In sales there is a rule that many sales people know, and that is, “he who talks least…wins.”  And of course, there is the old adage that God gave you two ears and one mouth and you should be using them in that proportion.

When you give a sales presentation, you should remember that it is a presentation – a chance to present your solution/product/offering.  When you present something, you are offering an introduction to it so you should be providing your overview, and then be using the rest of the time to determine how, if at all, you can solve your customers problems.

A lecture, on the other hand, is a LONG period of time, with one person talking.  You know, that hour or two hours that you were forced to go to in college and you forced yourself to stay awake thru – and you had to take copious notes to remember anything that was said.  Considering that it is hard to remember what was said, its hard to stay awake, and you just wish for the end… why would anyone think that turning a sales presentation into a lecture is a good thing?

Yet… too often, I see salespeople use their pulpit as a chance to lecture about their industry, their vision, their insights, their successes, etc.  But the truth is, that no prospect really cares about all of that.  They don’t even really care about your product – they care about their problems and how you can or can not solve them.  It is true that you should be looking for ways to connect with your prospect, but a lecture is not how you do this.  It may be nice to be able to pontificate and show people how smart you really are, but in fact, the thing that will make the sale is not that you are smart – its that you are smart enough to solve their problems.  And, the only way to know what their problems are, and how you can or cannot solve them is if you LISTEN more than you talk.

The worst part is that if you ask a salesperson that talks too much about how they felt a sales meeting went, they will likely feel better about the meeting the more they spoke and showed how smart they are – rather than thinking the meeting went poorly because they didn’t listen to what the customer wanted.  Again, the truth is that they are not going to sign on the dotted line because they are bowled over by your brilliance.

You need to judge a meeting by how much information you OBTAINED not by how much information you CONVEYED – because when you have all the information, you can best win the sale.

I wrote a while ago about how I think the value of the rolodex is gone, yet still so many people hiring sales people want to know about your Rolodex.  Who do you know at their target companies, and who do you know in a particular industry.

The more you’ve done in sales, the more you know that this is all hogwash.  I’d take a great salesperson who can network over someone who knows 15 people in an industry ANY DAY on my team.  Learning how to sell and find new people to sell to is 150 times harder than calling 15 people you already know and asking them to buy your new product.  And the fact is, even if you know 15 people, the odds are that at best 1 or 2 will want it.  Then you are back to needing someone who can reach out to new people again…  So… again… who do you want on your team?

Take this idea a little further and you know that great salespeople can learn new ideas and industries very quickly.  So, what is better?  Someone on your team who can pick up sales pitches easily, creatively creates new pitches and finds the value the customer needs or someone who is so entrenched in a single industry that they don’t have any reference to how the rest of the world works.  I have worked in so many different industries, that I clearly think that someone with a broad experience is MUCH better.  Its the core sales ability that is the most critical.

As I debated the rolodex idea with someone recently, I explained what I thought the rolodex of the 21st century was – its your sales network – your sales reach.  When I look for a team member, there are many traits (like expensive hobbies) that I look for, but I’ve really begun to understand the value of the sales network that team members have.

Recently, a connection of mine called me for some sales advice.  They had a particular question about how to sell into an account to which I had sold millions of dollars of things.  I was able to quickly tell this salesperson exactly what the best process would be in order to get that deal.  How to navigate the organization… how their purchasing process worked…  How to circumvent the “approved vendor” requirements…  How to arm his champion with the information he would need to sell it up the chain… etc.   This person was selling a COMPLETELY different product from a COMPLETELY different industry, but my advice was able to help him close the deal.

Rolodex?  OK – yes he had me in his “rolodex” but not in the traditional sense of what a rolodex means… that you have sales contacts who you can sell to immediately.  What he had was a person in his rolodex that can help him make the sale to someone who wasn’t in his prospect rolodex.

This is the 21st century rolodex.  It is about who you are REALLY connected to within the world of sales that can help you get the information you need to make the sale.  Its about who can get you the advice for that industry, that product, and that pitch to make those sales easier and faster.

Its the sales people that have the biggest and broadest reach that you should be getting on your team.  If you are a sales person you should be finding, expanding and utilizing your sales network.

I think a lot of really great ideas and tools are coming out now to help harness and expand your network and I think that its a need whose time has come.  Now… can we please let the term “rolodex” die?

Metrics are used all over in sales organizations:

• How many calls did you make?
• How many connects did you make?
• How many meetings did you schedule?

Metrics are how managers feel good about how people are doing – its how they can point to things and say, “look – my people are working.”  Often, tt is how managers and CEO’s can turn to their board and investors and say, “I have no idea how we didn’t make our numbers this month, we made 4,000 outbound calls!”

Its no secret that I’m not a fan of managing to certain metrics in a start-up like number of dials.  Yes – track them, but do not necessarily manage to them.  In a start-up or growth business, there is only one real metric that matters: quota.   The bottom line metric for any and all salespeople is their quota.  I don’t need busy salespeople who don’t close.    Ask yourself which salesperson you want on your team… the one that makes 5 calls a day and closes 5 big deals OR the one who makes his defined 60 calls a day – but only closes 2 deals.

Too many times, I see managers who focus on the wrong metrics and force behavior that ultimately leads to less (or worse) sales.  Especially in the start-up phase, you need those dials to be learning lessons so that you can get to the very repeatable sale.  Its certainly true that in a more established business with an established product that is well known by your prospects, you can draw a conclusion that x dials yields in $y in sales – but this is rarely true in a start-up and in fact leads your sales people to have the wrong behaviors.

In a start-up, you need to sell value to your prospect.   In order to sell value, you need to understand your prospect – their needs, their corporate goals, their issues, their problems.  This takes some research time.  If you expect your salesperson to make 60 calls a day, guess how much research is done prior to making that call on their list… NONE!  Oh maybe a real quick google search – but that is it.  Essentially, your salesperson will dial each person blind.  Therefore, most of those calls will be wasted.

There doesn’t exist a good sales intelligence tool, yet, that can bring all of that information together quickly and concisely for the salesperson so that they can make all of those calls quickly, and also be informed.  Be informed about any personal connection with that client.  Be informed about their corporate initiatives that match your product.  Be informed about where the person being dialed fits into the organization.

Being armed with good information is key to making sales more quickly.  Make sure that your salespeople are doing this.  If you are a salesperson… do this.

And make sure the metrics that you are tracking don’t get in the way of this.

One of the most frustrating parts about being a salesperson is the constant rejection, the constant stream of failure.  The more neophyte salespeople I work with, the more I see the frustration over this simple fact of sales.  Sales is a numbers game.  You can’t win them all, and you have to get out there and talk to lots and lots of people, to find those people that need your solution, have the means to pay for your solution, and decide that you have the correct solution against all the other alternatives.

Your failures teach you important lessons about how to listen to the rejections and get the yes, and your track record will certainly improve over time.  Great salespeople use their sales managers and mentors to refine their pitches, and constantly learn how to get better – but the ugly truth is that you will probably fail more than you will succeed.

As I was watching a baseball game recently, on the big board came a statistic for a player who will certainly someday be a hall-of-famer, and very likely a legend in baseball.  This man had just slightly less than a 300 batting average.  This means that for every 10 times he has gotten up to bat, he has failed 7 times.  For every 10 times his fans, his coach, his manager, and his teammates counted on him to perform at bat, he let them down 7 times – yet he will become a legend.

Go back in history… very, very few of the legends we know did much better than this.  Ty Cobb’s lifetime batting average is 0.366.  Only a handful of players ever got over .400 for a single season, and no player has ever finished a season above 50%.

The fact of baseball, is that, just like sales, the system has built into it the knowledge that individual failures are part of the game – and therefore the game and season have built into it the concept of individual failures – and that when you look at the team under the long term lens, that the best still rises to the top.  The same is true for companies and their sales organizations.

Thinking about the reasons for individual batting failures:

• Sometimes, the failure is just because the player is off his game.  Its certainly very difficult to be at your best all the time when you play many, many games each week.  The same is true of sales.  Not every salesperson will be able to find the right pitch, the right words, the right counterargument every time.  But in both cases, practice is essential to get better.
• Sometimes, the failure is because the pitcher is just having a great day, and can outsmart the batter – or knows the batters weaknesses and takes advantage of them.  In sales, your competition is working the same prospects as you.  Its essential to know everything about them, their products, and what their pitch is so that you can be prepared to overcome that.
• Sometimes, the batter is dinged because someone else fails (error).  In sales, there are a lot of times where there are very obvious wins, that are lost OR cases where you get moved forward in a pipeline discussion because of your competition’s mis-step.  Its important to capitalize on these – but never assume they will happen.

Of course, its the constant stream of failure that makes a win taste that much more sweet.   Hold on to that when your batting average takes a dip.

A sales person that used to work for me called me last week to get my opinion on a new position he was considering.  We chatted for a while about the position and the opportunity, and I was very excited for him.  Its a great company, a great product, a great team – and I think it will afford him quite a bit of opportunity to advance his career.

Then we started to figure out if the comp was right for him.

He explained to me the compensation plan that was presented to him.  As he spoke, I said, “wait… I have to get a pen and write this down so I understand.”  OK – the fact that I had to say this is 100% a clear indication that this is a bad compensation plan – but nonetheless I attempted to understand the plan.  The plan paid out upon a rolling average of monthly sales over a three month period and provided incentives on this and that.

After I thought about the plan for a while, I said, “OK.  I get it and from my calculations, its most likely a very generous plan – but its sort of hard to tell – and its going to be very hard to know what you will get until the end of each quarter.”

I certainly appreciate that the CEO of this company was trying to create a generous compensation plan, and I honestly think that he believes that he is encouraging the right behavior but the problem with the comp plan is two fold.

1)  It is so hard to calculate and know what you are getting paid on each deal – that the sales rep will spend too much time thinking about what he will or wont get paid instead of just focusing on closing.

2) By making the plan based on a rolling average, the “cha-ching” factor after a deal is closed is gone.  When a deal is closed, what does it mean to the rep?  Who knows until the end of the quarter so its not as exciting when a deal closes.

Here is my bottom line on comp plans.  Make them simple and easy to calculate.  Give me a cha-ching when I close that is very clear what I get and when I get it.  This will motivate me to close more and faster.  I see something I want to buy?  How do I do it?  Close a deal at this amount and I will get enough to buy it.  Want to make more money than that other salesperson.  How?  Close deals totalling X to get there.  This is how we think.

The more time I have to spend on math, the less time I spend on closing.  The more time I’m wondering about what I get paid, the less likely I am to close it.  When I don’t know what its worth to me personally – I have less drive to bring it home.

Perhaps these sound like strange concepts to non-sales types, but this is what motivates us.  The hunt.  Make it like a hunt and we will hunt it down.  Make it like a complex problem with too many goals and triggers and we will be less motivated and driven.

I think that my guy will do well in this role, and I actually think he will make quite a bit of money.  I also think he has the drive to succeed in this position regardless, but in general, I think that this comp plan should be tossed out and replaced with something simple that provides cash directly tied to an action.

I can’t name a single business that has failed as a result of over-paying sales people.  Its probable there are a few, and I’d love to hear that story if you know of one.  Its certainly possible to create a sales compensation package that is overly generous – but in general, commissions are designed to be a percentage of sales.  Therefore, by definition, if commissions are rising, then so are sales.

I want to clarify that I am talking about normally designed commission plans.  I do completely understand that you can design a compensation plan that doesn’t take into account the cost of doing business, etc. so much so that even as sales rise, you wind up killing your business.  However, what this post is about is not poorly designed commission plans, its about what you as a sales manager and entrepreneur are focused on when you think about paying commissions.

What will kill a business significantly faster than paying commissions is LOW SALES.

Recently, I was talking to an entrepreneur whose business had next to zero sales.  He looked to me for advice.  My advice was to make his sales compensation plan more generous.  He nearly had a stroke.  He picked and prodded at every suggestion until he essentially killed all improvements I attempted to make.  The crux of his argument was that he was able to identify a potential way for salespeople to take advantage of any improvement I was trying to put in place.

For example, there was one instance where he wanted to make sure we did not pay a sales rep double commission, if they sold double the items to a single client.  He wanted to make sure we were discounting (or actually NOT PAYING on) multiple sales.  I explained that in his early stage, the last thing we wanted was an disincentive against getting lots and lots of sales.  We were too young to be thinking with that much granularity.  I figured out that IF every sale by EVERY rep committed this sin, he was going to pay $7,000 in extra commissions that month – and in that case, we could institute new rules at that point.  He disagreed, because to him, paying extra commissions was the worst thing that could happen.  Salespeople should NOT be allowed to take advantage of him.

I sat there, looked at him and said, “If I said that I could deliver to you the perfect sales solution for your company right now, would you pay be $40,000 on the spot?”  He said “Of course!”  I said, “So then why would you not risk, at max, less than 25% of that amount to let the sales reps run and maybe learn something about your product, how its sold, how people want to pay, how much they want to pay?”

Critical to any start-up is the ability to let the reps run and learn from how they sell.  Last year, another start-up I worked with, experimented like crazy and paid lots of commissions.  In retrospect, some of the commissions paid were probably too high – but the end-result?  They are a profitable company with a great sales team and a great compensation plan.  Had that client worried too much in the beginning about optimizing his process to NOT pay sales commissions, he would likely be dead by now.

The main point here is that, in the beginning, you need sales.  Without sales, you are a product not a company.  Without sales, you will die.  I don’t think any start-up should overpay salespeople just for the sake of it – but I encourage startups to not optimize for NOT paying salespeople.  Optimize for getting the most sales – you can always scale back if you see something is too generous.  (Of course, there are challenges here to not destroying morale which I will discuss in another post.)

If you do optimize and determine how to make sure that salespeople do not get overpaid, the most likely solution is that you will have a salesteam that doesn’t deliver breakout sales, and ultimately, a company that can’t survive.

Video games certainly have changed since I was young.  Today’s video games have over-arching stories, character development, video interstitials, plots and sub-plots, awards and minigames, social integration, challenging gameplay, and certainly lots of amazing graphics.

In the 1980′s, video games all nearly had one objective, and then you got to repeat that objective over and over again, at an increasingly quickening pace, until you lost.  You couldn’t “win” at any game because these games didn’t really have an end.  And, when you did lose, you threw in another quarter and tried again – trying to get further and further along.  Pac-Man, Asteroids, Space Invaders, Donkey Kong, etc.   They all operated like this.

Sales is kind-of quite like that.  You repeat your pitch over and over again, trying to get better and better with each attempt.  When you lose one or win one, you do it again.  And no matter how many times you do it, there are more dots to eat, and more ghosts chasing you.

This isn’t meant to discourage anyone, its just a simple fact of the persistence needed to keep going.  Even though you KNEW you had to do the same thing over and over again, you still wanted a portion of your allowance in quarters.  You still wanted to try to beat that game.  That’s the fire that every salesperson needs in their belly.

Several years ago I joined an internet company as a sales rep, and in about 3 months, I became the top salesperson.  At the national sales meeting, one of the other reps came up to me and asked how I was having so much success.  I responded, “I’m honestly not that sure that I’m ding anything revolutionary.   It just seems that these people are happy to take my call and after explaining the product and how it solves their problems, they are willing to buy.”  He stared at me blankly for about a minute and then said, “…You call them?”

I’m very much in favor of the trend to social tools.  Social tools has given tremendous power to sales people.  LinkedIn, Jigsaw, Twitter, Foursquare, Facebook, etc.  are all great ways to research, network and get yourself into a company in ways that were not possible 20 years ago.   However, there is this trend in younger generation people on the over-reliance on these tools to get the job done.    Its true that many younger people will meet their spouses on-line, and will keep in touch with people on-line, and will continue to interact on-line, but deals get done when people talk to people.

The best salespeople that I have dealt with aren’t afraid to pick up the phone and talk to people – and are especially not afraid to get in front of people.  When I started in sales, trying to get a sale over email was frowned upon, yet today I meet salespeople who don’t leave email / twitter / facebook to try and get 90% of the way to a sale.  Its this over-reliance on the tools that holds them back.

I see start-up after start-up thinking that the magic of “being viral” and the social glue will propel them in sales.  These Sales people and start-up founders think that somehow the magic of the social internet will make their company profitable.  But far fewer companies succeed in this way.  Sales people need to reach out and connect to get the product sold – and cannot be afraid to do so.   The more successful the salesperson, the more likely that person is out talking to people.

In order to crush sales, you need to be a social being.  And that does NOT mean that you have 600 friends on Facebook, 10,000 followers on twitter, and 800 connections on LinkedIn.  It means that you are actually connecting with people one on one.  That device in your hand is a phone – and it has voice capabilities – so use them.  Its very likely that you will see your sales explode.

I wrote a guest post on Frank Peters’ blog yesterday on my thoughts on entrepreneurship in Jordan and the rest of the Middle East.

You can read the article here: http://www.thefrankpetersshow.com/archives/2011/03/jordan.html