karl hellman and wesley johnston's "the cost of ghost" webinar - presented by...
DESCRIPTION
Hiring for strategic selling is one of the most important aspects of effective execution. Hiring an ineffective strategic sales person-we call him a "ghost"-can cost your company hundreds of thousands-perhaps millions-in lost opportunities. This webinar will arm you with facts and formulas you can use to estimate the cost of a ghost for your company. You can use these estimates to justify a fact based, professional hiring process. We will also describe best hiring practices, including the criteria and processes you should be using as well as approaches to assessing candidates. Who should attend: * CEOs and CMOs will gain insights into how to increase their ROI by avoiding the costly ghost. * Sales people will value the best practice criteria, processes and assessment tools. * HR professionals tasked with the critical job of finding strategic selling talent. About Dr. Wesley J. Johnston The Executive Director of the Center for Business and Industrial Marketing at Georgia State University (http://robinson.gsu.edu/marketing/Centers/CBIM/index.htm), Dr. Wesley Johnston is Professor of Marketing at Georgia State University. Dr. Johnston is one of the leading experts in B2B marketing and sales management. He is author of a textbook on Sales Management and is currently writing Strategic Selling Playbook (co-authored with Karl Hellman) based on his workshops and consulting practice in strategic selling. About Karl Hellman Karl Hellman is President of Resultrek, (www.resultrek.com) a global marketing consulting firm dedicated to creating great marketers and sales people. Karl is also Executive in Residence at the Center for Business and Industrial Marketing at Georgia State University. Karl's most recent book, The Customer Learning Curve, explains the power of The Customer Learning Curve through 24 "real life" marketer examples: scenarios readers can call their own. Karl is co-authoring Strategic Selling Playbook with Dr. Johnston.TRANSCRIPT
Strategic Account Management:The Cost of a Ghost:
The economics of poor hiring decisions in salesA webinar for SMMConnect
Wes JohnstonKarl Hellman
Center for Business and Industrial Marketing
Georgia State University
1
This program was presented by SMMConnect.com as a live webinar. To view the recorded webinar:
Follow the link* below to:
• View the recorded webinar
• Download all the materials
• View other recorded webinars in this series
• Register for other live webinars in this series
http://bit.ly/StrategicSellingPlaybookGroup
*If you aren’t already a member of SMMConnect.com, you’ll need to register along the way. It’s quick, free and privacy-protected.
3
A ghost: A sales person who:Holds a sales position.Draws a salary.Is given a territory to cover.
4
A ghost: A sales person who:
Holds a sales position.
Draws a salary.
Is given a territory to cover.
But…..Cannot execute your sales strategy.Allows the territory to atrophy.Prevents you from hiring an effective sales person.
5
Participant poll:
# sales people fired or quit in last 5 years?
(post answer in the chat box)
6
Participant poll:
# sales people hired in last 5 years?
(post answer in the chat box)
7
Participant poll:
% ghosts hired?
(post answer in the chat box)
8
Hiring
Compensation
Maintenance
Severance
Lost opportunities
Disruption
TOTAL
$ 23,000
151,000
14,000
25,000
250,000
100,000
$563,000
The cost of a ghost: our experience:
9
http://www.objectivemanagement.com/NewGhosts2005.htm
Estimate how your company compares to the average with the cost of a ghost calculator:
10
If you have
50 sales people
20% underperform
You have 10 ghostsWho cost you $5,630,000
11
Participant poll:
Use the sample of $563,000 per ghost to estimate your company’s costs of ghosts:
# sales peoplex % ghosts
x $563,000
(post answer in the chat box)
12
How to fix the ghost problem:
A screening tool that hires sales people who can execute your strategy effectively….
……96% of the time.
Diagnosing a sales person’s likelihood to succeed
is a complex process.
The Center for Business and Industrial Marketing
(CBIM) has evaluated 20 of the most popular
assessment tools.
Most assess sales people’s psychological traits.
The one we have found to be best not only asks
about personality traits, but also asks about
company-specific and job-specific capabilities.13
14
How to fix the ghost problem:
The key: What is the sales task?
Step one: define the sales task. (which defines the kind of skills you’re looking for.)
15
How to fix the ghost problem:
The key: What is the sales task?
Facilitating repurchase?Hunting for new opportunities within existing accounts?Prospecting?Customer process innovation?
Most sales forces are called upon to perform more than one of these tasks.
16
How to fix the ghost problem: The Center for Business and Industrial Marketing process
Define the sales tasks and the ideal sales person profiles
Document the sales strategies
Identify the sales processes and systems
Customize on-line surveys for sales people/sales managers
Analyze survey responses.
Send only qualified candidates to be interviewed.
17
How to fix the ghost problem: Playing the hand you’ve been dealt:
You also need to assess your current sales force and
distinguish between the ghosts and sales people who
have the potential to develop into successful
contributors to your company.
If you just identified and eliminated ghosts, you’d get
the same sales at a significantly lower cost.
If you replaced ghosts with contributors, you’d increase
revenue at lower incremental cost.
18
How to fix the ghost problem: Finding the ghosts.
If you rank your sales people by sales produced, sales forces often fall into tiers: A’s, B’s, and C’s.
Participant poll:
What % of your sales people are A’s?What % of your revenue do the A’s generate?(post answer in chat box)
19
% sales people
6%
33%
61%
% revenue
64%
5%
31%
How to fix the ghost problem: Finding the ghosts.
Many sales forces looks like this:
A B2B financial services product.
20
How to fix the ghost problem: Discriminating between ghosts and “baby whales”
Define the sales tasks and the ideal sales person profiles
Document the sales strategies
Identify the sales processes and systems
Customize on-line surveys for sales people/sales managers
Analyze survey responses.
Create training programs for common needs.
Create individual coaching programs for individual needs.
Assess your current sales people—for development opportunities:
21
How to fix the ghost problem: It’s not always the sales person’s problem.
Underperforming sales people are often due to sales
management issues:
Are sales managers allocating time correctly?
Do sales managers have the required skills?
Sales management can almost always spend more time coaching, motivating, and holding accountable
CBIM research shows that best practice is for sales management to spend 75% of its time on three performance enhancing activities:
Coaching
Motivating
Holding their people accountable
25%
25%
25%
22
Sales management can almost always spend more time coaching, motivating, and holding accountable
Coaching
Motivatin
g
Accountabilit
y
Recruitin
g
Internal Is
sues
CompensationOrganizationStrategyDirect Selling
CBIM IdealClient’s target
Actual sales managers
Crisis
ManagementAn actual time allocation example:
23
Participant poll:Why don’t sales managers spend time coaching?(post in chat box)
Sales management capabilities.
As a motivator
As a coach
As a mentor
As a recruiter
As a performance master
Skills: 65% = desired
In addition to measuring the amount of time sales managers devote to each best practice activity, our assessments determine how well each manager is performing five best practice activities.
Sample:
24
Pipeline analysisDiscussing which prospects to spend time on is one of the most important topics for sales managers to work with their sales people on through the coaching and mentoring processes.
The CBIM assessments facilitate this critical aspect of developmental coaching by asking sales people to evaluate a sample of their prospects on 19 specific dimensions.
In this sample overview pipeline analysis over a third of the sales force’s pipeline is of low quality, reflecting the very common, human tendency to prospect where it’s easiest, rather than where there is the greatest return if key barriers are overcome.
High quality
Medium quality
Low quality
35%25%40%
25
The complete list of 19 questions about pipeline quality,:
Compelling reason to buy from us
Commitment to buy
Funding exists
Client knows price range
Competitive issues handled
Indicated preference toward us
Dissatisfied with incumbent vendor
Decision within 30 days
Delivery timeframe is appropriate
No need for competitive quotes
We have a solution
26
Quoting decision maker
Decision upon quoting
Compelling reason to solve their
problem
Will be profitable
Prospect is credit worthy
Developed strong relationship
Existing clients not impacted
Differentiated ourselves from the
competition
Of the 19 questions about pipeline quality, six have
the highest impact for this particular client
6 high impact questions
Prospect is dissat w current vendor
Compelling reason to solve prob
Our proposal solves the prob
Prospect committed to buy
We are differentiated from comp
Prospect has money
27
Eight skills areas:
The CBIM assessments evaluate each sales person on eight sets of sales skills that together comprised the sales job.
These eight sets of skills are :
28
Hunter skillsCloser skills
Qualifier skillsFarmer skills
Account manager skillsIntellectual skills
Ambassador skillsAnd what are termed Timid skills
Matched to sales strategies and tasks
Hunter skills
Qualifier skills
Closer skills
Sample sales force skill analysis:
Sample Plot of % Sales People practicing
each closer skill
41% Controls emotions32% Gets to decision makers
51% Have no need for approval
19% Has supportive buying cycle
8% Gets prospect to make a decision
8% Won’t make inappropriate quotes
5% attempts to close
0% Won’t accept put offs
3% Has closing urgency
30
Definitions of sales person characteristics
Hunter skills Closer skills Qualifier skills
Prospects consistentlyGets past gatekeepersGets to decision makersGets to decision makersGets appointments when prospectingReceives plenty of introductionsWill prospectHas no need for approvalRecovers from rejection
Gets prospect to agree to make a decisionWon’t make inappropriate quotesGets to decision makersAttempts to closeHas closing urgencyWon’t accept put offsHas supportive buy cycleHas no need for approvalControls emotions
Uncovers actual budgetGets to decision makersLearns why prospects buyLearns how prospects buyDoes not assumeComfortable talking about moneyHas high money toleranceHas no need for approvalControls emotionsHas supportive record collection
Farmer skills Account manager
skills
Intellectual skills
Has closing urgencyAttempts to closeControls emotionsWon’t accept put offsHas supportive buy cycleHas difficulty recovering from rejectionHas need for approvalWon’t prospect
Develops bonding and rapportGets to decision makersUncovers actual budgetKnows how to handle peopleEffective time managementLacks closing urgencyHas need for approvalWon’t prospectBelieves—”I should be their friend”Inappropriate follow up calls
Attempts to closeUncovers budgetGets to decision makersLearns why prospects buyLearns how prospects buyHas at least 10 skillsHas need for approvalHas non-supportive buy cycleHas self limiting recordsHas money issuesHas difficulty controlling emotions
31
Ambassador skills Timid sales skills
Develops bonding and rapportGets referrals and introductionsKnows how to handle peopleEnjoys sellingInappropriate follow up callsWasting time—selling systemBelieves—”I should be their friend”Skills limited to first three of this list
Has low self esteemHas need for approvalHas difficulty recovering from rejectionUncomfortable talking about moneyHas outlook problemIs not money motivated
32
Analysis of Buy Cycle Elements
The CBIM assessment analyzes several patterns of thinking and behavior that tend to obstruct a sales person’s progress and success.
One of the unique insights of the assessment is that the way a sales person thinks about buying products and services themselves affects how they sell. That is, if sales people comparison shop themselves, of if they wait and think before buying, they will accept these put offs and delays as natural in their prospects and customers.
Five aspects of these non-supportive behaviors and attitudes are:Non-supportive buying cycleVulnerable to think it oversVulnerable to comparison shoppersVulnerable to price shoppersLow money tolerance (they flinch at their price before the prospect does)
33
Executive
Inside sales
Outside sales
Executive
Inside sales
Outside sales
Executive
Inside sales
Outside sales
Executive
Inside sales
Outside sales
Executive
Inside sales
Outside sales
92%
100%
83%
75%
83%
67%
50%
67%
33%
42%
50%
33%
17%
17%
17%
Vulnerable to comparison shoppers
Non-supportive buying cycle
Vulnerable to think it overs
Vulnerable to shoppers
Low money tolerance
34
Sample Analysis of Buy Cycle Elements
The Major Sales Competencies
Coping with Rejection
Desire Commitment Responsibility
Outlook Need for Approval
Talking Money
Here are the dimensions of competency, behaviors, and attitudes our assessment evaluates:
35
Sample Summary of training needsWe develop a training curriculum for your sales force based on the issues we identified
Mastery of a more powerful selling system
Training Area Core Competency Training module % Group needing this
trainingDiscovering why prospects buy
Selling process 100%
Getting prospects to agree to make a decision
Gets commitments and decisions
Selling process 100%
Improve selling skills
Discovering why prospects buy
Selling process 100%
Improve productivity
Consistent effective prospecting
Prospecting 98%
Better closing skills and execution
Gets commitments and decisions
Closing the deal 92%
Fewer inappropriate time wasting decisions
Effective listening and questioning
Hot buttons 92%
Getting stronger appointments
Reaches decision maker
Hot buttons 92%
Eliminate put-offs Doesn’t need approval
Objections 85%
36
Economic value of addressing the developmental issuesAll of our assessment analyses and reports are presented in an economic context.
Based on the data collected from the sales people and sales managers in the assessment process, we calculate the economic impact you can achieve by addressing your key developmental opportunities, your systems and process issues, etc.. The economic value has two dimensions: Improvement in the quality of your sales pipeline, and increases in revenues from sales.
In this sample case the organization as a whole had six major issues, which, when addressed would improve the pipeline by $9 million and increase sales by $19 million.
Here are the six issues, and the economic value of addressing each: Devel o pmen t a l co a ch in g
o ppo r t u n it y a r ea In pipel in e In r even u es
Ineffective prospecting $5,200,000Ineffective qualifying $3,875,000
Ineffective selling system $6,022,000Lack of accountability $5,784,000
Discounting $4,252,000Need for approval and buy cycle $3,000,000
To t a l impa ct $9,075,000 $19,058,000
Po t en t ia l in cr ea se
37
A final word
CBIM is committed to supporting our clients in realizing the value of developmental coaching.
And our assessments are designed to provide sales managers and sales people with the specific feedback and insights to create their own, customized, highly specific development plans.
38
Do you screen your sales candidates?
A Yes, we have job specific screening tests.B Our screeners are general “personality” testsC No, we don’t screen—but are interested in doing soD No, not usE Other, comments (post in the chat box)
How effective do you find your screeners? (post in the chat box)
39
Do you assess your sales people?
How often?
A Yes, we have job specific assessmentsB Our assessments are general “personality” testsC No, we don’t assess—but are interested in doing soD No, not usE Other, comments (post in the chat box)
How often do you assess your sales team: (post in the chat box)
40
Dr. Wesley JohnstonDirector, [email protected](404) 413-7851
Karl HellmanExecutive in Residence, [email protected] 793 7343
41
Contact CBIM:
To discuss Sales Force Screening best practices
To ask questions about your Screening Program
To learn about the Center’s Assessments and Screening