Sales Management Blog

Sales management tips and advice on how to improve your sales team.

How to Structure Your Sales Compensation Plans

Posted by Gretchen Gordon on Thu, Aug 06, 2015 @07:00 AM

It seems that compensation plan structure is a hot topic with many Braveheart clients. The following are a few things to keep in mind when structuring compensation plans for your sales team.



1. Not all salespeople are money-motivated.
In fact, from the work that we do with clients and the thousands of assessments we see of salespeople, it appears that the majority of salespeople are NOT motivated solely by money. This means that ─ for most salespeople ─ increasing the commission opportunity will not necessarily incent them to behave dramatically differently. You could lower the base so substantially that they can’t survive unless they do more, but for many this tactic just increases turnover.

2. Remember to reward the behavior you want.
For instance, if you sell systems which have an installation component and a smaller recurring revenue component, but your company value is driven by the recurring revenue component, then the salespeople need to be rewarded for increasing company value ─ which means on the recurring revenue component, not just on the big installation sale.

3. Whether you incent on topline sales or on profit is company specific.
If your salespeople have control over the profitability of their sales, then by all means incent on profit rather than just topline sales. This will reinforce the right behavior. A plan design idea that we share freely with business owners is a concept whereby the salesperson gets to pick their compensation plan for the year.

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Tags: Sales Performance, For CEOs, By Gretchen Gordon

Top 5 Mistakes Made by CEOs Managing Sales (and How to Fix Them)

Posted by Gretchen Gordon on Thu, Jun 04, 2015 @05:24 PM

I had a meeting yesterday with the CEO of a small business that currently has six people on their sales team. He is stuck in an awkward place because they are now big enough that they need to have a sales team, but they still don’t think they are quite big enough yet to have a dedicated sales manager. This is a tough spot that tons of business owners find themselves in. He needs to build sales to propel the business to the next level (so he can justify hiring a rock star sales manager). But until then, it means that the responsibility of sales management falls on him.

That is where the problem lies. Because despite being great business leaders and perhaps brilliant salespeople, CEOs in general don’t have what it takes to be great sales managers. How can I make such a sweeping statement? Simple. It’s because I know that being a great sales manager requires significant time, something that is in short supply for any CEO.

Unfortunately, CEOs like the one I spoke with are forced to muddle through the sales management process as best they can out of necessity. Finding a way to balance this role as effectively as possible with their other CEO duties is critical to getting over the hump and growing their business enough to adequately support a high-performing sales team.

With that in mind, I put together a list of the Top 5 Mistakes I frequently see made by CEOs managing sales. More importantly, they are accompanied by tips on how to fix them.

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Tags: Sales Management, For CEOs, By Gretchen Gordon

Hiring for Sales: Round Pegs Do Not Fit in Square Holes

Posted by Gretchen Gordon on Thu, May 21, 2015 @09:08 AM

I was with a group of seven friends from college last weekend to help out a friend in need.  We have all been friends for over 30 years and we get together once a year.  What has been so fun to realize over the years is that we each have different talents.  And we each have different weaknesses.  This is not an earth-shattering revelation.  But, now we have the maturity to realize that different people’s talents can and should be used appropriately, rather than trying to get everyone to operate the same way.  We no longer attempt to put round pegs in square holes, so to speak.  On this particular weekend we had a collection of organizers, doers, and visionaries.  Each did what their particular DNA was most drawn to and the project turned out amazing.

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Tags: Sales Hiring, For CEOs, By Gretchen Gordon

You Hired A Salesperson Who Has What it Takes to Succeed. Now What?

Posted by Gretchen Gordon on Thu, Apr 23, 2015 @07:00 AM

We work with many companies and help them dramatically improve their sales hiring effectiveness. Unfortunately, companies tend to ignore what happens after the interviewing, assessing and hiring are done. All too often, companies ignore the importance of having a systematic sales onboarding program in place.

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Tags: Sales Hiring, For CEOs, By Gretchen Gordon

How to Get Your Sales Hiring Right

Posted by Gretchen Gordon on Thu, Apr 16, 2015 @07:00 AM

Sales hiring is not like any other type of hiring. For one thing, salespeople are the most difficult hires to get right. 

Unfortunately, the cost of making a hiring mistake is high. 

Statistics indicate that the cost of making a bad hire is between three and five times that individual’s annual compensation. That means if the base salary for a new sales rep is $36,000 per year and the company is superior at cutting ineffective salespeople free quickly (say, after three months) then the cost of one bad hire is $27,000 at a minimum. That is a very conservative estimate.

If they were making $75,000 per year and kept them for six months before parting ways, then it might be more like $75,000 divided by two for half the year = $37,500 x 3 (the low end of average) = $112,500. If we multiply by 5 (which is on the high side of average), the number jumps to $187,500. 

I suspect the true cost in many industries is significantly higher even than that. Particularly with a product that is purchased infrequently, such as on a multi-year contract, you really cannot afford to have an inferior salesperson losing out on those fleeting opportunities repeatedly.

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Tags: Sales Hiring, For CEOs, By Gretchen Gordon

6 Rules to Help the CEO Who Also Manages the Sales Team

Posted by Gretchen Gordon on Thu, Jan 22, 2015 @11:35 AM

If you own your own company and also manage the sales team, this article is for you. I have written before that it is not the optimal situation when the CEO also directly manages the salespeople, but I recognize that it is sometimes a requirement until sales support a different structure. It is not ideal because you as the company leader have to pay attention to numerous other activities and cannot devote the attention necessary to drive sales. You may have been the driver of sales earlier in the company’s history (and you may still be) so you may be comfortable with that side of the business. Unfortunately, selling and driving sales through other people are not the same skill set.

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Tags: Sales Management, For CEOs, By Gretchen Gordon

Hiring Hunters: Don’t Rely on Luck to Hire the Next Great Salesperson

Posted by Gretchen Gordon on Thu, Sep 04, 2014 @02:00 PM

One of the biggest challenges that middle market companies seem to face is the inability to attract and hire good quality salespeople consistently. Time and again it seems that they have had success with one or two hires but they can’t seem to duplicate their success. I believe it is because they got lucky and then tried to repeat the process of hiring another good one. Since it was luck the first time around that is pretty difficult to duplicate.

The Problem Is Two-Fold: 

1) Attracting the right candidates; and 2) Being able to pick out the ones that will work.

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Tags: Sales Hiring, For CEOs, By Gretchen Gordon

How to Construct the Right Sales Compensation Plan

Posted by Gretchen Gordon on Thu, Jul 17, 2014 @12:33 PM

I have recently had multiple discussions with business owners and CEOs about appropriate compensation plans for their sales teams.  Clearly there is not a “one-size fits all” plan,  but I thought I would share some thoughts that I use as guiding principles to help business leaders construct the right plan for their situation. 

There are a couple of basic foundations that might seem obvious, but don’t always translate well to a good plan.

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Tags: Sales Force Effectiveness, For CEOs, By Gretchen Gordon

Hunting and Account Management: Mutually Exclusive?

Posted by Gretchen Gordon on Thu, May 15, 2014 @12:15 PM

I have had several conversations in the last two weeks about the differing skill sets of Account Managers vs. Hunters.  It seems that there are many sales organizations that need both of these characteristics either within the same salesperson or across the team.  Additionally, over the course of the last five years, one of the most frequent problems we have diagnosed within the sales teams we analyze is the unfortunate realization that the company needs Hunters and all they have are Account Managers or marginal Hunters.
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Tags: Sales Management, Sales Performance, For Sales Managers, For CEOs, By Gretchen Gordon

Systematic On-boarding Programs Predict Success

Posted by Gretchen Gordon on Thu, Apr 24, 2014 @10:15 AM

As part of our work with clients, we sometimes help them improve their hiring effectiveness and efficiency by introducing an assessment into their hiring process. I have found that hiring managers occasionally get lulled to sleep believing that because the candidate was recommended by the assessment, and HR screened them that they will just step into the position and be a superstar. I wish it worked that way, but it doesn’t. As I discussed in this recent article there are six steps to successful sales talent hiring, and on-boarding is one of those steps.

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Tags: Sales Development, Sales Hiring, For Sales Managers, For CEOs, By Gretchen Gordon

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