It’s a difficult balance between maintaining the financial goals of the company and empowering Sales to go make magic happen in the market.
You can keep Sales focused on the revenue and profitability goals of the company while giving Sales the opportunities they want to make money.
Sales wants to be resourceful for their customers and wants opportunities to make money. Good sales talent realizes the intricate balance of these two things and works to maintain this balance.
At The AxisPointe, we often work intricately with the Sales function in businesses and the reciprocal relationship between leadership and Sales. Here are a few common threads that, in our experience, exist in a successful environment of: maintaining the business’ financial goals; empowering Sales to make things happen; attracting Sales talent and being competitive in the market:
The brand of your company matters.
Good salespeople take personal, “ownership,” of sorts, of the company they represent. The company’s brand becomes part of their personal brand, and they take great care of their personal brand.
Good salespeople want to be associated with companies that treat their customers well.
Good salespeople want to represent companies that do what they promise.
Good salespeople want to represent a recognizable company that has a stellar reputation.
Good salespeople want a brand position that they, themselves, can buy into. For example:
“We are the highest-growth company in the industry, which enables our customers to grow too…”
“We are the company that is continuously investing resources to deliver a better ______ for you, our customer…”
“We are the company that helps you get to market faster…”
Understand that brand positions are very different from value propositions, and they are used differently in applied go-to-market strategy.
A simple, balanced Sales compensation plan is in place.
A structured comp plan that is clear on what the priorities of Sales should be and how Sales can make money benefits the company, the salespeople and the customers of the company.
A singular point that makes sales comp plans successful is that they are balanced.
A comp plan should not be one-sided. Keep in mind that good salespeople always look for opportunity. Reward them by letting them benefit from the opportunities as well.
The comp plan should be balanced to: maintain the priorities of the company, enable salespeople to make money and maintain a stellar customer experience.
When comp plans are balanced in this way, revenue comes in for the business, salespeople are making things happen and making money and the deals that Sales is making are profitable. All of this is good for the company. The company is driving revenue and profitability while being able to attract top Sales talent. When priorities of the company change, the comp plan should change and the balance maintain the balance. The customer experience should be closely paid attention to during these changes. A change in the Sales comp plan should not inconvenience the customer.
Leadership should be very clear with Sales on the following points:
- What the priorities of the company are, and how those priorities translate to the marketplace (competing in the market, acquiring customers and servicing customers)
- What the sales strategy is
- How the performance of salespeople will be measured
- How salespeople will be compensated
- How the payout will work
- How questions about the comp plan or occasional instances of grey areas will be addressed
- Leadership that is leading or directing Sales should show salespeople how they can align opportunities with working their comp plan to make more money for themselves and for the company. This point is often missed, but it is imperative for aligning Sales with overall business goals.
- How client relationships should be structured and why they are structured that way
A sales process exists.
There are often conflicting schools of thought here: One side says a process is necessary to give Sales a playbook, of sorts, and to be able to manage sales teams. The other side says that there can’t be a standard playbook because of the many nuances that exist in sales communications.
At The AxisPointe, our experience is that a sales process can be structured to accommodate the nuances and it is important to understand that a playbook isn’t a standard thing in a profession or a business sector. It does consider sector norms, but it is very specific to a company.
Sales processes make controlling customer acquisition costs easier and help leadership better support Sales. Sales processes are built along funnels that start at lead generation and end at a sale. Note that customer retention is sometimes built into this first sales process or it can be a stand-alone process. It is important for the company to clearly define what a sale is. A sale is defined by a company’s financial requirements (revenue and cash flow), what the company’s definition of a customer is and how customer relationships are structured.
Culture between business functions matters.
A business doesn’t necessarily have to make drastic culture or org changes. It’s more about enabling specific collaborative actions internally. Here is a simple example:
Leadership, Finance and Sales have open, regular, reciprocal communications on how to generate revenue in a profitable way.
This means Finance can understand when they’re in the way of revenue and Sales can understand why priorities are what they are and what the company needs to be profitable and sustainable. In these communications, processes are improved to remove obstacles and maintain profitability.
Keep this simple. One of these functions has to take the initiative, whether it be Sales, Finance or Leadership. It doesn’t matter which one initiates the conversations. Formal meetings aren’t necessary, although it can be done this way, somebody just has to walk down the proverbial hall.
When this happens, the gates open to allow revenue to flow in and the company is set up for profitability.
Sales has a certain level of autonomy.
This is often difficult for a company because leadership doesn’t want to feel out of control. This actually helps a company be more competitive in the market.
Customers want to have a resource close to them, and it’s usually a sales representative for a company. When the sales representative has a certain level of autonomy to make recommendations to a customer or to authorize certain specifics of a deal, the company, as a whole, has more value for the customer. The customer feels that they are in good hands and can get answers and resources quickly.
This can be the difference between the company getting the contract versus not.
This doesn’t mean that the company turns the salesperson loose and the market becomes the wild west. It just means that the salesperson can make a certain set of authoritative decisions at will.
There will be some situations where the salesperson cannot authorize certain specifics of the deal, and that is expected. What’s important here is that the salesperson can immediately access someone internally that can green-light something or give an alternative that is valuable for the customer and beneficial for the company. This ability to immediately access a decision or a solution protects the salesperson’s credibility and establishes to the customer that they can expect a high level of customer service from the company.
An, “I’ve Got Your Back,” relationship between the company and Sales is established.
Salespeople are essentially going to battle in a market war every day. Sales shouldn’t have to battle the company too.
The company is always working to generate revenue and optimize profitability and sustainability. The company shouldn’t have to micromanage Sales on this.
With an, “I’ve Got Your Back,” relationship, both Sales and the company have an understanding that they are behind each other the whole way:
Sales works to always represent the company in a way that aligns with its brand, its mission and its vision. This means Sales may have to swallow its ego from time to time and do what’s best for the company.
Sales should be an active, or even a proactive, participant in establishing collaborative relationships with other internal business functions.
Sales should proactively communicate with the company about revenue opportunities and how they fit within company goals.
The company works to actively recognize the efforts and the accomplishments of Sales. Salespeople are unlike other company employees in that they have the burden of expectations of driving the revenue that supports the company. That can be a heavy burden, at times, with a lot of stress. Good salespeople don’t need to be coddled, but they do channel appropriate accolades into future market battles.
The company works to support the good that Sales does, even when a customer is being a bully. It is understood that the customer is always the customer, but that doesn’t mean the customer is allowed to be a brute. On the other hand Sales has to maintain a certain level of professionalism, tact and accommodations with the customer. When the company sides with a salesperson that has remained professional through all customer interactions, this shows the salesperson that he/she has the full support of the company and gives the salesperson the, “firepower,” he/she needs to remain competitive in the battles of the market war.
The best interests of the customer are maintained.
Revenue happens because customers by products and services. It is that black & white. A Sales initiative and comp plan that prioritizes the interests of customers can create competitive advantage and cost savings at the same time.
When Sales serves as resource for customers, the company enjoys less customer attrition and is more easily able to fend off competitive threats.
Customer relationships can be structured with this specific point at the core. The structure of customer relationships should be intentional and done in the overall market strategy that defines how the company is going to position and operate in the market and why. In applying the market strategy, when a company has a Sales function, the sales process is built around how customer relationships are structured.
The drive of the organization for revenue is internally centered around financial spreadsheets, but market strategy is the other side of that same coin. Revenue happens because customers buy products and services. The company has to come out of the conference room and go out into the market. Sales is a large part of going out into the market and driving revenue; in some companies, it is the driver of revenue.