Over the years I have been exposed to many sales management theories and strategies, some of them conventional and some of them less so. I have also seen many unconventional ideas evolve into mainstream practices as the times change, with varying degrees of success. Ultimately, challenging conventional wisdom is a smart move, if it results in taking a step back and looking at what approaches are really working or not working versus passively maintaining old habits or following popular trends.
In this article, we take a look at sales management ideas and approaches that spark vigorous debate over efficacy.
Sales Commissions Don’t Work – Arguably the most sacred of sales management thoughts is that commission systems are explicitly tied to sales results. In recent years, however, perhaps an outcome of the “everyone is a winner” cultural shift, there is a small but not significant and growing movement towards eliminating commissions from the incentive mix for sales people. Many pundits argue that commission systems prevent sales, including Harvard Business Review contributor and bestselling author Dan Pink who has written about sales teams that have increased production after dropping sales commissions. Norm Brodsky, a seasoned entrepreneur, Inc. contributor and author, has also been very vocal about the fact that commissions systems don’t work. Still there is much research to indicate that sales commission systems absolutely do influence the behavior of sales people and if designed and applied properly will result in increased sales. Whether this continues to be the case over future generations remains to be seen, however the balance of evidence today seems to support the usefulness of commissions in driving sales results.
For more from Peak on money motivation in sales people, see Money and its Influence on Sales Behaviour
Sales People Shouldn’t Cold Call – Another increasingly held belief is that sales people should not cold call. Driven in part by the Internet’s impact on buying behaviors (see Have we reached the death of the salesperson? Well, not quite) and by the general dislike for cold calling, there is a growing number of advocates that champion the notion that sales team should abandon cold calling. I have always been a big fan of cold calling, but the reality is that few buyers answer their phones anymore. It therefore takes a high degree of persistence and creativity to generate sales leads these days and there are many more effective ways to develop these relationships. Former Salesforce.com sales leader and author of Predictable Revenue, Aaron Ross, argues that sales people should not do their own prospecting and sales results are better served by dedicated teams of highly trained outbound sales teams that identify and qualify new sales opportunities, but do not close deals and instead hand them off to Account Execs to close. As the sales landscape evolves and sales teams become more sophisticated, I expect we will see more of this (see more on how cold calling is evolving here Cold Calling 2.0).
Fire The Worst Performers Regularly – Arguably the most contentious sales management practice is to automatically turnover a certain portion of the sales team each year. High profile leaders like Jack Welch and Andy Grove, led with an iron fist and were very vocal about the need to turnover the bottom 10% of performers annually. Recently business owner, investor and Shark Tank star Barbara Corcoran, talked about how she grew sales by dismissing the bottom 25% of her sales force each year. Critics argue that this practice is not good for morale and/or can negatively impact team work. Regardless of whether this practice is effective or not, in our experience it is the minority of companies that systematically terminate the weakest sales reps. It is intuitive, however, to think that the fear of being fired would have a positive impact on sales performance, and there is a multiplier effect of adding high performers to a sales team (see Building a Culture of Success in Your Sales Team).
Marketing is a Waste of Time – There is an insignificant contingent of sales leaders that don’t perceive value in marketing efforts. Some of this may stem from old school thinking when marketing did not play such a huge role in the shaping of buyer perceptions and behaviors. While I have been on sales teams where a common complaint was that the leads from marketing are useless, I have also been a member of teams where the reps stopped prospecting because the leads were so good. Marketing departments that are properly focussed on contributing to sales results can be extremely powerful and I think that as sales becomes increasingly sophisticated, we will continue to see better marriages between sales and marketing.
Leave Your Ethics at the Door – Perhaps most egregious of all sales theories, but surprisingly common, is the notion that to be successful in sales requires the absence of integrity. There is a reason why sales has a bad reputation in some circles and I have heard of more than one sales leader who told his reps to forget ethics when they arrived at work or to purposely lie to customers. Unfortunately, it is not entirely uncommon for reps to fudge on features that don’t exist, secretly channel kickbacks to customers, or even sell used products as new. To be fair, sales and all business interactions for that matter, involve a degree of manipulation by one or all involved parties, but while being dishonest might work in the short term, I have yet to see a sales leader promote shady practices and achieve long term success. As a top national sales trainer and Honesty Sells author, Colleen Francis points out that “top sales performers know that the real way to win a customer’s heart (and loyalty) is by building open, honest relationships with them.” Read more about sales and ethics here – Three Ways to Make Ethics a Key Part of Your Sales Effort.
What are some of the controversial sales management practices you are seeing? Add your comments below.
To your success!
- Forget carrots and sticks, they don’t always work
- The Sales Commission Dilemma
- Sales Force Compensation: Research Insights and Research Potential
- Why Sales People shouldn’t Prospect – An interview with Aaron Ross
- Barbara Corcoran: I Used to Fire 25 Percent of My Sales Team Each Year
- Should I Rank My Employees?
- Honesty Sells
Image by Craig Garner
Eliot received his B. Comm. from Carleton University and has been honored as a Top 40 Under 40 Award winner.
He co-authored Sales Recruiting 2.0, How to Find Top Performing Sales People, Fast and provides regular insights on sales team management and hiring on the Peak Sales Recruiting Blog.
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