6 ways your sales rep could be doing more harm than good

And how your business might be paying the price.

The most important role in any business is sales. Without someone selling it, nobody is designing it, making it or getting paid for it. Sales reps are unquestionably the lifeblood of any business. It’s not to say that everyone else in your business, regardless of their role, isn’t important, but without sales reps hitting the streets, making the calls and bringing in the bucks, everyone else might not have a job.

Like most, during the lifetime of my career, I’ve seen great sales reps and not so great ones. In fact, some people I’ve seen in sales roles were real head-scratchers as to why they even chose sales as a career path, simply because they were so bad at it and never showed improvement. Hiring the right sales rep is a topic that can fill a library on its own. There are plenty of resources that can help you find the right person for your company. But make no mistake, it does start with hiring the right person, which is something you can address in your next recruiting effort.

There are a variety of circumstances in which you might find yourself dealing with underperforming sales reps. Sometimes we hire people that work out in the beginning, but things change for one reason or another and it impacts their sales performance. Other times it’s as simple as the person hired was just not the right person for the job. Regardless of the reason, when looking at the role of a sales rep based solely on their performance, this is often cut-and-dry and you can choose to address the issue accordingly.

But what about your sales reps that do meet their numbers, and perhaps even outperform the rest of your team? Could they be holding your business back and stunting your growth? Sounds odd, right? But this situation is more common than you might expect. Believe it or not, there are performing sales reps that prevent their company from achieving greatness, and not dealing with them might cause you greater harm than good.

The self-serving opportunist will put their best interests before those of the company. If you can’t see or do anything about it when you know it is happening then you’re contributing to a dangerous problem that will cap the company’s growth potential. Here a few examples of circumstances that can have severe impacts on the growth of your business.

Sales reps camping on their accounts

In the online gaming world, the term ‘camping’ refers to players who situate themselves in overly advantageous positions and don’t move from that spot, because they are safe. In these circumstances, the other opposing players usually don’t have a chance, because campers repeatedly ambush their opponents. In most cases, camping is often synonymous with cheating.

Sales Camping is similar in that a sales rep works a limited amount of accounts that are generally responsible for 90% of their sales revenue.  While that’s great for their sales, in the long term it becomes a high risk for the company if those accounts were ever to be lost. There are a variety of scenarios that could jeopardize an account, including relationships with the customer changing or falling apart, competitors gradually penetrating opportunities with your customer, and your sales rep leaving the organization and taking their customers with them, just to name a few and none of which are far-fetched. When things are going great for the company, Sales Camping goes virtually unnoticed or nobody feels the pressing need to address the issue even if it is obvious. It’s when customer purchasing slows down considerably or when unforeseen circumstances show themselves, such as layoffs, budget cuts or mergers and acquisitions, that the problem hits-hard and could have a major impact on your revenue. It’s not impossible to see your number one sales rep end up with single-digit results.

Business Owners and Sales Managers should consider implementing sales models that make it beneficial to transition top tier accounts to house accounts over a period of time, while still rewarding their reps with a lesser commission for the accounts. Models like this help keep the rep hungry and potentially adding similar new accounts to the company’s portfolio. In the long run, they can increase their earnings considerably.

Servicing instead of prospecting

Companies that spend less time overseeing their sales teams are the ones that put themselves at the greatest risk of not meeting their sales goals. Most sales reps want to make sure their customers are well taken care of, especially right after the deal has been awarded. While that’s a noble gesture any customer is sure to appreciate, spending too much time with the customer after the sale will quickly sandbag future sales opportunities. Sales managers and business owners should implement hand-off processes that give the customer the support they’re needing while allowing your sales reps to do what they do best and pursue new business. Account Managers and Project Managers are ideally the right positions for servicing customers, not Sales Reps. A process like this supports sales enablement, and the more able you make your sales team, the greater the chance you have of doubling the size of your sales and growing your company, faster.

Develop a sales model that encourages growth and new business. Consider higher commissions on initial sales and rewarding sales reps for the number of new accounts they bring to the company over a period (quarterly, yearly, etc.). Incenting sales growth will keep sales reps hungry, resulting in greater sales revenue and company growth.

Straying from the processes

Even if you only have one sales rep, it’s essential that they follow the rules, and more important, they work within the parameters you set for them within your sales process. While it’s perfectly fine for people to contribute to the improvement and evolution within any processes, the processes need to be respected. If your sales process determines that proposals of a certain amount need to be reviewed by a senior consultant or manager, then they need to respect the process. If travel budgets are set for sales reps, then they need to travel within the guidelines stipulated. If sales reps are required to use the company’s CRM, then they must stop adding new contacts and email addresses to  Outlook or their Apple Address Book, or tracking their leads in spreadsheets.

Having a solid sales process is critical to your overall success. It’s a road map that both your employees and customers travel with during their business journey. While there are circumstances that can possibly require a few adjustments, any adjustments are only the exception and not the rule. A maverick sales rep who cares little for structure and doesn’t follow the rules of the organization can do more damage to your business than good. As an example, when working in a silo, tracking leads in spreadsheets while everyone else is using a CRM is undoubtedly causing the rest of the team more work, including unnecessary double-entry. An unstructured sales process will be proceeded by a broken delivery model, and each will have a negative impact on your bottom line.

Having your sales reps follow your process and procedures, while not running-off along their own path, will also set an example to the rest of the team, not to mention new hires. Cavaliers who don’t follow the rules and become obstructionist to the greater good are bound to have a negative effect on your other personnel, which is a formula for building a toxic work environment with a chaotic, cumbersome workflow.

Know how much your sales reps cost you

Sales are great. Being profitable is even better. You should always know how much your sales reps cost you. When companies hire sales consultants the expectation is that the individual will be consistently closing profitable deals. Aside from the obvious margins and markup on the sale, the cost of a sales rep and the cost they can incur throughout the sales process can exceed their profitability and in some cases add more red to their ledger than black. Line items like travel and lead services can easily add-up, especially if these types of expenses are abused, overused, or simply don’t lead to winning the sale. Just because people are busy, it doesn’t mean they are profitable or breaking even. The world is filled with busy people working for companies that are broke and in debt. Watch the costs. A good rule of thumb to live by is for every dollar you spend, sell three.

While keeping costs in-line is everyone’s job, it’s something that has to be most scrutinized within your sales force. They are the one position that comes with ad-hoc and sometimes unpredictable expenses. When you hire a sales rep with grand expectations wrapped-up in a blanket of entitlement, it’s a good idea to keep close tabs on their cost vs. their performance.

They resist using a CRM

Depending on their age or technical acumen, some sales reps in your organization might not be comfortable around technology, which will be great for your progressive competition, but not so much for you. When hiring new sales reps you should quiz them on their technology comfort zone. Find out what they are used to using in their sales position, why they use it and how it’s helped them. You might even get a few pointers even if you don’t hire them. If they aren’t comfortable with using the kind of technology your business depends on and that their peers are using, then pass. While there is a reasonable amount of training that comes with every new hire, teaching life skills that include tools of their trade that they should definitely be comfortable with is not one of your educational responsibilities. As for the current sales reps who are resisting technology (and your processes), make it an ultimatum. Either way, it will become a situation that will resolve itself one way or another.

Responsible Sales Managers and Business Owners alike are always paying close attention to the sales activity within their organization. CRMs not only make this possible in real-time but they exponentially reduce the amount of time required to manage and aggregate sales data across multiple channels, not to mention all the added benefits including mobility, automation, and compatibility with other software, making the sharing and transitioning of data seamless. Sales reps who exclude themselves from contributing to your CRM data are costing your company time in data processing, more lost opportunities and revenue. When sales reps manage their own data outside your CRM, they’re withholding valuable information that your company owns, in addition to compromising customer service by neglecting to update and share client information.

Teaching old dogs new tricks all depends on the dog and the trick

Everyone is always learning on the job. Imagine the changes you’ve seen in a decade and consider the impact they might have had on companies and their employees. The straight reality is that not every employee can adopt or embrace change regardless of how amazing your training programs are. Sometimes it’s generational, sometimes it behavioral. Teaching an old dog a new trick depends on the dog and the trick, so choose who you want to invest in. Invest in employees who are invested in the company. Everyone gets a fair shot, but in the end, time is money. The longer it takes to train an employee or even worse, selling them on what they’re being trained-on, the further you are from seeing an ROI. And at some point, that becomes a negative number for your company.

Conclusion

Business leaders and managers set the rules. Whether it’s managing expenses, ensuring that goals are met, or keeping the company culture in check, successful businesses are run by disciplined leaders. You can have discipline and a great work environment at the same time. That’s how respect is built.  It’s all about setting expectations with your employees and your teams. The more people that play by the same rules, the stronger the links in your chain. People who can’t see that or resist proven methods in your organization aren’t making you money; they’re costing you money. Tolerate that long enough and it will cost you dearly, including the potential loss of better employees who lose faith in their management’s ability to make the right personnel decisions.

Jumpstart your Sales and Marketing initiatives with Mothernode CRM.

What does the fourth quarter typically look like for a business? In most cases this quarter falls in-line with the holiday season. As a result, the majority of the focus remains in boosting sales and current revenues.

While this is an important time for any business’s bottom line, could this laser-focus toward sales serve as a mistake for leadership teams and executives? In many cases, management and executive teams set themselves up for failure at the end of the year by not effectively planning for what’s next.

Instead of simply focusing on the holiday rush, the final quarter should also serve as a time for leaders to step back and let their teams drive the business. While they’re a step back from the action, effective businesses are evaluating their year-to-date performance while planning for the future.

For example, McDonald’s recently deployed an all-day breakfast model to expand their fast food competition. While this is an important change that is creating quite a reaction, now is the time for corporate to evaluate the results of this change.

Additionally, Apple’s recent OS update to their Apple Watch has their perspective focused far beyond the flagship iPhone release. Their team is also currently assessing this performance to better understand how the road will proceed ahead for their business operations.

As these examples show, the importance of Q4 planning and analysis is critical. Here are five important components of that analysis that every team should follow. This list can ensure that any firm is better prepared for success in the next fiscal year.

1. Year-Over-Year Comparisons

Comparing current year data with previous years is one of the most important metrics a business can measure. This helps showcase performance, trends, growth and other critical areas of business operations.

Using reporting tools to compare key performance indicators can show how current sales and forecasts look within the market. Additionally, market reports cross-referenced with this data can help to better forecast what to expect for the next quarter within business.

In most cases this type of data measurement is easily accomplished through an integrative CRM platform. This type of data can be reviewed as a general overview – or more specifically within quarters, months and even the year-to-date. Both positive and negative trends can be better identify when compared within this context. Additional planning can be undertaken to help prevent ongoing negative trends – or to better address positive growth potential.

2. Cost Evaluation

Cost evaluation is one of the most challenging areas of any business analysis. After all, it’s the costs across a business operation that inevitably leech into revenue when left unmanaged. Subscriptions, term agreements, unchecked contracts and other factors can quickly add up to excessive costs against a company’s bottom line.

By remaining proactive in the analytics, businesses can better identify these costs. And they can devise solutions to reduce or even eliminate expenses that may be unnecessary.

One of the most common areas where costs can be reevaluated occurs within company health insurance. With the marketplace becoming increasingly competitive, more and more insurance packages are becoming available for businesses. In many cases, alternative plans with similar features and lower costs may be available for a switch.

Additionally, contract renegotiations may help to reduce spending. It’s important to remember that these companies are competing for business. Hence, a management team’s job is to leverage contract offers against one another to find the most competitive rates possible.

ISPs and other telecom service contracts are a prime example where costs can likely be lowered. By reviewing current plans, needs and available options, many businesses can reduce these costs by a significant margin. Even essentials such as rent or janitorial services can be reassessed to find cost-saving measures.

3. Product & Service Evaluation

Right alongside overall costs, planning for the future must also encompass an explicit evaluation of products and services. The goal of this phase is threefold:

• Make improvements.
• Make changes.
• Make cuts.

A company must stick with its mission and plan while holding true to the strengths that have contributed to success. If cuts are necessary, ensure that they are made with company strengths in mind.

While seeking out new opportunities is always great, it’s important that a company not spread itself too thin during the process. This stage can allow for planning – and exploring potential market opportunities. By planning ahead for analysis, a business can better set itself up for success. And they can readjust their business focus to remain more aligned toward their goals in the next year ahead.

Remember, making necessary cuts and spending adjustments does not show that a company is having financial trouble. Instead, it shows that they’re preparing for even more success in the future.

4. Employee Evaluations

The best employees to any organization are an investment to the company’s success. Accordingly, it’s important to measure each employee’s ROI and their direct contributions to a company’s potential future.

While layoffs and terminations are never an easy step, the truth is that performance is important within an organization. Without the right team in place, a business will never reach its greatest potential.

In many cases, employee evaluation comes down to assessing current workforce as well as investing in future growth. This could also include investing in fresh talent within new business areas to facilitate this type of growth.

5. Budgeting

Now that the planning has encompassed the major areas of operations, a realistic budget can be developed for the next year.

Utilizing a CRM or ERP software suite should come as no surprise within any organization’s operations. This software simplifies all the above-mentioned steps by compiling data and developing customizable, intuitive reports. This information can be used to quickly develop budgets that address all areas of a business – and plan with future market trends in mind.

Getting Ahead of the Curve

While this list contains many of the important steps a business should take in Quarter 4, it certainly is not exhaustive. There are all sorts of additional options that should be looked at for success. However, these five represent all the essentials any business management or executive team should address.

No matter a business’s size or scope, utilizing a CRM platform can enable even better analytics for improved fiscal performance into the future. These software packages help to compile data into intuitive reporting. That way, management can better forecast the business climate – and the best path forward.

When looking at CRM buying decisions, I compare CRM buyers to home buyers, specifically first time buyers and previous home owners. Previous home owners (in this case CRM owners) make decisions based on their previous experience (in most cases with a previous organization). Veteran CRM users know what they need and cut to the chase with a short list of top requirements. First time CRM buyers are like first time home owners wishing for a fully loaded house; pool, media room, spa, etc. and a bunch of features they’ll rarely use.

Here’s the problem, in most cases, and as I see it from our own experience. When a good leadership team is involved in planning to implement technology like CRM or ERP, their first priority usually is based on what the ‘company needs’ in order to a) make them more efficient in their current processes, b) deliver additional value in areas they have minimal or no capabilities, and c) become an investment for the business that either helps increase revenue, provides a savings or does both. Of course there are other areas of consideration, but we’ll keep it basic.

The 4000 questions in the RFP process usually begins when you appoint the wrong person to lead the project, specifically someone who isn’t part of the leadership team and doesn’t have a holistic perspective of the company’s operations, workflow and ultimate requirements. Usually you end up with ‘Mikey’ (the person in the office who will eat anything) assigned to the project. Rather than identifying in detail what the company’s needs are, he walks around the office asking the users what ‘their ‘ needs are, just as if he was taking lunch orders. When you ask people what their opinion is on a company related matter, they often feel obligated to participate they’re going to provide information based on their personal experience and individual requirements, and disregard the overall company needs. Relevant or not, you’ll get an answer and your list. Not to mention that a lot of that list was created beginning with the words, “It would be nice if it…” rather than, “It absolutely must…”

While a CRM solution is designed to streamline workflow and ultimately make the jobs of the employees easier, the solution is really for the business. Between personnel needs and the company’s needs, the company is the only constant in the equation. Something leadership teams should remember when creating their RFPs.

Successful businesses often find themselves adapting for growth, having to evolve and adapt to their latest challenges that come with meeting client demands, while keeping up with competitors and the latest innovations within their market space. Most companies discover this means changing their technology infrastructure and upgrading the processes in which they handle workflow to make tasks simpler and address both client and market needs. To be effective and efficient in your service delivery model this means consolidating as many chapters of your workflow into as few application solutions as you can and hopefully just one application.

In short, these are your options:

1. Find a technology that can manage your business from end to end, meaning from sales to delivery (and in some cases after-the-sale support).

and/or

2. Find a technology that has the ability to integrate or connect with other services or applications you may need to include in your workflow.

Both methods are acceptable and can deliver the positive benefits equated with smooth(er) workflow. However, if you choose option one it should be able to incorporate option two. Whatever solution you determine a best fit, it has to be a model that can account for scalability and growth. You will need to consider productivity, processes, product expansion, staff and even geography at the very least. Imagine your best case scenario as a business and then plan accordingly.

When it comes to business processes most people only address matters when problems arise and need absolute attention. Often takes a ‘serious’ issue for them to take action, but until then they just cope. Complications that develop in operations are a direct result of neglect in the workflow and the result is an inefficient and poor service delivery model that usually begins at the department level or employee roles. People make operational decisions based on their experience and capabilities. The less technically inclined they are the more defective their workflow may be.

Let’s compare a dysfunctional workflow in a company to diabetes in the human body. There are millions of people who are pre-diabetic and a good many of them are due to neglecting their own health, specifically diet and exercise. As a result, a person’s body suffers from a variety of problems like high blood pressure, kidney disease, heart disease, and enlarged organs just to name a few. Overtime if the health of the person continues to be ignored, these collective issues create more problems and can ultimately be fatal.

Inefficiency, lack of processes, dysfunctional workflow, however you wish to define it is diabetes for business. As with the body, both are caused by simple neglect and bad habits. Process problems that go on unattended create more issues throughout the company as time passes and can ultimately determine the fate of the company if not properly tended to. Depending on the business, ‘fate’ doesn’t necessarily mean death, depending on the industry it could simply mean the company finds itself struggling in areas that restrict growth.

Like the human body, resources would work harder than they should to achieve the same results, in the case of business; fulfilling an order. The process from taking a lead to an invoice can be as simple or as complicated as you want to make it. Never underestimate that each will have an ultimate impact on your service delivery capabilities, which affects not just revenue, but employee attitude and morale.

Learn from this; there are some people who have diabetes that actually have put a positive spin on the disease. They claim that if it were for being diabetic they wouldn’t feel as healthy as they do, because of the lifestyle changes they’ve had to make. The point is, make the change in your business workflow lifestyle for the better, by choice and early on, rather than having to be forced to do it later. The sooner you change, the sooner you will reap the benefits.

Most SMBs make this mistake from the very beginning. They enter the market with a vision, a product or service and a plan to execute. The problem begins with hiring talent in key positions with a single purpose and responsibility like sales, accounting, warehouse manager and so on. Smaller organizations (less than 50 people) often never engage a single source solution to operate or at least facilitate workflow. They focus on optimizing and perfecting their piece of the puzzle and ignore the entire ecosystem that is the workflow of the business. When technology systems are introduced long after processes and procedures have been established it makes the integration and adoption of newer improved solutions an even greater challenge, primarily because employees can’t break away from the legacy workflow they’ve implemented and refined over time.

Younger businesses should consider adopting an integrated solution, scalable enough to ultimately meet the needs of the 3-5 year business plan. Make the investment in time and resources to adopt the right CRM or ERP solution early on and spend your future days building your business and not rebuilding your operations. Be proactive and change the way you do business internally, rather than being reactive and having your challenges make the decision for you.