As I write this, the world is struggling with the COVID-19 health crisis. Sadly, the sales landscape was already dealing with a performance management crisis. Last year, Salesforce.com’s State of Sales report highlighted that an unprecedented 57% of reps were expected to miss quota.
The legacy model of sales management was already showing cracks from misalignment with the millennial generation’s style. With Gen-Z entering the sales force, and now the current health and economic crisis, that model is broken.
Some orgs saw this shift happening and were already evolving their management model. They've been able to more seamlessly transition to a distributed model while others are still struggling to get back to productivity.
A new model for sales management
Here’s the good news: the model that’s emerging, driven by the needs of a new generation of sales reps, is ideal for managing distributed sales teams.
While every rep is different, there are a few trends in the emerging salesforce worth highlighting. They are:
- Results, not effort-driven. Always finding ways to work more efficiently, they value results over hard work (some, wrongly, see this as laziness, which it’s not.)
- Authentic, not conforming. Seeking to connect their unique style to a purposeful “why,” they won’t simply follow a process because they’re told, “it works.”
- Fluid, not structured. Blurring the lines between work and home, they work when they believe they can be most effective, not on a set schedule.
In working with our customers at SetSail, we’ve discovered some methods that leverage the behavioral science behind motivating them effectively that can help leaders adapt quickly.
Measure progress, not effort
In the previous generation, sales teams were measured on closed-won deals and the largely subjective pipeline that feeds into it. To try to make things more measurable, we introduced activity metrics to track teams.
Let’s be honest, no one ever felt great about activity-based management. It was easily gameable, wildly inaccurate, and the side dish of micromanagement it served was unappetizing to reps. In an attempt to make these programs more palatable, some companies spun up gamification systems to make them more effective. They were well-intentioned but ultimately unsuccessful (mea culpa, I was one of the culprits.)
Data science is now uncovering what astute sales leaders have known for a while: activity does not equal deal progress. In fact, our data has shown that some of the best reps drive success with much less activity than the average rep.
The new salesforce desires room to be creative in their approach that activity-based management doesn’t allow for. Let’s move beyond the activity metrics in favor of measuring what matters: deal progress.
This can be gauged through things like emails received from important stakeholders or meetings attended by prospects. Your reps will love you for it.
Evolving an age-old incentive model
The traditional, closed-won-focused incentive model isn’t cutting it anymore.
It was designed long before we understood the dopamine-driven feedback loops (exploited by social media) that can be leveraged to motivate teams and inspire creativity.
The emerging salesforce has been conditioned to expect nearly instant rewards for their results, even the little ones (I'll spare you the joke about participating trophies.) If you’re successfully tracking deal progress, you can easily start to create a positive feedback loop by rewarding incremental deal progress.
For example, if you know that engaging on a deal with someone at a Director level or above in Finance triples your deal win rate, then reward a rep for creating that engagement. It’s a win-win. You’ve just:
- Created a positive feedback loop and help reps to form good habits
- De-risked the deal from a finance stakeholder kiboshing it later
- Saved sales managers from having to plead with them to multi-thread their deal
Monetary rewards are great but not always necessary. Sometimes just consistent recognition of their achievement is enough to influence their behavior. It sure beats them trying to calculate the net present value of a potential future commission payout several months from now.
Being “Data-Driven” is no longer optional
By now you’ve probably noticed that the examples I’ve provided require you to be on top of your data game. It’s true. We’ve reached the point where every organization needs at least basic capabilities in place.
The good news is that you don’t need the proverbial kitchen sink. You can be purposeful in your data-driven approach. Focus on what you need to drive better outcomes and provide it at all levels of the organization:
- Visibility into rep-to-customer interactions
- An understanding of what’s working well in the sales process -- what separates successful deals and reps
- A way to track which reps and deal are making progress each week beyond self-reported data
And finally, avoid making reps to enter data just for reporting purposes. If you absolutely need the data, consider at least rewarding reps for entering it. Which leads to my last point...
Carrots beat sticks most days of the week
The new sales force has been conditioned to avoid negative feedback and the people who give it, creating a big challenge for sales managers trying to drive compliance. Even small things like updating data in your CRM system can become a huge drag without the right tools.
You can fight the tide or have it work in your favor. Reward reps for good behavior and help them form good habits in the process. Whether it’s following your sales process or making deal progress, positive reinforcement is the key and incentives are the most effective reinforcement method.
Take action today with incentives
For most orgs, an opportunity is presenting itself to reallocate budgets given the current crisis we're facing. If you have a flexible travel, SPIFF, or events budget, consider reallocating it to keep your team motivated and evolve your sales management model towards something more sustainable in the midst of uncertainty.