TALKING SALES 182: “Stop paying salespeople commission”

salesperson commissions 04-Happy & Sad team 800x400              “Does traditional salesperson incentives drive the wrong behaviour?” – Interview by John Smibert

 

 

Modern B2B selling is a team effort.  Then why do we pay the salesperson commission?

In the discussion on the video below Graham Hawkins he told me “the concept of division of labour is used in just about every other business function, except sales”. “he also pointed out “we’ve got to put our best team on the pitch every single time in order to be successful”.

Graham HawkinsThat got me thinking.

In modern day selling we strive to give the customer a positive experience in every interaction along their buying journey.

Those interactions could include the delivery of relevant content via digital channels or email, interaction on social media, interaction with business partners. Plus of course, phone or face to face interaction via any of a number of members of our team including marketing, inside sales, bid managers, services consultants, presales people, and the field salesperson.

This team need to operate collaboratively and strategically in order to win the customers trust and commitment.

Because selling is such a team effort Graham claims that we should not be singling out the salesperson to pay commission.

View the video, or read the transcript below, to hear Grahams views and recommendations on this issue and tell me what you think.

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Graham Hawkins is a thought leader in B2B technology sales and an author.  He has recently published his book “Sales Transformation

Interview

John:            I’ve got Graham Hawkins with me again – welcome back, Graham!

Graham:        Thanks, John!

John:            Graham, you made a statement that floored me, and that is salespeople should not be paid commission.

Graham:        Yes, I’m going to step out on a limb here, John, and say that we’re now heading towards a future where salespeople will share their commission with a wider team.

John:            Okay, so we’re still going to pay them commission or a bonus or whatever, but… Why with a wider team?

Graham:        Well, because I think the days of a lone wolf salesperson operating out in a territory on their own, effectively as an autonomous agent, I think those days are slowly moving away. Certainly when you look at the increased competition that we have out there in the marketplace, vendors and vendor salespeople have to put their best team on the pitch every chance they get in order to be successful.

John:            And of course the buying journey dictates some of that as well. We’ve got to be able to bring domain expertise at different points in the buying journey, to create value for the customer, teach the customer, challenge the customer and help them through a thought process that ultimately will put them in a paradigm that we can satisfy.

Buyer Journey MappingGraham:        Correct. In the research phase of my book, when you think about The Challenger Sale and being able to bring those sort of insights to a customer, there’s a small percentage of current B2B salespeople that can effectively do that, so leaning on the wider skills and the knowledge and the expertise within the team I think is going to be increasingly important.

John:            You’re saying within the team. What sort of team are you talking about here?

Graham:        The wider business. If we think about most businesses, the concept of division of labour is used in just about every other business function, except sales. We still send a salesperson out into the territory, we tell that salesperson, “You’re going to perform all the duties required; whether you’re a good presenter or a bad presenter, you’re going to stand up and do the presentation.” My concept and where I think the buying journey is forcing us all to transform is bringing teams of people together to create that trusted advisor.

John:            But haven’t, in my experience, salespeople selling large, complex B2B solutions done that anyway in the past, drawn on different pre-sales people and so on inside the organisation?

Graham:        They have, yes. There’s always been a pre-sales person in the role of an account director, you’ve got a team of people sometimes behind you. But largely, still to this day, it’s the account manager or the B2B salesperson that’s tasked with winning the business, that carries the quota, that’s paid the commission, and I think we’re moving rapidly now towards team-based selling.

John:            So, are you saying that because this buying journey is dictating the fact that we need to get in earlier, we need to have marketing, we discussed the marketing alignment earlier, actually involved in a sales opportunity very early before the salesperson’s involved? Are we now saying that that whole sales process that’s aligned to the buying process requires a very strategic view of different people being brought to the table?

Graham:        Yes. Customers expect their salesperson to bring them value; when a customer decides that salesperson isn’t bringing value, then the relationship will unravel. My theory is the salesperson has to lean on everyone else in the business that they can get hold of, and sometimes it might be an external third party. Bring those people in, add value to the customer, make sure you’re getting the awareness at the appropriate stage throughout the buying journey, and you’re bringing value pre- and post-sale. Customers want to be taken on a journey, John and if a salesperson doesn’t bring value, doesn’t bring insight, how can they challenge the customer or ever achieve trusted advisor status?

John:            Okay, I think that makes a lot of sense. We really need to identify all the roles necessary to help a customer through a buying process, and to bring value to that customer, insight or domain expertise or whatever it is, both through marketing type activities or sales type activities, but it’s a whole team of people with defined roles to fulfil through that process. So it’s much more a strategic, team-based strategic type approach, than the old days of the lone wolf and he’ll pull in a skill whenever he needs a skill, but if he doesn’t need them he won’t pull them in. We now really are a team, thinking about how we help the customer through that buying process.

Salesperson commission 06 - sales teamGraham:        That’s exactly what I’m saying.

John:            Okay, and I understand then the concept of how you’ve got to share the commission. The team has to all be set objectives, KPIs, to take the customer through the buying journey and come up with a successful outcome for the customer and for ourselves.

Graham:        Correct. We operate, John, in highly competitive markets now; you’ve got to be able to put your collective best team on the pitch each and every time in order to be successful.

John:            And going back to an earlier discussion where you qualify out early is absolutely vital, because the last thing you want is throwing your best team at every single opportunity; you’ve got to very selectively do this.

Graham:        Correct, and leverage the resources that you have available, to give yourself the highest percentage probability chance of being successful – simple.

John:            I think that’s a great point, and it is a rethink of the way we give objectives, the way we motivate, the way we cohesively get people working together in a sales environment. It’s quite different to what most organisations have been doing over the last 10 or 20 years.

Graham:        It’s the opposite of what I’ve always done. I’ve always been a lone wolf out in the territory on my own, but if you look at other parts of the business we do this already, we bring teams together, we look at how we can leverage their skills and their strengths whilst minimising weaknesses

John:            And every buying journey that we’re addressing is actually a project in its own right and need a project team to work towards the end result of that project, and they all need to share in the rewards.

Graham:        Yes, exactly.

John:            Great message. Let’s talk next about how you bring everything we’ve been talking about into how you actually manage a transformation. We’ve been talking about significant change required in the way we sell as organisations – let’s talk about that next time.

Graham:        Sounds great – thanks, John!

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More interviews with Graham Hawkins:

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John works with companies who are striving to grow high margin revenue by retaining customers, creating value for customers and strategically acquiring new customers. He loves successful and happy sales teams who are driving positive change for their customers. He coaches sales professionals who are keen to enhance their career. He helps them develop their skills and capabilities and enhance & leverage their personal brand.

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