In this episode Marina Ruiz (@marina_ruiz) shares her expertise and experience using social media to improve her sales, prospecting, and value proposition. Her insights are practical and her point-of-view is dynamic. Enjoy the interview!
In this episode Marina Ruiz (@marina_ruiz) shares her expertise and experience using social media to improve her sales, prospecting, and value proposition. Her insights are practical and her point-of-view is dynamic. Enjoy the interview!
“It’s not a proxy of your seriousness that you’ve filled every minute in your schedule.” –Bill Gates
“I need to get out of the weeds,” the salesman said. His manager nodded in agreement. “I’m spending all of this time doing my job and it’s starting to eat in to my personal life. We have a child and another one on the way and I want to be there for them.”
I think that most salespeople have felt this way. You might be feeling this way right now. Long days, plenty of meetings, putting out fires, building proposals, following up on emails or voice mails or text messages. Too much wind shield time. Then there’s everything that didn’t get done that still has to get done. So you come home from work, maybe hit the gym or make time for the family, and then get back to the laptop because you have to update the CRM or answer all of the emails that you weren’t able to answer during the normal day. Repeat until burnout.
Too many salespeople have convinced themselves that busy and productive are synonyms. What the hell happened to us? Did we all see too many pictures of Gary Vaynerchuck pretending to martyr himself while sleeping in an airport or read too many Elon Musk tweets about a 20 hour work day? It’s time to get out of the weeds by focusing on high-gain/low effort activities, systems, and technologies that can help improve your quality of life and your sales results.
Spending time with low-gain accounts will put you in the weeds. They can be just as demanding as a high-gain account but yield little, if any, gain. Focusing on high-gain/low-effort account activities will de-leverage your time while allowing you to re-direct your energy on the best projects. Consider the following:
Which quadrant would you like to be in most of the time? Hint: Upper right. If you’re in the weeds where do you spend too much time and energy? Bottom left. Are you spending time with accounts that demand a huge amount of your effort and don’t buy very much of your product? Do you spend an inordinate amount of time with accounts who are openly disloyal (but one day, trust me, they’ll come on board)? Do you spend too much time with accounts who have expressed no interest in legitimately partnering with you while demonstrating that partnership in the form of new sales? The list goes on.
Here’s a test. Look at your last month of scheduled appointments. Put a check mark in one of the 4 quadrant field for each meeting. Notice any imbalances or patterns? If you’re in the weeds then you’re probably putting more check marks in the low-gain/high-effort or low-gain/low-effort boxes. Compare the time you spent with these accounts as well as the money you made from these accounts. Was it worth it? Could you have delivered better service and made more money by spending more time with your high-growth/low-effort accounts? If you have 50 accounts and you generate most of your income from 10 of them then what would happen to your quality of life and income if you spent significantly more time delivering value with The 10 and significantly less time with the low-value accounts? The hard-won loyalty you have with your best accounts can be amplified if you create the time to over-serve them.
You have to trust your systems, however imperfect. Getting out of the weeds means learning to use your systems and support network. Your inside sales team, your counter representatives, your branch managers are there to help you and you’re there to help them. But you have to trust them. That trust has to move in both directions. If you don’t trust your systems you’ll never be completely out of the weeds. “But they’ve messed stuff up” or “They screwed up an order and I had to deal with it.” And so have you! Sales is an imperfect science. Learning and improvement are happening with every transaction. If your company is culturally committed to systemic improvement then you have to learn to trust and use your systems. Luddites will eventually work themselves out of the organization. The idea of sitting in a Starbucks hammering out an order because you believe that you’re the only one that can do it right is the recipe for obsolescence. Learn to trust your systems, communicate with your accounts that these systems are in place to help them, and let the systems do their jobs. I know I’m asking you to give a sacred cow but it’s another way to create the time needed to focus on high-gain/low-effort activities.
Learn to manage your territory using technologies. It makes more sense to record a weekly Zoom that you can distribute to your low-gain accounts than it does to chase down a low-gain meeting. Investing in a newsletter service will help you share all of the general up-dates with your company. Write it, schedule it, and move on to high-gain work. They’ll all receive the same information at once and you can follow up with phone calls if you feel the need. Apps can also help you reach your entire territory at once. The Superphone app, for example, helps you organize your contact list for text-based marketing. Use it for promotions, product updates, trainings, announcements. Let your smart phone do the work. If you’re using face-to-face visits to share information that can be quickly broadcasted then it’s time to re-consider the value of your time and the quality of your meeting content.
Your customers give you feedback every day in the form of purchases. It’s frustrating to look at your sales numbers for the day and think ‘I was so busy today yet I missed my number.’ It’s also frustrating to look at your to-do list and realize that a lot of the effort you’re going to spend shoring it up will be spent on clients who aren’t rewarding you proportionally. But you’ll do it–another long night and/or another early morning.
Time goes by my friends. Protect your time. Be stingy with it. Discipline yourself to spend most of your time with a handful of high-gain accounts and much less time with low-gain accounts. I doubt your sales manager will object to that. Trust your systems. For some people that means setting their ego aside. Finally, learn to use technologies to help you share information on a broader scale at a significantly reduced effort.
“People don’t read ads. They read things that interest them. Sometimes that’s an ad.” — Howard Luck Gossage
“The only advertising that people truly trust is a peer-to-peer recommendation.” — Alex Bogusky
My flight from Spokane to Seattle arrived on time. Unfortunately another plane was at our assigned gate and it was departing late. My 30 minute layover was quickly turning in to a sprint from one end of the airport to the other. If I missed the flight from Seattle to Atlanta the week was going to go off of the rails. When we finally reached the gate I had 15 minutes left. If you’ve been in that situation then you know the feeling.
I charged out of the plane and there’s this guy. He’s the other dude in the picture. He was smiling, wearing a Delta uniform, holding a tablet with my last name on it: Plughoff. “That’s me” (neurotic sub-text: is something wrong, is my daughter ok, is my wife safe, did something disastrous happen?) He shook my hand. “Mr. Plughoff, my name is Thomas and I’d like to escort you to your next gate.” Please bear in mind, this sort of thing had never happened to me. I fly a lot and usually suffer the stresses like everyone else. This changed everything.
Thomas opened a side door on the gangway. A metal rolling staircase led down to the tarmac. A white Porsche was at the bottom of the stairs. Thomas said, “If you’ll come with me I’ll drive you to your next flight and you’re already checked in.” A minute later we were speeding across the busy runway, from one end of the airport to the other. It was unbelievable. I might have welled up a little bit. Thomas continued, “We watch our frequent flyers and if there’s a tight connection we help them so they don’t miss the connection.” “Why?” I asked. Why would you do this? It defies every negative association with flying. Too personal. Too, too, thoughtful. “It’s our way of saying thanks,” he said. He walked up the stairs to the departing flight, opened the door for me, and once again thanked me for flying Delta. Every stress, frustration, ire–was immediately replaced with gratitude. It was the first thing I shared with someone when I reached my destination.
Every business owner I know thinks about effective advertising, on-life, off-line, all the time. They’re advised to allocate thousands (in some cases millions) of dollars to make the phone ring–hoping that the investment will generate enough cold leads to keep the machine running. They pay for clicks, calls, impressions. None of which are uniquely persuasive. Nor warm. To which I’d say this: I’m one guy. But the Delta experience has generated at least 150 peer-to-peer referrals. Many of the people I’ve told this story to are also frequency flyers. Instead of spending all sorts of money in order to generate cold leads why don’t more companies learn what Delta knows: There are quietly loyal customers that will become happily loud advocates if the experience is elevated, if the engagement is personal, if they know you beyond a membership number, and if they make an ordinarily stressful process extraordinarily enjoyably. A company that is culturally dedicated to delighting customers doesn’t need to spend as much money generating cold leads. Thrilled customers will gladly pay it forward.
This was a fantastic conversation and I’m looking forward to round two with Paul Redman. Paul’s experience in the HVAC industry and the digital space gives him a practical and informed perspective. Ryno Strategic Solutions promotes transparency, industry specific talent, and results. If you’re looking for a trustworthy friend in the digital space you can find Paul at http://www.rynoss.com. He’s the real deal. Enjoy the episode!
If you’re enjoying these podcasts I’d sincerely appreciate a review or rating on iTunes. Thanks a million.
I’ve been waiting a long time to interview Fred Nichols. Fred is not only a rock solid guy but an extremely well-rounded professional. Fred is the Sales Manager for an incredibly successful company in Southerm California. In this episode he shares his experience and tactics used to find, motivate, and drive an exceptional sales team. Tons of smart lessons and best practices included. Thanks for listening!
If you’re enjoying these podcasts please rate or review The Thank You Note Podcast on iTunes. Many thanks, Matt
I quit Twitter last week. There’s just too much “sound and fury, signifying nothing.” Facebook. Pinterest. Snapchat. It’s all tetched. Social media was going to evolve in to a force for good. It was our shiny new toy. Now, however, the platforms have found their nadir.
Remember when you’d sit at a dealer meeting and listen to a social media expert/guru/ninja/rockstar/revolutionary? What happened to those silicone promises? Leads!. Loyalty!. Brand Strength!. Now, pictures of Dorsey meditating in Myanmar illustrate the hypocrisy. Facebook has experienced a similar self-inflicted decline in user engagement. Forbes insight is as follows:
Engagement has fallen below 1% across segments. 1%. Think about the money and time that people ask you to spend on social media.
The knee-jerk response that you’ll likely hear from a Ninja is that your content strategy is weak. Your spend is insufficient. Double down. Yet these Insurgents apply generic campaigns, stock image, and predictable content among their clients. They sell parity and tell you it’ll work.
The uncomfortable reality is that social media agencies often used the same canned content for the lion’s share of their clients. This content squarely falls in to what David Ogilvy once described as “The Valley of Distrust.”
Unless you decide to design and control your unique content it is time to say goodbye to social media as a lead source. Don’t outsource it. Cut out the middle man. Engagement levels are so low that it’s nearly irrational to pay for an agency. If given a choice what you rather have:
100 Likes or 1 loyal customer?
My dad told me a story about doing business before the internet. He explained that his secret to winning business was not based on algorithms but in taking notes. His client files were filled with notes, observations, records of conversations, dates and times and locations from meetings. His client’s names, interests, goals, pastimes, hobbies, concerns. These were all recorded in what he calls “bankers files.” That was his CRM. That was how he stayed connected with people: by actually getting to know them and care about them. When I asked him how he grew a one branch farm bank in to a multi-branch success story he said, “One farmer at a time.” He visited every farmer in every town, introduced himself, got to know them and over time became their financial partner. He prioritized “social” over “network” and the “human” before “resources.”
I’m not trying to get sappy or overly nostalgic. I am simply suggesting that we assess the return on engagement regarding social media. Has it generated a truly loyal customer base as evidenced by referrals and increased top/bottom line growth? Has it lessened our dependence on other lead sources? Is there a reasonable return on time spent? Has it resulted in differentiation? Has it created an on-going customer conversation among the followers? If not then why devote the time, energy, and resources required to sustain it?
Small businesses are better served by a smaller group of highly loyal customers that grant access to their networks based on personal service. I believe that the future of small business is better built on 1:1 relationships.
PS–Results based on traditional SEO/M will crumble as conversational search surges.
A friend of mine has been trying to set a meeting with a prospect. After the initial communication the prospect replied:
Just checked you out on line. I have had discussions in the past with your representatives. We are a Factory Authorized Carrier Dealer and do not have any intentions of switching or carrying a “second” line. I always enjoy meeting people, however I do not believe our meeting would be productive. If I ever become frustrated with Carrier, I know where to find youThanksD________
“Everything we teach should be different from machines. If we do not change the way we teach, 30 years from now we will be in trouble.” — Jack Ma
Jack Ma, the co-founder of The Alibaba Group, was referring to education in the broadest sense but his point is spot on. Trying to imitate or duplicate machine learning is a losing battle. For many of my friends and clients this poses an existential problem. The solution is embedded in Ma’s observation: An individual, company, or team must master the skills and attitudes that machines can’t: Building and nurturing human connections, loving the process of innovation, learning to use our imaginations, and appreciating the power of inclusion and cooperation.
While the paramount objective of a machine is to complete a task, the paramount objective of a business is to enhance human well-being in economically efficient ways. The richness of the customer experience is the most constructive way to out maneuver artificial incursions. This experience thrives within the firm, with people who earnestly enjoy serving other people. The ways in which they learn and creatively customize their products and services, the ways that they invite participation in an interactive process. Most important to long term sustainability, the ways in which they send the right message: “Welcome to our family, and we’re grateful that you’re here.” Business’ should optimize for customer loyalty instead of customer transactions.
Let’s continue to rethink attitudes about how we treat people. Business labels tell us that people are human resources first, and humans second. Serving customers isn’t a race to an undetermined finished line, another call in the queue, another lead on another dashboard (doesn’t the name itself imply ‘Go fast’?), another inspiration-murdering KPI completed. Instead, help them learn to listen to customers deeply in order to understand and appreciate them. Empathy cannot be mechanized. Machines will never replace a warm hand shake or an incandescent smile or a joyful laugh. In other words, customers cannot be seen simply as end-users. In other words:
A business that fails to make people, communities, and society durably better also fails to create meaningful payoffs that matter in human terms, not just financial ones.
Matthew Tyner (@MatthewTyner) is the Vice President of Marketing for Valve + Meter (www.valveandmeter.com). In this episode he answers important questions about doing business in the digital world: What does a winning digital campaign look like? How should home service business owners allocate funds for their on-line presence? Which digital media are delivering the best returns? And many, many more. This is Matt’s second interview and his expertise is on par with the best. Enjoy!
I recently listened to a human resource manager restructure the compensation plan for a group of salespeople. “Sounds like I’m going to make less money next year,” someone said. I watched the two top salesmen dust off their invisible resumes. I’ve seen owners use everything from Apple watches to vacations in an attempt to improve sales performance. Many owners and sales managers feel that salespeople thrive under straight commission compensation plans. Most of this, however, is a combination of collective wisdom and “hey how do you pay your guys?” conversations. Over the last 30 years, however, a great deal of mathematical and behavioral economic analysis has contributed quantifiable recommendations as to which compensation plan most effectively improves a firm’s profitability while reducing the uncertainties and asymmetries influencing the effort.
I have read and relied heavily on a number of expert sources for this blog:
Salesforce Compensation Plans: An Agency Theoretic Perspective; Basu, Lal, Srinivisan
A Study of a Class of Simple Compensation Plans; Basu, Kalyanaram
Optimal Incentive Plans with Imperfect Information; Grossman
Salesforce Compensation: An Empirical Investigation of Factors Affecting the Use of Salary versus Incentive Compensation; John, Weitz
I recommend all of these for anyone interested in further research.
Compensation plans don’t exist in a vacuum. There are variables involved in developing a compensation plan that need to be considered:
Compensation plans must also account for various internal uncertainties effecting a salesperson’s effort. Marketing, for example, is an uncertainty. Is the firm’s marketing plan on-going, sporadic, promotional? Are competitive marketing efforts more robust? Does the firm allocate sufficient funds in order to generate consistent opportunities for salespeople? Do selling technicians impact opportunities? Is there a lack of transparency between the sales manager and the sales team? These and other variables should be considered as the compensation plan has a specific goal: Maximize a firm’s profit. Considering external and internal uncertainties, owners and managers then determine the compensation plan.
There are four fundamental types of compensation and incentive plans:
Straight salary compensation plans are best applied when the selling effort involves a team. Straight salary compensation plans appeal to security oriented individuals rather than achievement oriented individuals. And while straight salary compensation plans are easy to administer there is a drawback. This type of compensation plan results in “the total inability on the owner or sales manager’s behalf to provide the strong motivation that induces high performance” (Basu 1985). I’ve worked with firms that relied on a straight salary commission plan. The salespeople were happy, the owner believed that every employee deserved stability, and that sales people would do the right things for these reasons. He was correct in his thinking on the first two outcomes. Less so on the final outcome–specifically pertaining to new business results.
Straight commission compensation plans are perceived to be fair. Over a period of time good performers are rewarded while poor performers are discouraged. But there are limitations to straight commission compensation plans in both B2B and B2C settings. Salespeople will be hesitant to spend much effort on opening new accounts, administrative duties or other activities perceived to be not financially rewarding (John, Weitz). In B2B selling this is evident in insufficient prospecting activities that are not viewed as a priority because they don’t reward the salesperson. In B2C selling this often results in poorly assembled job packets, a lack of customer follow-up, and lackluster reporting efforts on the part of the salesperson. Finally, straight commission plans are unstable. Market uncertainties, inconsistent marketing efforts, economic or seasonal shifts, and aggressive competitive tactics challenge risk-averse salespeople with financial uncertainties.
Contests are a form of compensation. Contests, games, and rewards are intended to raise a salesperson’s effort for a short period of time. Contests are also used among field teams for the same reason. Unfortunately this type of compensation has a flaw: the best salespeople typically win while the lesser salespeople fail to improve their effort or, worse yet, slacken their efforts.
Ala Carte compensation plans allow salespeople to select a compensation plan that satisfies their risk tolerance. Highly risk averse salespeople are likely select a salary while risk tolerant salespeople are likely to select a straight commission based compensation plan (Gonik 1971). I’d like to point out that this this conclusion preceded current Agency Theory research. I work with a company using this compensation model. It accomplishes the goal of meeting individual requirements. It does not result in a consistent effort across the sales team. This model also results in an element of unfairness as salary based salespeople are less impacted by market variables while maintaining an income while others are susceptible to inconsistencies.
In theory the compensation plan that best protects a firm’s profit is one in which a salesperson is guaranteed a salary only when the firm’s profit goal is met and a commission only when the firm’s goals are exceeded. If the goals are not met the salesperson does not receive any compensation (Grossman). In reality, however, there are obvious problems. Firm’s who are profitable some months and not profitable during others risk losing salespeople to competitive offers.
The compensation plan that is most accepted combines a salary and a commission. However, the salary and the commission rates must be based on a realistic assessment of the role that a salesperson plays in the sales cycle. Should the salary be higher or lower? Should the commission rate be higher or lower? Basu and Kalyanaram recommend the following considerations when determining a salary:
For example, a salesperson’s salary should be lower if their “personal skills in making sales” is “considerable” and the salary should be higher if their personal skills only slightly contribute to the sale. In the trades, a market in which product parity is widespread, the salesperson’s salary should be lower. If the salesperson’s product has a distinct advantage over competitive products then the salary should be higher and the commission should be lower. If there are important factors beyond the control of the salesperson’s influence then the salary should be “slight.” This is important in that revenue producers play a significant role in the firm’s net profitability. As well as determining the current salary level given the above variables, owners must also determine the correct commission levels.
Sliding scale commission rates are less effective that fixed rates (John, Weitz). Consider product mix, for example. Risk averse salespeople are more likely to sell less profitable projects despite the fact that their commissions increase with higher margin product sales. They reduce their effort accordingly (“something is better than nothing”). In turn, this makes it more difficult for the firm makes less money. In the trades we see this in a consistently imbalanced unitary mix. Sliding scale commission rates are also more difficult to administer. Fixed rate commissions based on net profit provide the truest compensation for effort.
Commissions based on gross profit are less effective than commissions based on net profit. This is particularly true in B2C sales. Gross profit commission plans relieve the salesperson from accountability regarding application errors, parts and material omissions, labor overage caused by hasty or poor planning. In other words, the salesperson is paid regardless of any intentional or unintentional oversights. Owners and sales managers then have to determine any deductions, communicate these deductions, and negatively impact the risk averse salesperson’s future effort.
Owners and sales managers should determine the appropriate salary level as well as a fixed commission rate based on net profit.
Risk averse salespeople want security and stability. Compensation plans must be easy to understand. I often ask salespeople how they are paid and I often hear: “I really couldn’t tell you.” The goal of a compensation plan is to maximize a firm’s profit given the salesperson’s effort. This effort is best ensured when the salesperson understands how he is paid and therefore how he should best exert himself.
Zig Ziglar was quoted as saying “Timid salespeople have skinny kids.” He’s only partially correct. Is the firm providing sufficient selling opportunities? Does the firm invest in training? Are market conditions uncertain? Does the firm respond to competitive adjustments proactively or reactively? Is the salesperson the right fit for the job? And if he is then is the compensation plan creating the right results? A firm’s sales compensation plan should maximize profit while reducing as much uncertainty as possible. Yet many owners and sales managers determine a compensation plan through arbitrary methods and then wonder why the team isn’t performing at or above expectations. Why won’t they sell more high-efficiency products? Why won’t they sell more accessories? Why does salesperson X always make layout related mistakes while salesperson Y acts like a project manager? Why won’t salespeople spend more time prospecting? Why do salespeople stick around for just enough time to find a better job? The mathematical and behavioral economics suggest that the right compensation plan will significantly reduce these uncertainties while extracting the right efforts from risk averse salespeople.