Category Archives: Sales leadership

The Modern Sales Force: Too Male to Fail

Companies vanquish competitors by having superior products, and by providing outstanding buyer experiences. But a company I worked for in the 1980’s had neither, and still won a key deal. Through pure serendipity, a competing salesman committed a mistake by assuming a buyer he was working with did not have authority to make a purchase. His assumption backfired, miserably.

The account was a large, family-owned retail lumber company near Washington, DC. The company needed a distributed IT system, with a full suite of integrated accounting, sales, and distribution software. A purchase worth well over $100,000. “We were almost ready to sign the order. But their salesman regarded me as just a secretary, and that basically, I wasn’t worth his time,” the buyer later told me. “That ended it. I wouldn’t meet with him again.”

In fact, the buyer, a woman named Georgie, managed the lumberyard, and there was a reason she was in charge of this purchase: she knew the company’s ins and outs – down to the tiniest nail and shortest 2×4 – better than anyone. The CEO fully entrusted this all-important purchase to his soft-spoken employee, who wasn’t ensconced with an impressive job title.

The competitor’s arrogance cost him more than this sale. While it provided my company an immediate opportunity to win the order and to assuage the buyer’s pain, we reaped large revenue dividends later when Georgie became a steady advocate, nudging prospects to buy through recounting many happy experiences as a customer.

In the 1980’s, it was rare to find women running operations at a retail lumber yard. Men predominated in management. And those men hired more men to work for them. Underlings who operated forklifts and supervised millwork production before moving into higher-paying sales positions. Eventually, they changed jobs, hopping from retailer to supplier, from supplier to supplier, and from supplier back to retailer. Lumber, doors, windows, roof trusses, construction hardware, and supplies. Call it industry incest: everyone knew everyone. Coddled in professional comfort, men – most of them white – sold to the same demographic. Against that backdrop, a woman-in-charge at a lumberyard spelled doom for the clumsy competitor. Had he been female, would the outcome have been different? In the same situation, would a saleswoman have brought a nuanced perspective – in this case, one less dismissive and more empathetic?

Those questions bubble at the center of a recent firestorm in which Sam’s Club CEO Rosalind Brewer answered a question during an interview with CNN’s Poppy Harlow, who asked, “You are a rarity in the corner office in America, and it is something that so many people want to see change. Not only are you a female CEO, you’re a minority CEO. Where do you fall on who has to make the change and how is it going to happen so that there are more women like you represented in the top echelons of corporate America?”

Ms. Brewer shared that she encourages diversity not only with her staff, but with her business partners. “My executive team is very diverse, and I make that a priority. Every now and then you have to nudge your partners. You have to speak up and speak out. And I try to use my platform for that. I try to set an example,” she said, adding, “Just today we met with a supplier, and the entire other side of the table was all Caucasian males. That was interesting. I decided not to talk about it directly with [the supplier’s] folks in the room because there were actually no females, like, levels down. So I’m going to place a call to him.”

When the interview aired, social media exploded with ardent support for Ms. Brewer, along with vociferous complaint. Some customers used the hashtag, #BoycottRacistSamsClub, accusing Brewer of racism toward white men. (Should those customers defect to rival Costco, they won’t find any different attitude. Costco has an equally-firm policy regarding diversity.) Walmart, which owns Sam’s Club, weighed in with a statement from CEO Doug McMillon. “For years, we’ve asked our suppliers to prioritize the talent and diversity of their sales teams calling on our company,” he wrote. “Roz was simply trying to reiterate that we believe diverse and inclusive teams make for a stronger business. That’s all there is to it, and I support that important ideal.”

Sales managers should heed his message. In nearly every industry today, salespeople can regularly expect to find women managing a major purchase, or participating on a buying committee. Not to mention finding people of many races and ethnicities. So cavalierly marching in a group of white salesmen to talk with them might not be considered the best marketing tactic. “Having a more eclectic workforce, and thus a greater range of perspectives, is actually a very promising way to make money. Prioritizing diversity is not just compatible with maximizing profits; it may be the key to doing so,” Catherine Rampell wrote in The Washington Post (Yes, Corporate America: Diversity Pays, July 31, 2015).

The diversity problem extends beyond sales forces into the constellation of service providers that support them. “Tech companies are experiencing growing pressure to diversify their workforce which is predominantly white, Asian, and male,” according to an article in Forbes, Lack of Diversity in Tech is a Cultural Issue (August 12, 2015). That includes CRM systems, where the Chief Technology Officer’s worldview and problem-solving approaches are deeply etched into the processes that govern a large portion of the world’s customer relationships.

Large sales training companies suffer from a similar problem: a preponderance of men in senior leadership positions. In a group of sales training organizations listed on a training industry website, I found only two out of 20 that had women CEO’s.

These realities portend the stubborn persistence of sales calls like the one Ms. Brewer described in her CNN interview.

Lazy, Uncoachable Sales Rep Produces Record Revenue

Search for the phrase top attributes in sales performers, and you will get about 400,000 results. A harvest that includes blogs, magazine articles, research studies, and white papers. Many of them describing archetypal qualities similar to ones that Kendra Lee, a sales author and strategist, posited in an article, 5 Telltale Signs of All-Star IT Salespeople: work ethic, effort, coachability, sales intelligence, and problem solving.

Hard to argue with that list. If you subtract sales from sales intelligence, you get a set of desirables for every occupation. Try it with me! I swapped out IT Salespeople for dentist, lumberjack, and talk show host. Yep, yep, and yep. These are telltale signs for All-stars, alright.

But another list, Key Qualities of a Great Salesperson, by Flip Flippen, offers an entirely different set: driven, confident, outgoing, assertive, funny, structured, relational, and focused.

These attributes don’t have the universality of Lee’s list. That’s a plus. A competent lumberjack does not need to be relational, except when a heavy branch is about to land on a co-worker. A talented dentist does not have to be funny. Better, actually, when he or she isn’t. If you’re seeking the skills toolbox that predicts whether a rep can “just crush it,” maybe Flippen’s list brings us closer to that nirvana.

But why is funny important for a salesperson, and why does it receive mention over other essentials, like honesty and empathy, which are absent from Lee’s list as well? I can offer no answers, other than it leaves room for future iterations.

Lee had five success attributes, and Flippen had eight. What did others think? Once again, my interrogative journey spiraled to new heights. Tweaking my search, I discovered sets of attributes with as few as three, but topping out at eighteen. Eighteen! Some were from well-known thought leaders like Brian Tracy, others from people less famous. A random sampling of articles, listed in ascending order of the number of essential traits needed in top sales producers:

3 traits
5 traits
6 traits
7 traits
8 traits
10 traits
12 traits
13 traits
14 traits
18 traits

Hiding behind these superficial views of success are serious logical distortions. If putative success attributes explain rep achievement, what explains reps who succeed despite having some – or none – of these qualities? What explains reps who have these qualities, but don’t succeed? And what explains reps who have roller-coaster revenue results – sky high one year, and deep in the tank the next? Surely their skills did not spike and recede in tandem.

People are wired to identify patterns even where they don’t exist, creating what author Nassim Taleb describes in his book, Fooled by Randomness, as hindsight bias. According to Taleb, “past events will always look less random than they were,” a rampant myopia that infects marketing and sales. Example: Tomas just closed a big sale. We retroactively call out the positive reasons, carefully enumerating the salient elements of his “skillset.” The opposite for the deal he lost. We explain, point by point, what makes him a buffoon. If you’ve never experienced this, please enter a comment below (caveat: you must have worked in a sales organization for sixty days or longer).

Three elements play huge roles for determining a sales rep’s success – a quality frequently conveyed through a simplistic, over-used numerical proxy called percent-of-goal:

1. Luck. People need to “take knowledge less seriously,” Taleb writes at the outset of his book. “The role of luck [in outcomes] is something that few people understand, but many think they understand.” Hence the breadth of opinion on what portends a sales rep’s success.

2. Corporate strategy. Which rep is likelier to make goal – an average one working for a company executing a great strategy with great products? Or an excellent one struggling with feckless leadership and failed marketing? I’m betting on the average rep. “All we really had to do was answer the phone!” an account executive who sold DEC VAX’s in the 1980’s once told me.

3. Quotas. The denominator of the percent-of-goal metric that every executive wants to know, but few bother to investigate. How was the number derived? Many quotas are created without mathematical or logical rigor – only a simple parsing of the corporate revenue goal onto individual revenue producers. A mediocre rep who achieved 140% of a low quota will always appear more skilled than a great rep who achieved 88% of a goal that she didn’t have a snowball’s chance of making. When the 140% achiever was lauded at the annual kickoff, which “success attributes” were mentioned? Most assuredly, someone voiced an opinion.

“We need to purge our minds of the notion of intellectual certainties,” Taleb writes. Do attributes like intelligence, work ethic, tenacity and focus contribute to positive sales outcomes? Probably. The same for good personal hygiene, punctuality, eye contact, and a firm handshake. But contribute and causality are not the same. People would laugh if I said that popping a breath mint before the contract was signed caused me to win the deal. But they wouldn’t be disturbed if, ex-post-facto, “tenacity” was pinpointed a causal factor.

An opportune time to question an idea is when it appears glaringly obvious. For example, a strong work ethic seems a reliable progenitor for sales success, but some argue that it causes people to get mired in detail, to lose creativity, and to miss big-picture problems. A situation no company would want for a sales rep.

Be skeptical about what others profess as causal in sales success. A lazy, un-coachable rep who produces record revenue might not be the anomaly people think it to be.

Swanluv’s Customer Letdown Underscores Why Companies Must Begin with a Good Premise – And an Honest Promise

The Business Model Canvas, or BMC, helps entrepreneurs take those first wobbly, bug-eyed steps toward being a company. It helps them get past giddiness over EBE – Earnings Before Expenses – and to think pragmatically. That means learning to sell profitably and to grow revenue – skills that are almost never innate.

The company that developed the BMC, Strategyzer, describes it as “a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model.” The BMC has nine components, represented in an organized array of stacked boxes of different dimensions: Key partners, Key activities, Key resources, Value proposition, Customer relationships, Channels, Customer segments, Cost structure, and Revenue streams. Don’t yawn. This is solid, nuts-and-bolts MBA stuff.

The BMC has worked well for me, and I like using it for young and sassy clients. Startups can be fraught with frenetic ideation, and this nifty schema keeps everyone on the same page – or canvas. And when the caffeine is abundant, energy is high, and conversations are flowing like the Spring flood, just using the name, Business Model Canvas, brings gravitas and focus into the meeting room. That alone makes this tool extraordinarily valuable. The BMC allows plan-tweaking and reshaping, while its reassuring structure reminds entrepreneurs that every great idea must be coordinated elsewhere on the canvas.

In the BMC, there’s a place for everything, and everything in its place. Well, almost. Wonderful as it is, the BMC has a hideous weakness: it can’t stop a horrible premise. Simply adding a tenth box to accommodate Premise would ameliorate the Achilles heel on an otherwise capable model. A recent controversy involving a Seattle-based startup, SwanLuv, poignantly reminds us why an ethical, well-intentioned premise matters before jumping full-bore into launching a company.

In December, 2015, SwanLuv promised aspiring newlyweds the opportunity to have a dream wedding. The value proposition, as entrepreneurs like to say, was that SwanLuv would fund up to $10,000 toward the nuptial celebration – a hefty chunk of G’s toward the $31,213 average cost of a wedding. Giving people what they want seems a reasonable litmus test for a nascent business idea. And Want, they did. The capital W is not a typo.

The fine print? “If your union crumbles, at six months or 25 years, you must pay [SwanLuv] back — with interest,” according to a December, 2015 article in The Washington Post, This Startup Bets $10,000 that Your Marriage Will End Badly. In essence, the business model required “someone’s breakup would fund someone else’s future nuptials.” And SwanLuv had up to 25 years to claw back the money! How’s that for a start-up premise? As Scott Avy, Founder and CEO of SwanLuv described it, “we’re a casino for marriage.” Possibly the most honest elevator statement I’ve ever seen. But I question whether Avy could stomach looking in a mirror as he honed it to five words.

SwanLuv’s concept spread across social media like wildfire, and Avy rode the publicity wave. On talk shows, he crowed about receiving “hundreds of emails telling me how meaningful this is.” Then, not even 60 days after The Washington Post article published, SwanLuv’s offer imploded. On Monday, February 15, 2016, SwanLuv announced that “actually, no – it would not pay for a single ceremony. Instead, it would let friends and relatives pay for it, providing a crowdfunding platform similar to GoFundMe,” The Post reported in a follow-on article (A Website Offered to Pay for Weddings. Then It Came Time to Write the Check).

In a 2016 version of Qu’ils mangent de la brioche (Let them eat cake!), Avy explained away SwanLuv’s policy change as “adjusting our funding pattern.” In a statement, he wrote, “Due to overwhelming demand (nearly $2 billion at $10,000 per couple) and unanticipated legal regulations/restrictions in the lending space, rather than pull out, we came up with a tool we believe still helps couples with their wedding financing.” This entrepreneur could certainly benefit from a webinar on compassion.

Not surprisingly, SwanLuv’s Facebook page, which had accumulated more than 20,000 Likes since December, 2015, reflected wrath from those who had entrusted the company with their dreams. Many comments are painful to read:

“They should be ashamed of giving couples hope and dashing them to pieces. Hope this company goes down the tubes.”

And,

“I only have 4 months left until the wedding and we can’t afford ANYTHING.”

Here, I humbly disagree with Oscar Wilde, who said, “the only thing worse than being talked about is not being talked about.” In this situation, I’d much rather not be talked about.

One SwanLuv victim, Precious Pruner, posted a tearful 7:30 video on YouTube. “I was hoping to use some of the money to pay for my mother and three little brothers to fly to Michigan for my wedding,” reads one of the notes under her video. Her post has received a paltry 438 views (as of March 8, 2016), but watching this video should be mandatory for every startup team. It should be required in the curriculum for every college entrepreneurship program, and in every startup incubator. The message: a bad business premise can create tragedy. So, entrepreneurs: Put away your spreadsheets, flowcharts, cash-flow projections, and marketing automation plans for a moment. Stop, and listen to a real-life person describing what a misguided business premise, once executed, means to her. Something to think about before skipping over Premise, and diving into Value Proposition. It doesn’t matter which planning tool you use.

Jeff Reid, Founding Director of the Georgetown University Entrepreneurship Initiative, sees SwanLuv’s failure as tactical problem. He says that SwanLuv could have launched with good intentions, and that it collapsed before it could deliver on the promises. “There’s a line you don’t want to cross,” he said, “in terms of over-promising.”

He misses the point. Over-promising is not the issue. Swanluv’s warped business premise is. Before the planning boxes are populated with great ideas, before a crisp value prop has been created, and especially, before prospective customers are engaged, entrepreneurs need to ask – and answer – “is the premise for this venture ethical and well-intentioned?”

“The percentage you’re paying is too high-priced/
While you’re living beyond all your means/
And the man in the suit has just bought a new car/
From the profit he’s made on your dreams”

– lyrics to the iconic song by Traffic, Low Spark of High-Heeled Boys, produced 45 years ago in 1971. The more things change, the more they remain the same. Except today, “the man” probably doesn’t wear a suit, and could be a woman.

Had SwanLuv’s founders, mentors, and financial backers considered the pain inflicted by their “casino for marriage” premise, the company might not have taken flight.

For Young People Starting a Business Career, Sales and Marketing Salaries Lack Sizzle

Hollywood continually brings new expressions into pop culture. “Toto, I’ve got a feeling we’re not in Kansas anymore.” “May the force be with you.” “Show me the money!” This time of year, “Plastics,” the memorably benignant career advice young Benjamin Braddock receives in The Graduate becomes personal to millions of college students engaged in graduation exercises – the hallowed ritual when diplomas are handed from faculty to student.

My recommendation to any young person who cares to listen to my underappreciated wisdom (my children are 21 and 18) is to enjoy the ceremony, because the next step, entering the workforce, can be a bumpy ride. In 2015, “just 14 percent of college seniors [had] steady, career-type jobs lined up for their lives after graduation. Thus, 86 percent of America’s college grads — about five out of every six — have zilch in the way of career prospects for their post-campus lives,” according to the website, The Daily Caller.

Much has changed in 50 years since The Graduate made plastics a metaphor for career success. Today, Finance has become the new plastics – at least for B-school graduates. Last year, people holding newly-minted undergraduate finance degrees from the University of Virginia’s McIntire School of Commerce were awarded average compensation of around $93,000 (compensation includes base salary, signing bonus, and annual bonus). That amount topped every business specialty, according to the 2015 McIntire Commerce Career Services 2015 Destinations Report. Not bad, considering the anodyne titles attached to the offers, including Financial Analyst, Sales and Trading analyst, and Consultant. (Disclosure: I am a McIntire alum.)

The report provided the following compensation information regarding job acceptances among the school’s graduating students (The figures for 2015 are on the left, adjacent to the corresponding 2012 compensation):

Finance__________________$92,932 / 81,117
Consulting_______________$78,557 / 71,633
Operations______________$77,417 / n/a
Information Technology_$66,500 / 67,133
Accounting______________$58,000 / 57,423
Marketing/Sales_________$54,062 / 52,762

Approximately 345 students graduated in 2015.

The numbers provide interesting comparisons: Finance comp increased 14% from 2012, while IT remained basically unchanged. Consulting had a handsome 10% gain. Marketing / Sales pay rests melancholically at the bottom of the heap in 2012 and 2015, with average comp improving only about 2% during that period. At least it didn’t decline. But on average, a graduate entering Marketing / Sales in 2015 got 72% less coin than one entering Finance. Odd, considering that Biz Dev professionals – long stereotyped as aggressive and money-driven – aren’t known for accepting delayed pay gratification.

But beyond superficial comparisons, professional trend-spotters will struggle to extract meaning from the Destinations Report. The findings are hard to extrapolate for several reasons. First, year-to-year, different companies recruit from a new talent pool of McIntire fourth-year students (UVa does not adhere to the common parlance of Freshman, Sophomore, etc.). Second, compensation is not the only motivator for accepting a job offer. Third, the compensation reflects the cost of living in the geographic locations where graduates choose to work (In 2015, 92% of graduates took jobs in the Eastern part of the US). Finally, this data reflects compensation on graduation – not beyond. So longer-term, we don’t know the numbers or how they compare.

Still, data from other undergraduate business schools reflect average base salary figures not far from McIntire’s. Carnegie Mellon’s Tepper School, the #7-ranked undergraduate business school according to US News, reported a 2015 average of $73,582, 6% above McIntire’s $69,184. (McIntire was ranked #6 in the same US News survey.) In 2013, Notre Dame’s Mendoza School of Business, the #10-Ranked School, reported an average salary of $58,000. McIntire reported an average salary of $64,666 for the same year. The difference may be attributable to the fact that more of Notre Dame’s graduates work in Midwest cities, where the cost of living is lower than in the East.

All the hype that B2B customers want – demand, really – business-literate salespeople hasn’t produced more demand and better pay for newbie B-School grads choosing that field. As far back as 2010, I thought it would. I have pondered this inconsistency and offer five conclusions:

1. Business Development remains one of the few egalitarian business specialties, where characteristics like empathy, high motivation, communication skills, and personal integrity are strongly associated with success. Since people can gain these skills without attending college, employers hiring business developers don’t consistently require them to hold a degree.

2. Automation has de-skilled sales roles, eliminating some positions, and leaving others to be filled by others willing to accept lower wages.

3. Hiring managers seeking business developers who do have a college degree aren’t willing to pay a premium for B-School graduates over say, job-hungry religion majors. Both require equivalent training and development.

4. Many B-school undergraduates don’t seek sales positions in the first place. Some might recognize the degree that took four years to earn doesn’t ensure adequate earnings in a commission-driven biz-dev role, so they seek jobs with higher base salaries and more security.

5. The personal assets that business developers need to achieve a higher income – including a strong network of connections and tacit sales knowledge – aren’t generally present on graduation, and often take several years to accumulate.

When my kids prepare to graduate in 2017 and 2020, respectively, here’s what I’ll tell them: “Get your engineering degree. Learn how to sell by succeeding and failing. Take intelligent risks. Become an entrepreneur. And if you want to make decent money, don’t go into sales – unless you’re in Finance.”

That’s longer and far less memorable than Plastics, but hopefully, more useful.

Further reading:

2014 Commerce Destinations Report

Mental Health for Salespeople: A Topic that Needs a Discussion

When you visualize a top sales achiever, what comes to mind? A well-dressed, polished professional wearing a starched white shirt accessorized with a Mont Blanc pen, clipped to a conspicuously stain-free pocket? Someone with a winning smile who always seems proud, confident, and fit?

These trappings often mask an insidious reality. The day-to-day experiences that salespeople encounter are emotionally stressful and can jeopardize mental health.

“I am trying to get out of sales, but seems so hard to change fields because I have been in this for so long, so only way is to continue to be in sales and minimize the effects of depression on my job. Boy, let me tell you how tough that is. Along with depression comes low self esteem — but a good salesman should have too much confidence, not the other way,” a commenter, Jake1777, wrote on Healthboards.com in 2008.

There are millions of Jake1777’s. They go to work every day. They cold call. They talk with clients. They close deals, too. People don’t like to read about them, let alone empathize with their angst.  They get brushed aside in a cold sales culture that venerates quota-busting men and women who bring in the revenue bacon.

Blogs and articles spew idealizations of top producers as “superheroes” who are relentlessly positive, tenacious, and goal-driven. People who don’t make excuses, and never quit. The others? Get rid of them. Sayoonara. Adios, pal.  Business is business.  “Oh yeah, I used to be a salesman, it’s a tough racket.” Blake’s mocking sarcasm in Glengarry Glen Ross. Everyone knows how resilient salespeople are, even the bad ones. No need to be cordial.

It’s time to dump the sales superhero archetype. Not only is it grossly misleading, it subverts the mental health risks that salespeople must manage. Difficulties of any magnitude can overwhelm the best salespeople. I’ve seen it. I’ve experienced it. And many highly successful peers have confided it to me. Among the professions surveyed in the recent National Survey of Drug Use and Health, Sales ranked #11 for jobs that can lead to depression, with a rate of 6.7 percent. I don’t know a single sales veteran who hasn’t slammed hard into an emotional wall somewhere. Superheroes? Not at all. I call it being human.

People often self-select into sales because they like the simple calculus: make your number, stay on the team. Fall short, you’re a bum. There’s no ground in between. Even top-producers can be unceremoniously churned from their jobs when revenue attainment goes south. For many, the send-off “ceremony” is held in a sterile room or office. It begins with a formulaic conversation capped off with a terse handshake, and an escorted walk to HR for the obligatory exit interview.  “Sorry we had to let you go, but don’t let the door hit you in the rear on the way out. Oh, before I forget – here’s a box to carry your Achiever’s plaques.” If you want to retain a tiny ego in sales, it’s best to start off with one that’s over-sized.

On the other end, those prone to living quarter-to-quarter at the bottom echelons of revenue production have a different, but no less humiliating, outbound experience. They are regularly reminded of their failing through corporate programs deceptively called Performance Improvement Plans, or Plan, for short.  A better term would be slow-path-to-“you’re-fired.” “What percentage of the staff put on Plan become productive employees?” I ask clients. The frequent reply: “Zero.” I usually advise them to drop the program.

People like Jake1777 who clearly need help will find a dearth of compassion and earnest interest. Managers take the toughness that salespeople are expected to have as license to dish out condescension, and even abuse. “What have you done to justify your existence?” one sales manager I worked with asked a colleague who was below goal for the quarter.  She was the top producer in our group, and though normally stoic, the question brought her to tears.  In another situation, when I discussed with a senior executive who oversaw a division of 3,500 people about her decision to lay off most of the sales organization, she quipped, “I’m not worried about it. Salespeople can always get jobs.” If she had added “let them eat cake,” I would not have heard through the steam blasting out of my ears.

Not everyone thrives as a salesperson. Not everyone can thrive. And not everyone thrives all the time. Senior managers must first stop regarding salespeople as unfailingly resilient. That’s a harmful myth. They must acknowledge that significant emotional strains and hazards accompany selling, and understand that they carry deleterious mental health risks for high producers and low producers alike. No one is immune. They should care enough to learn and recognize the warning signs. The website for the National Institute of Mental Health offers more information.

Above all, companies must recognize that good mental health for every individual is a crucial part of sales readiness. Culture sets the tone. “Only one thing counts in this life. Get them to sign on the line which is dotted!” Blake said in Glengarry. A great motivating statement. One that might produce short-term revenue. But not one that preserves mental health.

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