#161: Some Thoughts About Sales
Dear All
Two of my favourite artists have recently opened new shows.
Ceramicist Zizipho Poswa opened iiNtsika zeSizwe (Pillars of the Nation), at Galerie56 in Tribeca. These astonishing photographs form a backdrop to her magnificent bronzes. This show, and her previous show uBuhle boKhokho (Beauty of Our Ancestors), are glorious celebrations of Africa’s cultures and women.
Matthew Hindley’s Memoryscapes opened at Everard Read’s Leeu Estates gallery in Franschhoek. Hindley is one of South Africa’s leading painters. In recent years, his work has been abstract – paintings, yes, but more accurately portals to realms whose existence we intuit but can’t comprehend. In this exhibition he returns to the landscapes and figures of his early work, imbuing them with the power and magic of that which we can never know.
As an aside, Leeu Estates is also home to Andrea Mullineux’s Leeu Passant wines. She is one of South Africa’s foremost winemakers, consistently winning the country’s highest accolades. Her Mullineux Syrah is one of my favourites, and her Chardonnay and Sémillon under the Leeu Passant label are spectacular.
After spending time immersed in Memoryscapes, we had lunch at Haute Cabriere, which probably has the best view in the Franschhoek Valley – although some would say La Petite Ferme’s is better (you can discover more musings on wine farms with great views here).
Apologies, I am getting distracted. Let’s do some thinking about sales.
/ strategy
Despite the absolute truth that sales is survival, surprisingly little is written on the subject.
Yes, there are the charismatic ‘three steps to…’, ‘the hidden secrets of…’, ‘diary of a super seller…’ and the like, but it takes some effort to find serious scholarship on a business’s most important life-force.
A while ago, I asked a group of friends – all senior executives – for their recommendations. My usually opinionated, well-read, well-informed crew were mostly silent.
I turned to Harvard Business Review’s 10 Must Reads. They’re always a good introduction to a topic covering themes like trust, performance management, digital transformation, and happily, sales.
I can now tell you that you should read Andris Zoltners’ books, and those of Brent Adamson, and keep an eye on Doug Chung’s research.
The sales world is contradictory. It is one of the most measurable components of a business’s ecosystem. Yet, for decades, the language of sales strategy has been filled with words like relationship, persuasion, impact, executive presence, communication, presentation – all speaking to the inter and intrapersonal. And then, even though this complexity is acknowledged, sales success often becomes reduced to how salespeople are compensated.
In Getting Beyond “Show Me the Money”, Zoltner comments “You know, it is not all about incentives. You manage through culture. You manage through managers. You manage by sizing, structuring, territory design, training, and hiring – there are many decisions that drive sales force effectiveness”.
In other words, sales success is multifaceted. It is complex. It requires serious and sustained strategic attention to achieve results.
HBR’s 10 must-reads show that successful organisations are systematically leveraging the data generated by their sales activity.
The authors of Selling into Micromarkets interviewed 120 sales executives at companies exceeding their sector’s performance.
These companies all developed a granular understanding of their customer base, enabling them to identify ways to increase effectiveness.
To accomplish this, you need to build an intelligence system. Or, at the very least, create a consistent view across all your customers.
If you don’t have the data, get it.
No matter how rudimentary your sales intelligence is, you can collect deal size, categorise customers into size and other attributes, you can estimate sales and servicing effort, you will have salesperson remuneration.
Even without getting all ‘big datary’, you have more than you think you do.
Building this basic foundation will already improve your sales process.
For example, they note that one sales rep spent more than half her time 200 miles from her office, even though only 25% of her region’s opportunity lay there. Armed with that insight, she then spent 75% of her time where 75% of the market was. That simple insight increased the firm’s growth of new accounts by two-thirds in one year.
You may discover that you are particularly successful with companies in their start-up phase, but you’re only servicing a small portion of the start-up market in your territory. Joining the data dots will help you see the bigger picture.
The micro-markets authors suggest creating structurally similar peer groups of your customers. For example, high-growth markets with limited competition or mid-sized customers who are lapsed clients.
Differentiating sales approaches in alignment with these peer groups’ characteristics creates considerable impact.
Have fun with the process.
Experiment with different sales approaches for each peer group.
Experienced salespeople have decades worth of tacit knowledge, their processes have become instinctual. Being more systematic helps make explicit and replicable the wisdom built over years of trial and error.
A simple question like “What, in your experience, works best with these types of customers?” is enormously powerful.
Unlocking the power of the data requires integrating analytical capabilities into your sales operation, and identifying ‘bridges’, quantitatively strong problem-solving salespeople, who can turn the insights into actions.
In Dismantling the Sales Machine, the authors argue that the strong process orientation that traditionally characterised sales operations – compliance with call rates, short-term incentives etc – is now insufficient.
They suggest that the “selling approach is about creating demand, not simply responding to it” and so “verifying whether the customer is ready to shift is a prerequisite for pursuing a sale”.
Their view is that pipeline building rather than sales velocity is the critical determinant of success.
This means that managers have to shift their approach from monitoring – ‘have you scheduled time with the decision makers?’ – to coaching – creating a ladder of customer verifiers and exploring how a rep might get a customer to that point.
For example, if the verifier is ‘the customer recognises the status quo is unsustainable’, the sales coaching would explore ‘how do we demonstrate the risks in the customer’s current approach?’
The better you understand both the big picture and each customer, the more effective and creative you can be.
/self
An ongoing debate in any sales operation is how to incentivise salespeople.
Doug Chung in How To Really Motivate Salespeople advises ‘don’t cap compensation’.
He cites a number of studies showing that show how the removal of commission caps accelerated revenue growth. Zoltners describes it as “feed the eagles”.
Your sales strategy must respond to different groups of customers, so too your remuneration policy must be broad enough to appeal to different subsets of your salesforce.
Although high performers tend to only need an annual bonus, more frequent bonuses help keep weaker performers on track. Having both helps cover different eventualities.
Zoltners says simplicity is best.
Your payment plan should have no more than 4 or 5 elements, and none should be worth less than 15% or they’ll be ignored.
Financial incentives are also only one part of sales performance.
Training, ongoing coaching, and managers that activate and share internal and external networks all have a significant impact.
Zoltners makes a similar point in relation to external sales partners – their remuneration is only one part of success, you need to invest in encouragement, celebrating successes, and sharing insights, relationships, and data.
It is a partnership, not a transaction, whether internal or external.
/soul
Thursday marked the 60th Africa Day, the day that marks the founding of the Organisation of Africa Unity, and its successor, the African Union.
Thanks to a kind prompt from Charlotte Ashamu, we joined the Desmond and Leah Tutu Legacy Foundation’s screening of Claudine Shenge Ndimbira’s Lend Me Your Voice and Damian Samuels Coach.
I discovered we can stream dozens of African documentaries for free at AfriDocs.
Samuels tells the story of Merlin Mosoko, a Congolese immigrant to Cape Town. Mosoko had wanted to become a pro basketball player, but the life of the refugee meant it was a dream denied. Today, he channels his love for the game, by giving his time to coach the children of Delft.
He gives them a place where they can dream, for many of them he is the father figure they never had.
Ndimbira reminds us what it means to have one’s story told. She reminds us of what it means to be seen and to be heard. She reminds us of the gifts that come to us when we see another.
I wish you a week of being seen (and making a few sales 😉)
All the best
Karl
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