Inside Sales and Field Sales Harmony

I’m publishing a series of Q&A excerpts from my interviews with Sales 2.0 leaders, which will appear in my next book. This excerpt is from my interview with Bill Donellan, vice president of the Americas sales teams for i2, a company that provides intelligence and investigation software for law-enforcement, intelligence, military and commercial organizations.

Anneke: No new Sales 2.0 project is flawless. What were some of your mistakes, challenges or failures?

Bill: We’ve had a lot of challenges as we transformed our marketing. That’s been a big challenge for our inside sales team, because there has been a gap in lead-generation activity.

Also, while the inside sales team has kept the outside reps focused on large opportunities by handling our smaller transaction sales, opportunities in that size range decreased in the past year. With greater focus on larger deals, our outside reps are building bigger deals based on solution selling. Examples include how we position all our products around high growth areas such as fraud and cyber.

Anneke: Did your field sales organization readily accept inside sales?

Bill: (laughs) Field sales reps can’t appreciate inside sales until they’ve had a chance to work with good inside sales reps. Not everyone has had that opportunity, because not every company has a top-notch inside sales team. Besides that, many field sales reps don’t always want to delegate tasks, which makes it challenging for them to work in a team-selling environment. Phil (i2′s VP of the State and Local sales team) and I had to manage through the process and reassure the reluctant members of field sales that it was OK for inside reps to touch the customer first. We got everyone on the phone together to talk about what each sales rep, inside and outside, was doing on every account. Outside reps had to learn that the burden was on them to help their inside teammate come up to speed and let them take ownership — and that it would benefit them in the long run.

Anneke: How did management support the success of inside sales?

Bill: We had to monitor the program closely, listen in on phone calls and coach everyone through the value-selling process. And we had to ensure we had the right comp plans.

Anneke: What are the key things to get right with compensation plans?

Bill: Comp plans shouldn’t create competition in a team environment. They need to reinforce the goals of the program and the company.

Anneke: How long did it take for field sales and inside sales to work comfortably together?

Bill: It took two or three months. After that, field sales realized the value and was reassured the inside reps knew what they were talking about. With new field reps at Documentum (Bill’s former employer), it was the same: It took six months for the field to get comfortable with the inside group. Our goal in both companies was to find a way to work it out with no turnover.

Read the full interview with Bill Donellan in the Resources section of this website.

Tags: compensation, field sales, inside sales, lead generation, Sales 2.0

A Unique Understanding of Inside Sales Compensation: Take Our Survey

We’ve just released our annual survey covering compensation for inside sales professionals. The survey evolves every year with the help of our clients and the inside sales community, who review and edit the questions before we release it. It’s crucial to get the questions right, as an increasing number of companies start up or grow their own brand of phone and Web selling initiatives. Because we at Phone Works spend every day starting up, expanding, optimizing and testing inside sales groups of all sizes, we have a unique perspective on what inside sales professionals and their executive managers need to understand when budgeting and structuring incentive compensation. Asking, “What do your inside sides reps earn in base salary and commission?” is no longer a specific-enough question, as specialized roles emerge.  Consider, for example, the differences in hiring profiles, job requirements, objectives and compensation in the following positions:

• “hybrid” (inside/field) reps who spend most of their time “inside” but also travel when appropriate
• reps who engage, generate and qualify sales opportunities but do not close
• reps who manage a territory with a field rep partner and carry a team revenue quota
• reps who only sell new business or only sell to existing customers
• reps who only renew service agreements or subscriptions monthly, quarterly or annually
• VPs, directors or managers who have other managers reporting to them vs. a team of reps as direct reports

Take a look at the (free) compensation survey reports we’ve produced in the past. And if you want early results that will help you with end-of-year planning and budgeting, take this year’s survey now.

Tags: compensation, inside sales, survey

The Importance of Fun and Games in Sales 2.0: The Debut of “Make That Sale”

Keeping sales reps motivated — especially in today’s business world where no prospect has time for a sales call — is a key challenge for managers. Compensation, commission and bonuses alone are not enough to get sellers up in the morning, ready to take on another day of prospecting, qualifying and closing.

A day after kicking off the panel discussion on process and metrics at the Sales. 2.0 Conference East in Boston — a critical but more-geeky-than-fun topic — I got to be on the TV game show “Make that Sale.” Yes, you read that right: a game show for sales people. Competing for the coveted electronic device of the moment (an iPad), the contestants — some confident and practiced, others flustered and nervous — got on stage one at a time, as the audience enthusiastically chanted: “Make that Sale! Make that Sale! Make that Sale.” I was one of three “experts” (along with Will Wiegler from BigMachines and Garth Moulton, cofounder of Jigsaw [recently sold to salesforce.com]) on a panel of judges who rated each contestant’s performance on a scale of 1 to 10. The audience got to pick their favorites, and the contestants got to score themselves, too.

Many managers play into the fact that sales reps are naturally competitive and organize monthly or quarterly contests with prizes in order to boost short-term sales results. But the typical approach is to reward reps for being top sales person or selling the most of a certain product. Why not, instead, organize a skills-based contest that has longer-term impact?

Best-selling author Daniel Pink, who draws on research in psychology, economics and sociology, has many of us thinking about a different approach to motivation. Rather than always throwing money at the problem, how might we integrate mastery, autonomy and purpose — the real motivational factors Pink identifies in his book, Drive: The Surprising Truth About What Motivates Us — into our incentive plans? I submit that fun is an equally important motivator in a profession in which it’s commonplace to hear the word “no.”

This is exactly the premise of “Make that Sale,” which tests sales professionals’ mastery of core skills, such as presentation and story-telling, technology-usage and personalization, in a fun new way, using the popular and proven TV game-show format. The show is the brainchild of Gerhard Gschwandtner, the creative executive force behind Selling Power magazine, the Sales 2.0 conference and other market-leading media and events for chief sales officers. It is produced by the top-notch team at San Francisco-based DreamSimplicity.

Gerhard and DreamSimplicity’s Floyd Tucker took turns hosting three pilot episodes of the show: “Most Memorable Sales Story,” “Find That Prospect” and “Make that Elevator Pitch.” Three to four contestants competed in each time-limited contest. It was a blast to be on the judge’s panel, though, as on American Idol, we didn’t always agree. Will, the senior director of marketing for Big Machines and a jazz musician in his spare time, was, for the most part, detailed and spot on for a marketing guy critiquing sales performers. Sometimes, though, I gave him a hard time for being a little too brutally honest for sensitive sales types. Garth was the not-afraid-to-be different, quintessential iconoclast we know and love from his popular blog, Garth’s World. Not surprisingly, he showed a bit of favoritism for the nontraditional underdogs. Garth gets extra style points, though, for performing on the spot when Gerhard asked him to make his own elevator pitch in the final episode. The guy is seriously good.

Watch the show to see which contestants won, how we scored them and how the audience’s favorites differed from the judges’.

What creative methods do you have for mixing it up and motivating reps? Are fun, skills-based contests part of your incentive plan?

Tags: "Make That Sale", compensation, contests, game show, incentives, Motivation, Sales 2.0

Sales Compensation Trends: How Does Your Package Compare?

Compensation is a critical component of business strategy, and sales incentives are especially important to get right. In his new book, Drive, Daniel Pink professes that most people are motivated by autonomy, mastery and purpose rather than carrots and sticks. When it comes to sales reps, though, I disagree: Most great salespeople I know are still motivated by money. To be credible consultants and to provide the most current advice to our clients, we at Phone Works conduct two compensation surveys each year — one for VPs of sales and one for inside sales professionals at all levels — and we’ve just released the latest results. This year, we are also offering customized versions of the reports, so contact us at Phone Works or leave a comment here to request a quote for specific data relating to your industry, geography, size or type of company, and other criteria.

Is your sales compensation tracking with industry standards?  Are you experimenting with new models such as Pink-style “Motivation 2.0″ compensation in your sales organization? I’d love to hear more about your experiences.

Tags: compensation

A Recovering Economy? A Sales Recruiter Sees an Increase in Hiring

Are you moving from a “flat is the new up” mentality to a more optimistic outlook for sales in 2009? Have you used the down economy as an incentive to shift sales strategies and reduce cost of sales?  How has this affected the all-important “people” side of your sales organization: candidate profiles, hiring, and compensation? These are critical elements in new sales organizations, when sales reps are making first impressions and testing assumptions, positioning and messaging with your customers. Even in established companies, it is not enough to define job descriptions, ideal candidate profiles, and comp plans once; it’s a good idea to revisit them when market conditions, customer preferences, and company goals shift.

I spoke to David Sterenfeld at Corporate Dynamix this week to discuss these topics as well as get his general thoughts on Sales 2.0. David and I first “met” when I was a new sales manager at Oracle, building the fastest growing sales organization in the company in the mid-1980’s and he was a Southern-California-based recruiter.  Hiring managers in the know told me that David was the guy who could help me build an organization of Oracle-worthy superstars. As I was in the San Francisco Bay Area and David was then in Marina del Rey, our meeting was virtual – which was less common then than it is now, but appropriate given my sales division was selling by telephone. I chose to work with David at a time when my job depended on fast growth.

Several years ago, David followed his dream of relocating to a golf Mecca and re-established himself in Scottsdale, AZ. He remains the “go-to guy” for many a sales manager in Silicon Valley and all over the western United Sates, further proving that strong business relationships don’t require meeting face-to-face. Over the years, I’ve called David many times to get his perspective on the job market and trends in hiring and compensation. This time, I asked him what he saw coming in the second half of 2009.

Anneke:  I’m hearing reports from some clients and partners that the economy is starting to recover. Are you seeing this reflected in an uptick in hiring?

David:  Yes I am.  I saw this beginning the first week back after the July 4th holiday.

Anneke:  That’s great news! Do you think this is a harbinger of more good things to come?

David:  Yes. Because I believe hiring is a lagging indicator. What I’m observing in my clients is a more positive view toward their ability to achieve their numbers. And they’re much more forward thinking and looking at revenue instead of backward-thinking, looking at expenses. That’s translated slowly into additional job openings.

Anneke:  How has the economic downturn affected hiring profiles and compensation?

David:  Most of the openings in the first six months of this year and through July have been replacement hires. Very few companies are in expansion mode. These companies have used the downturn as a reason to cut expenses and in some circumstances clean out the bottom 20% of sales people. After layoffs in Q1, most companies did not hire back in Q2, but they are starting to do so in Q3. However, they are requiring that candidate profiles be very close to an exact fit to their specifications. They are being very stringent about the criteria. For example, if managers have five hiring qualifications, candidates need to have four out of those five. If they do find the right person, though, they now have budgets to hire back.

Anneke:  What about compensation? Has the economy had any impact on sales rep earnings?

David:  I haven’t seen compensation affected at all. Sales people’s base salaries have stayed consistent for the most part, but as always, most of the compensation is made up on the back end as commission. There aren’t that many variables to change around. However, in some cases, quotas may have been adjusted downward to make the on-target number a little more realistic because of the downturn.

Anneke:  What about sales organizations? Do you see more inside sales groups starting up? Are field sales teams shrinking?

David:  Field sales teams are shrinking, but not necessarily because of the economy. I see field sales organizations declining because of other factors including Sales 2.0 methodology, and more products being sold to the SMB market, in a hosted environment. When the cost of a product is lower, companies can’t afford to have a large field sales team and they try to do as much selling as possible by phone and Web with a lower cost sales organization.

Anneke:  In my interview with you for my book, you indicated that you were seeing a rise in the hiring of multi-talented hybrid reps (inside sales reps who can visit customers when appropriate or necessary). Is this still the case?

David:  Yes. In fact it becomes more and more the case as the larger enterprise companies look to build their own hosted or online solutions. Startups selling Software-as-a-Service (SaaS) have already embraced the hybrid or “inside/outside” delivery approach.

Anneke:  Are you seeing any other emerging trends?

David:  I’m seeing a different trend following this recession compared to the downturns following 9/11 and dot com crash. Unlike in the past, companies have continued to spend money on lead generation specialists. In 2002, businesses stopped hiring lead generation or sales development reps during tough times because they thought of these positions as an expense rather than a revenue producer. Instead of hiring pipeline-filling professionals, they hired more experienced, senior field sales people who unfortunately didn’t do a good job at prospecting. In this downturn, I have not seen that happen. Most sales managers now understand the importance of sales development in the sales cycle.

Anneke:  You recruit all over the western United States, mostly for technology companies. Where geographically do you see the best availability of sales talent? And where do the most cost-effective candidates reside?

David:  The San Francisco Bay Area, which is 75% of my focus, has the best availability of talent both in terms of people aggressively and passively looking because of all of the technology companies located there. A number of my clients are moving their inside sales organizations from Northern CA to lower cost of living locations in CO, NM and AR. But I don’t know how successful they are going to be because the talent pool is limited in those locations and it’s very difficult to recruit there. It certainly will be less costly and salaries and commissions will be lower, but the sales results are unknown. I wonder if being removed from corporate headquarters and the visibility of a VP Sales will affect their effectiveness and efficiency.

Anneke:  What are your biggest challenges in attracting the best candidates for your clients?

David:  My biggest challenge is addressing the fear factor that candidates have of being the last person in and first person let go in a shaky economic climate.

Anneke:  What advice do you give your clients for how to best work with recruiters?

David:  Most managers in this economy tend to very fearful for their own jobs and favor hiring reps who can come up to speed fastest to ensure their own personal safety. I would advise them to hire the best available sales athlete they can, because this will serve them better over the course of a year than worrying about who’s going to hit the ground running in the first 90 days.

Anneke:  What do you think of the emerging Sales 2.0 trend? Is it generally recognized by your clients? Is it here to stay?

David:  Sales 2.0 is recognized by my clients – both the venture-backed start-ups as well as the established companies – and it is definitely here to stay, largely because customers have embraced a new way of researching information, interacting with sales people, and buying. I believe that as old line, legacy organizations take a look at their ability to sell downstream, they will have to change the way they sell. It will be customer-driven.

Anneke:  Do you personally practice Sales 2.0? In what way?

David:  I have been a virtual headhunter for 20 years. Most hiring managers are happy that they don’t have to spend the time to meet me and we can accomplish our work together via the phone and e-mail.

Anneke:  What works better for you– the phone or e-mail?

David:  The phone enables me to ask more pointed questions and gather additional referrals. But e-mail has become a huge tool for me to work 24 by 7 and communicate any time of day or night. Also, my client base is fond of BlackBerries and laptops and is used to working long hours answering e-mail.

Anneke:  Sounds like selling in the way the customers want to buy, a key tenet of Sales 2.0!

David:  Exactly.

Anneke:  Is there anything else you have to share with the Sales 2.0 community?

David:  As more and more companies jump on the Sales 2.0 bandwagon, more and more sales people will be organically grown and there will be a new generation of sales people who will be ideal hires over the next 5 years. Today in many cases we’re trying to put square pegs into round holes, as company sales models change.

Are you hiring sales staff in the second half of 2009? How have you aligned your hiring profiles, recruiting processes and compensation plans with your Sales 2.0 practices?

Tags: compensation, hiring, incentives, SaaS, Sales 2.0