In this week’s Labcast, David Steel sits down with OpenView to share his expert advice on how best to motivate and effectively manage highly aggressive sales people, aka sales hunters.
Listen to the podcast to hear David’s insights into the characteristics of sales hunters.
Kevin: Hello and welcome to the podcast. I’m Kevin Cain. Today we’re going to be talking about successful tactics for working with hunters, a.k.a. highly aggressive salespeople.
Today I’m joined by David Steel, one of the nation’s leading experts in sales motivation. He’s widely recognized for his ability to energize sales teams and drive up new results by working with businesses and C-level executives on such issues as hiring the right salespeople, compensation, goals, and sales strategies. David also teaches highly effective sales management skills that fuel aggressive sales teams.
David, thanks so much for joining us today. How’s it going?
David: I’m fantastic, Kevin. Thanks for asking. Yourself?
Kevin: I’m doing really well, thanks. As I mentioned, what we’re talking about today is this idea of the importance of having an aggressive sales team. To start off, I wanted to ask you what your actual definition of an aggressive sales team is.
David: That’s a great question, Kevin. An aggressive sales team really has to do with the personality of the sales team. The reason why I say the personality of the sales team is because I believe you can’t have an aggressive sales team unless you have the people with the right personality doing the right job. An aggressive sales team is made up of individuals that are geared towards business development, that are looking for compensation geared towards attracting, bringing on board, and developing new customers, but not necessarily keeping that relationship long-term.
Kevin: Is that something that you would say is a generalization across all industries or are the nuances depending on if you’re in technology, say, or another area?
David: The nuances have to do with the length of the relationship. When I say not keeping a long-term relationship, I don’t mean not talking to the customer and keeping ongoing dialogue. What I mean is the compensation is not geared towards the long-term relationship. A lot of industries started that very early on, mainly in the insurance industries, when it pertains to life insurance where there’s a nice up-front payment for bringing on the customer because you know that there’s a long-term contract involved.
However, the compensation diminishes over time. We found that in most industries, and there are a few exceptions when it really gets down to highly transactional industries that require the sales people to be highly transactional and consistently talk to their customers, and I want to say to obtain orders on a regular basis, but it’s a highly transactional marketplace. This can really be applied to any industry, any customer, and if it is more transactional, there are some elements that need to be changed a bit.
Kevin: What elements are those, exactly?
David: The elements have to do with the length of compensation and how the compensation is made. For example, if it’s a highly transactional industry, you might compensate more in per order or in keeping an ongoing annuity for that customer, just a smaller annuity versus actually bringing on the customer. Does that make sense?
Kevin: Yes. Let’s switch gears a little bit now that we have a little bit of a definition of what an aggressive team is. Can you explain to me what some of the skills are that you need to meet that definition? What actually does that sales team need to do?
David: It starts with the personality of the salesperson himself. For anybody who’s starting out and building a sales team, I recommend doing some sort of personality profile assessment prior to the interview process so that you have a good understanding of exactly what motivates that individual. That personality profile assessment will give you some key indications as to whether that person has the ability to be an aggressive salesperson. It’s not necessarily the end-all that says this person is going to succeed, but it gives you indications of what the motivators are and how motivated they are and driven for success.
Kevin: Are there any specific assessments that you recommend?
David: I use a standard DISC assessment. There are a few different companies that have them available and if somebody contacts me directly we can hook them up with actually the assessment itself. But the reason why I use a DISC assessment is we’re looking for a very particular behavior. Some of the other assessments really go into how the individual will fit in with the culture and how they’re viewed outside of work. We’re looking for that one, what we call a D, that driver instinct.
Kevin: Are there any other key characteristics?
David: You need to look at what their performance is and what their compensation model is. Most of the time when a salesperson comes in they’re looking to move up the ladder when you’re hiring a new salesperson, even an existing employee that’s looking to build their career. An aggressive salesperson will not shy away from a compensation model that has what we call a graduation built into it, where a nonaggressive salesperson, or more of a farmer salespeople, will look for a compensation model that has long-term annuity and a high base versus a high commission structure.
I want to be careful when I talk about commission structure because I’m not talking about a flat commission rate where that’s one area where most companies fail or go wrong. The reason why is because compensating on one behavior or on one result doesn’t necessarily get you the full picture of what you’re looking for from a salesperson and could have a negative impact long-term.
Kevin: I would think that another issue that’s probably something that comes up in your world is this idea of salespeople becoming complacent. What do you do to combat that? What are your tips and suggestions?
David: One of the tips for combating complacency is relooking at the revenue model and looking at how the total compensation is being developed. I’m careful when I say that because one of the things that is very, very important, now and going forward, is the people who built your business, you don’t want to change their compensation to hurt them in any way because they’ve got you to where you are now, but looking at indicators in their business to help them gradually get into a more aggressive mode by offering them higher compensations on bringing in new business.
Slowly decreasing the business that they currently have, as far as compensation, is a good way of doing it. But you want to keep it balanced so it’s moving slowly. You don’t want to do anything too quickly or too drastic, because that individual will leave or feel very, very demoted and basically stop production altogether, so a smooth transition and one which requires you to compensate a little bit differently or more aggressively as a company for new business coming in.
Salespeople are very, very smart. They’ll go where the money is. Ultimately, they’ll look at the way they’re being paid and compensated and look at the actions they’re doing and will find a way to maximize their revenue. As they maximize their revenue, it’s just like exercise. As they do it more, they’re willing to do it even more. If your problem is the individuals that you’re working with aren’t cold-calling or bringing on new customers or the pipeline is flat, or whatever metrics that you’re looking at increasing, you want to make sure that when you’re doing so and increasing the drivers, you’re showing the salesperson what the results of what their efforts are going to show and how it’s going to benefit them the most, obviously.
Kevin: One of the points you keep hitting on is this importance of compensation as an incentive. Are there other tips or methods you can recommend for someone looking to build a really aggressive sales team, and more importantly, sustaining it over time?
David: It’s all about compensation. Most salespeople come into sales to make more money. They realized early on in their career that they have a knack, where a lot of owners look at it thinking that anybody call sell something. But true salespeople, aggressive salespeople, salespeople that really work on their craft and developing their craft, are really money-motivated. I hate to say it that way; that it all comes down to money, because there are work environment issues.
Let’s assume the work environment is good, let’s assume that morale is good. Compensation comes in two ways. There’s monetary compensation and there’s reward compensation. By reward compensation, salespeople in general love to be recognized within the company itself and amongst their peers. Compensation might come in a pure dollar amount, but it might also come in rewards, trophies, benefits, trips, sales contests, boards on the wall that show the ranking of each individual; all these together as a full compensation really drives those drivers that we’re looking to develop within a highly aggressive sales team.
Kevin: Absolutely. That makes a lot of sense. David, before I let you go, the final question is pretty easy. How can our listeners find out more from you?
David: The best place to go is to my website which is www.TheSteelMethod.com. From the website, you can find videos and a link to my blog. On my blog we don’t only tackle compensation, which is important in motivating sales teams, but we also talk about how to utilize social media for salespeople, which is a huge topic that’s going on right now. For sales managers, how to manage their sales force, look at very interesting metrics and tools to be able to do so, and using everyday principles that will ultimately get them the sales that they’re looking for.
Kevin: Great. David, thanks so much for joining us today.
David: It’s my pleasure.