improvements, it is very likely that this will lead to better results. Such improvements need to be recognized, reinforced and made as good examples for others to follow.
Motivating the Sales Force Without Using Money
In a nutshell, when people join the sales force, they may do so in the hopes of making more money. However, if you want to get them to perform to the next level of performance, you will need to improve their skills and abilities to achieve better results. In fact, management guru Ram Charan mentioned that if using incentives as the main means to get better performance from the sales team is an outdated approach
If you find isolated cases of poor performance from your team, then perhaps these few bad hats are just making excuses not to work hard. However, if you find that poor performance is widespread and pervasive in your sales force, then you, as manager, are making THE excuse for not providing the necessary support and guidance for your people.
However, is money then the ONLY motivator, or are there anything else?
If you were to ask anyone why they want to be one, there will usually be 3 answers:
1. For the money (of course); 2. Being able to directly link their efforts to tangible results; and 3. Having the (relative) independence and flexibility in their jobs
As such, while money may be the key driver for most, it certainly is not the only one. They are also motivated by a sense of achievement, and the more successful ones usually have large egos as well.
If we were to look deep into what motivates people, here are 2 factors that we need to consider:
1. Are the rewards attractive (or punishment severe) enough? 2. Am I able to achieve it?
Avoiding Pain vs. Seeking Pleasure
While making money is a great pleasure for many people, including sales people, some are first motivated by avoiding the punishment of NOT achieving their monthly, quarterly or annual sales targets. Hence, it's a very common practice for sales people to "hide" potential contracts to "save them for the next financial period", rather than to risk NOT meeting the sales targets for that period.
Sales people are indeed masters of work flow optimization in this sense. However, this does not help you in getting results from your sales team, and sometimes deals may be lost due to the delays caused when sales people want to "save them for the next quarter".
When companies use money as the only motivator, it is also a riskier proposition. There's nothing to prevent competitors to use the same motivator to entice your best people (along with your best customers) to defect. While there may be some non-competitive clauses in employment contracts, these are seldom enforceable, especially in Asia.
As mentioned earlier, successful sales people usually have large (sometimes over-sized) egos. Nothing feeds the ego other than believing (correctly or otherwise) that you had singlehandedly contributed millions of dollars to your company's sales revenue. However, massaging the sales person's ego (either by making them superstars when they succeed, or "humiliating" them when they don't deliver the intended results) is a double-edged sword. On one hand, it will drive people to achieve super-human results. On the other hand, they may be so focused on their self-achievement that they become insensitive to issues such as:
Serving customer needs, Maintaining healthy margins, Ensuring cross department support and other factors that will impact business results.
When the egos become over-sized, some people can have a false sense of "invincibility". Some live on past glories, even when current sales results are not as good or outstanding as before. To overcome this, Dell Computers have made sure that their egos are in check by just focusing on the present and future. Past performance mean nothing to Dell's sales managers, and a top performer is only as good as the next sale. They are as such motivated to maintain their "successful" status every single day.
Eventually, sales people get burnt out. Depending on the industry, they usually achieve their peak about 1 to 1.5 years after joining a company. How they perform beyond the peak period is a matter of how you motivate and nurture them.
Besides dishing out ever better incentives (usually money-related), many companies chose to promote their top sales to be sales managers. Unfortunately, both motivational strategies are not effective. When they feel burnt out, it's not an issue that can be resolved with money (or most incentives). In addition, only 15% of top sales people can be competent managers.
When they feel burnt out, it is usually they found that they are not further developing themselves or learning anything new anymore. Usually, they found they have reached some kind of plateau in getting better sales results, and the repetition of doing the same old thing is becoming boring to them as well.
This is also the phase when good people are the most vulnerable to defecting to your competitors. To overcome this, we will have to looking into other overlooked motivators.
Can I Do It?
As mentioned earlier, the other aspect of motivation is whether you feel you are able to do your job well.
In some industries where sales management practices tend to be Neanderthal (email me to find out which ones), the attrition of new sales hires are astonishingly high. These new hires are motivated by making more money, just like any successful sales person will be. However, due to the lack of proper training, coaching and guidance, as much as 90% of these new hires leave within 1 month. If they don't see brightness of the future, they'll just go.
While such companies do provide some level of sales training, as much as 87% of all sales training evaporates within 1 month of the training. And this statistic refer to companies with better sales management practices in place. For companies with weaker sales management, most of these training are outdated and don't really prepare the sales person to handle customers in the real world. Without a post-training supporting environment, the new hires feel overwhelmed and and helpless, and then they just leave.
When sales people find that they are not able to achieve better results, or net bigger deals, or improve margins, what they need now is support from management on how they can achieve breakthroughs. They know that if they can do better, the monetary incentives are all there waiting for them. What they really need is the right guidance and support them how they can do so.
Besides providing the usual training, here are other ways that managers can get their people proceed to the next level of performance:
Align sales strategies to market realities. Sometimes, due to rapid market changes, sales strategies mapped out 6 months ago may have already be outdated. A sales strategy re-alignment may help close more sales;
Provide recognition of improvements in sales process. While people are rewarded (or punished) based on results (sales targets), few sales managers actually recognize the improvements that sales people made in their sales process. If sales people made sales process improvements, it is very likely that this will lead to better results. Such improvements need to be recognized, reinforced and made as good examples for others to follow.
Motivating the Sales Force Without Using Money
In a nutshell, when people join the sales force, they may do so in the hopes of making more money. However, if you want to get them to perform to the next level of performance, you will need to improve their skills and abilities to achieve better results. In fact, management guru Ram Charan mentioned that if using incentives as the main means to get better performance from the sales team is an outdated approach
If you find isolated cases of poor performance from your team, then perhaps these few bad hats are just making excuses not to work hard. However, if you find that poor performance is widespread and pervasive in your sales force, then you, as manager, are making THE excuse for not providing the necessary support and guidance for your people.
Technical Performance Review
Your performance review looks back at your last review period to assess your progress against agreed objectives or operational measures. Your performance review is also a great opportunity to give your boss feedback too. It is also very important to ask powerful questions in your Performance Review in order to spot future opportunities and understand the future of your role, department and organization. Here are eleven powerful questions to ask during your next performance review.
The first three questions are the simplest and most powerful of all. You should receive a lot of information with these few alone.
1. "What should I continue to do?"
2. "What should I stop doing?"
3. "What should I start to do?"
The next 8 are designed to draw out more specific information from your reviewer and to help you spot development opportunities and even more responsibilities you could take on.
4. "What personal goals will deliver the most value to our organization?"
5. If you're in a technical role then ask "What emerging technologies could I investigate and report back on their potential value to our organization?", or if you're in a management role ask "What emerging management practices could I investigate and report back on their potential value to our organization?"
6. "What criteria should I satisfy to move onto the next level in this organization?"
7. As your boss "What can I do to make you more successful?"
8. "How will my role align to company direction in the future?"
9. "I see that department [choose one!] is a big internal customer of our department, so how could I understand more about its contribution to the business and how I impact its effectiveness?"
10. "What impact has my training had on the department, and what further training should I take to add more value?" or "If external training isn't available, then what else should I consider?"
11. "Who do you think is a great role model for me in the organization?"
Try them out in your next Performance Review and see what impact they have!
The first three questions are the simplest and most powerful of all. You should receive a lot of information with these few alone.
1. "What should I continue to do?"
2. "What should I stop doing?"
3. "What should I start to do?"
The next 8 are designed to draw out more specific information from your reviewer and to help you spot development opportunities and even more responsibilities you could take on.
4. "What personal goals will deliver the most value to our organization?"
5. If you're in a technical role then ask "What emerging technologies could I investigate and report back on their potential value to our organization?", or if you're in a management role ask "What emerging management practices could I investigate and report back on their potential value to our organization?"
6. "What criteria should I satisfy to move onto the next level in this organization?"
7. As your boss "What can I do to make you more successful?"
8. "How will my role align to company direction in the future?"
9. "I see that department [choose one!] is a big internal customer of our department, so how could I understand more about its contribution to the business and how I impact its effectiveness?"
10. "What impact has my training had on the department, and what further training should I take to add more value?" or "If external training isn't available, then what else should I consider?"
11. "Who do you think is a great role model for me in the organization?"
Try them out in your next Performance Review and see what impact they have!
Friday, 27 February 2009
Technical Competence
There is a high expectation that the leader be competent in the assigned task or specialty he is supervising. This expectation exists to some level in all endeavors. Workers want the boss to know what they do and to have, at least, a rudimentary understanding of how it is done. At a minimum, the leader should be familiar with the task. Even better, he should have some proficiency at it. Employees at all levels consistently cite the importance of technical competence in their leaders. First, this is a respect issue. Second, it is a direction issue. Employees correctly believe that if the boss doesn’t know what they do and how they do it, he will be unable to make the right decisions on how to effectively employ them, implement changes that positively impact performance, and improve the team’s ability to capitalize on future opportunities. `
Even more important is the willingness of the leader to admit when he doesn’t know how to do something. People who do the task daily don’t expect the leader to be an expert on the task they routinely perform. They do expect him to be familiar with it and to take an interest in it. When the supervisor asks questions about what the employees are doing and sincerely listens to the responses, he establishes a positive relationship with his employees. When you, as the leader, take the time to talk to the person repairing equipment in the repair ship, the message comes thorough loud and clear: “I care about you and what you are doing.” Employees recognize this and tend to respond with increased loyalty and dedication.
Manager, boss, foreman, etc. All titles used to describe that person with responsibility for getting a job done by directing other people. The key point is that this person must accomplish a certain amount of work beyond that which one person is considered capable of doing. They are expected to oversee the production of others to get that work done.
Often this person occupies their position because of demonstrated proficiency at the task they are supervising. For example, a carpenter may be great with his tools and very efficient at doing his job. One day he is told he will now supervise three other carpenters. He becomes the foreman. No big deal really, as he generally works alongside the three of them, setting the pace, and taking corrective action right away when one of his crew does something wrong. This foreman is often cited for his ability to “make it happen” and his behavior is reinforced with this praise. Perhaps this foreman gets promoted and then supervises three foremen yielding the same results. This situation is not limited to the field. Consider the accounting supervisor who is known for her attention to detail. Nothing got by her when she was a clerk, and now, nothing gets by her as a supervisor. The reason nothing gets by her is that she is basically replicating the work of her team as she very closely rechecks their work. Or perhaps the super sales person, who is now the sales manager.
These people fail to recognize they are no longer getting paid to actually do the work. They are getting paid for the work to get done – by others. They are relying on their own expertise to get the job done rather than teaching others to do it. Unfortunately, we often end up rewarding them for the result rather than the method.
Successful leaders know and understand the jobs they supervise. They are able to make decisions based on that knowledge, which increases their credibility. Successful organizations recognize the new skills and responsibilities necessary for continued success at higher levels, and they work to put qualified people into those positions of greater impact and responsibility.
The willingness to “get dirty” once in a while demonstrates respect for the people being led. It enables the leader to understand the conditions the employees face and to craft strategies to help them succeed. The leader who knows the requirements of the tasks is better able to troubleshoot when things go wrong, and to help employees. Competence also enables leaders to know to detect when they are not being told the whole story.
The issue of technical competence vs. technical expertise is critically important. Yet, it is one that many leaders fail to grasp. The most effective leaders are able to balance this approach. It is a fine line, but one worth walking.
Even more important is the willingness of the leader to admit when he doesn’t know how to do something. People who do the task daily don’t expect the leader to be an expert on the task they routinely perform. They do expect him to be familiar with it and to take an interest in it. When the supervisor asks questions about what the employees are doing and sincerely listens to the responses, he establishes a positive relationship with his employees. When you, as the leader, take the time to talk to the person repairing equipment in the repair ship, the message comes thorough loud and clear: “I care about you and what you are doing.” Employees recognize this and tend to respond with increased loyalty and dedication.
Manager, boss, foreman, etc. All titles used to describe that person with responsibility for getting a job done by directing other people. The key point is that this person must accomplish a certain amount of work beyond that which one person is considered capable of doing. They are expected to oversee the production of others to get that work done.
Often this person occupies their position because of demonstrated proficiency at the task they are supervising. For example, a carpenter may be great with his tools and very efficient at doing his job. One day he is told he will now supervise three other carpenters. He becomes the foreman. No big deal really, as he generally works alongside the three of them, setting the pace, and taking corrective action right away when one of his crew does something wrong. This foreman is often cited for his ability to “make it happen” and his behavior is reinforced with this praise. Perhaps this foreman gets promoted and then supervises three foremen yielding the same results. This situation is not limited to the field. Consider the accounting supervisor who is known for her attention to detail. Nothing got by her when she was a clerk, and now, nothing gets by her as a supervisor. The reason nothing gets by her is that she is basically replicating the work of her team as she very closely rechecks their work. Or perhaps the super sales person, who is now the sales manager.
These people fail to recognize they are no longer getting paid to actually do the work. They are getting paid for the work to get done – by others. They are relying on their own expertise to get the job done rather than teaching others to do it. Unfortunately, we often end up rewarding them for the result rather than the method.
Successful leaders know and understand the jobs they supervise. They are able to make decisions based on that knowledge, which increases their credibility. Successful organizations recognize the new skills and responsibilities necessary for continued success at higher levels, and they work to put qualified people into those positions of greater impact and responsibility.
The willingness to “get dirty” once in a while demonstrates respect for the people being led. It enables the leader to understand the conditions the employees face and to craft strategies to help them succeed. The leader who knows the requirements of the tasks is better able to troubleshoot when things go wrong, and to help employees. Competence also enables leaders to know to detect when they are not being told the whole story.
The issue of technical competence vs. technical expertise is critically important. Yet, it is one that many leaders fail to grasp. The most effective leaders are able to balance this approach. It is a fine line, but one worth walking.
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