The POISON known as “commission”.. and the cure!!
We have all been part of this story for many decades. The manipulation of salespeople under the guise of commission. Well, its time is past, AND there are much better answers for everyone involved.
Let’s look at some data that should open up your thinking if you will let it!
A few data points to set the stage:
The Bridge Report across 350 B2B firms with median revenue of $24M shows the following data.
This is just crazy! And we wonder why. Well, I will get there, but let's look at some more data. This time around let’s look at how long your sales folks hang around your companies. (per www data resources)
The average time for a salesperson to ramp to productivity is 5.3 months, in complex sales environments, it is 10 months. And sales cycles often exceed 6 months.
So while there is a struggle to well educate the sales team, and it takes 10 months to bring them up “to speed”, on average we only get about 8 months of “productivity” from them and they are gone. And over a 3 year period, you have had to retrain your entire sales and management team completely. It’s actually worse than that in the real world, as this is not a fenced-in activity that starts and finishes, but rather this turnover is always and you must be onboarding and baseline training your team ALWAYS, without a break if you are hoping to at least survive. To thrive you need longevity in the team… it's CRITICAL!.
So why do you lose your entire team in 3 years? Don’t buy that data… then check yourself, as you should. I know for certain that the local large team of electronics network equipment provides lost its entire team inside of that 3 years. That same company had (pre-Covid-19) more than 10,000 salespeople. Do the math and the cost of that turnover rate, recruiting, hiring, onboarding, and training is HUGE!
AND it is not necessary, it’s just sadly accepted as normal.
Why? Why is it ok for this terrible outcome to be accepted as normal?
Because it is accepted by almost everyone in the corporate chain from the top down that “salespeople are coin-operated”!
And that is absolutely NOT true. More on what IS true later.
A benchmark study by SeriusDecisions on the reasons that salespeople left the company that they were working for (turnover) shows the 3 top reasons.
WOW that all hurts doesn’t it!
Sadly there is a phrase that we use regularly that describes this… Every system is perfectly designed to deliver the results that it gets!.
So your system is causing this turnover and retention problem. That sucks!
Here I love to quote my good friend Dave Brock… “Talent will be the single most important issue facing sales execs in the coming 5-10 years. We HAVE to invest in acquiring the right talent, investing in their development, and retaining them.”
So if we want to change the outcomes we must change the system.
To keep this blog from rambling on any more than I have I will publish “the rest of the story” in the next two blog posts. One will cover the nature of the manipulative system that we have created over the years, and the second I will share with you the CURE that you have to neutralize the POISON known as commission.
Just a few weeks ago, organizations were in the middle of rolling out their highly strategic annual operating plans and the really BIG things that their corporations and their sales teams were going to diligently focus on for the wonderful year of 2020. Revenue assumptions were made. Marketing plans were created to “gain share” during the times then. Sales plans with quotas, budgets, and all sorts of crazy commission schemes were ready to launch. Events were on the calendar for gatherings and trade shows around the globe. This was the most “global” business environment we had ever witnessed in our lifetimes. WOW! 2020 started off well, mostly. Some early signs about another virus coming from China were starting to appear, but no one guessed where it was headed… at least I did not! However, it became clear shortly that “things” were not headed in a good direction. Then, pretty suddenly, the world stopped, and reality set in. We were frozen in our tracks. Now what….
As my friend Hendre Coetzee says… we all went into PAUSE mode. And for the most part that is where we are today. Annual plans are out the window. Trade shows don’t exist. Even travel to a client is not happening. Revenue objectives of almost every company on the planet are in “revision”. Forecast… what forecast. How do you do that now? Sales commission… based on what plan? (I will write about our Non-commissioned sales team later and the GREAT value that has always had).
Well, we must shift. We must shift into preparing to move into the next phase of what this all means to us. I don’t believe we will go BACK to where we have come from. While challenged, too many good things are happening in our newly learned client engagement process, and we should not be willing to give those up. At the same time, I don’t believe that we need to give up the good from where we have come. There is room for BOTH in the new client engagement process.
While there is tremendous fear around us everywhere, our choice in response is still ours. With respect to business, we all have many choices. Choices of attitude, choices of direction, and choices of actions. Choices, fundamentally of failure or success in a ‘new world”. In our little world where I work we CHOOSE success…regardless of the size or nature of whatever challenge we face, we CHOOSE to overcome every obstacle and create SUCCESS, even in this battle for survival. This requires that we create a system that stays close to our clients, quickly understands what they are seeing change, and rapidly shifting our focus to match their new needs. The heart of SHIFTABLILITY!
We do that by understanding the NEW fears that our clients face. By having tremendous empathy for THEIR battles and concerns. Only after we truly understand and acknowledge our client’s own truths do we open up the conversation about the possibility that there might ALSO be an alternative truth that may be of great value to them.
This way of empathically engaging with a client is known as a PIVOT.
The PIVOT concept in its simplest form is the art of listening closely to a person. Acknowledging what they say and believe, as certainly true… because it IS to them. AND then, after acknowledging their perspective…. offering a complementary idea or concept that opens up another possible outcome or direction of thinking. Listen closely, understand, and acknowledge their view of what they are explaining. Once you openly and clearly accept what they say as true… to them… only then do you pose another concept that may provide an alternate truth. Listen, acknowledge, ask for permission to explore another idea…. Then share.
The PIVOT starts with a very clear understanding that the biggest battlefront that exists today is in the MIND of the client. Fear has gripped our clients with a stranglehold and won’t let go. They have hit the PAUSE button and are frozen in place. We must clearly understand what they are facing, how they are frozen, what their NEW fears are now that we face an invisible enemy… TOGETHER! These times of monumental change create serious reluctance to go down a new path or count on a new resource for help. These times also open up the possibility to connect with a person at levels that you may not have been able to do, up until now. From now on… that openness, based on truly understanding another person is your chance to reach out and serve without reserve!!! Serve endlessly… Serve freely….SERVE… without expectation!!!
The BIG PIVOT that we need now… is a monster… Once we understand what has them in PAUSE mode… we must do the work that moves them from PAUSE …to Planning …to PROGRESS (again from my friend Hendre Coetzee)
From Pause…. To Planning… to Progress….
As we look at today, we must realize that all of what we face right now, will again… SHIFT. And that SHIFT has started. Those that are prepared to guide this next part of the journey will THRIVE!
KEEP SHIFTING!
Sales people as counselors! Really?
Yes, and more so now than ever before. As sales professionals, we are all pretty accustomed to “working from home” in many ways. The average on the road sales-type spends a great deal of time “alone” in one way or another. Now we can define alone as the situation that exists as you travel from client to client and reach out for one more phone call to fill that time between face to face meetings. We can also define alone as that endless string of old-style phone calls that you used to make during the day. Alone, maybe not literally, but most certainly wrapped up on one on one interactions… just like the world today in many cases, but with a degree of freedom that we now cherish and wish to have back.
So the world of the salesperson, inside, outside, roar warrior or not, has not really changed all that much. It is still up to us to earn the right to interrupt a client and have them spend time with us. It's just different now! Our anchor was ourselves, and it still is. Our dependence was mostly on what we did as individuals. And again is mostly still is.
But, for the client, the world has shifted terribly in many cases. Their anchor was most likely their personal space in their office arena. They had cubes, they had labs, they had common places to gather and socialize. They had a quick smile amongst teammates and over the wall conversations. They had instantaneous and freely non-structured times of communication with other people. For the most part that is now all gone. Now they have to schedule a video call, schedule a phone update, time-activate a meeting with people that they once would have just walked over to see. Nothing is as easy and simple as it once was. And all this is likely brand new to them, and they are stuck in the middle not really knowing which way to turn, mostly just in PAUSE mode, waiting for the good old ways to come back. They are confused and it is still the job of the salesperson to figure out how best to interact with them. How to serve them.
And that ‘how” is more critical than ever. If the engagement between client and sales is still rooted in all about product features and benefits that “engagement” will last, at best, a few minutes, as the patience for “worthlessness” has grown to an all-time high. Again, it comes back to the vital few basics of client communication. PREPARE. Understand the challenges of the client in terms of today, in the middle of this pandemic. PERSONALIZE that understanding by intelligent inquiry…(example, chatting with my engineer client…”Bill, a few of my clients tell me that they are struggling to connect with their teammates on critical project elements, causing projects to be late…. Are you seeing that?) Listen closely, understand their position, and PROPOSE an alternate idea or solution to their approach. It is called a pivot. It starts with listening without bias, understanding the personal challenges of the individual that you are talking with, acknowledging what their perspective is…and only then reaching out to offer another perspective. The PIVOT… AND it begins with significant preparation about the client, their industry and their business challenges.
So, understand that our clients are working in ways that are not preferred by them. They have perspectives on how that has changed their world. Seek to understand, before being understood (Stephen Covey). And be a counselor with the PERSON that is your client.
And we thought we were scared before…. Yikes! Now look at what’s going on around us!
The fear input to our systems is on overload. This is way beyond business stuff. People we know are dying, not some stranger across the ocean. These are folks we know.
When will this stop? What will it all look like when it's over? You planning on getting on a plane and snuggling up to someone in the middle seat any time soon, or ever?
We are in a rowboat in the middle of an ocean storm and facing the biggest tidal waves ever created. This just sucks!
The animal kingdom gives us a clue about what to do next. Generally applied across most “critters” the fear reaction possibilities are the same as humans. They are FIGHT, FLIGHT, FREEZE. When the bitty bunny in the wild first senses a threat is near, its first reaction is to freeze in place, not move a hair (hare), and pray that it will not be seen. Only when the threat clearly passes does the cottontail take off for other spaces. Now, should that same threat spot the bunny and start to move towards it things change. It's not likely that your average bunny is going to stand up and go into attack mode against any adversary, so the likely response is FLIGHT. In the bunny’s case, it means to run like all get out. And run in a direction that is most likely to be successful. They are great at this, as they have to be.
So, back to our dilemma. Our little rowboat is stuck in a huge ocean storm facing a monster tidal wave… hundreds of feet tall. No time to FREEZE. Not likely to do much good to FIGHT this thing. We have but one choice… Turn the nose of our little boat INTO the wave and row with every ounce of effort that we can pull together. ROW!!! ROW!!! Like our life depends on it… because it does.
My friend Hendre Coetzee, and co-author of Shiftabilty, put this thinking into my head the other day and it needs to be communicated to all of us. Many of us have pushed the PAUSE button on life at the moment and we must quickly get our selves out of the standstill process or we will be swamped by the series of tidal waves that are headed our way. We must take action, we must ROW! We must move now and keep moving. Move first, figure it out as you go. No time for perfection… Get going, don’t look back. Whatever action you can contemplate that even might add value for anyone, take it. Figure out how to course-correct as you go. ROW faster!
We will figure out the long term picture later. Today we need to ROW for today. Nothing strategic needed… ROW! And here is how.
Reach out and connect with everyone you can. Look to help them answer and solve the following question that you will ask them. “What one thing that you could do in the office that you can’t do working from home would help you the most?” Then go help them find a way to do it anyhow.
Now… ROW… do it all again. Connect with people, share their concerns. Face them together. Let them know that you are here to help. Because you care!
At Microchip where I work we created the following guiding thoughts for all that we do in our Client Engagement actions.. CUSP!
CARE greatly!
UNDERSTAND deeply!
SERVE endlessly!
with PURPOSE!
I think maybe for the moment I may add a R to that for ROWWWWW!
CUSPR, or maybe not… as I think our PURPOSE today is distinct and clear enough. SURVIVE to THRIVE!
And we will!
Mitch
I have been quiet on the blog front for a while. I think that the world could use a bit of positive direction, so I will do my best to contribute in that vein. Lets start with a view of the moments that we are all stuck in right now…
Our world is pretty well turned upside down at the moment. Personal lives, work lives, everything… an uncertain jumble of stuff with a lot of unknown, all caused by this nasty thing call COVID-19. A trip to the grocery store yesterday showed the impact of fear. No eggs, no milk, very little meat, not a frozen pizza in sight. A huge empty section of the freezer row was once full of frozen vegetables. I heard a comment from one of the folks in the cheese section, where I got the last two packages of sliced cheese that I was looking for, make an interesting observation. He said that if Stephen King (famed author of many wierd horror stories) were to create a grocery store it would look like this. This is a big mainstream grocery store, not some local corner market, and it looked like it had been ransacked. And surprisingly people were still calmly shopping around, willingly substituting what was on the shelf for what they really wanted. I did pick up 4 more cans of chili with beans than I had intended to purchase…. Just in case!
I happen to know the manager at this store and I ran into him as I shopped. He told me that this panic buying had been going on for several days now, but they would stock back up overnight and have everything back on the shelf at 5:00am when they opened back up. Not sure I will get up at 5:00 just to get the eggs I was looking for, think I will just do without until things normalize.
The catalyst of all this panic buying and panic thinking is fear, and that is a very powerful emotion.
It is a result of the very first section of the brain that ALL inputs go through. The amygdala is the input section into the brain where every single input must pass before processing elsewhere. The amygdala is often called the “lizard brain” as it is the most primeval part of our processing. Here every input is judged. With one of three states (flight, fight, freeze) possibly happening it is here that our caveman instincts were honed that kept us from becoming someone/something’s dinner. The amygdala acts on our behalf even today to judge input and decide quickly if it is time to run like the wind, put up a big fight, or perhaps freeze in place hoping to not be noticed.
Nearly two decades ago we learned about that same topic from our friend Tom Freese (author of Question Based Selling). His teaching was that people will work harder, do more, in fear of pain than they will do to positively achieve something good. His framing of that was “running away from German Shepards” vs running towards “gold medals”.
Fear is a strange thing… all this said, what I want to lead to is that while fear is strong, it is still our CHOICE as to how we respond to it. Without the concern for being eaten as a meal from caveman days, the fight/flight/freeze element can still be tempered by the logical part of the rest of our brain. So, what I am striving to bring to the surface is that it IS our logical part of the brain that can overcome all else and it CAN become the largest voice, and we ARE able to choose our reaction to everything around us. It is eventually YOUR choice. Not always easy, I know. Bravery can be defined as facing directly into your fears and still taking strong positive action. You choose!
My challenge to you in these difficult days. Take time to show more than the normal amount of compassion. Take time to listen closely to those around you and understand their fears. Take time to find unique ways to serve one another in every way you can. Take time… to do what you know needs to be done. One of the best antidotes to fear is to find someone new to serve. Get up, find someone that has a need, help them, however you can. In fact, take the bigger challenge, find someone new to serve EVERY DAY!
Stay well!
Mitch
p.s. the grocery store was much better stocked today.
