Do You Know Where Your Customers Are?

Google has done a great job with storytelling in their video on Micro-Moments. As part of their Think with Google series, it is a two minute introduction to capturing a customer in their “moment of need.” It’s especially powerful on LinkedIn where it presents complex scenarios as images delivered regularly. Four can be found at the end of this post.

When marketing jargon like a “micro-moment” is stripped away, the underlying idea is that a company needs to be present when and where a customer needs to find them. Many high tech companies in niche markets that I have worked with still rely primarily on trade shows, industry magazines, and other traditional methods. They do not take advantage of even the most basic online tools. There are many reasons, but most center around lack of resources and the challenges of reaching customers in fragmented markets.

Potential solutions vary hugely by industry, but here are three that almost every niche, high tech company should be addressing:

LinkedIn – Despite being bought by Microsoft, it is still an excellent resource. At the very least, have marketing deliver regular updates to your company page at least once a month to boost customer awareness. Avoid having random employees provide status updates unless coordinated by marketing. This looks amateurish.

Google – A basic Google Adwords campaign is a good idea, but even better is “organic search results.” Many “SEO consultants” charge expensive fees for this, but it can easily be developed over time by publishing technical content on your website that customers can find via a Google search. Over time, your company’s website will rise to that coveted first page position… at zero cost!

Email – Contrary to popular belief, email is not dead. You can even reuse the technical and marketing content you are already creating. Assuming this content is useful, your customers will be happy to signup for regular updates. One warning however, once you start, don’t stop, it could look like your company is having troubles.

As I quoted Elon Musk (Tesla / SpaceX) in a recent post, “When you have a product that really resonates with customers, the word of mouth grows like wildfire.”

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Rethinking Sales: Part 10 – Sales as a Profession

There is much more to be said about the topics in last month’s post “Rethinking Sales: Part 9 – Sales Without Commissions,” but the writing is on the wall. Sales must stop being a black box where commissions go in and orders come out. It is the last part of an organization where a lack of understanding (and management accountability) results in unnecessary commission expenses. Sales managers may be the only people who know if their salespeople are contributing to the organization at a professional level and they ain’t telling. Their compensation is based on sales performance too! I’ve seen mediocre sales people making $200K+ a year after receiving large, unexpected orders from major accounts. Management has no clue whether the salesperson was key to winning those orders or not.

Many people think salespeople work incredibly hard to win those opportunities and sometimes they do. Sales is typically filled with long days full of risk, rejection, and uncertainty. You won’t find Sales on Glassdoor’s “25 Best Jobs for Work-Life Balance” list. Of course, you also won’t find any $200K+ / year jobs on that list. Even highly trained engineers and scientists are not making that much. Which brings me to the point of this post: for many companies and markets, sales needs to become a career like engineering, management, or marketing. Sales professionals need to be trained in a system of selling that is aligned with the company’s culture and goals. A sales degree program would be a good step in this direction. The Wall Street Journal touched on this when it published a recent article “Why It’s So Hard to Fill Sales Jobs” with the subheading “‘Salesman’ Baggage Means Well-Paying Tech-Industry Positions Go Begging.” Even Microsoft is writing interesting articles on the seismic changes occurring in sales as part of the Microsoft Dynamics Blog,  Sales in the Modern Era, and Social Selling eBooks. The Social Selling eBook is not for most high tech selling environments, but does give a good overview of how sales has changed in more traditional consumer selling environments.

If you want to have a moment of fun, try Googling “degree in sales” and just read the first page of results. First is DeVry and the rest are split between sales management and articles on whether a degree is even needed for sales. One link did catch my eye, the Sales Education Foundation has an annual magazine featuring the top sales degree programs so it is possible to get a degree in sales. I’ve never heard of this foundation, but the website was interesting enough to get me to sign up for their newsletter. In the meantime, it’s ten o’clock, do you know where your salespeople are?

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Monthly Recap: Tipless Restaurants, Commissionless Salespeople, and What It Means to Be Great

September was a look back at a series of posts that started in 2013 with an exploration of the idea of eliminating tips in restaurants and how that might be a clue toward eliminating commissions for certain sales positions. Even the BBC recently published an article, “Is This the End of Tipping?,” proving it is definitely a current subject. The post “Following-Up: Amazon’s Fire Phone and Tipless Restaurants” had the details and was soon followed by the post “Rethinking Sales: Part 9 – Sales Without Commissions.” There is obviously a lot to say on this controversial topic so the post “Sales Without Commissions – Some Additional Thoughts” was published three days later.

Along the way, an informational post discussed better writing in “MailChimp Publishes a Guide to Effective Communication,” IOS and Android went head to head in “Some Thoughts About… Android Versus IOS,” and some useful advice for everybody was provided in “Who Knew It Could Be So Easy to Curb Our Cravings for Sex and Food.”

However, back to the big question: Can a sales team be successful without a commission based compensation plan? As usual, “Yes, No, Maybe” is the answer. Yes: In my experience commission motivates salespeople to act in the self interest of maximizing commission, but does not always lead to more or better performance. In specialized markets, salespeople do not seem to perform worse without commission, but pursue projects based on other motivational factors: prestige, interest, and compatibility. No: With a well designed compensation plan, those self interests are aligned with company interests such as maximizing motivation, sales, and profit. Maybe: Examining specific company cultures and sales environments can lead to a reduction or even elimination of commission structures. Human motivation is complex and sales are a company’s lifeblood, the right balance can lead to higher levels of organizational health and success.

As a bonus to newsletter subscribers, here is an articled linked to by Phil Schiller, the senior vice president of worldwide marketing at Apple, “What It Means to Be Great” by Horace Dediu. Horace is known for his analysis of Apple’s business strategy and predictions of their financials, but to me he is more of a technical poet. It is one of the best articles I have read recently. He says:

“Greatness is transcendental. It’s hard to pin down. It inspires debate. It divides as much as it unites. It creates emotions as much as thoughts. It builds legends. It engages and persists. It lives in memory and penetrates culture. It implants itself in our consciousness persistently, to linger and dwell in our minds while we are bombarded with stimuli.”

Here’s to greatness!

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Sales Without Commissions – Some Additional Thoughts

After writing the recent post, “Rethinking Sales: Part 9 – Sales Without Commissions,” I came across the post that started this series “Part 1 – Rethinking Sales: Overcoming Functional Fixedness in Commission Based Selling.” Although it was written over two years ago, the basic ideas are still relevant. If commissions are eliminated and a reasonable (even generous) salary replaces them, there can still be a lack of salesperson motivation. The original post references a TED talk by Daniel Pink related to his book “Drive: The Surprising Truth About What Motivates Us.” The transcript of the talk is a quick read, faster than watching his talk, and a lot faster than reading his book. To summarize, employees prefer activities that include these three characteristics:

  • Autonomy: Control over their work
  • Mastery: Getting better at their work
  • Purpose: Involvement in something bigger than they are

So if you are considering eliminating commissions, careful planning is necessary to transition motivation from the strongly motivating “intermittent reinforcement” of commission checks to motivation based on other sources. To be continued…

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Rethinking Sales: Part 9 – Sales Without Commissions

What types of companies can begin to consider transitioning to a commission-less sales team? One answer comes from David Chichelli’s book “Compensating the Sales Force.” If salespeople are not the primary influence at the point of persuasion then why is commission being paid? These types of companies are common in high technology industries. If a company is the “gorilla in the marketplace” with brand recognition, effective marketing, great support, and significant mindshare from customers, then salespeople are probably not doing much to influence at the point of persuasion. These salespeople should be transitioned away from commission based compensation. R&D engineers are not on commission, support teams are not on commission, marketing is not on commission, why is the sales team so special? Apple’s retail stores are legendary for their sales performance and none of their salespeople receive commission.

In my experience, salespeople in these types of companies are laughing all the way to the bank. Their performance is only marginally influenced by big commission checks which are many times delivered at fancy sales meetings where the rest of the company is not invited. Many managers are probably thinking that their sales team would be decimated if the company shifted away from commission. The truth is that few sales engineers would leave. Where would they go? They are already working for the industry leader with job security, excellent products, and great support. Is a mature sales professional with a family going to leave that environment for a risky startup or B-player? With a lack of risk, the rewards should be correspondingly lower. Of course, this entire discussion assumes that sales professionals without commissions would still be paid a competitive salary, but that is part of the standard Human Resources type of discussion. More information can be found in the post “Part 10: Sales Without Salespeople – Commissions.”

Since this is a complex organization change that will take time to implement, the next post in this series will provide some detailed steps that can be taken to begin the transition to a non-commission sales team. It looks like it is already time to start planning for 2017!

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