A Common Misconception about expansion and sales expectations

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This week I observed a sales company react to what for them is a very poor couple of weeks, and it got me thinking about expansion efforts of sales companies and common errors in judgement or expectations that seem to always raise their ugly head.

So without using company names or details let me set the stage and hope I can articulate what I feel are some common errors in expectations and judgement by Sales Managers and Company leaders.

The Stage: Your business has reached the point where your sales team has a full plate and growth of new business seems to be slowing dramatically. You decide to expand sales staff and help your company reach the next level.

How do you do it?

Action steps commonly seen:

Hire great people you believe are going to add or improve on your current teams sales ability. Pay them a competitive salary and then shake up the current territories or account lists so that new sales people has a base to start with and will feel they have hope to build a territory which pays them great commission and gives your current team room to breathe and grow again.

Sounds good right?

Well here is the problem I have seen with this very logical model:

We tend to use current production measurements to determine core success of all the team even during transition.  Meaning if the old team was producing XXY then the New Team should automatically produce XXYZ  and never should we see XX as a result.  You figure if I am going to ever go back to XX why would I ever expand my expenses and get less in sales.

As I watched this company respond this week to exactly that scenario It got me thinking about why we have seen sales fall when the sales team has expanded by 30% and the Industry is stable.

Then it hit me  the expansion process is much like driving a car. Have you ever wondered why a car can get 32mpg highway and only 26mpg City?  It is because the car is working at higher efficiency for longer periods of time on the highway.

The Sales team of Old was a well oiled machine cruising along at Highway speed, seldom needing a break and all the parts were working at inefficiency. Meaning every sales call made was getting top performance and resulting in better outcome from the sales person.

The New Sales team is just as talented but now they are held to the same expectations as the well oiled team and frustration arises. Why?

The old staff now has more time to prospect which will grow account base of the company. (Goal accomplished). The New Sales team has an established base and feels more secure with its job and future. (Goal accomplish).  So what is not working for you?  The timing of your expectations? Lack of employee buy in? Lack of talent? Laziness?

I believe this process breaks down because of expectations. I know when I ran my sales organizations that this was often something I struggled with, setting expectations that are based on a metric that did not fit any longer.

See in our current scenario; the expectation is that the sales talent, with 30% more people and increased prospecting time,  will be running at top efficiency right out of the gate and that sales metrics from the  past sales organization would do nothing but grow and improve.   But like our car which was driving at top speeds and efficiency on the highway  the old sales team is no longer traveling at a smooth pace and is now in a different environmental (city) the pace and inefficiencies have changed.

Old sales team members now are doing more prospecting, which means more thinking, learning,  processing and building of relationships, their days are not filled with eight hours of prime selling, instead they are broken up by traffic stops, like finding prospects to call, learning who to speak with , understanding connections, and teaching new people about themselves and the company. They are now driving in the city and are less efficient.   The new sales members have now taken a group of accounts which were used to being handled by a very efficient sales person to a person which is still learning how to drive making the sales process less confident and less productive.

Both these symptoms are short-term, but could take some time to work back to efficient times. Our expectations need to be adjusted and the metrics we measure success with in this time need to be set based on new standard of production. Simple controllable measurements based on a less efficient model, not a top performing model. You have to believe that with the proper tools and training that your new team will eventually pass your old production marks. In reality they will reach them about the same time you start thinking you need to expand again, When the hit make efficiency. We tend to forget the growing process that we went through to get to this point and the reality is that your sales even though they may be slower now are probably still well ahead of where you were the last time your sales team was in this new environment.

My advise, review your metric that you use for measuring success. Bring them back to basic such as number of calls made and presentations made to new customers versus sales relationship and close ratios on an intern basis. Make sure your company has  level of performance which is based on a level of activity that is moving the process forward even at a slower pace than before. Reinforce the efforts and teach the team again how to establish relationships, get referrals and work at an efficient pace in their new cars.

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