When building a winning sales team and strategy there are a few principles that are sometimes overlooked. Let’s take a look at five questions that when answered properly should help youth build a compensation plan that inspires your sales team to thrive and keeps your company on track for revenue and profit goals.
1.) What will it take for my salespeople to survive on their income based on our cost-of-living?
While it is true that salespeople should be paid for their performance and that the top salespeople will earn the highest income, you do not want your salespeople worrying about how they will pay their basic expenditures. Maslow’s Hierarchy of Needs makes it pretty clear the physiological and safety needs are requirements for people to perform at a basic level. Fearing how you will pay rent or buy food is not likely motivating your salespeople to sell more. It is likely hurting them and causing them to question their abilities, lowering their confidence, and may be impeding their ability to close.
A base salary should allow someone to at least survive their basic expenses during a difficult month or quarter. If performance issues last longer than a quarter and are not team wide, then we should be working on coaching to a standard or coaching to a new opportunity.
While I suggest a base salary that allows for survival, be careful that the base is not so large that it impedes the company from offering a strong compensation plan for outstanding results while maintaining a comfortable profit margin.
2.) What is most important to my people? What drives the people on my sales team?
This has nothing to do with your compensation plan, but it is the most important question in determining how the compensation plan is promoted to your sales team on an individual basis.
Most people are not driven only by money. People are driven by security, travel, ability to provide for their family, and freedom. These are often afforded through income. The income alone though is not usually the driving factor.
It’s important to spend the time to get to know the driving factor for your sales team. When you are promoting the compensation plan structure and how it will impact their lives, they will be more likely to hit higher goals that will keep your company on track for your revenue and profit goals. Keep your team in mind and ask from their perspective, “What’s in it for me?”.
If I sell $4 Million in product a year, and I earn $X. Pushing me to sell $5 Million to earn $Y will require an understanding of what I would have to give up in order to hit that higher number – training, travel, hours worked, more calls and rejection and comparing that to what I will gain in return – income, freedom, recognition, promotion, significance, etc. If I, as a member of the team, believe the trade-off is worthwhile I will hit the higher goal. If I don’t, why would I put in the extra effort.
When building your compensation plan, consider whether or not you know enough about the people on your sales team to understand what drives them. Then coach them consistently on how to take advantage of the compensation plan to help them achieve their dreams. You will have happy salespeople which will consequently increase your results.
One of my favorite books on this topic is The Dream Manager by Matthew Kelly. If you are looking for a new level of connecting with your team by helping them achieve what is important to them then you should grab a copy of this book right now.
As a sales manager, team leader, coach, sales consultant, and even as a teacher the majority of my career has been spent in conversations with people around goal achievement. There are lots of different ideas about how to be an effective goal-setter and goal-achiever, and these are the 5 concepts that I share in helping people to develop and achieve their goals. I have found that when one of these ingredients are missing then people are far more likely to fall short of their goals, yet when they have all five of them, you may not want to stand in their way.
Sort of like Simon Sinek’s Start With Why, grand vision has more to do with the underlying theme of what is most important in your life and your business than it does with the actual goals. When we talk about grand vision, I am talking about giving yourself permission to dream as big as you possibly can. In all likelihood if you knew exactly how you were going to achieve your grand vision at this point then you probably are not thinking big enough.
The is an exercise we teach in our 1-Day Workshop for The Miracle Morning for Salespeople called Your Greatest Potential which asks the participants to write down what their life and business would look like if everything unfolded perfectly over the next five years. We then ask them to expand on that to determine their greatest potential in the next ten years. The idea behind the exercise is that it gets people to expand their thinking and not be limited by the thought that they have to have everything mapped out as to exactly how it will all unfold. We want to commit to a grand vision that excites us, and we need to leave enough time to let that vision come true.
You would be amazed at how difficult this exercise is for most people. It usually takes a long time for most participants to write down anything of substance. We always have a small percentage in the room who have thought this answer through prior to the workshop, but for most we will get one or two lines that lack clarity in the vision. We hear lots of generalized goals like being a millionaire, being retired on a beach with a frozen drink, or having $X in the bank, but I am looking for people to dig deeper in their grand vision.
What do they want?
How will they spend their time?
What will their relationships look like?
Where will they live?
What will their finances look like?
What will their business look like?
Who’s on their team?
What impact will they make?
How will they give back?
We are looking for this grand vision to provide the energy, passion, enthusiasm and drive to make the outcomes come true. Clarity is a must. The clearer the vision the greater the chance of success.
In his book The Road Ahead, Bill Gates says “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
He is speaking to the idea of grand vision. When we leave ourselves five or ten years of growth to build towards our greatest potential we are capable of far more than we can even imagine. If you were to look back five or ten years ago, could you even imagine how you got to be where you are right now? Did you ever think you would be doing what your doing? Did you think you would be this successful? Did you think you would have travelled all the places you have been? Met all the people you have met? And achieved all that you have achieved? For most people the answer is no.
The reason is that it’s hard for us to fathom how much we will change, learn, and grow over the course of the next two, three, five, and ten years. We only see what we are capable of based on who we are today, not who we are going to become. If you are focused on personal and professional growth, then you will likely grow exponentially over the next five or ten years. Most people when laying out short-term goals will fall short when they challenge themselves, yet they will often surpass their five-year vision by year three.
2.) Goals (Annual and Quarterly) –
Having a grand vision and having shorter-term goals are not mutually exclusive. We must have both. Most of the people that I work with have goals. They have written down things that they would like to achieve in the next week, month, quarter, or year. The shorter-term goals are important because this is where we can break down the steps to achieve the goal. Knowing the end destination allows us to reverse engineer the plan to move from where we are currently to where we would like to be. I think this is where most people’s strength lies in writing down the goals. There are a couple key weaknesses though that stop people from achieving these goals.
Most of the short-term business, financial, and health goals I have heard from people appear to be solely based on what they think they should do rather than what is important to them. If they spent a little more time on their grand visions they could build goals that would help them take the next step this year towards achieving their greatest potential. Often people look at goal achievement as though it were linear, but when people achieve at the highest levels the exponential growth pattern is more like that of a hockey stick. The majority of the growth happens at the end because of consistent and disciplined action over time.
The Need for Immediate Results
Because people in our society want everything yesterday, we fall into the trap of overestimating what we can achieve in one month or one year. With a little patience and some focus on the key tasks to achieving our goals over the next three to five years instead of all at once we may experience more success, have higher confidence, and live with a stronger sense of fulfillment. The process and the journey should be enjoyable, not just the results.
Too Many Goals
Having too many goals dilutes the priority placed on the most important items. The dog that chases two foxes catches neither. The book The ONE Thing is probably one of the best resources on this topic. You can have more than one goal in the different areas of your life, but there has to be ONE thing at any given time that ‘makes everything else easier or unnecessary.’ When you have too many priorities, then nothing is a priority.
3.) Game Plan –
This is the reverse engineering of the shorter-term goals. The reason for the game plan is to take larger goals that may seem daunting at first glance and break them into a list of smaller, more manageable tasks that can be done each day or week in order to stay on track for achieving your goal.
There are three keys to a game plan will work.
1.) Priorities must be scheduled as daily, weekly, and monthly activities that will be completed consistently to stay on track for the goal. The activities should also be assigned, so that one person is responsible for ensuring that the task is completed.
2.) The activities must be measurable. For instance, when training for a half marathon the game plan for this week can not be running. The game plan should be run 3 miles on Monday, run 4 miles on Thursday, and complete a long run of 8 miles on Saturday. There is no question as to whether or not I fully completed those actions. I either did them or I did not.
3.) We must have faith that plan works. If we have no evidence or no belief that the plan will work, then we will likely not follow through with the activities over the long haul. Why would we commit to a plan if we did not really believe that it would help us to achieve our goal. We would not. This is similar to the idea of Hal Elrod’s Miracle Equation at the end of our book The Miracle Morning for Salespeople. You must have the faith to conjure the energy to complete the tasks.
I am believer in making sure that when you break down the goals into a plan that you must ask yourself three questions to ensure you will follow through. Does it align with my grand vision? Do the activities fit in my calendar? Do the activities fit in my budget?
Just as when we discussed goals a few paragraphs ago, if your game plan is not in alignment with your grand vision and the things that you have deemed as your top priorities then it will be difficult to find the energy, capacity, enthusiasm, passion, or willpower to complete them. If you add up all the hours to complete the tasks in your schedule on a daily or weekly basis, and they are not physically possible then we are setting ourselves up for failure. If we consistently over-schedule ourselves to hit our business goals or health goals, to the point where we neglect our relationship with our spouse or time with our family, then we may find ourselves burnt out on the journey. We must either find leverage or lengthen the timeline. Lastly, if we have leveraged tasks then they often come at a price and we must ensure that they fit in our budget over the long-haul so we can maintain consistency in those tasks as well. This leverage may come in the form of vendors, coaches, or employees, and if we suddenly cannot afford them in our budget then it will leave us short of our goal and our previous spending may be for nothing.
I wrote about an example of this with real estate agents in my newest book, Explosive Sales Growth in Real Estate, and this could be related to anyone using direct mail. Farming is a long-term direct mail strategy targeting specific people. A common mistake agents make is that they choose a larger farm than they can afford to sustain. Since it’s a long-term strategy they should be planning to follow through with the activities consistently for at least a year or two before expecting typical results. Most agents do not take this into consideration, so they burn their budget in six months and decide that farming is not working for them, so they either decrease the farm, decrease the frequency of direct mail, or they stop altogether. By not reverse engineering the budget for the plan, they set themselves up for failure or at least a lesser return on investment. If they slowly built the farm as they began to see the results, the results would fund the continued activity.
4.) Guidance –
We can either learn from the successes and mistakes of others or from our own. I have found that learning from my own mistakes is a lot more costly than learning from the mistakes of others. Guidance could come from any number of resources: a book, a webinar, a workshop, a training, an online course, a mentor, or a coach. Some offer a higher level of learning than others because of their on-going nature and your ability to interact and ask questions to get help specified to your own goals and obstacles.
You can certainly accomplish just about any goal on your own. After all someone had to be the first person to do everything the first time it was done. However, in most cases the goals we seek to achieve have already been accomplished by someone else. Their success leaves clues for us along the way. The easiest way to achieve any goal is to find out exactly how someone else already accomplished what you have set out to do. You may have your own little nuances, personality, and strengths that impact your final plan on achieving your goal, but having an understanding of how others have already achieved your goal will substantially shorten the learning curve.
Accountability is the second component one should look from coaches, mentors, or accountability partners when setting out to accomplish significant goals. There are bound to be obstacles along the way. There will likely be times when we need to be reminded of why we have set out on the journey in the first place. And there will be times when we need someone to remind us of our small wins along the way, so we remain committed even in the face of adversity. It’s far easier to be accountable to someone else than to ourselves. It is far too easy to let ourselves off the hook and tell ourselves stories about why it’s okay that we didn’t achieve the goal.
5.) Get It Done –
We can do all the planning and goal-setting in the world, but in the end it comes down to taking action. If we do not follow through with our commitments through disciplined and consistent action then we will always fall short of our goals. In coaching salespeople I will often work through prospecting plans that involve a certain number of calls or handwritten notes that need to be completed per day or per week. The easiest way to tell if someone is going to succeed at hitting their goal is whether or not they know exactly how many they completed and that they are consistently hitting their activity goal. While measuring results is important, sometimes results lie. The person with consistent action according to their plan will continue to improve over time and hard work will beat out talent most of the time, unless the talent is also working hard. The difference between goals and achievement is discipline and consistency.