What can happen when employees are held to unreasonable standards by managers and their behaviors don’t drive the best outcome for the company?
Ask Wells Fargo.
In 2016, it was discovered that Wells Fargo employees secretly created millions of unauthorized bank and credit card accounts — without their customers’ knowledge — to meet sales goals. More than 5,000 employees were fired as this outrageous behavior came to light.
Now, looking back, it’s important to understand why these salespeople were willing to implement such dishonest tactics.
As you might guess, it boils down to how leadership incentivized the sales team.
The more accounts employees opened, the more commission they would receive. And aside from being illegal, this was an expensive strategy. Rather than raising profits, it landed Wells Fargo a $575 million settlement fee to resolve claims that the bank violated state consumer protection laws.
Are You Driving the Right Outcomes?
For any sales team, it’s a challenge to ensure employees’ day-to-day activities produce the right outcome for the team. That’s especially true when incentives are based on things that don’t necessarily affect the bottom line — they’re just easy to manage without a lot of care.
For example, if a company’s sales staff is being graded or compensated based on activity level, an easy way to game the system is to send a bunch of emails. However, this will irritate a business’s target audience and look like spam, which can be counterproductive and negatively affect the company’s reputation.
As a sales leader, it’s your responsibility to solve these issues, helping your team understand what outcomes and activities are helpful. It’s also your responsibility to communicate and coach teams to put good sales behavior into practice.
Keep reading for actionable tips to drive good sales behaviors, including:
- How to set proper expectations
- 4 steps to drive good sales behavior
- Some dos and don’ts to keep in mind
Communicating Good Sales Behaviors
When communicating with your team about good sales behaviors, you need to keep a few things in mind.
Any time you give your reps a metric or goal to hit, you also need to provide:
- A clear path to achieve that goal
- The outcome you’re looking for
- An understanding of how different behaviors will ultimately drive that outcome
You, as sales leader, need to do the leg work — either on your own or with your team — to pinpoint the behaviors that will affect the company, and then set goals around those behaviors.
You must also be able to clearly articulate those behaviors and goals to the organization.
Be aware, if sales reps don’t buy into the idea that doing X, Y, and Z is going to be better than doing A, B, and C, they’ll just fall back into their old patterns.
At the end of the day, though, the results matter.
If you’re doing all the right things and not getting results, that doesn’t help the business. So when your setting sales goals for your team, you want to make sure you’re doing two things:
- Incentivizing for results
- Making sure individual activities aren’t easy to game
For example, it’s harder (though not necessarily difficult) to game a “number of meetings” goal than an activity one. The client has to confirm, be on a calendar event, and accept the invitation because the client thinks the partnership is potentially a good fit.
It’s also more effective than payment based on activity. It forces you to create a more complicated compensation structure to mitigate the risk of somebody doing something that will harm the company.
4 Steps to Drive Good Sales Behaviors
How can you achieve all these goals? These 4 steps can help you meet your sales targets by establishing good sales behaviors and encouraging the habits of the most successful sales professionals:
1. After setting a goal, think about how the cycle could be gamed.
Some people just like to game a system. They enjoy the challenge of manipulating a goal. As a sales leader, it’s important to take this into consideration.
Imagine that a sales rep could reach out to 10,000 prospects per day. What would that mean? How would that impact the business in the short and long term? Alternatively, what would happen if the rep reached out to only two or three prospects a day?
Assuming inputs and outputs are proportional to each other, you can mitigate risk and improve outcomes if you consider the extremes. It also helps you see any potential gamesmanship of your goals.
2. Help your team make the connection between opportunities and outcomes.
While it might be difficult for teams to communicate effectively, it is critical — especially if you have a talented team.
You need to correlate the types of conversations you have with your team and the behaviors they develop as a result. When you have a particular type of conversation, do your reps respond positively, or do they look for alternative ways to reach their goals?
In the same way, you need to correlate good sales behaviors with desired outcomes. Does the frequency of calls versus emails make a difference? The team doesn’t want to wing it. Team members want to know how their tasks and behaviors are going to make an impact.
And while part of communicating this connection takes a bit of analytics, it’s important to realize the limitations of taking a purely analytical-based communication style. Ultimately, you need to be able to motivate your team.
For example, my team looked at the general activity metrics we wanted to manage against and how team actions impact ROI. We discovered the average turn rate based on how many people sales reps contacted. We also looked at outcomes based on the sequence or method of reaching out — such as emails, calls, and social media.
We found that if sales reps were not doing cold calls, it was going to be hard for them to reach their targets.
Bringing sales reps into the process and sharing these examples really helps them understand what it looks like to close a deal.
3. On the flip side, get ideas from your team.
I’ve gotten ideas from my team on how we should be managing particular incentives on a day-to-day basis. Get that buy-in. It propels team members to be more effective because they’re the ones on the ground and have an intuitive sense of how things operate.
Just make sure you’re guiding them in the direction the company needs to go. Someone might say he wants to try no phone calls, but you can push back and help him understand why that might not be a good idea.
It’s your job to create a winning sales culture where everyone can win.
According to a study published in Performance Improvement Quarterly, a coached salesperson performs 2.9% to 6.2% better than one who receives no coaching.
4. Make sure the ability to drive the outcomes you’re looking for is within your control.
Sales reps need to understand how their actions can affect the bottom line, and you need them to feel confident they can control their destiny.
Allow your salespeople to experiment with new ideas. This gives them the power to put a new plan into action to see whether it can improve the rest of the organization. When working toward reaching a certain outcome, you should focus on — and have your team focus on — what you have direct control over.
Dos and Don’ts
When it comes to good sales behaviors, you need to be aware of these dos and don’ts.
- Do help your team make the connection between opportunities and outcomes.
- When incentivizing sales teams to reach a goal, do think about how the cycle can be gamed.
- Do get ideas from your team on how you should be managing particular incentives on a day-to-day basis.
- Don’t make your sales reps feel powerless when it comes to driving certain outcomes.
- Don’t neglect to communicate effectively with your team.
- Don’t use a purely analytical-based communication style.
Take these tools and use them to come up with a strategy that works for your company and will help your employees develop the sales behaviors that will give them the most success.
Now, I’d like to hear from you. What have you done that I haven’t mentioned that has drawn success for your sales reps?