A question I am often asked by my clients is should I hire someone who can sell but lacks industry experience; or should I search for someone who has been around the industry and has good product knowledge.

I advise them to hire a re who can sell, and teach them the specifics of the industry. Here is why.

I recently delivered am appointment setting program at a company in a vertical I do a lot of work in. In the audience was a lady whom I trained at a competitor some six months ago. Before she came over to peak with I remembered her clearly. She was very outgoing, and I remember she spoke to me at length when we first met, talking to me about her experience, and the challenges she faced in selling the products and services of the company.

It didn't strike me till this last encounter, that she had mentioned that she had deep experience in the industry. She knows a lot of people both on the customer side and the various providers. It was clear that she had a good understanding of the product, in fact her schooling was directly related to the industry, and she had kept her knowledge up by attending a number of continuous education programs offered by associations active in her industry. She was a keep participant, open to learning, mostly due to the fact that despite her "industry experience", she had only made her target once over 12 years, with four different companies, the current employer being her fifth in the industry.

What really got me to think about this more were tow prospect meetings I had the following day. One was with a VP of Sales in a "highly specialized" industry, who made a point of telling me that he only hired people who have product and industry experience. The other was with a Sales VP in the special chemicals field, who went out of his way to tell me that he will hire anyone that can sell, and is not very concerned about the individual's product or industry knowledge. Key for this leader was that he hired "sales ability" as he called it, "I can always teach them about the product, I need someone who can find the right people to talk to and know how to talk to them". He went on describe his sales process, how he measured activities and other sales related things that have helped him deliver year after year.

This reinforced a belief instilled in me by one of my first sales directors, who hired me despite the fact that at the time I know little about the industry he brought me in to, but he felt I could sell and to him that was the key thing.

Many people I work with would rather spend money on "industry" knowledge or experience rather than sales ability and attitude. But over and over I see successful companies focus on hiring those that can sell and have a winning attitude. They stay away from sales rep who may know people in the industry (let's hire their book theory). Often these are the same industry experts who know all the reasons why things wont work, people wont buy, and how you - the employer - need to change (sometimes everything) to help them sell.

We recommend to our clients that they hire "sales people" to sell, and focus on teaching them the industry or company specifics. The alternative usually leads to a lot of smart people who can tell you exactly why the numbers aren't there. They know everything about the product except how to sell. I often encounter people we train who tell us that "it is different in this industry"; you can't sell if you don't know this or that, or him or her. The only accurate part of their statement is that they "can't sell" and their organization is not willing to call them on it, especially since they hired them for the wrong reason.

Seems to me that if you need a CFO you're going to hire someone with a finance background, not industry expertise, why not apply that logic to your sales force. Hire someone with ability and attitude, you can teach them about product, it does not work the other way around. If your goal is to increase sales, go for a sales rep!

Tibor Shanto, is a Principal with Renbor Sales Solutions Inc., Renbor Sales Solutions Inc. enables companies achieve sustained growth, by focusing on critical aspects of revenue growth. By recognizing that an outstanding sales force is THE differentiator in today’s environment, our clients with our help, focus on the development of both strategic and tactical initiatives to foster a winning team that will out think, out sell and out perform competitors while consistently gaining market share.

Renbor’s Objective Based Selling (OBS) is a structured approach to delivering ongoing results and improvement by focusing the entire sales organization on a key set of objectives. The overarching objective for any sales organization is to achieve exceptional and sustainable revenue growth. This is accomplished by creating a culture of sales excellence built around the principles and processes adopted by world-class sales organizations.

Incentives are one of the greatest challenges most sales organizations face. While many start with the age old adage that “incentives drive behavior”, they still find it difficult achieving a plan that drives business.

One of the core challenges is that many organizations do not clearly define the behavior that they are truly trying to drive. While it is easy enough to say you want your incentive plan to drive sales, sales are not a behavior, they are an outcome. An outcome is a set of actions and client interactions that lead to a sale. Successful organizations have a clearly defined sales process that helps them in mapping out the actions that reps have to follow to be successful. Their goal is to have a process that lays out the steps for their reps and clients to have a value add relationship.

Their ultimate goal is not so much the sale, but having a road map that will allow their reps to consistently repeat the steps with each client that will lead to a transaction. If they have this map, they can use it when one of their reps seems lost, (declining sales, lack of prospects, etc.). They can also use to evaluate new candidates and ramp up their new reps by giving them a step by step map for the actions that will drive on going success.

Many of these organizations reward not just the outcome but the successful implementation of the process. After all, if you can follow a structured plan, reinforce it with skills and talents; the outcome is more likely than in an environment where you seemingly have to make it up each time you set out with a new prospect.

To achieve this, incentives may take on two additional forms to the traditional commission payment. First, some actually incent specific actions being taken. For example, in a high volume transaction based sales force, where prospecting for new names is key to achieving numbers, you can reward people for actually prospecting and pursuing new clients rather than relying on existing clients or marketing generated leads. While it is not advisable to pay for the act of prospecting, you can take advantage of methods such as scorecards, KPI, or MBO.

Second way is through investing in your staff, not just through skills development and training, but systems and tools to assure their success. What you may notice is that your best sales people respond to training most. As part of the manager’s coaching activity she can define those areas that will support the process and drive sales, and invest in training to directly impact those areas. When you bring on new systems, say a CRM, don’t just train them on features and functionality of the system, but also on what is in it for them when they use the system. Often tools are not used not because they are difficult, but there was no connection made to the direct benefit the rep will get from using it. Said another way how it helps them more sales in less time with less effort.

With both the above examples communication is key, not only as to why things are taking place, but the direct impact on their ability to earn tangible rewards.

Another effective means of mutual benefit from incentives is focusing on margins, while has been a standard in some industries, it is new to others. More and more companies I work with are paying commissions based on a percentage of margins rather than gross revenues from a sale. The advantages for the company are clear, and they can be for the rep too when done right. Where it has been successful, companies introduced it as a means of involving the rep in the health of the business, and getting them to accept greater responsibility and accountability for their actions. Of course greater responsibility and accountability goes hand in hand with greater autonomy to make decisions that impact the outcome. While many companies talk about “empowering” their sales reps, this provides an opportunity to put some teeth in to the mantra. Since the amount of commissions earned will be a direct result of the margins, give the rep greater flexibility in pricing. Shift their view from discounting and going straight to price in a sale to developing value. The better job they do in leading with value and validating the price, the more commission they will earn.

To ensure success, some companies are adding a couple of elements to the mix. Some pay a higher scale for higher margins. So if at list there would be 25% margin, and the average sale is fetching 15% margin, they add more incentive for sales coming in at 21% margin or higher, where a bulk of the gain above 17.5% goes to the rep, allowing him to more directly benefit, and more importantly driving the behavior that consistently results in higher margins.

Another way companies are ensuring long term relationships with their best reps and clients is to also measure reps on over-all territory margin in addition to sale by sale margins. This again empowers the rep to decide which client he may want to sell at a lower margin this time in order to secure an otherwise profitable long relationship. If the rep feels he can manage his territory and make up for the margin elsewhere, and is showing good judgment, both you and he benefit from taking a holistic view.

While margins are one aspect, another is pay back period. Many companies understand that it may take over a year before a relationship with a client begins to show returns. Most reps are ready to talk to the client about the ROI of their product, using any number of models to prove their products value. Often however, the same reps do not calculate the ROI for their own company, the pay-back period for that client, which often extends to 18 months plus. Many companies have a claw-back policy; this has a number of negative effects. Least of them is the cost of maintaining the plan, there costs associated with tracking, applying and administering the process. There is also the negative sense it leaves the reps with. Many of them feel that they have done the work when they sold the client, and that they are not directly responsible for the loss, especially if they can point to pricing issues with a competitor under cutting you to win the business.

Over the long term there are those who question if clawing back really delivers results or shapes behavior. Most reps work the incentive plan and find ways to deal with this issue, not always to the benefit of the company. They build in allowance for churn and manipulate timing, etc.

Some have turned to a more inclusive and positive means of addressing the balance between motivating reps and attaining strong ongoing business. Some split the potential incentive between growth of revenue in the territory and commissions paid for new revenue stream. This works in some cases, but runs into trouble in a mature market where the number of customers is not growing at the rate high enough to satisfy corporate growth. Market growing at 5% a year and the company is looking to achieve 8% growth. Add a strong competitor, and the pressures of market share, and you run the risk of encouraging discounting and reliance on commissions as reps work the plan and focus on new sales to out pace loss of revenue in their territory. Resulting in discounting, no growth in revenues and increasing payouts; how many of you paid more in incentives last year, but lost revenue?

Another alternative spreads the incentive over the life of the relationship. After all you don’t receive all the benefit in year one, why pay out the cost of the revenue streams all at once? In all other aspects of the business you accrue to match related revenues to expenses why not here. It is not a cap; the rep will earn full incentive as long as the company realizes full benefit. In fact, done right, as long as the client continues to perform for you as a customer, the rep will continue to receive incentive. After all, a new customer is much like an annuity that will pay-out over a period of time, why not have a reciprocal incentive plan that works in reverse. It’s amazing how the reps take a different view of the client and ongoing relationship.

Tibor Shanto, is a Principal with Renbor Sales Solutions Inc., Renbor Sales Solutions Inc. enables companies achieve sustained growth, by focusing on critical aspects of revenue growth. By recognizing that an outstanding sales force is THE differentiator in today’s environment, our clients with our help, focus on the development of both strategic and tactical initiatives to foster a winning team that will out think, out sell and out perform competitors while consistently gaining market share.

Renbor Sales Solutions’ Objective Based Selling (OBS) is a structured approach to delivering ongoing results and improvement by focusing the entire sales organization on a key set of objectives. The overarching objective for any sales organization is to achieve exceptional and sustainable revenue growth. This is accomplished by creating a culture of sales excellence built around the principles and processes adopted by world-class sales organizations.

I was recently asked to present on the impact of technology on sales, has it helped, in what way, or has it had a negative impact?

After examining the issue with some colleagues and experts in the field, it became clear that technology is an enabler, and as such amplifies what is already there, and what is not.

I don't think that that there is anyone in sales today that has not heard of, used or been impacted by a CRM package of one sort or another, be it a simple contact management application with some added functionality, to a top of the line CRM that fully integrate with other enterprise applications.

Harvard Business Review: Avoid the Four Perils of CRM, stated that "55% of all CRM projects don't produce results", and went on to say that "According to Bain's 2001 survey of management tools, which tracks corporate use of and satisfaction with management techniques, CRM ranked in the bottom three for satisfaction out of 25 popular tools. In fact, according to last year's survey of 451 senior executives, one in every five users reported that their CRM initiatives not only had failed to deliver profitable growth but also had damaged long-standing customer relationships."

Yet by November 2004, one of the same writers in an article entitled CRM Done Right stated: "Senior executives have become considerably more enthusiastic about CRM. In 2003, Bain & Company's annual Management Tools Survey of 708 global executives found that firms actually began to report increased satisfaction with their CRM investments. In 2001, CRM had ranked near the bottom of a list of 25 possible tools global executives would choose. Two years later, it had moved into the top half. In fact, 82% of surveyed executives said they planned to employ CRM in their companies in 2003-a large jump from the 35% who employed it in 2000."

While the piece went on to suggest a number of factors, we've experienced a number of key things in our work with clients that are worth noting.

First, we very much believe and have seen numerous examples to support the view that Customer Relationship Management is a way of doing business. Most of our successful clients have a consistent view on Customer Relationship Management.

To them CRM is part of their culture, part of their corporate DNA. They see CRM as the proper alignment between software and process to effectively manage their relationships with their customers. The alignment is based on objectives:

Corporate objectives drive the sales organization's objective; which in turn are the foundation for regional/territorial objectives, and client objectives; when properly executed, these objective form the basis for each client/prospect interaction.

It is as much about process as it is about software. If you don't create a balance and alignment between the two, you will fail to manage the relationship with you key customers, and not derive much benefit from your investment. In fact we are working with a company that has spent in excess of $13 million dollars over the last 5 years implementing a CRM software with little tangible results to show in improved sales, increased productivity or understanding of their clients and how to mutually improve their relationship.

A study I read recently showed that over 80% of the CEO's surveyed said their sales organization had a process that was poorly defined or a process that wasn't being followed. A sales process is like a good map or a GPS if you will. Used properly it helps you determine where you are, if you are in heading in the right or wrong direction, also helps you plan what your "next step" should be to get to your destination. A well defined sales process gives a sales organization the same advantage. It should have logical and defined steps that allow both parties to develop a better understanding of each other and a set of questions that help you qualify or "disqualify" an opportunity.

When we meet with a new client we always enquire about their sales process. A VP we recently met responded: "why yes of course, we use XYZ" (name change to protect the innocent, us). Yet he openly admitted that he struggles with forecasting, prospecting, and his people were spending too much time with unproductive activity, in the little activity he was able to glean from the system. (Unfortunately no software will pick up the phone and do a cold call, I'm working on it.)

The clients who do use the software to support their process tell a different story. Activity is focused on the client experience. It is still true that getting new business from an existing client, is much more cost efficient than from new prospects. No I am not saying you should stop prospecting, but don't ignore those that have rewarded you with their business, show them some love, make it easy for them to deal with you, and hard to leave you.

A good CRM (software and process) provides you with a complete view of the client, allowing you to align your resources to best serve them. Reducing service calls, reducing time to respond, reducing the effort to take orders, reducing the cost of sale, increasing their satisfaction level and creating a mutual economical value add relationship.

The data available to you will also help segment your clients better, allowing you to decide where you want to put your focus, and which clients you may want to off load. Remember that some 30% or your lowest margin clients suck over 50% of your resources. A CRM done right can assure that you are retaining the right clients.

CRM system can also break down hierarchical communication barriers allowing everyone, not just sales to focus on the customer relationship, allowing top executive to get involved in meeting client expectation and driving revenue. Of course this will only work where the CRM culture is present. And in many companies that have rolled out the software without the process, with out the training, without the internal value proposition, it is not. As stated earlier it in fact diminishes the client relationship. Many companies are experiencing push back from the front line because they failed to show the ROI to the users. Like the clients sales reps want to know what's in it for them. There is a lot, if there is a supporting process focused on everyone's success, the company, the rep, the client. This can be achieved with a sales process that aligns around key objectives.

One last thing to consider, CRM systems are usually associated with sales organizations. But client satisfaction is the function of the whole organization. A truly successful CRM extends beyond sales to all groups with in a corporation, and as such, a key success factor is the alignment of the sales process with other processes impacting the client relationship.

Tibor Shanto, is a Principal with Renbor Sales Solutions Inc., Renbor Sales Solutions Inc. enables companies achieve sustained growth, by focusing on critical aspects of revenue growth. By recognizing that an outstanding sales force is THE differentiator in today’s environment, our clients with our help, focus on the development of both strategic and tactical initiatives to foster a winning team that will out think, out sell and out perform competitors while consistently gaining market share.

Renbor’s Objective Based Selling (OBS) is a structured approach to delivering ongoing results and improvement by focusing the entire sales organization on a key set of objectives. The overarching objective for any sales organization is to achieve exceptional and sustainable revenue growth. This is accomplished by creating a culture of sales excellence built around the principles and processes adopted by world-class sales organizations.