1

Recruit and Retain Superstars in Sales

Ilona Jerabek, PhD

PsychTests AIM Inc.

2

Reasons for recruiting salespeople

Growth in primary business 84% Expanding into new markets 28% Expanding into new lines of business 12% Replacing agents leaving firm 37% Other 4%

Source: National Association of REALTORS®

3

In-house sales team or alternatives?

In-house sales team Outsourcing Resellers Distribution channels Independent reps

4

Reality check

In a survey of 23,000 employees at more than fifty-five companies, they found that:

Only 36% of those surveyed clearly understood the corporate or organizational goals, what the organization was trying to achieve and why

Only 20% of those surveyed understood clearly the link between their jobs and the organization’s goals

Only 15% felt fully enabled to achieve their goals Only 20% fully trusted the organization they work for

5

In other words …

If these same statistics had to do with a football team then:

Only 4 of the 11 players would know which goal was theirs

Only 2 of 11 would care Only 2 of 11 would know what position they played and

the expectations of their positions All BUT 2 players would consider competing against their

own team

If this were your team, how long would you keep the coach?

6

Common challenges

Hiring the right people Personality suited for sales Personality suited for the particular position 80% of your company’s sales volume comes from the top 20% of your

sales people => Why pay 80% of sales force to bring in only 20% of the revenue?

Turnover Greener pastures (flocking to employers of choice) Gen X and Y – the job-hopper cohorts Leaving bad managers Turnover is very, VERY costly

Marketing vs. sales divide

7

Common challenges

Behavior issues Big egos and Prima Donnas Backstabbing – taking competitiveness to the extreme Dishonesty Absenteeism

Motivation Unclear vision Disengagement issues Commission structure Personal vs. organization’s goals divide

Loyalty

8

Turnover – How much does it cost?

9

According to McDonalds, the turnover cost of losing an entry-level employee earning $12,500 per year is ____.

1. Less than $2,500

2. $2,500

3. $5,000

4. $7,500

5. $10,000

Pop quiz

10

According to McDonalds, the turnover cost of losing an entry-level employee earning $12,500 per year is ____.

1. Less than $2,500

2. $2,500

3. $5,000

4. $7,500

5. $10,000

Pop quiz

11

The turnover cost of losing a sales representative earning $75,000 per year is ____.

1. $48,000

2. $67,550

3. $93,750

4. $110,500

5. $125,000

Pop quiz

12

The turnover cost of losing a sales representative earning $75,000 per year is ____.

1. $48,000

2. $67,550

3. $93,750

4. $110,500

5. $125,000

Pop quiz

13

Turnover cost summary

Entry Level – Hourly , Non Skilled (e.g. Fast Food Worker) 30 – 50% Service/ Production Workers – Hourly (e.g. Courier) 40 – 70% Skilled Hourly (e.g. Machinist) 75 – 100% Clerical/ Administrative (e.g. Scheduler) 50 - 80% Professional ( e.g. Sales Representative, Nurse, Accountant) 75 – 125% Technical (e.g. Computer Technician) 100 – 150% Engineers (e.g. Chemical Engineer) 200 – 300% Specialists (e.g. Computer Software Designer) 200 – 400% Supervisors / Team Leaders (e.g. Section Supervisor) 100 – 150% Middle Managers (e.g. Department Managers) 125 – 200%

JOB TYPE/ CATEGORY

TURNOVER COST as a % of

annual salary

14

NOTE: Percents are rounded to reflect the general range of costs from studies Costs are fully loaded to include all of the costs of replacing an employee and bringing him/her to

the level of productivity and efficiency of the former employee. The turnover included in studies is usually unexpected and unwanted. The following costs

categories are usually included: Exit cost of previous employee Recruiting cost Employee cost Orientation cost Training cost Wages and salaries while training

Turnover costs are usually calculated when excessive turnover is an issue and turnover costs are high. The actual costs of turnover for a specific job in an organization may vary considerably. The above ranges are intended to reflect what has been generally reported in the literature when turnover costs are analyzed.

Sources of Data: Industry and trade magazines have reported the cost of turnover for a specific job within an

industry. The Saratoga Institute Independent studies have been conducted by various organizations and compiled by the Jack

Phillips Center for Research. The Jack Phillips Center for Research is a Division of Franklin Covey.

15

Who are the right people?

16

Climbing the performance pyramid

GAP

17

Marker traits of star salespeople Intrapreneurial characteristics Business sense and instincts

Sales knowledge Prospecting Qualifying leads Gathering info Presenting Resolving objections Closing Getting referrals

Strategizing and positioning Resourcefulness Mental speed Negotiation skills Research skills Problem-solving skills Relationship building skills Memory for names, faces, personal information

18

Marker traits of star salespeople Drive and ambition

Goal-orientation Competitiveness Initiative Energy

Social skills Listening skills Questioning skills Communication skills Sociability Networking skills Empathy and recognition of other people’s emotions Persuasiveness Helpfulness

19

Marker traits of star salespeople Self-assuredness

Self-confidence Assertiveness Comfort with rejection Comfort with decision-making Comfort with public speaking

Organizational skills Neatness Record keeping Time management Meticulousness

Coping skills Tolerance for failure – thick skin Comfort with rejection and criticism Emotional control Adaptability

Honesty

20

Intrapreneurship

An intrapreneur is someone whoComes up with new ideasDevelops them conceptuallyEnsures buy-in from stakeholdersMobilizes the necessary forces ImplementsPersonally assumes risks

21

Characteristics in an intrapreneur business insight understanding of the market environmental awareness strength of character persistence, stamina and determination innovative and creative problem-solving ability to manage change capacity for analysis, organization and control of activities ability to inspire people at all levels, to engage their

interest and ensure they are effective and successful loyalty

22

Different jobs, different profiles Similar traits, different mix

High-tech sales vs. car sales vs. retail Sales style:

Pioneers Hunters Farmers

Sales approach: Improvisers Chameleons Planners Hawkers Persuaders

Hire people with the right profile for the job

Hire people whom you can keep satisfied Take into account organization’s policies Keep it real – don’t hire people who are motivated by things your company

cannot offer Be aware of trade-offs

23

Sales personality test factors Comfort with public speaking Comfort with risk-taking Comfort with decision-making Comfort with rejection/criticism Sales knowledge Self-confidence Recognition of other’s

emotions Adaptability Assertiveness Persuasiveness Communication skills Networking skills Competitiveness

Goal orientation Initiative Energy Neatness Time management Meticulousness Listening Skills Integrity Helpfulness Emotional control Mental speed Research skills Problem-solving skills

24

How to find the right people?

25

How to recognize talent

“Hire for attitudes, train for skills” Screening process Interview Assessment Decision tools Assessing impact of trade-offs

26

If you can’t measure it, you can’t control it …

Bottom Line:

People who perform well have: Increased self-awareness

Improved morale Increased retention Increased engagement Enhanced productivity Better job satisfaction

. . . profits surge!

27

“Assess and conquer”

Define the job Assess the incumbent Assess the candidate Perform gap analysis Assess and manage performance Assess and manage promotions Retain your best people

28

Assess the job

Task analysis Task description Shadowing

Job analysis Job description Personality profile of the ideal candidate Key characteristics and attitudes Behavioral benchmarks for the position Reach consensus among the stakeholders

29

Assess the incumbent Strengths

What traits and attitudes contribute to good performance?

What are the downsides? Challenges

What are the traits and attitudes that hinder performance?

What do you wish you could change in the incumbent?

30

Assess the candidate

Select and hire effective employees Find people with the right profile for the

position Recognize team players Accurately predict successful performance

31

Assess the candidate

Prescreening Interview Personality assessment Assessment of work environment

preferences Skill assessment Attitudes and values

32

Prescreening

Screen for deal-breakersFrom company’s perspectiveFrom candidate’s perspective

Evaluate key attributes Knock-out questions Assess essential skills

33

Interview pitfalls – The candidate

Candidates well-trained in interviewing skills Rehearsed responses Spinning Outright cheating Read between the lines Ask unusual questions Ask situational questions

Good candidates inexperienced in interviewing process Disadvantaged – have to think about answers on the spot Can miss diamonds in the rough

34

Interview pitfalls – Interviewer bias First impression

It takes seven seconds to make a first impression 50% of it is based on the person’s appearance First opinions are formed in the first 12 minutes of an interview

Halo effect strength (or weakness) in one area is generalized to other areas

Primacy and recency effects: The interviews we remember most are the first and the last of the group We tend to remember the beginning and the end of individual interviews

Rationalization of negative aspects if we like the candidate Looking for someone similar to self Self-fulfilling prophecy:

First impression of someone (from a first meeting or from their resume) will subconsciously influence questions resulting in confirmation of said first impression

35

Interview – Probing for revealing info

Situational/behavioral questionsGut responsesAttitudesReasoning

Strengths and weaknesses Ambitions Motivators

36

Interview – Down the memory lane

Past behaviors are the best predictors of future behaviors Did you experience conflicts or major differences in

opinion with co-workers or management? How did you resolve them? What did your past employers value most about you? What did they suggest you improve/work on? What’s the most common misconception about you?

37

Interview – Show me what you’ve got

Initiative and resourcefulnessWhat do you know about our company?Why do you want to work here?What can you contribute to our company?What do you think our company can bring

you? In 3 sentences, why should we hire you rather

than somebody else? (elevator pitch)

38

Interview evaluation

Decision tools Objective criteriaWeighting systemDecision grid

Quantify qualitative information Multi-rater evaluation

39

Perform gap analysis

Measure the difference between the candidate and the requirements of the position

Identify significant gaps – changes in behavior and playing a role of the “job persona” are required to close the gap

Determine the actions that support these required changes/behaviors

Predict the energy requirements to make these changes and the resulting frustrations

40

Keeping the best and getting the best

out of them

41

Retain the good ones

Training and professional development Personal development Empowerment Engagement Alignment of goals Growth potential (career and earnings) Organizational culture Management climate Working hours and flexibility

42

Retention drivers … times are changing

DISCONNECTING DRIVERS OF RETENTION

EMPLOYERS’ VIEW EMPLOYEES’ VIEW

1. Management Climate 1. Benefits

2. Supervisor Relationship 2. Compensation

3. Culture & Work Environment 3. Growth & Earnings Potential

4. Benefits 4. Management Climate

5. Growth & Earnings Potential 5. Time & Flexibility

6. Training & Development 6. Culture & Work Environment

7. Compensation 7. Supervisor Relationship

8. Time & Flexibility 8. Training & Development

43

Manage what matters Management by objectives Management style

Transform the management style according to what works for the person

Micromanagement – avoid or use it sparsely and for specific purposes If possible, adjust the job to the person

Manage expectations What’s expected of employees What the employees can expect Resist pipe dreams

Keep employees in the loop Decisions Results

Align personal goals with company’s goals

44

Motivating your sales force Set clear goals and expectations

When they know what they’re aiming for, they will make more efforts to get there

Hold team meetings Discuss strategies and ideas Every member of the team can contribute to the discussion

Team building Organize periodic team building activities Make a point of celebrating birthdays and anniversaries Celebrate new hires Celebrate successes

45

Training and development

Offer training possibilitiesAbout what they sellHow they sell itCareer developmentPersonal growthMentoring and coaching

46

Pop quiz

What is greater?

ROI generated from Training & Development

ROI generated from the acquisition of capital improvements

47

Pop quiz

What is greater?

ROI generated from Training & Development

ROI generated from the acquisition of capital improvements

48

ACTUAL BUSINESS RESULTS FROM TRAINING & DEVELOPMENT SETTING TARGET GROUP DESCRIPTION METHOD RESULTSCoca Cola First level supervisors 8 ½ day workshops Action planning 1447% ROI

covering supervisor roles, Follow-up session Benefit/costgoal setting and team building Performance monitoring Ratio 15:1

HMO All Managers and employees Organizational Development Performance Monitoring 20,700 New members

(team building Management 1270% ROIbuilding, group meetings Estimation BCR 13.7:1Customer service training

Direct Sales All employees in the 20 hr. program spread over Action planning Payback of program Financial Services Division 60 days focusing on investment in 1 yr total quality mgmt

Yellow Managers Redesigned interviews Follow-up interviews 1115% ROIFreight Performance appraisal BCR 12:1Systems appraisal with training Performance monitoring

interpersonal skills

Federal Government New Supervisors 5-day intro to Follow-up questionnaire 150% ROI supv. course BCR 12:1

covering eight key competencies

Bakery Multi-Marques, Inc Supv./ Admin 15 hrs of supervisory Action Planning 215% ROIskills training (Work process

Including the analysis), role of training Performance

Monitoring

ROI from training

49

Sales contests

A little friendly competition goes a long way: Hold sales contests with non-cash awards (winning a fun night

out enriches the winner’s life and creates enjoyment, a cash award has to be substantially larger to make a difference)

Keep the contests about short-term goals (long-term goals foster procrastination)

Use largest percentage increase as a goal rather than highest number of sales to give everyone a chance of winning

Make the contest periods and types unpredictable: When you become predictable, it is easy to hold off big sales for a little while to have them count in the upcoming contest.

50

Building trust and engagement

Align goals Explain what the company goals are and how the individual sales representative

affects those goals Make their contribution personal

Provide comparison tools Share financial information Show them how they compare to their colleagues

Provide coaching and mentoring Coach them periodically We tend to forget key concepts when we get rolling We all need to be reminded what we do well and what we need to improve from

time to time Keep the atmosphere positive

Encourage rather than threaten Reward improved performance rather than demoting and decreasing bonuses

51

“Show me the money!” … and a little pat on the back will help too Monetary compensation is important

Decent base Commissions Bonuses

Be creative with incentives Offer original non-monetary rewards Tailor rewards to the recipient

Create social reinforcement opportunities Public praise is much more powerful than doing the same in private

Pay particular attention to reward improvement in the bottom-tier sales staff’s performance Rewarding the top performer is expected, but the sales representatives

that don’t do so well need to be rewarded even more

52

Big egos and Prima Donnas

To get the most out of them: Make them feel important Make them feel appreciated Figure out their needs and play into them Instill upon them the vision and mission of the company Communicate how they're an integral part of the team Praise them for a job well done Give them perks

53

Big egos and Prima Donnas

To mitigate the down side: Don’t give in to unreasonable demands Try to keep them grounded Cultivate humbleness Boost the team spirit Talk good traits into existence Throw them a challenge Reward team players Be diplomatic but candid with negative feedback

54

Other factors

Age Positively related to commitment Negatively related to turnover

Personal needs Work/family balance Personal situation (attitude to travel, furthering one’s

education, commuting, hobbies) Flex time Virtual office

55

Retention – what to watch out for

Compensation Gross revenue vs. Gross margin Commission caps Expense accounts Other perks

Control of factors affecting performance Budget control after closing (if commission based on gross margin) Availability of supporting materials Turnaround of feedback from others

Quotas Focus on the top line Take into account the sales cycle

56

Retain your best people

Motivate, develop and retain your employees Improve coaching and development sessions Add objectivity to the promotion and review

process Predict how a transfer or promotion will impact

performance

57

Are you the “Employer of Choice”?

Do you…

Align benefits & workplace attributes to create a dynamic work environment?=> EMPLOYEE ENGAGEMENT

Use tools to measure performance of exceptional workers? => BEHAVIORAL & LEADERSHIP 360 ASSESSMENTS

Build career growth and development from the inside out?=> BEHAVIORAL & LEADERSHIP 360 ASSESSMENTS

Reward employees for driving organizational flexibility (adaptation to change)?=> EMPLOYEE ENGAGEMENT

58

Ilona Jerabek, PhD9001 blvd. de l’Acadie, Suite 802

Montreal, Qc H4N 3H5

ilona@psychtests.comDirect line: 514-745-3189, ext 112

Fax: 514-745-6242

http://archprofile.comhttp://www.psychtests.com