If you read the comments of both posts above, I was called a heretic (in jest), a socialist (in seriousness); I was congratulated for my sales expertise in one comment and debased as someone who probably never sold anything in the next.
Perhaps some people even called me a Space Cowboy…I don’t know.
But each and every comment was appreciated and I’m glad to have waded into this conversation.
However, what I’m most thankful for is the messages from people – sales reps and managers – who read my piece and thanked me for writing it. I was flabbergasted by the number of messages – it was exponentially more than the number of initial comments or likes – from people who are out there selling stuff every day and wanted to have a conversation like this one.
Many stated they couldn’t “comment or like” the article due to some threat (either implied or real) of negative reaction from their bosses and employers.
I get that.
While the term is way overused, and misapplied, it is actually hard to think and talk outside the box. Especially in a field where advice like "just pick up the phone" or "hustle more" qualifies as "coaching" from management. It reminds me of the old joke:
Sales Manager One: What did the unhappy, top performing salesperson say to their manager?
Sales Manager Two: I don't know, what did they say?
Sales Manager One: Wait, I just got an email. Frank just quit and he was half my team's forecast, I gotta go.
That one cracks me up every time.
In all seriousness, one email I received was from a long time, quota-busting sales rep. Someone who - aside from excelling at their job of sales - was trying to be an agent of change in their organization. This person was not only making their number, but was working diligently to bring new data into sales meetings and approach management with new tools and new methodologies to try and increase sales revenue in their org:
“…it is quite frustrating at times to be stuck in an antiquated sales organization and cycles. Where the "raised hand" and suggestions backed by solid data and research gets categorically ignored. Sales are down, sales people are unhappy and other more open minded companies surpass your bottom line.”
How many times have you heard your top reps talk to you like that?
What do I take from feedback like this? Simply this – there is a new reality out there and many reps simply believe their managers and their executives are stuck in old world practices and procedures. And a big part of that is commission-based comp plans.
For years, the comp plan, the SPIF, the sales contest could motivate great "closers" to "move widgets" out the door - creating that post-purchase dissonance and churn Graham Hawkins speaks of. In today's competitive market, that just doesn't cut it with clients.
We've all sat in sales meetings where the phrase "customer-centric" was bandied about - usually right before the SPIN roll-playing exercises started or the this quarter's SPIF was kicked off. Today's customer IS really centric now. They're not going to sit around and listen to me blather on with value prop and ROI during a PowerPoint presentation. They want to trial and pilot - they want a Proof Source, not a closing technique, that will convince them to take the risk with me and my widget.
I understand the pushback against this by the sales community. It's our culture. It feels good to talk about "hustle" and hard work and how it's GRIT that makes a salespeople exceptional. For YEARS I equated "will" with "success" in sales. The salesperson who wouldn't make the phone calls or couldn't over come objections or said "the product doesn't really fit their needs" was a "loser." They couldn't cut it. They weren't salespeople.
My personal mantra was "if the customer doesn't see the VALUE, I didn't sell them hard enough - I didn't do my job."
But where has that kind of thinking gotten us?
We've created an entire culture where the ACT of selling is looked at as more important than WHAT we're actually selling.
No don't get me wrong - I believe in educating and reeducating yourself. I read sales books, sales blogs - I even have taken Sandler, SPIN, Challenger and other sales courses. But those are just opportunities to learn, to help me figure out how to better sell the "widget" my company makes.
I love salespeople. How can you not love people who get up every morning to face the day, knowing rejection will hit them square in the eye? The best people I know in the world have spent a lifetime in sales. But the world has changed and we need to change with it.
Here's the deal - I, personally, used to wear my years experience and success of being a hard-edge, quota busting closer as armor - wrapping myself in at as engaged with prospects, not so much selling them as attempting to vanquish them. Tell me you haven't sat in a sales meeting where the imagery of war and of conquest hasn't been broached.
Well. I. Was. Wrong.
That experience I valued so much? A few years ago, I awoke from my fever dream to see it wasn't armor I was adorning myself in every day - it was shackles, each Marley-esque link in the chain forged every time I "hard closed" a deal to meet my number. Each time I thought about my own comp rather than serving the customer, another link was added. Each time I sold something off the "discontinued" list because there was a SPIF, the chain got longer.
I didn't have to wait for three ghosts to visit me - I saw the future of sales and the way I was working there was NO room for my old belief system in that future.
Forrester says 1 million US B2B salespeople are going to lose their job by 2020. I don't want to be part of that 1 million - do you? And I don't want anyone that works for me as part of that million either.
So over the last few years I re-trained myself to work and exist and lead in this new normal we salespeople find ourselves in. A new normal where the customer doesn't want to hear my pitch, where they want to come to me when they are ready to. And don't kid yourself, it IS the new normal. 54 million millennials in the workforce right now are being promoted to management positions in then next 5 years. They aren't going to wake up one morning and say "Hey, now that I am a buyer or a decision maker, I need to start answering the phone and listening to sales pitches!"
So, back to the main point - what do I think is the main reason sales commissions need to be replaced with something else?
For some time, we lived with this reality that there was no better way to get information about our products or services to our to potential buyers than by hiring sales people like me (who were motivated by money) to do what most humans didn't want to do - pick up the phone, knock on doors and talk to people about widgets. To tell them about how "our" McGuffin was better than Brand X. If I was selling a commodity, how would a buyer at Gazoo Inc. know my widget was better that someone else's? Or if I was an innovator, how could an IT manager at Gazoo Inc. know I could save him 30% on skibble-dabble costs without him talking to me?
Whether you were selling to the SMB or the Fortune 500, the buyer needed to be interrupted in their day to day to learn about your company and your solution and the problem you solve. And a great cold caller could make 20 or 30 calls to such buyers and get two or three meetings. Get 3 meetings at day, that's 15 a week. Close two or three of those and rinse and repeat. We've ALL been here, right?
Of course commissions worked in this environment, because the more you hustled the more people you talked to. The more people you talked to the more people heard your pitch - which was HEAVILY information based. The more pitches, the more sales. And the sale is what gets the commission. Bada Bing Bada Boom!
Then one day in the 1990s, somebody wrote a few lines of computer code that let someone post page of text and a photo (information) on a public network that let someone else on a computer half a world away access and consume that information.
And it all changed. Thanks Al Gore.
I think we can ALL agree that customers in 2016 do not need salespeople to deliver product or solution information anymore. With a few keystrokes and mouse clicks there's a world of information out there for our customers.
So we had to change - or at least appear to change. So over the last four or five years we've shifted from salespeople delivering information and a proprietary value prop to delivering INSIGHTS.
But what is INSIGHT? The dictionary on my desk (yes I'm over 40 and have a dictionary in book form, right next to my bottle of Geritol) defines insightas "understanding of the true nature of something."
What does your sales team understand the true nature of? Do they understand the true nature of the market your customers operate in - the problems and challenges your customers face daily? Or do they understand the true nature of our sales culture that pushes "close them to get paid?"
We've all seen the Forrester Research stats that tell us that from the perspective of our customers, only one in eight B2B sales meetings creates any useful value for the customer - and that's after everyone and their brother has been talking about how to coach sales teams to provide insights for the last three or five years!
How many sales orgs have trained their sales teams to deliver "insight?" How many articles are we reading about how to deliver insight? For the majority of sales reps out there, why isn't this "insight" sticking?
I think I know.
You have a leaky faucet. You call two plumbers.
Plumber one is paid a great wage, based on her level of knowledge and skillset.
Plumber two is paid on commission on her plumbing jobs.
As a consumer, which plumber's understanding of the true nature of your plumbing problem are you going to trust?
If we're honest, 100% of us - when we're spending our own money - would choose plumber one. Every time. Because plumber one has no "skin in the game" to sell us something we don't need. Sure you can add "what if the plumber wants to stretch out the time on a small job" argument - but really, isn't that more an issue with the type of plumbers you hire?
And to that end, I give you this comment from the PlumbingZone website from an owner of a family plumbing business in Michigan (yeah I did some research for this):
My family business...tried a few times to hire commissioned service plumbers, never worked out for owner, employee, or customer. What would happen, IMO, is that the commission guy was truly an honest person, but with the commission hanging over his head, he became dishonest, but not in his own mind. Slowly but surely, jobs started to get way overcharged, & like one said, customers stopped calling. I would go back on some of his screw ups, after he left, & was shocked at some of the work, & what customer was charged. Bottom line, commission is ok if [you're] honest, & stay honest. But most will not. Especially if they don't have another job lined up that day, they will try to upsell, or upcharge, the job... as amatter of survival.
Now this is a business owner. To many of you reading this post, selling to the SMB, this could be a potential customer.
If he thinks this way about his own plumbers - what does the think about our "insight" driven commissioned salespeople calling on him to sell him a copier, or SAAS or HR Outsourcing or an alarm system?
Sales commissions are a great way to incentivize people to push a certain product, story or narrative. Everybody knows that.
Especially our Buyers.
It is any wonder that Gartner says today's B2B buyer spends 32% of their buying effort reviewing information from or interacting with providers or their partners, but they spend the other 68% working inside their organization, engaging peers, & seeking info and insights from influencers they trust?
Could it be simply because their peers aren't getting paid to sell them something?
So what am I trying to say?
How can I ask my customer to trust my insight about whether they need a widget if I am only paid or paid more, if they buy MY widget?
To me, the answer is simple - I can't. Not anymore.
There - that's my argument. It took a few posts but that's it.
So where does that leave us? Well, if you're still reading, you're obviously interested in what I think comes next.
So the final post of this series will detail how you can recalibrate sales comp to drive insight and sell stuff without having to pay commissions. Here are the points we'll cover:
- Hiring A Different Type of Salesperson or Evolving the Ones You Have
- Creating a REAL Team - Not a Group of Hired Guns
- The Need for Higher Base Pay and Fewer Employees
- Paying Everyone (sales, service, ops, delivery) To Meet The Same Goals
I'm interested in your feedback. Let me know what you think,