CEO & Founder @ Refocus, EdTech enthusiast, investor, mentor and marketing expert.
According to insights from McKinsey & Company, the sales experience accounts for as much as half of a company’s value creation. Building an effective and 24/7-profitable sales team from the ground up is a dream of every boss.
In reality, the team-building process may bring you a lot of pain—there are some common omissions, like inefficient recruitment, that are peculiar to managers who lack necessary experience. But this article focuses on the mistakes that are often made unwittingly and that adversely affect the financial performance of a company.
1. Reserving Inadequate Time For Onboarding
Workforce planning, when done wrong, can significantly disrupt sales targets and cost the company billions of dollars. If your business faces aggressive growth, a need arises to enter new job positions or hire several employees at once, and it may be sheer luck finding a salesperson who is already well aware of how your type of business operates.
As a rule, staff members come from different fields, and it would be a mistake to allow them to just get on with what they knew how to do before they joined your company. Those selling approaches that are viable in one area of business might not necessarily work well in another. For example, my company focuses on the Philippines and Indonesian markets, but if we hire local salespeople, they are unlikely to immediately yield results. This is because we use a very different approach that requires time to learn. Every business has plenty of such nuances, so make sure you have enough resources for training your new sales reps from scratch.
There is a statistic that says a new sales rep needs 10 months or more to become fully productive, although in my experience, this time can be greatly reduced. What’s far more important is that you don’t waste resources and draw out this time by having only one employee who is responsible for all onboarding-related activities.
2. Engaging Salespeople Who Have A Low Threshold Of Expectations
Sales compensation typically includes base salary and commission fees for meeting or exceeding quotas. I recommend hiring sales reps who will always be money-hungry and thus striving to close more deals and get more bonuses.
But how can you tell whether or not a salesperson is ready to increase revenue? During interviews, candidates may say that they want to make $10,000 per month while the workload they are actually ready to take on is estimated at just $500. “Sale specialist” is a job with no salary ceiling, so if a person is willing to earn more, they will have opportunities. A good way to determine their actual readiness is to ask potential employees about their personal financial goals during the interview.
For example, if a person has a family to provide for or an ambitious dream, you can be reasonably sure that they will work hard and show excellent performance for the sake of those motivators. Of course, some of them may lie, but usually, it’s pretty clear from the communication: You can see that the person indeed has a dream and will put their passion for that dream into their work ethic.
3. Creating An Inflexible System Of Motivation
This is a fairly common move dictated by business owners’ efforts to save on employees. If you want your salespeople to become willing to sell more, you should be ready to pay them for it without being tied to timespans that are unduly long.
Create conditions in which the sales team can always stay in tune and earn more. Give them short-term motivation by combining different methods, such as weekly plans, a system of contests that gives physical presents to the best performers, and a “helicopter money system” that enables salespeople to get commissions on the same day they meet their quotas. You will see how an opportunity for instant earnings can push the sales team forward—and with them, the company’s revenue.
Another tactic to consider is setting a minimum quota of sales required to receive bonuses. It guarantees that your salespeople will aspire for better results—otherwise, they get no commission fees at all.
4. Ignoring The Capacity
Cognitive psychologist George Miller found (paywall) that average humans are limited in terms of the amount of information they can process at once. That is why a manager can only productively control between six and 10 subordinates. You may have thousands of employees under supervision, but it is essential that you create a hierarchy that will not compromise communication and business processes.
Additionally, each salesperson needs a certain amount of time to interact with the prospect. This means that in order to maintain the quality of lead processing, there should be a particular number of applications that a sales rep can handle per day. Calculate this indicator based on a few criteria, including (but not limited to) audience characteristics, the time required for the first touchpoint, and the number of interactions typically required to close the deal. This will allow you to set realistic expectations for each salesperson, maximizing their potential output without causing burnout.
5. Going Overboard With Non-Sales Tasks
Do not overload your sales team with too many indirect duties, as it reduces the time they should be spending on selling. Moreover, some studies suggest that salespeople who spend more time on sales-related activities enjoy their jobs more. Don’t make your salespeople responsible for tasks such as sending documents or shipping goods. It is better to hire a separate manager to perform operational tasks, which will increase the sales capacity and should save you more in the long run.
Implementing an appropriate sales culture largely determines the success of any business. In order to avoid mistakes you may not even realize are being made, always keep your eye on the ball and pay attention to what motivates your team.
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