A New Year’s Wish
Dear Friends,
Here’s wishing you true wealth and prosperity in 2011
In our competitive environment, our focus is on sales growth, expansion and … let’s be honest, making more money. However we do realize that there is another very important side to life.
According to the Pirkei Avot, a compilation of ethical teachings by Rabbis of the Mishnaic period, one who is wealthy is one who is happy with what he has. This might seem like a very simplistic outlook in a very complicated world. But is it really? And is this simple way of thinking contradictory to what we try to accomplish with our lives by trying to make bigger and better sales all the time?
At the end of 2010, you might feel you did not reach all your goals, so eagerly set out in your New Year’s Resolutions at the beginning of the year. We were all blessed with talents and gifts of some kind and you should seize every opportunity in 2011 to develop yourself so that you may reach your full potential.
However, our sincere wish for you is that you’ll be able to spend the next few days in a state of complete serenity and thankfulness for what you have – right now. We hope that you can focus on the love of family and friends and enjoy good food and responsible celebration. We hope that you will welcome 2011 feeling refreshed and ready to turn every obstacle into an opportunity for progress and growth.
The Difference between Target Markets and Market Niches
There’s no doubt that a targeted sales focus plan can be beneficial to your company. But, before you can research what a target market is in broader terms, you first need to explore the difference between two commonly confused terms: target market and market niche.
I always say that simply put, your target market is a narrowly defined group of customers, while your market niche is the particular product and/or service you offer to your target market. For example, you may aim at vision care practices located in the Pacific Northwest with revenues of less than two million dollars per year and whose management is open to outsourcing administrative functions (your target market). Further, you want to sell to eye doctors within that market your regional offsite patient data management and billing services (your market niche).
A message that specifically addresses how your product and/or service helps improve whatever woes keep the prospect awake at night is also required. Even though this recommendation is well documented and written about, websites still do not include it and most sales people cannot articulate it. You must answer how you solve their pain.
A targeted sales focus is a combination of all the above factors – a well-defined market, customer niche and a well thought out, pain-solving message.
To learn more about effectively defining your target market and market niche be sure to check out my sales focus ebook, Targeted Sales Focus.
What exactly is a targeted market?
“Show me someone who has done something worthwhile, and I’ll show you someone who has overcome adversity.”
- Lou Holtz: Famous Sales Quotes
To fully understand the benefits of using a targeted sales focus plan, first you need to determine what a target market is, and what it isn’t. I would say that a target market is not simply any market that could be interested in your products and services. That kind of “target” is far too big, and requires a scattershot sales approach that will quickly drain your marketing budget and deplete your resources.
As I found out while managing our medical device company, using this unspecific approach you’ll spread yourself too thin and put yourself at the mercy of mercurial market and competitive conditions.
Also, with a target that big, you’re likely to become a “me-too” company. In other words, you’ll be a very small fish in an extremely large pond. Eventually, price will be the primary differentiator between you and other companies. And as I discovered, that’s a race to the bottom that you can’t win – not that you’d even want to.
I find that by spending a little time researching your potential target market, you can avoid stretching your valuable resources out too thinly, and will obtain better sales results.
To learn more about narrowing your target market make sure you check out my complimentary sales focus ebook, Targeted Sales Focus.
How a Lack of Focus Can Be Detrimental to You Business
To quote Jay Abraham: “If you’re attacking your market from multiple positions and your competition isn’t, you have all the advantage and it will show up in your increased success and income.”
I speak to many marketing executives who use a combination of methods to target new business. Most agree that a targeted approach can have a huge impact on getting new business, and in turn, the overall success of an organization. The process itself can be called many things – Market Focus, Customer Focus, Sales Focus, Ideal Customer or Market Niche to name a few. Many terms are used to describe the process, but generally expectations remain the same – to obtain and retain new business.
So, what impact will a lack of a targeted sales focus have on your business?
One of the most common problems I hear about from struggling companies is the lack of clarity as to who the “ideal” or “perfect” customer actually is. This general lack of clarity can result in wasted sales efforts, slower growth rates, lower profit margins and increased sales and marketing costs. Even those companies who had a strong market focus in the past often don’t react quickly enough as technology, markets, companies, customer needs, staff and economies evolve. By not adapting to these emerging trends, they lose market share and profitability.
And why is this? The simple answer is a lack of strategic target sales focus. We typically hear something like this: “A market is a market. A client is a client. A sale is a sale. A dollar is a dollar. In this economy, you take all you can get, right?” The logic is seductive but flawed. Regardless of whatever economic or competitive conditions you find yourself in, a narrower focus wins.
Can’t wait to learn more about what a targeted sales focus can do you for your business? Check out my complimentary sales focus e-book now, Targeted Sales Focus.
Easing the Transition to a New Sales Compensation Plan
So you’ve created a new sales compensation plan; one that addresses the challenges you’ve been having and fills in some of the holes in your sales team’s efforts. Good for you! Now, get ready for a transition period that may make you wonder whether this whole sales compensation plan update was worth it.
Trust me, everyone goes through this. Almost every sales manager I’ve talked to says they are shocked at not only the resistance they met when they rolled out a new sales compensation plan, but also at the length of time it took for the sales team to transition successfully and comfortably to the new plan.
From the very beginning:
- Go over specific numbers with your sales team.
- Show them how the new sales compensation plan will pay out for each of them.
- Host team meetings and break-out sessions with individual sales reps.
- Supply each salesperson with a detailed explanation of what you expect of them and why their support is important to the overall company goals.
For sales managers who are having a particularly tough time with helping their sales staff adjust to a new sales compensation program, I often suggest a time-limited transition period. This eases the burden of change that every sales team feels, especially when the sales reps weren’t involved with the development of the new sales compensation plan. This kind of time-limited transition plan might offer a middle ground between old sales compensation goals and expectations and those under the new plan.
Remember that your job as sales manager is to keep your team motivated and engaged, even during times of transition. So don’t be afraid to make a few allowances for them for a limited time if necessary.
For more information on transitioning to a new sales compensation plan check out my sales compensation e-book, Compensation Compass.
P. S. I’m still looking for participants for my survey on how business leaders are approaching the upcoming year. I’d appreciate if you’d take a few minutes to complete my sales management survey. Thanks!
Selling Your New Sales Compensation Plan to the Sales Staff
Introducing a new or updated sales compensation plan to your sales team can be a stressful event. You were probably involved in developing the plan, and based it on the challenges you’ve been facing. You’re aware of company policy, and you can see the goals the new sales compensation plan will ultimately help your company meet. You’re looking forward to the benefits and new challenges your team will face.
But your sales team doesn’t necessarily have this kind of insider knowledge of the upper management plan. One mistake I see all the time among sales managers in the roll-out of a new sales compensation plan is underestimating the need to sell the new plan to sales staff in an enticing manner.
It was tough for you to hammer out a fair and ambitious plan for the company. It will be even tougher for your sales team to implement a plan that they didn’t have a hand in creating or conceiving. So as you roll out the new sales compensation program, I suggest you get ready to do some selling of your own.
A good way to prepare for the negativity you’re likely to encounter is to list some of the objections you might have in their position. Are sales quotas higher than in the last sales compensation plan? If so, anticipate some resistance to this. Anticipating objections and planning your counter arguments and the reasons for the sales quota adjustments in advance will add value to your plan and instill confidence with your team.
Even if the income potential under your new sales compensation plan is increased by 50 percent, you will likely encounter objections. So be prepared for this from the beginning and spend some one-on-one time with each team member until all objections are answered. Little by little, you’ll narrow down your sales team to those who are willing to work under the new sales compensation program and those who aren’t.
Want more tips on getting your sales team exciting about your new sales compensation plan? Get my free ebook, Compensation Compass.
P.S. This week I’m collecting trending data on how businesses are approaching 2011. I’d appreciate your input on this short sales management survey. Thanks!
How to Motivate and Engage Employees with Sales Incentives
Keeping employees motivated and engaged is a constant challenge for sales managers, and sales incentive plans are a great way to accomplish this ongoing goal. An appropriate sales incentives can help you sales team to focus on achievement and easily overcome obstacles with an end goal in mind.
This type of sales incentive plan is essential for those sales reps who have key customer contact roles. I’m not saying that account managers aren’t an essential part of your sales team’s success every month, but most sales managers recognize that the sales reps who are on the front lines bringing in new business have unique challenges and needs. To meet these needs, establish a sales incentive plan that recognizes their extra efforts and unique skill set.
If you run into resistance from the non-sales staff when it comes to implementing the sales incentive plan for sales reps, make these employees aware of how important reaching new customers is for the growth of the business, and help them see the essential nature of the front line sales rep for their own job security.
Focus sales incentives on activities that will encourage sales reps to develop, to be part of a team, and to pursue career development, regardless of their experience or skill levels. I’ve seen many forms of sales incentives, including cash bonuses, recognition, gifts, trips, or time off.
Whatever form the sales incentive plan takes, it should help you to keep our sales team motivated and engaged on an ongoing basis, and if handled properly, will not ruffle too many feathers among support staff.
If you want more tips on leveraging an effective sales incentive plan check out my free compensation ebook, Compensation Compass or call me at (612) 267-3320 today.
Also, there are two more days to take advantage of the offer for Business Expert Guide to Small Business Success. Purchase the book by Dec. 16th and you’ll receive bonuses worth thousands of dollars. In this book, I teamed up with 20 other small business experts to give you the know-how of how to make your business thrive. Get more information here.
How to Set Realistic Sales Quotas in a Sales Compensation Plan
Sales quotas in an updated or new sales compensation plan have multiple benefits. First, they act as motivation and step-by-step guides to goal achievement for the sales team. They also offer a means of measurement so both the team and sales managers can keep track of progress, or lack of it. These measurements are vital to the success of your sales strategy and important information in terms of keeping the right staff on board.
But good sales quotas are also in place because as a sales manager, you must base your budgets on the sales revenue. This is a critical, non-negotiable number.
So when setting sales quotas, it’s vital that you set realistic goals for the sales team. Here are a few tips I’ve learned over the years in terms of setting and maintaining realistic sales quotas.
- Make sure your quotas are high enough so they are profitable to your company but still realistic for your sales reps to accomplish.
- Set the rewards for meeting your sales quotas high enough that sales reps will push themselves and work hard to meet goals.
- Keep your sales quota period short so that goals are measurable on a regular basis.
- Evaluate your sales quotas on a regular schedule so you can make adjustments or answer questions and concerns as needed.
With these steps, you should be able to establish sales quotas that are realistic while still effective at motivating your sales staff and helping you meet your revenue goals.
Read more about setting realistic sales quotas by getting my complimentary sales compensation eBook, Compensation Compass, now.
P. S. – When you purchase the book I co-authored, Business Expert Guide to Small Business Success, between December 14-16 you get bonuses worth thousands of dollars. Check out this great deal here.
Avoiding the Negative Effect of Sales Quotas in a Sales Compensation Plan
I’ve found that establishing a new sales quota as part of a new or updated sales compensation plan is an excellent idea. As you roll out your new sales compensation program, having effective and motivating sales quotas will help ensure your sales team reaches their goals and you reach your target margins.
Unfortunately, introducing new sales quotas isn’t always easy. You may find that some members of your sales team will have a difficult time accepting the new guidelines and goals. To help ease the pain of change among your sales staff, try to position your sales quotas as a part of what the company is doing to help them each achieve their personal sales goals.
In addition to positive positioning, you can also ensure an easier transition by creating sales quotas that are realistic to your sales team. Quotas that seem unachievable are de-motivating to sales reps, causing them to feel discouraged or even defeated before they even pick up the phone to the first prospect. On the flip side, when you set sales quotas too low your sales staff will easily exceed the goals and your budget will be blown.
If your new sales quotas are significantly different than the previous quotas, make a point to clearly communicate the details of the sales strategy with your sales team. Lay out the activities that are required for each individual to reach their goals. Don’t be afraid to trust your salespeople with information that will help them get on board with your strategic goals.
You should walk away from team and individual meetings feeling that each member of the team believes they can meet their goals and understands what is expected of them. As you implement the new sales quotas, keep the team informed of progress on a regular basis and watch them adjust to new goals with ease.
Need more information on how to set up effective sales quotas in your sales compensation design? Get my sales compensation eBook now.
Setting Realistic Sales Quotas in a Sales Compensation Plan
Assigning sales quotas as part of an updated or new sales compensation plan doesn’t have to be as difficult as people make it out to be. I’ve seen people get way too nervous about this process. It’s really quite simple, as long as you do your homework.
The basic idea is to assign sales quotas based on two major factors: historical sales and the responsibilities of each salesperson. First, you should take a look at the salesperson’s historical sales over the last two years’ revenue. Do they have a history of consistent strong numbers or do their results fluctuate depending on their state of mind, the changing times of year, changes in staff or policy, or other factors? This is important to consider so that you set quotas that are attainable while motivating the salesperson to perform at their highest level all the time.
Next, look at the responsibilities of the salesperson. Each person has a different role on the sales team, requiring different skill sets, training, and experience levels. One person may be more of a hunter, out full time on the front lines, while another sales rep may split their time between bringing in new business and managing accounts. The quotas for these two individuals should be different.
In addition, a salesperson’s territories may affect their numbers, and should therefore impact their sales quotas. A territory analysis will shed some light on the variations among territories that should impact sales quota levels.
I suggest that you meet with your sales team and discuss their expectations before you roll out new quotas. Afterwards, pull each one aside individually and discuss monthly, quarterly, and yearly goals. How can you set quotas to help them meet or exceed their goals?
Need more tips on setting sales quotas for your team? Get my free compensation ebook now!
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