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Wc sales research

  1. 1. as s Sal es Cl A d w l r arWo d © HR Chall y
  2. 2. The 2006 Customer-Selected World Class Sales Forces© The HR Chally Group
  3. 3. as s Sal es Cl A d w l r arWo d © HR Chall y
  4. 4. Winning Company Profiles Applied Industrial Global Imaging Systems Technologies Global Imaging Systems,Applied Industrial Technologies (NYSE: Inc. offers thousands ofAIT) is one of North America’s leading customers a One-Stop Shopindependent distributors of bearings, power providing 1) a broad linetransmission components, fluid power of digital office imagingcomponents and systems, industrial rubber solutions including the sale and serviceproducts, linear components, tools, safety of copiers, fax machines and printers, 2)products, general maintenance, and a video conferencing and other electronicvariety of mill supply products. Applied® presentation systems, and 3) networkrepresents more than 2,000 manufacturers integration and management services.worldwide, offering more than 2 million Since its founding in June 1994, Globalspecific products to about 156,000 has acquired more than 80 businesses andcustomer accounts within a broad cross- has operations in 32 states and the Districtsection of industries, including primary of Columbia. The operating companiesmetals, pulp and paper, food processing, are organized into core companies in keychemical processing, mining, utilities, markets across the U.S. The remainingtextiles, agriculture, and automotive. businesses operate as satellites of the coreHeadquartered in Cleveland, Ohio, since its companies. Under the Company philosophyfounding in 1923, Applied® employs more of “Think Globally, Act Locally” and athan 4,600 associates in more than 450 decentralized structure, core companiesfacilities in 48 states, 5 Canadian provinces, operate under their pre-acquisition namesMexico, and Puerto Rico. The company and management, preserving and buildingchanged its name from Bearings, Inc. to upon existing customer relationships.Applied Industrial Technologies in January www.global-imaging.com1997.www.applied.com Insight Enterprises, Inc. Corporate Express Insight Enterprises, Inc. is a Corporate Express, Inc., leading provider of a broad a Buhrmann company range of top name-brand IT(NYSE:BUH), is one of the world’s largest computing products, software and advancedbusiness-to-business suppliers of essential IT services helping companies around theoffice and computer products and services world enable, manage and secure their ITwith 2005 sales of approximately $4.6 environment. Located in major cities aroundbillion in North America. Corporate the globe, Insight provides local accountExpress’ product offering includes office and services in over 170 countries and has thecomputer supplies, imaging and computer process knowledge, technical expertisegraphic supplies, office furniture, facility and management tools necessary to easesupplies, document and print management, the burden of selecting and purchasing ITdesktop software, promotional products, assets while streamlining IT managementand other similar products. and costs.Corporate Express’ broad product offering, Insight combines more than 200,000commitment to service, distribution products with one of the mostexpertise, technological excellence, and comprehensive IT service offerings in theworld-class associates bring a distinct industry to tailor solutions to businessescompetitive advantage to the office and public sector organizations. Today,products industry. With operations in small-and-medium businesses, enterprise,more than 17 countries and strategic government and education clients relypartnerships in an additional 11, Corporate on Insight for expert technical support,Express is currently the only B2B office industry-leading integration, onsiteproducts company with a true one-company deployment, management, and more.global capability. www.insight.comwww.corporateexpress.com© The HR Chally Group I
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  6. 6. The Chally World Class Sales Excellence Research Report Principal Author: Jason Jordan, Mercer Sales Effectiveness Consulting Authors: Howard Stevens, HR Chally Sally Stevens, HR Chally Sponsors: Advantage Performance Group The Real Learning Company GM Fleet and Commercial Operations IBM Mercer Human Resource Consulting Marriott Vacation Club The Sales Centre at Ohio University Selling Power Magazine Research Team: Debbie Bailey Linda Faupel Pat Lokai Delores Smith Betina Brown Karen Flory Jenny Mayl Marri Smith Noralee Bussell Dana Jackson Robin Pacey Howard Stevens Harmony Danielsen Beth Kauflin Mary Ann Rosser Sally Stevens Danada Davidson Linda Kertesz Mike Roth Pauletta Wells Brianne Elie Phyllis Kutzera Ryan Sexton Dean Wright Production Team: Cindy Burgess Nuannit Lilabhan Sue Pearson Dean Wright Steve Krieg Cindy Mitchell Adrian Perez© The HR Chally Group III
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  8. 8. DedicationThis Report is dedicated to the great progress we need to make toward the “professional-ization” of sales, and also to those few Sales organizations that have had the insight andcommitment to champion this transformation.Today, more college graduates will become salespeople than all other careers combined.Yet fewer than a few dozen of the more than four thousand colleges and universities inthe United States have established a formal sales program.*It will take an effort from our great colleges and universities to develop suffi-cient numbers of professionally trained salespeople to fill our present businessneeds.In the meantime the only blueprint for developing a truly “professional” salesforce comes from these customer determined “World Class sales forces” whoseexceptional “benchmark” practices are presented here. They have defined thethree major standards for a sales “profession”: 1. All professions specialize. Chemical engineers do not design bridges, pediatricians don’t do brain surgery, and patent attorneys don’t defend murder cases. Chally’s research has identified fourteen distinct types of sales. The skills and training for each are distinct. Most are not interchangeable. The great majority of New Business Developers (Hunters) fail at Account Maintenance (Farming). Field Sales people seldom succeed in telesales, and so on. In fact, 65 percent of the salespeople who fail do not fail from lack of competence or commitment; they fail because they are in the wrong type of sales for their talent and skill base. 2. All professions have a standard and recognized minimum “curriculum” of academic education, on-the-job training, or internship. Members of professions also benefit from the appropriate practice through supervised apprenticeship that oversees the quality of their development and maturity as practitioners. 3. All professions have an independent “certification” process that anoints the emerging intern or student as minimally qualified to practice their chosen profession.In the meantime, corporate sales organizations must fill the gap with the help of salestraining resources. Unfortunately, only a few non-college sales development organiza-tions have recognized the hands-on participatory requirement for the “training” of salesprofessionals.* We have been honored to be involved with the Ralph and Luci Schey Sales Centre at Ohio University and the other colleges of the University Sales Center Alliance. Fifty percent of the revenues from this report will be contributed to them.© The HR Chally Group V
  9. 9. Table of ContentsWinning Company Profiles. .................................................................................. I .The Chally World Class Sales Excellence Research Report. .......................... III .Dedication..............................................................................................................V2006 World Class Sales Force Benchmark Executive Summary. .................... 1 .Methodology.......................................................................................................... 9 Benchmark 1: Customer-Driven Culture............................................................... 17 Ensure that Your Salespeople Know Their Customer’s Business....................................... 18 Demonstrate the Value You Create for Your Customer....................................................... 20 Establish Formal Feedback Mechanisms – Both Good and Bad. ....................................... 22 . Benchmark 2: Recruiting and Selection................................................................ 29 Recruit and Hire Specialists . .............................................................................................. 32 Go Beyond the Interview. .................................................................................................... 34 . Make Sure there is a Cultural Fit......................................................................................... 36 Benchmark 3: Training and Development............................................................. 41 Sales Management Coaching Aligned with Training and Development Programs.............. 47 Coach, Coach, and then Coach Some More....................................................................... 49 Measure Results.................................................................................................................. 52 Provide Just-In-Time Training that is Easily Digestible ....................................................... 54
  10. 10. Benchmark 4: Market Segmentation. .................................................................... 59 . Clearly Define Your Target Markets..................................................................................... 61 Organize Around Your Customers, Not Your Products........................................................ 63 Deploy Your Resources Wisely Across Market Segments. ................................................. 65 . Benchmark 5: Sales Processes. ............................................................................ 71 . Formalize the Way You Sell................................................................................................. 73 Sell How Your Customers Buy............................................................................................. 75 Clearly Define Your Selling Roles........................................................................................ 77 Measure and Manage Inside the Pipeline. .......................................................................... 79 . Share Best Practices........................................................................................................... 81 Benchmark 6: Information Technology................................................................. 87 Customize Technology to Your Business, Not Vice Versa................................................... 89 Avoid ‘Big Bang’ System Development................................................................................ 91 Make IT Valuable for the Salesperson … And the Customer.............................................. 94 Benchmark 7: Organizational Integration.............................................................. 99 . Request Dedicated Functional Resources to Support the Sales Force . .......................... 101Appendices........................................................................................................ 105 Benchmark Survey Interview Questionnaire....................................................... 106 . Customers Interviewed for Research................................................................... 109
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  12. 12. 2006 World Class Sales Force Benchmark Executive SummaryThe 2006 Theme: Change Creative engineers or other technical experts who invent new products are notIf there were a theme for the 2006 World enough to sustain a competitive advan-Class Sales Benchmark Research, it would tage.have to be Change. Not a change in ourresearch – This year our team again inter- Too many new products do not matchviewed over 2,500 customers and collect- customers’ priorities or are too difficult toed their opinions of more than 4,000 indi- understand or use; sometimes they arevidual salespeople. Nor a change in the simply not needed. A major challenge isoutcomes – Customers again identified moving a selling organization to becomeonly a handful of sales forces that they “customer driven” from whatever drivingtruly perceived as ‘World Class’. Rather, force had previously dominated corpo-the changes we observed this year were rate strategy. As Figure 1 demonstrates, ain the demands that customers are placing simple scale distinguishes the progressionon salespeople and the ways that sales companies can make toward a custom-forces are responding to those needs. er focus. Corporate managers who are rewarded for quarterly profit, for example,The changing dynamics between buyers have little likelihood of investing the timeand sellers are being driven by larger soci- needed to develop “customers for life”etal trends that are affecting us all. The relationships or partnerships. The focusproliferation of information, the mobility of must change from product to benefit orthe work force, the ease of communica- business result. Grandiose products andtion, the globalization of markets … these services with more capacity, features,and other trends have altered the way or options are often just seen as over-we live. Similarly, they have altered the priced. Additionally, products and servic-way we work. The overriding philosophy es must be simple to use and manage,of these best sales forces, simply stated, either in their own right or because theis: “Be the outsource of preference.” The seller manages the complexity as part ofbasic priority, therefore, is to add value to the sale. The focus must also change fromthe customer’s business. price and delivery to ease of use, not only of the product but in doing business withChanges at all the world class sales forces the seller.are still in process. Customers did not creditthese top sales forces with perfection...just The outsource of preference will takebeing closer to it than their competitors. In responsibility for managing the relation-fact, most of the top-ranked sellers were ship or, as sometimes defined, the “part-surprised to be named. While customers nership” between seller and customer. Thissee how far sellers have come, the sellers requires the role of the salesperson, andthemselves remain focused on how far consequently, the role of the sales manag-they still have to go. ers who train and develop the salespeople, to change.New Requirements, New An examination of the actual sales figures,Culture or metrics, produces some show-stopping surprises. Since the salesperson is the keyTo be the “outsource of preference” forces contact point between seller and buyer,a seller to refocus the corporate culture. the most important skill is that of the sales© The HR Chally Group Page 1
  13. 13. Executive Summarymanager who coaches and develops the The Critical Sales Evolution ofsalesperson. However, most sales manag- the Millennium: Outsourcingers are more administrator than coach.The surprise finding: salespeople who get the Sales Forceat least one half day a week, one-on-one, These new demands have stressed thewith their managers are twice as produc- major product, technology or even market-tive than other salespeople. This means ing-driven companies. They realize theira manager cannot be fully effective in strengths are in product development,coaching or developing more than four research, or other driving forces, andor five salespeople. The results clearly they are coming to realize these strengthsdemonstrate that a sales manager having need to be maintained, rather than diluteda span of control of more than four or five by attempting to develop a very differ-to one can’t be fully effective, no matter ent corporate mission and culture. Theyhow much formal training is provided or are turning to “Alternatives Channels”, behow powerful the compensation plan is. they efficient call centers, market segmentIn addition, well-coached and very effec- distributors, or highly specialized “Valuetive sellers become so valuable that their Added resellers” (VARS). In 1992, all ofroles are actually changing. Top sellers the world class sales forces representedare changing from product developers, their own products. In the mid 1990’s, weto relationship managers, from “solution began to see distributors such as Boisesellers” to consultants. In some cases, Cascade and CDW. By 2007, all of the worldorder taking, service, technical support, class performers are specialized sales andand product expertise are not even direct- service organizations who manufacturely provided by the salesperson. no products themselves. World class sales How Well Different Corporate “Driving Forces” Support the Development of a World Class Sales Force Corporate Typical Average Customer Likelihood of Driving Force Major Focus Evaluation of Developing a World Examples Sales Force Class Sales Force World Class Customer Customer Driven Retention 91%+ High Sales Winners Value Added Sales Driven Re-sellers (VARs) Market Penetration 88-95 High Specialized Distributors The Invisible Corporate Threshold for Internal Sales Excellence Market Driven Consulting Services “Project” Sales 75-90 Moderate Financial Services Technology Driven Software New Applications 50-80 Low Pharmaceuticals Office Equipment Manufacturing or Building Supplies New Products Very Low Product Driven 50-80 Raw Materials Venture or Stock “Venture” owned M&A 40-70 Very Low Price Driven businesses Figure 1 Page 2 © The HR Chally Group
  14. 14. Executive Summaryforces have transformed their approach- from the seller to the buyer, and buyerses in order to set themselves apart in the are using that power to turn up the heateyes of their customers. on the salespeople who court them. As any sales executive will recognize, this isChanging Customers the bad news. But there is good news, too.To put the changes in perspective, thinkof how differently you yourself purchasethings now than you did in the past. Recall Changing Salespeoplehow you might have purchased a televisionin 1992, the year that HR Chally began The good news is that these changingbenchmarking world class sales forces. customer expectations are very apparent.Without the Internet and easy access to Customers expect salespeople to changeinformation, your search for a TV prob- along with them. They expect salespeopleably began with the Saturday newspaper to transform themselves into professionalsand a trip to an electronics store. When who are deft at identifying and satisfyingyou encountered a retail salesperson, you their new buying needs. Having conductedwere likely early in your buying process. extensive research into customer purchas-You were probably still in ‘education’ mode ing behavior, we are able to enumer-and wanting to learn about the products ate these new buying needs. This list ofthat are available. expectations essentially defines the role of the new sales professional of the 21stBy the time you encounter a salesper- century. In the customers’ own words …son today, you have probably alreadyeducated yourself on the alternatives and Need #1: “Be personally accountablebegun to narrow your choices. And with for our desired results”the increased complexity of the products Customers are tired of pass-the-buck(high-definition formats, flat-panels, etc.), sellers. They do not want a salespersonyou have probably also amassed a long list to close the deal and run, they want toof technical questions that you will expect work with a partner who is personallythe salesperson to answer with great committed to a successful outcome. Busi-authority and confidence. Compared to ness-to-business customers are usually1992, you are a much more sophisticated accountable for the results inside theirbuyer. organization, and they want someone else to be accountable alongside them.Consequently, you are a more demandingbuyer. You are less tolerant of the typical Need #2: “Understand our business”deer-in-the-headlights salesperson who is The second customer need flows logicallyno more useful than the tag on the retail from the first: For salespeople to personal-display that you can read for yourself. You ly manage a customer’s results, they mustexpect salespeople to be skilled, knowl- deeply understand the customer’s busi-edgeable, and above all, value-added. If ness. This means knowing the custom-salespeople cannot demonstrate in a very ers’ competencies, strategies, challenges,brief amount of time that they can under- and organizational culture. To be a value-stand and resolve your concerns, you added professional, intimate customerwill quickly discard them and move on to knowledge is now a prerequisite.another salesperson or to another elec-tronics store. Need #3: “Be on our side” Customers have little or no control overThese are the trends that sales forces what happens inside the salesperson’sface today … increasing product complex- company. Yet, the inner workings of theity, increasing customer sophistication, selling organization can have a dramaticdecreasing access to buyers, and decreas- impact on the buying experience. For thising customer loyalty. These factors all reason, buyers expect salespeople to becombine to create a selling environment their internal advocates, manipulatingthat is more challenging now than ever their own company’s processes and poli-before. The power has clearly shifted© The HR Chally Group Page 3
  15. 15. Executive Summarytics to see that the customer gets what demands that salespeople encounter everythey need throughout the buying process. day. Sales executives, too, are aware that customers are now more demanding andNeed #4: “Design the right want different behaviors from their sales-applications” people. The challenge for executives is toCustomers want salespeople to think put these demands in the context of theirbeyond technical features and functions to own sales force and create an organiza-the actual implementation of the product tion full of people that can meet these newor service in the customer’s unique busi- customer needs with the right skills andness environment. They want to know not aptitudes.just what the offering will do … They wantto know what it will do for them. They This is how world class sales forces setexpect the new sales professional to be a themselves apart in the eyes of theirbusiness consultant who thinks beyond the customers. Their sales forces havetransaction to the customer’s end state. evolved with their customers and have created these capabilities in their sales-Need #5: “Be easily accessible” people. They have identified the organiza-If anything has changed in the workplace tional levers that determine success withsince 1992, it is the connectivity of today’s today’s customers, and they are drivingwork force. Desk phones, PC’s, and pagers their sales organizations to higher levelshave been replaced by cell phones, laptops, of professionalism than their peers haveand Blackberries. This 24/7 access to yet been able to attain. This document iscommunication has not escaped the notice a report based on our research into theseof customers. They expect salespeople to organizational levers that world class salesbe constantly connected and within reach, organizations have identified and exploit-whenever and wherever they need help. ed.Need #6: “Solve our problems”The word ‘solution’ has been overused and Changing Sales Managementmisused as much as any other term in thelast decade, but its prevalence does point Agendasto one major shift in customers’ expecta- As the demands on salespeople havetions. Customers no longer buy products changed over the last 14 years, so haveor services, they buy solutions to their the agendas of the sales executives whobusiness problems. They expect a profes- must invest wisely to ensure that theirsional salesperson to diagnose, prescribe, sales forces are in tune with their custom-and resolve their issues, not just sell them ers’ needs, and 2006 was no exception.products. In the four years since our last researchNeed #7: “Be creative in responding effort, sales executives have not onlyto our needs” shifted emphasis among their existingWith easy access to information, anything benchmark agenda items, new bench-that was known yesterday is old news to marks have emerged as top priorities ofmost customers. When they have a busi- the leading sales forces. The areas of focusness problem and pursue outside assis- we observed in this year’s class of Worldtance, it is because they perceive their Class Sales Benchmark winners were:problem as unique and not addressable 1. Creating a Customer-Drivenwith conventional solutions. Buyers expect Cultureprofessional salespeople to be innovatorswho bring them fresh ideas to solve their 2. Recruiting and Selecting the Right Sales Talentproblems. Creativity is a major source ofvalue in today’s salesperson. 3. Training and Developing for the Right Set of SkillsThese seven needs are the new customerexpectations. They are not secrets hidden 4. Segmenting Markets in Meaningful Waysaway from the sales force; they are Page 4 © The HR Chally Group
  16. 16. Executive Summary 5. Implementing Formal Sales Another benchmark that has exploded in its Processes (New) prominence is Training and Development. 6. Developing Enabling Information Getting the raw talent in the office building Technology is a critical accomplishment, but two factors make continued investment in 7. Integrating Other Business the sales force an imperative. Foremost, Functions with Sales (New) top sales forces are now highly complexIt is no surprise that creating a Custom- organizations with processes ander-Driven Culture continues to lead the technology that are tailored to theiragenda for sales forces that are consid- particular selling tasks. A top salespersonered the best of the best by their custom- from another company cannot simply stepers. As the customers’ needs have shifted into a specialized selling role of anotherover the years, these companies have company and be expected to hit theremained in sync with their customers ground running. The ‘onboarding’ processby uncovering and adapting to the new is growing to a scale never before seen indemands on their salespeople. This focus the sales organization.on customer needs and expectations willprobably never fall from the list, because The second factor that makes Trainingit is so fundamental to the success of a and Development so critical is the ratesales force. Without it, companies become of change within world class sales forces.internally focused and tend to impose These organizations tend to be nimble andtheir own needs on customers, rather than willing to change as soon as the marketimposing the customers’ needs on their dictates. With complex internal process-salespeople. What is evolving, though, es and technology in a constant state ofare the methods that sales executives are evolution, continuous training is the onlyemploying to drive this philosophy into way to keep the sales force operating atthe heads of their sellers. As you will see, peak productivity within the organization’sworld class sales forces are experts at business model.connecting customer strategies to selling Another staple on the list of World Classreality. Sales Benchmarks is Customer Segmen-One very clear trend is a dramatically tation. Like Customer-Driven Culture,heightened emphasis on Recruiting and Customer Segmentation is fundamentalSelection in leading sales forces. These to creating the differentiated customercompanies have come to realize that every experiences that lead customers to raveother competitive advantage they can about a sales force. Reviewing the newachieve in the marketplace (better prod- customer demands like Understand Ouructs, better pricing, better relationships, Business, Design the Right Applications,better technology, etc.) is fleeting except and Solve Our Problems, it is easy to seefor having better human capital. Nearly why Customer Segmentation is so criticalevery other aspect of a business can be for a sales force to succeed in the custom-duplicated by a competitor except the er’s eyes. Sellers cannot accomplish thesequality of the people they employ. objectives with a one-size-fits-all approach to the market, so grouping customers whoAs a result, world class sales forces are are alike and aligning sales resourcesputting more and better effort into finding accordingly allows salespeople to developand hiring the right people for the job. They familiarity with their customers’ businessare putting more effort into the task by issues. It enables the salesperson toinvesting more in the process and casting become a specialist with credibility and toa wider net. They are putting in better engage customers with confidence.effort by pursuing more specific skill setsthat map into their increasingly complex A new entrant to the list of world classand specialized selling roles. Across the benchmarks this year is Formal Salesboard, this is an already large and growing Processes. These are the tasks and activi-concern for sales executives. ties that define how a sales force manages its time, its opportunities, its custom-© The HR Chally Group Page 5
  17. 17. Executive Summaryers, its territories, its salespeople, and its The final agenda item in our benchmarkbusiness. In the past, sales process was research is a second new entrant thisalmost inextricably mingled with infor- year. We observed that sales executivesmation technology, but the processes are becoming very skilled at Integrat-are finally standing on their own as sales ing Other Business Functions with Sales.executives strive for consistency of execu- Traditionally, Sales has been the functiontion and measurability of performance. in a company that was least understood and most in its own silo. Sales executivesThe top sales forces that we observed rarely went out of their way to engage IT,manage their organization with the disci- HR, Marketing, and other peer groups inpline of a manufacturing assembly line, any capacity.with explicit processes that can be bench-marked and improved in the spirit of Total Increasingly, sales executives are findingQuality Management. They monitor and themselves at the table with these othermeasure their salespeople from every business functions. They work with IT topossible perspective to isolate best prac- build customized technology. They worktices and pinpoint opportunities for with HR to hire and develop highly-skilledimprovement. They leave little to chance sellers. They work with Marketing to equipby setting clear objectives for their sales and inform their salespeople. No longer isforce, providing a roadmap of how to Sales trying to go it alone in the world. Topsucceed, and managing their salespeo- sales forces focus on their core competen-ple within this framework of formal sales cies and leverage other groups to improveprocesses. the performance of their people.Information Technology is now a well-entrenched part of any sales force. From Changing Facese-mail to CRM, it is hard to imagine amodern sales force without technology Amid all of this change, we are pleased tothere to hold it together. The trend that recognize four new faces as winners of HRwe do see with IT, thankfully, is the recog- Chally’s World Class Sales Force Bench-nition that Sales Force Automation is not mark award.a silver bullet that will cure all the ills of adysfunctional sales force. After the mete- • Applied Industrial Technologiesoric growth of SFA tools in the 1990’s, sales • Corporate Expressexecutives are settling down and puttinginformation technology in perspective as • Global Imaging, Inc.an enabler of salespeople, not a reformer • Insight Enterprises, Inc.of them. These companies were deemed to be theIT is undeniably critical to any company, best-of-the-best by the only people whoand all world class sales forces rely heavily are qualified to judge them – their custom-on technology. They use hardware and ers. In a time of increasing demands on asoftware to capture, manipulate, and share sales force, these four organizations wereinformation and to run their businesses agile enough to change in lockstep withefficiently. However, no leading sales their customers and exceed their high andforces would (or could) point to informa- ever-changing expectations.tion technology as a source of competitiveadvantage. Nor would they say that their In the following pages, we will explore inCRM application is the backbone of their greater depth how these world class salessales force. What they will do is point to forces achieved this high level of perfor-how much more effective their salespeo- mance. As you will see, they are innova-ple are as a result of well-designed and tive companies that have worked diligent-properly-implemented technology. World ly to plan and execute changes that wereclass sales forces are very deliberate and frequently off the beaten path. Changesthoughtful in the ways they leverage the that put them in very elite company aspower of information systems. World Class Sales Forces. Page 6 © The HR Chally Group
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  20. 20. MethodologyT he HR Chally Group has conducted World Class Sales research projectssince 1992. Each World Class Sales Summary. The second phase, with the cooperation of the customer-rated World Class sales forces, provides full benchmarkresearch cycle has involved two phases. research results, including best practices,The first phase is the assessment of the metrics, management processes, andcorporate needs of customers and their profiles of each World Class sales force.ratings of excellent sales forces through Overall, Chally has developed the leadingtelephone interviews. These results Six Sigma styled set of World Class salesare presented in the Phase I Executive force metrics and databases.Overview of the World Class Sales Databases & Metrics Customers identified 21 Benchmarked the best for 80,000 customers interviewed world class sales forces processes and criteria 210,000 salespeople rated on 15 criteria PLUS: How much each customer Identified top and bottom bought from each salesperson over 7 critical best practices & salespeople 3 years critical success metrics Data on 7,300 sales forces Statistically identified the 7 salesperson deliverables that drive customer decisions Achieve Sales Excellence Identified 14 distinct salesperson Statistically identified the profiles by the unique set of salesperson competencies to achieve competencies for each deliverables across markets, products, and services sold Assessed and tracked performance Statistically identified assessment of 300,000 salespeople items that accurately predicted each competency in each position profile© The HR Chally Group Page 9
  21. 21. MethodologyPhase I: Survey Calls ToCustomers To Identify WorldClass Sales CompaniesData Collection to be investigated so that contacts would be distributed over a variety of positionUsing resources such as American Big classifications. An introduction call wasBusiness Directory, decision makers were made to each potential contact to explainrandomly selected from an even distribu- the research and to ask for an appoint-tion of large and small companies (deter- ment to complete the interview. At themined by number of employees) across appointment time, a survey interview wasindustry, geographic location, and position completed. See Appendix for the surveyclassifications. Likely positions of contacts interview questionnaire.were identified for each market segmentCompany Size Total Surveys Surveys Completed Completed Prior to in 2006 2006 Small Companies or units 90,315 1029 (1-249 Employees) Large Companies or units 120,300 1418 (250+ Employees) Overall Response 210,615 2447Industries Represented by the Completed Contacts Aerospace Energy Media Agriculture Financial Services Metals Automotive General Services Non-Profit Beverage/Food Products Healthcare Paper Chemical Information Technology Printing & Publishing Construction/Building Legal Public Sector Distribution Manufacturing Retail Education Materials Transportation Page 10 © The HR Chally Group
  22. 22. MethodologyPosition Classification Position Classification Financial/Engineering Human Resources Purchasing 4.4% 5.3% Financial/Engineering 21.3% Human Resources Information 18.1% Technology Information Technology Executive (Director and above) 6.6% 29.6% Executive (Director Managers 14.7% and above) Operations/ Administration Operations/ Managers Purchasing Administration Percent of Sample in 2006 and representative of the totalGeographic Distribution Geographic Distribution of completed contacts throughout the studies 16% 27% Southwest Northeast Northeast 7% Northwest Southeast 10% North Central 18% Southeast South Central South Central 22% Northwest North Central Southwest© The HR Chally Group Page 11
  23. 23. MethodologyData Analysis Phase II: DeterminingOpen-ended questions went through a Methods of World Classtwo-step coding process. Data was gath- Sales Forcesered using a customized version of Survey- Each of the target companies was sent aPro to populate an SQL database. Further congratulatory introduction letter discuss-analyses were run using the Statistical ing the history of the project and stepsPackage for Social Sciences (SPSS). Each involved in participation. They were thenvariable included in the study was subject- contacted by telephone to solicit participa-ed to detailed univariate analysis. These tion. The primary company contacts wereanalyses provided a further check of the provided with the reasons their customersdata quality and a guide to the interpre- identified the sales forces as World Class.tation of the data. Companies mentioned The contacts were then asked to identifymost frequently as World Class, and the key sales functions which they thoughtreasons why they were mentioned, were would result in customer satisfaction inidentified. these areas. Each interview resulted in the identification of critical success factors, key processes that explain and supportResults critical success factors, and individualsDuring the 2006 research project, Applied responsible for each process. TelephoneIndustrial Technologies, Corporate interviews were scheduled and conductedExpress, Global Imaging Systems, and with each of the individuals responsibleInsight Enterprises, Inc. were the only for a process. Based on these interviews,companies to meet the criteria of being Chally developed a company profile andrated on average as “Very Good” or better identified best practices for each of theby at least 50 customers. All four compa- target companies. Best-In-Class companynies agreed to participate in Phase II of profiles were then reviewed by targetthe research. company representatives for accuracy. From the best practices, a set of key salesPrior winners include: Allegiance Health- metrics was identified and subsequentlycare Corporation, Applied Industrial Tech- collected from each of the target compa-nologies, AT&T Consumer Products, AT&T nies. On-site visits to confirm informationMiddle Market, AT&T Global Business gathered through telephone interviewsCommunications Systems, Boise Cascade and to gain first-hand exposure to bestOffice Products (twice), CDW, DuPont, practices were conducted when possible.Exxon Corporation, GE Industrial ControlSystems, Grainger, Inc., IBM Corporation,John Deere and Company, Moore Corpora-tion Limited, and Motion Industries, Inc.,(twice). Page 12 © The HR Chally Group
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  25. 25. Benchmark 1:Customer-Driven Culture
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  27. 27. Best Practices Benchmark 1: Customer-Driven CultureObjective: cally, they expect customer-driven behav- ior. So if customers expect it and we knowCreate a sales organization that is focused we need to do it, why is there still suchon the needs of the customer and is capable a chasm between the ubiquitously statedof satisfying those needs in a manner that desire for a customer-driven organiza-meets or exceeds the customer’s buying tion and the apparent widespread lack ofexpectations customer-driven behavior by salespeople? The challenge is that customers do notA Perspective: interact with an organization’s culture; they interact with its salespeople. SalesBy the year 2007, you would think that calls are incredibly tactical affairs, and nothe concept of being “Customer-Driven” level of organizational strategy will affectwould be so fundamental to the business the customer unless the strategy is trans-landscape that it would not even warrant lated into field-level tactics. Therefore,a mention in the definition of world class sales management must find ways to gosales forces. It has been decades since beyond mission statements and conversa-we collectively acknowledged the shift of tions about being ‘customer-driven’ and topower from the seller to the buyer and put in place specific processes and mecha-since terms like customer-centric and nisms to create sales forces full of individu-customer-focused became basic elements als who behave in customer-centric ways.of our business lexicon. However, our Saying you are customer-driven is oneresearch reveals that all of this corporate thing, proving it consistently to customersconversation has been lost on the actual is another.customers, who still perceive a noticeabledistinction between sales forces that are World class sales forces have solved thehighly responsive to their needs and those riddle and found actionable best practicesthat are essentially oblivious to them. that connect their customer-driven strat- egy to selling reality. They are leveragingAs discussed in our recent book, Achieve their organizational capabilities to createSales Excellence: The Seven Customer memorable customer interactions, andRules for Becoming the New Sales Profes- their customers have taken notice. Thesional, customers have deceptively simple ability to execute on a strategy is a hall-expectations of the salespeople who serve mark distinction between good perfor-them. They expect salespeople to under- mance and superior performance. Belowstand their business, to offer innovative we highlight some of the tactics this year’ssolutions to their problems, and to do so world-class winners are using to createas a customer advocate who is commit- customer-driven cultures that lead toted to managing their satisfaction. Basi- customer-driven selling.© The HR Chally Group Page 17
  28. 28. Best PracticesBest Practice:Ensure that Your Salespeople Know Their Customer’s Business BEST PRACTICE: ENSURE THAT YOUR SALESPEOPLE KNOW THEIR CUSTOMER’S BUSINESS TYPICAL SALES FORCE WORLD CLASS SALES FORCE SALESPERSON SALESPERSON EXPERIENCE EXPERIENCE CUSTOMER BUSINESS OPERATIONS CUSTOMER ISSUES CUSTOMER NEEDS CUSTOMER BUYING PROCESS WORLD CLASS SALES FORCES GO OUT OF THEIR WAY TO TRAIN THEIR PEOPLE ON CUSTOMER ISSUESW orld class sales forces recognize that customers today expect profes-sional salespeople to understand their ing curriculum. Whether they train their salespeople on their customers’ market dynamics, their business operations, theirbusinesses inside and out. A knowledge- buying behavior, their business problems,able salesperson can quickly engage in a or other customer-centric issues, worldmeaningful conversation and offer insight- class companies no longer rely on theirful business advice, rather than asking salespeople’s previous work experiencefrustratingly basic questions and reciting or their ability to learn on the job. To beproduct features and functions by rote. In a customer-driven company, your sales-response, leading companies are taking on people must know your customer’s busi-the responsibility of educating their sales- ness. Rather than leaving it to chance,people about their customers. sales managers in leading companies are making it their business to ensure thatWe are observing with increasing frequen- their salespeople are prepared to sell tocy companies that include customer insight their customers.as a key component of their sales train- Page 18 © The HR Chally Group
  29. 29. Best Practices Case Study Global Imaging illustrates a commitment to a customer-driven culture through its focus on customer knowledge. All of its employees receive 1½ days of training on customers and their issues. The training begins with a module on customer satisfaction and its importance to the success of Global’s organization. Training then proceeds to understanding customer behavior, solving customer problems, and communicating from the customer’s perspective. The intent of this training is to put Global Imaging’s employees in the shoes of the customer so that they are capable of delivering customer-focused behaviors that resonate with the customer and distinguish them from the competition. Additionally, Global trains its sales force on their customers’ buying needs. Rather than the more traditional approach of teaching its salespeople how to sell its products and services, Global teaches its salespeople how its customers buy its products and services. In doing so, the salespeople are again put into the shoes of the customer and see from the customer’s perspective how their own selling behaviors are perceived. In the words of Dan Cooper, SVP of Sales, “We teach our salespeople the buying process rather than the selling process. We want them to understand the sales cycle from the buyer’s standpoint, not necessarily ours. Because in the end, what we’re trying to do is advance their buying process, not our selling process.”© The HR Chally Group Page 19
  30. 30. Best PracticesBest Practice:Demonstrate the Value You Create for Your Customer BEST PRACTICE: DEMONSTRATE THE VALUE YOU CREATE TYPICAL SALES FORCE WORLD CLASS SALES FORCE CAUSE EFFECT CAUSE EFFECT BENEFIT ? PRODUCT PRODUCT - COST OR OR SERVICE SERVICE QUANTIFIED BUSINESS IMPACT WORLD CLASS SALES FORCES CAN EXPLICITLY QUANTIFY THE VALUE OF THEIR GOODS OR SERVICES World class sales forces again leaveU ltimately, customers interact with salespeople for only one reason: Theybelieve that salespeople and the organiza- nothing to chance. Rather than expect- ing the customer to implicitly acknowledgetions they represent can create some type the value that the salesperson has createdof business value through the implementa- for them, these companies have devel-tion of their products or services. Viewed oped processes and tools to communicatethrough this lens, the customer’s need for that value in very explicit terms. Using thea salesperson to thoroughly understand customers’ own metrics and terminology,their business is really just a means to an they quantify the productivity improve-end. It accelerates the speed with which ments, cost savings, revenue increas-a salesperson can accurately identify the es, or other changes that have resultedbusiness needs of the customer, and it from using their products or services. Byincreases the likelihood that the solution demonstrating to the customer the valuethe salesperson offers will successfully that they have created, they prove thatproduce the promised business value. they have the customer’s business resultsCustomer-driven salespeople recognize as a top priority.the often overlooked fact that they canonly create value for themselves by creat-ing noticeable value for their customers. Page 20 © The HR Chally Group
  31. 31. Best Practices Case Study Applied Industrial Technologies has trademarked a process they call DVA®, or Documented Value Added to help them demonstrate the value that they create for their manufacturing customers. Applied’s salespeople use a PC-based system to calculate the value they have created for their customers through reduced maintenance costs, increased productivity, lower procurement costs, and other means. They work with local plant managers to identify the source of the improvement and to assess the economic impact of the changes. They then document the value they have created and obtain sign-off from the plant managers as proof that the value was realized. These improvements can then be shared and replicated across the customer’s other facilities to further increase the value to the customer. Ted Carl, Vice President of Strategic Accounts, illustrates how Applied uses this program to improve its customer relationships: “Too often customers simply do not remember all the good things that you do. Through this process we have documented over a billion dollars worth of savings for our customers. It is fun to go into a customer and say, ‘You bought $200,000 last year from us, but we saved you $85,000 in Documented Value Added® savings in your process and your procedures in your plant.’ That takes the sting off of a three or four percent price increase or competitive offer that might be a few points better than you are. It clearly allows us to convey to the customer, in terms the customer understands, what we are doing for them.”© The HR Chally Group Page 21
  32. 32. Best PracticesBest Practice:Establish Formal Feedback Mechanisms – Both Good and Bad BEST PRACTICE: ESTABLISH FORMAL FEEDBACK MECHANISMS TYPICAL SALES FORCE WORLD CLASS SALES FORCE SALES FORCE SALES CUSTOMER CONTINUOUS CUSTOMER FORCE EXPERIENCE IMPROVEMENT EXPERIENCE CUSTOMER FEEDBACK WORLD CLASS SALES FORCES DILIGENTLY GATHER CUSTOMER FEEDBACK AND USE IT TO CONTINUOUSLY IMPROVE THEIR SELLING CAPABILITIEST o become and remain customer-driven, a company obviously must understandthe perspective of the customer. Without World class sales forces understand that salespeople and executives are not the best resources for customer research.a clearly articulated understanding of the Instead, they establish formal feedbackcustomers’ perceptions, it is only through channels and processes to gather continu-trial-and-error that a sales force can ever ous input from their customers. By doinghope to align themselves with customer so, they remain in tune with their custom-expectations. However, it is frighten- ers’ ever-changing needs and are ableingly common for sales forces (and orga- to react quickly to problems and to takenizations as a whole) to use executive advantage of new opportunities. Thesecommentary and anecdotal observations feedback mechanisms include written andas the primary input to their customer online surveys, customer focus groups,strategies. Salespeople are especial- executive councils, third-party research,ly notorious for misunderstanding their and a myriad of other means to gain candidcustomer, despite their frequent refrain of a view into their customer’s mind.“I know what my customers need … I talkto them every day.” Page 22 © The HR Chally Group
  33. 33. Best PracticesAnother noteworthy observation from our Leading sales forces would rather learn theresearch is that world class companies are bad than the good. When they solicit feed-obsessed with what is wrong. Typically, back from their customers, it is frequentlyour award winners are shocked that they to uncover the cracks in their armor. Unlikehave been recognized as the best-of-the- most sales forces, they prefer to focusbest by their customers, because they are on filling the cracks rather than admiringso focused on what needs to be improved. the shine. This negative feedback can beThis focus on improvement is also reflect- garnered from traditional customer satis-ed in the companies’ approach to custom- faction surveys, but there are also distincter feedback. All too often, companies ways to go exclusively after the ugly facts.conduct customer satisfaction surveys to A common such method for discovering thevalidate what they are doing well. Known in cracks is a “loss analysis” that is conductedcynical circles as the “applause-o-meter”, post mortem to discover why a customerthese customer feedback mechanisms can defected or a proposal was lost. Was itprovide useful insights, but they can also because of price (which it rarely is), badprovide false comfort.1 World class sales products, bad service, or bad selling? Forforces tend to look further. a customer-driven organization, informa- tion like this helps them alleviate customer pain, in addition to improving the pleasure of the overall buying experience.1 >80% of customers who defected from a supplier ranked them as “good” to “very good” as to the service they provided - Harvard Business Review, Nov./Dec. 1995© The HR Chally Group Page 23
  34. 34. Best Practices Case Study Global Imaging goes out of its way to identify areas of improvement for its sales force. Among other means, they frequently conduct loss analyses to understand what types of failures lead to customer defections and lost bids. Also, they recently conducted customer research to learn explicitly from its customers what they are doing wrong in their sales and service efforts. The outcomes of this research did not sit on a shelf; they were used to design training programs that addressed the customers’ concerns and improved the customer-centric behaviors of their sales force. Case Study Applied Industrial Technologies uses several means to stay in touch with the opinions of their customers. Annually, they conduct one- on-one interviews with 1500 customers to determine how they are performing against key customer-determined criteria. To ensure the candor of the comments, the interviews are conducted by a third- party research firm who does not reveal that Applied is the sponsor of the survey. This allows them to objectively track progress against performance measures that drive customer satisfaction and loyalty. Applied also maintains a Customer Advisory Council that meets annually to allow existing customers to discuss Applied’s areas of strength and opportunities for improvement. These sessions are conducted by a third-party facilitator with no Applied personnel in the room to influence the commentary. The outputs of these sessions drive improvement initiatives, and the customers are updated quarterly on Applied’s progress vis-à-vis their suggestions. Additionally, Applied conducts brand awareness studies that measure customer perception in the context of the broader market. These varying research methods allow them a comprehensive view of their own performance, their customers’ evolving expectations, and the competitive environment in which they go to market. Page 24 © The HR Chally Group
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  36. 36. Benchmark 2:Recruiting and Selection
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  38. 38. Best Practices Benchmark 2: Recruiting and SelectionObjective: fied by their customers as having world class sales forces. It is fair to say that ourImprove productivity and reduce turnover world is short a few great salespeople. Ain the sales force by recruiting and select- shrinking labor pool will not make it anying the right salespeople with the right easier to fill a sales force with qualifiedskill set for the right sales roles sellers. Second, the cost associated with hiringA Perspective: a wrong candidate is extremely high in the sales function. The investment toRecruiting and selecting the right employ- hire and train a new salesperson rangesees has always been a challenge. Unfor- from $75,000 for a tele-salesperson totunately, the challenge is going to get more than $300,000 for a more seniorincreasingly difficult in the very near sales position. These costs probably pale,future. According to Human Resource though, beside the economic damageExecutive magazine’s Forecast 2006, “70 done by a poor salesperson who repeat-million Baby Boomers will retire over the edly loses deals that would have been wonnext 15 years. During this time, only 40 by a better seller. When these costs tomillion workers will enter the workforce.” hire and maintain the wrong salespersonThe implication of this math on the labor are coupled with the disruption causedmarket is easy to see – we are entering when a salesperson leaves, the negativean extended period of time where finding impact of a hiring mistake is tremendousand hiring appropriately qualified workers for a sales force.is likely to be even more difficult than it is Given this context, it is no surprise thattoday. sales executives are turning more andWhile this challenge will affect every func- more attention to recruiting and selectingtion within a company, it will have an the right salesperson for the job. However,acutely painful impact on the sales force. more attention does not necessarily corre-Foremost, there already exists an enor- late with more success. The troublingmous deficit in the number of highly-skilled reality that most organizations face is thatprofessional sellers. While no one reading they do not have the strategies or tools tothis report is likely to disagree with this identify or hire the right candidates. Untilassertion, it is not a difficult one to quan- sales forces and their human resourcetify. Since 1992, we have collected data counterparts improve their own capabili-on more than 7,200 sales forces in over 20 ties, it will be hard for them to improve themajor industries. During this time, fewer capabilities of their salespeople.than 20 companies (or less than three-tenths of one percent) have been identi-© The HR Chally Group Page 29
  39. 39. Best PracticesStrategically, companies suffer from a to identify why salespeople fail in partic-traditional focus on the wrong criteria for ular roles than it is to identify why theyselecting candidates. Most companies look succeed. This allows sales and humanfor candidates that share common traits resources executives to concentrate on notwith their superstar sellers. For a number hiring, promoting, or training candidatesof reasons, it is very difficult to identify the who are likely to become below-averageunique characteristics of top salespeople. performers with limited potential. ByAnd even more to the point, there are not simply eliminating the bottom salespeoplethat many superstars out there to be had. and replacing them with at least averageOur perspective is that it is more fruit- performers, a sales force’s overall produc-ful to focus on the other end of the bell tivity can be dramatically improved.curve – the poor performing sellers. Withgood statistical analysis, it is often easier Example: Beating the 80/20 Rule for dramatic sales increases In this example of a 200 person sales force that produces $200 million in sales, we apply the 80/20 rule (which is typical), meaning that the top 20% of the sales force will produce $160 million in sales. The bottom 20% will produce only $6 million in sales. If we reassign or replace the bottom 20% with candidates that just meet or exceed the Chally predictive competency levels for success, sales will increase by a minimum of $30 million and a more probable $70 million. Page 30 © The HR Chally Group
  40. 40. Best PracticesAnother strategic error that companies Weak outcomes such as these from typicaloften make is in believing that candidates hiring methods were the reason the Justiceare either good salespeople or bad sales- Department originally funded HR Chally.people. In fact, there are a typical number Our research demonstrates that by usingof different sales positions for winners position-specific, statistically-validated job(account manager, new business devel- assessment tools, recruiting and hiringoper, sales engineer, etc.), and success or decisions are improved to 75-85% accu-failure in one role does not predict success racy*. A strategy is only as good as itsor failure in another. Often the issue is implementation, and the tools that manynot having too little talent in a sales force organizations use today to recruit andor in a candidate pool … it is putting the select candidates prohibit their ability towrong talent in the wrong role. A world execute their hiring strategies dependablyclass sales organization typically has and successfully.several different types of salespeople, andunderstanding the need to mix and match In summary, the effective recruitment andindividuals accordingly is a key strategic selection of candidates must be near theadvantage in today’s (and tomorrow’s) top of any sales executive’s agenda. Whentight labor market. the wrong people are in the wrong roles, every task of a sales force is made expo-Beyond the strategies companies use to nentially more difficult. The salespeoplerecruit and select salespeople, the tools are are more difficult to manage, they arehard to find. Research has shown that the harder to motivate, their performance ismethods most commonly used to screen sub-optimal, and their customers know it.and hire candidates are only marginally Today and in the future, finding and hiringmore predictive of success than the flip of the right salespeople will be the most criti-a coin. Interviews, reference checks, and cal input to a world class sales force.other mainstay recruiting tasks are fraughtwith biases and subjectivity.Typical Hiring Method ImprovementMethods* Flipping a CoinInterview + 2% AccuracyAny short selec- + 3% Accuracytion testScorable Interview + 7% AccuracyReference Check + 7% Accuracy* Taken from the research; “Validity and Utility ofAlternative Predictors of Job Performance,” Psycho-logical Bulletin, July 1984© The HR Chally Group Page 31
  41. 41. Best PracticesBest Practice:Recruit and Hire Specialists BEST PRACTICE: RECRUIT AND HIRE SPECIALISTS TYPICAL SALES FORCE WORLD CLASS SALES FORCE PROFILE OF A SUCCESSFUL SALESPERSON PROFILES OF SUCCESSFUL SALES SPECIALISTS SALES SPECIALTY MAP Outside: Field Sales Inside: Telesales/Mktg. AGGRESSIVE Customer Service Indirect Sales Direct Sales RESILIENT Full Line Specialized Products/Services Strategic Territory PERSUASIVE Account Major Account System Product/ Product/ ETC. New Business Account Specialist Service Transactional Development Management Specialist Specialist (Hunter) (Farmer) Outbound Inbound Customer Sales to Service Resellers or Consultive Relationship through (more Hunter) (more Farmer) Distributors Product/System Product/System WORLD CLASS SALES FORCES REALIZE THAT SELLING IS A SPECIALIZED PROFESSION -- THERE IS NO "ONE SIZE FITS ALL" SELLERT he term ‘salesperson’ often conjures up a singular image of the stereotypedseller – the aggressive smooth talker various tasks – identifying new opportu- nities, developing technical requirements, negotiating profitable deals, and managingwho succeeds through persistence, resil- executive relationships, to mention a few.ience, and personal persuasion. The new To find these experts, they target special-reality, though, is that sales has become ists with the precise skills and experiencea profession with highly specialized roles to excel at each task, recognizing thatthat require a wide range of skills. Just as salespeople are not interchangeable anddoctors, lawyers, and accountants develop no candidate can excel at every job.particular areas of expertise, so do sales-people. And just as you would not hire When salespeople are properly cast ina chemical engineer to build a bridge, their roles, they are highly productive andyou should not hire a relationship build- enjoy their jobs. When they are miscast,ing salesperson to make 200 cold calls per their performance falters and turnoverweek. Different selling roles require differ- ensues. Top sales executives recognizeent skill sets, and there is no such thing as that getting the right people in the righta universally equipped salesperson. roles is fundamental to a high perform- ing and stable sales force. Consequently,World class sales forces appreciate the they are adept at clearly defining theirmyriad of selling roles and the unique selling roles and in pursuing specialists todemands of each. They have complex staff them.sales processes that require expertise at Page 32 © The HR Chally Group
  42. 42. Best Practices Case Study When Insight began an overhaul of its SMB sales force in 2005, one of its key objectives was to reduce turnover in its sales force by 50%. While there were many options that they could have pursued to accomplish this goal, they chose to focus on recruiting and selecting the right type of candidates for the demands of a pivotal role in their sales force – their telesales reps. Julie Dervin, Global Vice President of Learning and Development at Insight describes their thought process: “We began by looking at the front end. How were we hiring and selecting our candidates? We were about to spend a lot of time, money, and effort on developing them, and we wanted to make sure that they were the right fit. We have over 600 salespeople selling to the small to medium size business market, so it was significant for us to focus on that part of the organization and how we hire and develop them. As any of you know who work in a telesales environment, it is very hard to bring in the right talent. It is very hard to retain those folks, as well as to train and develop them to a level where they can engage in a consultative type of sale over the telephone.” By understanding the unique challenges that Insight faced in hiring people who could succeed in their telesales role, the company was able to target and hire candidates that not only were capable of performing the job, but also were likely to last in the position. Within 12 months of the first new hire, the attrition rate of the new salespeople had been reduced by over 40%.© The HR Chally Group Page 33
  43. 43. Best PracticesBest Practice:Go Beyond the Interview BEST PRACTICE: GO BEYOND THE INTERVIEW TYPICAL SALES FORCE WORLD CLASS SALES FORCE INTERVIEWS EXTENSIVE SELLING REFERENCE SIMULATIONS CHECKS QUESTIONABLE INTERVIEW HIGH-PROBABILITY HIRING DECISION HIRING DECISION "RIDE-ALONGS" OTHER COMPANY-WIDE METHODS CAPABILITIES TEST WORLD CLASS SALES FORCES DO NOT RELY ON INTERVIEWS ALONE -- THEY RECOGNIZE THAT THE MORE PERSPECTIVES THEY GET ON A CANDIDATE, THE BETTER THEIR HIRING DECISION WILL BEI nterviewing job applicants has long been the lifeblood of the recruiting and selec-tion industry. Few, if any, salespeople have think that a company could get nearly equal odds of success by merely employ- ing a single, corporate coin flipper.ever been hired without a face-to-face ortelephone interview during which they got World class sales forces do not leave theirthe chance to do what they supposedly do hiring decisions to chance. They go beyondbest … sell. They sell themselves, their the interview and supplement it with aexperience, their capabilities, their poten- variety of other screening tools and tech-tial contribution, and any other feature, niques. Top sales forces employ statisti-function, or benefit they can possibly offer cally validated job-specific assessmenta prospective employer. If a salesperson tools. They also use other filters, suchcan not sell themselves, then you would as putting their candidates in a simulatedhave to question whether or not they could selling environment to ‘test-drive’ theirever sell a product. abilities and see how they react in certain situations. They might let the candidatesIt is not surprising, then, that so many ride along with their existing salespeoplebad hiring decisions are made in a sales to get a glimpse into their behaviors in theforce. As we mention above, the inter- real world. They go the extra mile … orview is only slightly more predictive of two … to limit the risk of hiring the wrongon-the-job success than the 50-50 chance person for the job, because they realizeyou get with the flip of a coin. When you that getting the right people in their salesconsider all of the time and money that is force makes everything else they do bothspent interviewing sales candidates over easier and better.the course of a year, it is remarkable to Page 34 © The HR Chally Group
  44. 44. Best Practices Case Study Global Imaging employs many of the recruiting and selection techniques that personify a world class hiring effort. Dan Cooper, Global’s Senior Vice President of Sales, explains how they use multiple methods to ensure that they have a candidate that can succeed in their organization: “With 1400 salespeople throughout North America, we obviously need to find good quality salespeople. One of the ways that we do that is through a capabilities test. Then we send a prospective sales rep out into the field to ride with one of their peers. There is nobody better than another sales rep to tell you if they think this person is going to make it and will be a team fit. Next they meet with two or three different sales managers, eventually coming up to the VP of Sales or the President. We also do extensive reference checking. It is not just, ‘Let’s call their HR department and talk to them.’ We want to dig down to the third and the fourth level person they give us to try and find out really what makes up this person. Finally, like everybody, if you are going to take care of your customers, you have to find employees that are willing to be customer service focused. We spend a lot of time asking questions about how they like to be satisfied as a customer in their own lives.”© The HR Chally Group Page 35