I am often asked the question, how do I know if I am getting the maximum value out of my sales people by business owners. Really what they are asking is, "Am I getting the maximum bang (ie revenue) for the buck that I am spending on sales people". This question can be further clarified as really two questions:

1.  Is there a way that I can get the same output for less payroll costs
2. How do I set a quota that generates maximum revenue for the company with the sales compensation dollars that I pay my salespeople

I think I will leave the first question for another post as there are many issues around sales compensation and the setting of commission plans (a topic that could cover many posts I am sure). The second question presents an interesting conundrum for the karmic sales manager or owner. 

My hypothesis is that because its difficult to measure and really understand ROI on sales people most managers/VP's/owners go for "gut approach" or "the spaghetti on the wall approach". This often manifests itself in statements like: the last guy did this much in sales, or lets set the quota as X and we will keep the guys that get closest.

The karmic readers of this blog should all be shuddering at this approach. Given that it is obvious that there is no way you can predict foreseeable consequence from either of these  sales methodologies. In my mind a karmic approach would be to identify once again the input variables to success and derive a repeatable formula that in the absence of a dataset that is statistically significant will provide an educated approximation of the total sales achievable by a sales person. There are multiple approaches on how to build this approximation. Which input variables might need to be considered?

1. Average sales price- The average sales price of your product is required to get anywhere close to an estimate of the total revenue that a rep can produce. If your average sales price is $40, setting a quota of $500k annually might not make sense as it would require roughly 6.5 deals per hour to hit quota (assuming 2000 working hours a year).

2. MTTC- Mean time to close- This is the time that it takes for a typical deal to close. If we use the example above the same quota might be too low if the MTTC of a deal is 5 minutes.  Just using these two variables a quota of $960k might be more appropriate (12 deals per hour x $40/deal x 2000 hours).

3. Funnel Multiple-This is the number of opportunities you need in your funnel to get one closed deal. If your multiple is three, then you need three opportunities to get one closed deal. How does this variable impact the quota consideration? Well unless you, as the business owner, are providing these qualified opportunities (example inbound call center) it will take the sales rep time to generate them. You need to factor this time into the quota estimate. Typically this involves some work with your marketing folks and sales people to estimate the time required to generate an opportunity and factor that in to the time spent in sales generation.  For example if 2/3 of the opportunities are provided by marketing and sales generates one third then you have to discount the period you use for sales activities by 1/3 as only 2/3's of the time period available for sales is spent  truly selling. Thus perhaps annual quota looks like:

(MTTC/Period) x (ASP/deal) x  (0.66 x Period) 

As you can see this process very quickly gets complex as you add more variables. So if your head is spinning you wouldn't be the first. The key here is to get to a successful approximation. Depending on your sales organization, cost of sales, cost of turn over, investment to require a salesperson to be functional, etc you are going to want to spend more time on this.

Another tact is to look at this exercise from an output perspective (which I will go through in another post). This looks at the cost of sales and then determines "coverage" ie. how much revenue do you need to cover the cost of your employees and projected growth. Ideally by approaching the problem from both perspectives independently you will come to a number that is similar and each method can verify the other.

Validate the model by experimentation on a quarterly basis. Plotting the quota achievement of reps should hopefully create a normal distribution (if so you have done something right). If not analyzing the trends will help educate what you need to change in your model to accurately reflect the reality of the sales environment.

The reason why it is so critical to invest in this exercise is because the foundation of karmic selling is creating foreseeable consequences. If you have a model that is predictive in nature you will see the benefits in many other areas of the business such as forecast accuracy, consistent revenue growth, customer service, employee satisfaction, employee turnover, etc.

Moment of Zen
"All things appear and disappear because of the concurrence of causes and conditions. Nothing ever exists entirely alone; everything is in relation to everything else."-Buddha

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

There is plenty of literature out there that describes how to be a great sales person, but I think a large part of becoming a great sales person is what you are made of. I was having a discussion with colleagues over a beer and we attempted to recount the key characteristics that made up the best salespeople we had worked with and for. Surprisingly the list was pretty short, and seemed to focus on a few key areas.

1. Invested- The best salespeople that I have worked with are more invested in their profession than those around them. By invested I mean that they are constantly investing in technology, customer relationships, people, and themselves in an attempt to get the slim margin's they need to win their "unfair" share of the deals they engage in.

2. Consistent:  One of my firm belief's is that sales is a marathon not a sprint, and consistency trumps skill every day and twice on Sunday. Poor selling done consistently will be more effective than great selling done sporadically. One of the sales people that I work with and have tremendous respect for characterized it best when he said "In the quest to be a superstar I was inconsistent and failed. In focusing on consistency, I achieved the sales super stardom I was seeking."

3. Patient:  A hunter will sit in the trees for days waiting for a clear shot. Less than 5% of sales are made on the first call, over 80% are made after the eighth call. The best sales people I have worked with understood that there will be always a need, the key is to be there and be the person that gets the call when the time is right.

4. Farseeing:  The best salespeople understand that the sale is the start of a longer term relationship. They spend 1/3 of their time marketing to prospects. But they spend most of their time, energy and money marketing to people who have already bought.

5. Customer Fanatics:  They seek to set realistic customer expectations and then go beyond them EVERY TIME! They are focused on the customer and ensuring that the customer sits at the center of their universe.

The interesting thing about this list is that these characteristics naturally align to the karmic selling principles we explore in this blog. The key is to have a sales process that enforces these competencies into your daily activities. In the practical application of these competencies sales stardom is found.

Moment of Zen

"Comfort is no test of truth; on the contrary, truth is often far from being “comfortable.”-Swami Vivekananda

 P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

There is probably no single more hated task of a sales manager than the performance review. It often seems like an exercise in futility. For the sales people who are doing well and hitting quota, it seems like a huge waste of time to do a detailed performance analysis, when a pat on the back would suffice. For the folks that are under performing the performance review is really just an execution order in disguise, as it is used to ensure that the employee file has been given enough of a chance to "improve" to meet the employment regulations of the jurisdiction where the company operates before they get the axe.

The reason why these reviews are so challenging is, tied to the view that sales achievement is pretty self evident. If you are hitting quota all is good, if not get there fast. The problem is that one of the primary purposes of a review is to assess multiple variables, such as activity, skill, knowledge, etc. Quota achievement though useful as an output doesn't really help you determine if the person is truly skillful or just plain lucky.

I have spoken in a previous post about building a set of performance metrics that are tied to leading indicators, the natural by-product of having those indicators is a performance schema that incorporates those indicators as well. So how should one structure the reviews with sales people to try to get to root causes, and hopefully influence behavior?

1. Take the key performance indicators that you know predict quota achievement and measure them consistently over the course of the review period. Ensure that you communicate with the reps that you are doing this and that execution on these variables will have impacts on their reviews.

2. Account for quota achievement but in a weighted fashion. Quota achievement should amount for a percentage of the review not all of it. This will ensure that proper territory development will occur and you don't have sales people swooping in skimming business and quiting to find a new job, (or at the very least you will be able to identify those folks early-as they wont execute on the KPI's).

3. Identify what the key competencies are for the role and set a relative weighting. Focus on things that have a longer term view as opposed to monthly quota achievements. The Quota metric will take care of this for you.  The competencies should be tied to strategic objectives for the company, territory, or product line. This will ensure that your reps are building the business for the long term.

The goals of your review process are not just to evaluate the capabilities of your reps, provide constructive feedback and growth, its also to gain visibility to the development of the territory/product/etc. Having a karmic review process, defined as a sales process and review process that is clear about its objectives, will gain you satisfied high performing sales people that is sustainable.

Moment of Zen
"If one has faith one has everything." -Swami Ramakrishna Parmahamsa

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

I had a very interesting conversation with a sales person recently. He was bemoaning the state of his pipeline, and how he would engage deeply with prospects, follow his sales process yet things would go south for apparently no reason. After a detailed discussion trying to understand what he was doing and why this was happening it occurred to me that most sales people (myself included) hear what they want to hear.  We spend a lot of time seeking out prospects and when someone finally agrees to talk to us we don't really hear what the prospect is saying, we hear what we want to hear.  In the course of our discussion I noted the difference between what he heard from the prospects statement and what I was hearing. Here are some examples:

Example 1:
Prospect (P): We are very interested in looking at this
Sales Rep (SR): Really thats great, when do you want to move forward?
P: As soon as we can work out the details, we have a working solution in place so its not urgent.
SR: Great lets look at your current solution

Example 2:
P: We are looking to switch off of our current supplier
SR: Really, thats great lets talk about my product

What is wrong with both these scenarios? Well my rep in both these cases saw a great opportunity, while I saw a whole lot of work with a very low probability sale at the end.  Here is what I heard:

Example 1:
P: We are really interested in looking at this
SR: Really thats great, when do you want to move forward?
P: I don't..I am really just wasting your time because I have no compelling reason to change. If you give me a really good quote I will take it to my CFO and try to look good by saving the company some money. But I wont push too hard if people are tied to the current solution...if it ain't broke don't fix it.

Example 2:
P: We are not really looking to switch off of our current supplier but I don't have any leverage given that our contract is coming up. The best way I know to get our price down would be to get a couple of competitive quotes. So I will do what I need to do to get some pricing (wasting a ton of your time in the process) then I will take it back to my current supplier who I have a relationship with and beat him up a bit, and then never return your call.
SR: Great lets get started....

Its critical as karmic sales people we look to only work with prospects where our solutions transform the clients business. How do you do this..only seek out engagements where there are real difficult business issues that need to be solved. This of course assumes you are not selling something like consumables which are highly commoditized. The natural output of a sales process that focuses on transforming the clients business is that you will never have to play games to build urgency, never have to chase a customer down to have them get back to you, and your pipeline will be filled with only the gold standard of opportunities. So check your babelfish (wikipedia it..if you are unsure what it is) and listen carefully for what is not being said during your qualifications and your pipeline will be stronger for it.

Moment of Zen
"It takes time for a fruit to mature and acquire sweetness and become eatable; time is a prime factor for most good fortunes.”-Vedas

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

The unfortunate truth is that majority of sales managers have won their positions by virtue of being the last man left standing, or the most cut throat, etc (I discuss the difficulty of making the transition from sales person to sales manager in another post). So what about the ones that genuinely want to get better at their jobs and make their people successful. The challenge is the majority of these well meaning folks fall back to a prescriptive learning process..ie "you do it the way I do". The challenge with this methodology it relies on a very classical method of education, the conduit model,  that is really ineffective in a professional environment . 

The conduit model is formulated on the premise that the teacher is the conduit of knowledge to the student. It isn't very interactive and tends to view the student as a tabula rasa (clean slate). In a professional context this simply isn't the case. Often the manager doesn't have more knowledge or experience than his/her team. They might be older, have different sales skills and sales tactics, that are in many ways superior to the managers. The conduit model is the model most of the readers of this blog went through in high school and university, and for myself-railed against.

The karmic manager believes in foreseeable consequences. The consequence of a inferior training methodology, that doesn't take into account the assets of the student, will be inferior results.  What is a better way? Well  the sales manager needs to take the following into consideration:

Learning needs to be:

1. Personalized to the needs of the learner. 
    
2. Delivered in byte-sized chunks, when it’s needed. 
    
3. It is available on demand – 24x7 –  
    
4. Clearly distinguished between information-Sometimes a salesperson just needs information and they need it in a hurry-don't over complicate.
    
5. Addresses the problem of retention 
    
6. Use the right medium for the learner.  
    
7. Forces mental mastery. If your system doesn’t have a way for sales people to practice in the job context, they will never reach the level of mental mastery they need.

 ...And most importantly leverage the knowledge and skills of the sales team to make the transition from proficiency to mastery bi-directional so both manager and staff benefit from the exchange.

Moment of Zen   
"The world is the great gymnasium where we come to make ourselves strong.” -Swami Vivekananda

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

Every company that I have ever worked for or with over my career had a mission statement, and value proposition that was carefully crafted by the leaders of the organization to be filled with motherhood statements, ambiguous values or ideals, and often was incomprehensible to clients or the vast majority of employees who made the organization function on any given day (ie. the ones earning less than six figures).  So why have them?

I think the reason organizations build value and mission statements is because they struggle to capture the reason d'etre of the business and its stakeholders. Its tough to admit that for most organizations the mission statement is simple: make money, as much as you can, as fast as you can, without breaking any laws. Its tough to throw that on a slide and get the whole organization behind it.  So they hire high priced MBA's to say the same thing with a lot of big words and ideas that mask this ultimate truth.

So given that your corporate value statement isn't going to help you much as a karmic salesperson what are your alternatives? I have always been a fan of a personal value statement/value proposition as part of your bag of sales techniques. The integration of a value statement as part of your sales process can accelerate the sales cycle as well.  What is your value statement? In its best form its your elevator pitch.  Ideally it is clear, simple, and most importantly tied to customer outcomes. What are some examples?

"<company> is in business to be the leading provider of CRM products that reduce sales people's administration tasks, support predictable forecasting, and reduce sales cycles, at a reasonable price."

Why does this work as a sales value statement? Well...its clear (no jargon), simple, and tied to specific client outcomes.  This kind of statement very succinctly informs the customer of what you bring to the table, how you will provide value to them, and implicitly states that you intend to make a lot of money doing it. Your value statement is a reflection of how you will treat them in your sales engagement. A clear no games approach will guarantee a strong relationship. A value statement filled with big words and ideas not measurable or client centered gives the prospect a preview of what is to come.Build yourself a simple value statement or value proposition and you will see instant results.

Moment of Zen
"Speak the truth, follow the righteous path"- Vedas

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

I have spent a lot of time in this forum talking about karmic selling in terms that focus on the science of sales success. It is clear though that success is equal parts art and science. The question is how do you give sales people the flexibility to practice the art of selling, through their innate sales skills and sales techniques, without sacrificing the predictability of a data based sales model. An earlier post that I have made talks about "data in context", good sales managers define the context of sales in strategic terms while their data is formulated in specific tactics.

One way to implement this philosophy is a metrics based scorecard. Identify the key performance indicators of your sales team and begin tracking trends over a statistically significant period. These metrics should be tied to strategic objectives of your business. Ultimately the goal is to take the KPI's of your business and try to correlate them to strategy achievement and sales.

What are some KPI's that you should consider:

1. hours on the phone.
2. New opportunities weekly
3. Growth in pipeline.
4. Quota multiple in pipeline
5. average sales price

These are just some ideas. Ideally the order of operations to gain maximum benefit of this scorecard approach is: Strategic objective-tactic that will produce results-kpi that measure those tactics.  It is important though not to fall into the trap where you are dazzled by the numbers. Remember data must always be placed in context and flexibility must be given to the sales people to practice the art of selling.

Moment of Zen
“The earth is enjoyed by heroes”—this is the unfailing truth. Be a hero. Always say, “I have no fear.” -Swami Vivekananda

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

I would bet that most folks who consider sales their career (as opposed to just a job) strive to be masters of their craft. Karmic sales folks for sure understand that the foreseeable consequence of seeking out mastery is more predictable sales results. The question arises though at what point are you truly an expert? There are a lot of sales folks that make a lot of money with very little training or sales process and seem to do wonders on pure talent or luck. There are an equal number who have read every sales book out there, can quote Zig Ziegler, Dale Carnegie, Jeffrey Gitomer, etc and yet are unable to hit quota in any consistent manner. It is clear that expertise is neither easy to identify or understand its input variables.

Yet defining and becoming an expert is a critical step in the path to becoming a successful karmic salesperson. Niels Bohr (Danish Physicist, first to apply the quantum theory.Nobel Prize for Physics in 1922. 1885-1962) has been famously quoted as saying,

“An expert is a man who has made all the mistakes which can be made, in a narrow field.”

This is a key variable in expertise is the ability to understand not necessarily what needs to be done (which may be deduced), but what will not work within a given situation. Malcolm Gladwell in his recent book Outliers reaches the conclusion that expertise is achieved when 10,000 hours are performed (good, bad or ugly) in a given task.Given that there are roughly 2000 working hours a year of which a salesperson might spend 650 actually selling (the rest is most often on administration, research, proposal preparation, etc), it would take roughly 16 years to be considered an expert at the profession of selling.

The question is how can you shorten this time? Well I have a couple of ideas:

1. Since expertise is often knowing what not to do as much as its opposite. Lost orders are your friend! Get all the information you can from your colleagues on why they lose deals, detail them, research them and understand. If you are in a team of 10 and you milk them every time they lose a deal on why and what were the circumstances you will leverage their sales time towards your 10,000 hours.

2. Read everything you can. Same philosophy as above leverage other experts and learn as much as you can about what makes them successful and unsuccessful. Not the trite trainings that are done by sales consultants once a year, but a deep digestion of sales concepts on a regular basis.

3. Spend more than 650 hours a year selling. Be ruthless about eliminating tasks that are not directly related to selling to the customer. If you can get to 1000 hours a year selling you will take 6 years off of the time.

Expertise is a requirement for a successful karmic salesperson. Recognize that it doesn't come easily but be diligent in the effort to build expertise and you will see the results in your pipeline, relationships, and ultimately paycheck.

Moment of Zen
"A man in this world without learning is as a beast of the field. " -Hindu Proverb

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

Sales people are hypnotized by the large sale. The idea of the big pay day, the out of the park home run. It is the stuff of legend, the sales rep that made his or her entire quota in one deal, the multi-thousand dollar commission check, etc. The "major deal" is so intoxicating that most reps spend their entire year nursing at least 1 or 2 on the slim hope that it will solve all their problems.  Basically salespeople like to hit for the wall (or for the cricket fans out  there the boundary).

The title of this article is Karma and Babe Ruth. The reason I picked Babe Ruth to illustrate this analogy is because his statistics are staggering. The Babe was famous for always aiming for the fences, and often claimed that it was his goal to hit a home run at every at bat. The result of this strategy was that he was one of the most successful home run hitters of all time but also over his career he struck out an awful lot. How much? The Babe, over his 22 season career scored 714 home runs a mind bending number. Yet he also struck out 1330 times in the same period. So he struck out 1.6 times as many times as he scored a homer.  And this is one of the BEST players of all time.

The lesson in my mind is don't aim for the fence.  For the rest of us our mortgages and car payments are made by hitting singles and doubles regularly day in and out. It is here that the karmic sales person shines. The karmic sales process builds a process for ensuring you are always on base to score and requires a discipline where you aim for smaller more repeatable sales, always being ready for the gift pitch which you can blow out. The key being not giving up the singles and doubles (smaller sales) in the hopes of the big one. So what are some of the key sales management techniques that will target you to these deals:

1. Consciously limit the time you spend working on big deals to a finite amount per week/day/etc based on your industry. Remember big is all relative. Figure out what the average sales price is for your product and focus your activities on opportunities that are within one standard deviation (+ or -) from that norm.

2. Figure out how to carve up big deals into multiple smaller deals. This is a lower risk way of still locking up the business and commissions without all or nothing swings.

3. Be ruthless about culling opportunities that are sitting around for greater than 2 times your mean time to close for normal deals.  Your likelihood of closing that deal reduces exponentially with the multiples on MTTC. Fill up the empty space in your pipeline with deals from 1.

Karmic selling is all about foreseeable consequence. If you are working deals using the points above you are for sure going to close more deals than swinging at the occasional pitch that might take you over the wall. A final point is that if you look at the all time great players as far as batting average (ie. hits to at bats) you will probably not recognize most of their names. Guys like Richard Hornsby and Pete Browning are not household names but were masters of the game. Where does Babe Ruth rank as one of the greatest home run hitters of all time? He is number 10.

Moment of Zen
"Are great things ever done smoothly? Time, patience, and indomitable will must show."- Swami Vivekananda

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!

Cold calling, a staple in any sales persons tool kit of sales tactics, but the bane of their existence. I think its clear that prospecting is a critical function of any successful sales organization, the question though is whether cold calling is the way to go. The classic sales management volume metric is only useful if the calls you make have minimum level of quality. I think sales people and sales managers need to rethink cold calling entirely.

Lets start with a definition. The open the phone book and dial for dollars approach might have worked 30 years ago before the information age, but today prospects are able to easily seek out the information on the products they are interested in. The original purpose of the cold call was to introduce a prospect to a new product or service that they were unaware of.  The advent of the Internet and most importantly google has completely changed the purpose of a cold call. In my organization the cold call is not about introducing the product to a prospect (we are in a mature market where evangelizing has already happened), but about providing some key piece of information to a prospect they could not otherwise get if they didn't speak to a salesperson. If you define a cold call with this parameter-ie. I don't pick up the phone to call a prospect unless I have something compelling to say that he couldn't figure out in five minutes on google, all of a sudden everything changes.

So how does this philosophy play out:

1.  Seek out conversations not calls
2. Identify a key market or vertical in which your product or service can be innovatively applied (not traditional install and go). To find this information I would go to your customers you will be amazed at the innovative ways they use your products. A great example of this is the use of UV lights to sterilize wine casks displacing the old method of sulfur bombs.
3. Target 5 conversations a day where you can make your elevator pitch to customers in which the application of your technology in two above would transform their business. It is clear that people are just not going to spend money in this economy on purchases that create small incremental improvements to their business. Seek to transform and you will see great success
4. Dont leave for the day without completing your five- and do it every day.

You will be amazed how much easier it is to have 5 conversations like this as opposed to 40 "dial for dollars" calls. Is this a lot of work to prepare for...absolutely, but karmic salespeople understand the foreseeable consequence of a targeted message implemented in a disciplined manner is a full pipeline and quota achievement.


Moment of Zen
Efficiency is the capacity to bring proficiency into expression-Swami Chinmayananda

P.S. If you are interested in leveraging the karmic philosophy to accelerate your career or business please check out my website http://www.karmiccoach.com , and get Karma working for you!