Warning: Missing argument 2 for wpdb::prepare(), called in /home/johnhhsu/managebits.com/wp-content/plugins/category-icons/category_icons.php on line 1068 and defined in /home/johnhhsu/managebits.com/wp-includes/wp-db.php on line 1291
John H Hsu » ManageBits

Famous Quotations

Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while. -Jack Welch

John H Hsu

An international and strategic executive commanding over 14 years of progressive management success within highly competitive global markets. Also excels consistently by surpassing corporate targets as well as identifying and capitalizing on market opportunities to drive growth, maximize profitability, and improve operations. Always interested in seeking new challenges as a professional-level manager within the High-tech industry.

 

Warning: file_get_contents(): php_network_getaddresses: getaddrinfo failed: Name or service not known in /home/johnhhsu/managebits.com/wp-content/plugins/digg-digg/include/dd-class.php on line 1726

Warning: file_get_contents(http://feeds.delicious.com/v2/json/urlinfo/data?url=http%3A%2F%2Fwww.managebits.com%2F%3Fauthor%3D1): failed to open stream: php_network_getaddresses: getaddrinfo failed: Name or service not known in /home/johnhhsu/managebits.com/wp-content/plugins/digg-digg/include/dd-class.php on line 1726

Image: photostock / freedigitalphotos.net

One of the most important abilities I’ve found most useful in both my personal and business life is the ability to read people accurately and to have a decent sense of their personalities and emotions.  For some people they have a natural instinct or sixth sense that allows them the uncanny ability to know if people are telling the truth, how they will react and what they will do. However, other than natural instincts, there are ways to increase one’s awareness and observations to a point where they too can read people accurately and predict how people will react and behave.  Basically, if you want to be able to understand people better, you must work at it and keep practicing.  Here are some simple guidelines I personally follow with great success over the years. With simple practice and determination, you too can better your instincts on reading people accurately and learn how to build sensitivity to gauge other people’s emotions and behaviors.

Before you can start reading other people at all, you must first have the correct frame of mind. If you do not have the right mind set, no matter what you do, you will not understand other people at all and you will actually become a very negative and irritating presence amongst others. First off, take a look at this list and see if you can honestly compare yourself to these concepts.  If most of them apply, then you are off to a good start and more than likely already are very good at reading people.  If not, see if you can apply these concepts to your own personality and force yourself to follow them for your own benefit.  Now let’s take a look at the list:

  • One must generally like people
  • One must have an open and aware mind (Try not to be stubborn and pig headed)
  • One must pay close attention to details of people (Physical & Emotional)
  • One must be sensitive to all these details of people
  • One must be patient to these details
  • One must care to have this correct frame of mind

Once you have begun with the correct frame of mind, we now need to go back and discuss about people’s general instincts. Of course some people have better natural instincts than others; however, you must understand that everybody still has natural instincts. It’s just the matter of honing & trusting your instincts, which can be done to a point. Once you have built up your experiences and know how through learned skills, then you will be better equipped to understand your own instincts and learn how to follow them. There are 3 basic principals about general instincts that one should consider for their own purpose of improving their abilities to read others.

  • One needs to have good Instincts! (Start to trust yours and learn to recognize them)
  • Unfortunately, Instincts are innate but learned skills can enhance your Instincts to better serve oneself
  • Trust ones 1st instinctual feeling not ones 1st superficial impression(difficult to do, due to the heavy influence of first superficial impression)

With the right mind set and understanding of how instincts come to play, you can now apply these learned skills to better hone your abilities to accurately read people. I have described a simple 3 step process to sharpen your instincts and experiences that will give you the learned skills needed to improve your abilities. Here are the 3 process needed to develop your learned skills:

  1. Training
  2. Categorizing (Physical, Mental, Environmental)
  3. Research and Analysis

The first step is training and it is the most straight forward process. You need to practice, practice, practice and then practice some more. You need to practice by interacting with different types of people through socializing, business interactions, observations, negotiations, arguments, etc (The more, the richer the experience, but it needs to be face to face and not electronically).  You need to read and observe as much as you can, so that you are knowledgeable about many different topics and have a broad understanding of different opinions.  Finally, the most important aspect of your training is to teach yourself, train yourself, beat yourself, do whatever it takes to make sure you, Listen! Make sure you listen carefully to examples, experiences and situations of others, so that you learn to advance yourself and observe more accurately. I can not stress enough about this point, if you don’t listen, you don’t see, and if you don’t see then you are just an idiot that stands there listening and seeing themselves only.

The second process which is actually a more detailed aspect of your general training is the understanding of categorizing and how it allows you to better sort out the differences and similarities of people. Once you can sort out and categorize people into a mental form or shape in your mind, then it becomes easier to figure them out and predict what, how, and why they will react in a certain way. Categorizing can be sorted into 3 distinct parts; Physical, Mental, and Environmental.

The physical aspect of Categorizing can be broken down into 3 key components, that one needs to be aware and keenly observant of:

  • Specific physical traits (Look and Appearance)
  • Specific movements or gestures (Body language)
  • Specific sounds or sayings (Verbal language style)

The Mental aspect of Categorizing can be focused on 4 areas of thought with the 5th one an extremely useful technique by “Wilson’s Learning (4 Quadrants of Personality)”.

  • Look for patterns, people tend to show or develop signs or portray images subconsciously (Habits).
  • Pay attention to how they think, their thought process, the way they come to conclusions.
  • Specific emotions or reactions (Non-verbal language)
  • Know and understand their interests
  • Wilson’s Learning, 4 quadrants of personality (Amiable, Driver, Expressive, Analytical) . Note: This technique is very useful and if possible you should study it or take their seminars.

The Environmental aspect of Categorizing can be summarized through observing 7 types of environmental factors that distinguish the different types of people. Pay close attention to these factors to help you categorize the traits of the people you are reading by:

  • Understanding their culture and cultural preferences
  • Understanding their religious beliefs and backgrounds, and how it may affect them
  • Know where they live and come from
  • Know family backgrounds and Value systems
  • Understand how their Gender may be affected by their environment (Family, Culture, Tradition, etc)
  • Know their educational & professional backgrounds
  • Know and understand what type of Social or Business circles they come from

Finally, the third and last step is too continually do Research & Analysis of your results,  while you are training and categorizing the details of the people you are trying to read accurately.  By fine tuning these actions and results, you should also compare and asses the information with people you know of personally or compare with people of history, because, most likely they will behave similarly (remember; due to human nature, history repeats itself).  Remember, to listen carefully and learn from other people’s experiences, but most of all, learn to trust your own instincts and know that you can do it!

 

 

 

 

 

 

 

 

 

 

email
 

Image: tungphoto / freedigitalphotos.net

Once you have set up your competitive strategy and sales management polices & rules, you need to start monitoring the progress of your sales force with an objective, easily accessible and accurate system. This Sales Forecast system should be a customizable and powerful software application component in an overall CRM (Customer Relationship Management) environment. The forecast system needs to be easily accessible by the sales force (ie: through the web by PC, laptop, smart phone) with a business process engine that allows for approvals and data reporting all in real time. However, one must understand that no matter how powerful or technologically advanced a system or process is; it is garbage if the management doesn’t drive for accuracy and timeliness of the data that goes into it. Remember, “Garbage in, means garbage out!”

It is extremely important to condition the Sales force to diligently update their Sales forecast data and have the Sales Management check the data weekly or bi-weekly for accuracy and confirmation. If any sales lags or deliberately falsifies, boosts, sandbags their forecasts, they need to be disciplined severely.  It should be one of the Sales management’s most important tasks to enforce and drive the Sales forecast system. Once the data that goes into the sales forecast has been screened carefully, the organization can now gauge their marketplace and predict their revenue pipeline with a certain degree of accuracy. With the confidence gained through the accurate forecasted data, management can also conduct their operational planning, marketing budgets, and continue to engage in their competitive strategy. Again, depending on the type of industry, size of organization, culture and mentality, the sales forecasting process will vary significantly. However, the basic concept for the Forecast system will remain the same in that it can be broken down into a process of categories and steps with assigned percentages of closing to each level of the completed process.

In creating this Sales Forecast system, the organization needs to customize the process to fit its own organizations industry and practices. Also the sales marketplace can be an important factor in dictating the types of processes in the Sales Forecasting System. Here is an example of the Sales Forecast process I have used in the past with great success. I have the whole process broken down into 6 categories:

1.    Get Prospect’s Information
2.    Get Customer Involved
3.    Get Customer Engaged
4.    Get Customer Committed
5.    Get Customer’s Purchase Order
6.    Get 100% of the Money

With these 6 categories in mind, the Sales forecasting process can now be divided into stages within these categories and finally steps completed to form a percentage of closing the deal for that customer.

Get Prospects Information

–    Assign territory, account, & salesperson                                             5 %
–    Qualify opportunity (Company & Contact Info Gathering)                10%

Get Customer Involved

–    Compelling Event / Motivation to Change / Value Proposition            15%

•    Is there any critical business issues, if so, explain?
•    Is there motivation and value for them to change, if so, explain?
•    What is the cost of the change?
•    Is this need strategic?
•    Is there a compelling event?
•    Why would they spend money?
•    What is their current way and how could they do differently?
•    What is the priority of this project?
•    How do we see the problem?
•    Do we have a vulnerability analysis?
•    Do we know their priority?

–    Identify players, decision makers, sign-off process & draw political map        25%

•    How decisions made and what are are their criteria?
•    How many people are involved and who are they?
•    Who is the Decision Maker (DM) and are we connected?
•    Do we have a connection to the DM’s boss?
•    Who could be our champion and how do we develop them?
•    Why does he/she support us, if so are they actively selling for us?
•    What influence do he / she have with (DM)?
•    Who are our inside enemies and how do we counter them?
•    Who are the gatekeepers, beneficiaries, end-users, influencers and coaches?
•    Who else has impact on us?
•    Who signs off on this deal?

–    Account plan (including strategy of selling, influencing, & competitiveness)    30%

•    Which competitors are in this account?
•    What products do they use?
•    How can our capability and technology fit?
•    Can are vision fit with their needs?
•    Can we compete?
•    Why us and not the competition?
•    What are our strengths?
•    What are our weaknesses?
•    How will they be better off if they use our products?
•    What is the estimated closing time?
•    What economic changes can impact the deal?

Get Customer Engaged

–    Negotiate a sequence of events with customer                    35%

•    Have we negotiated sequence of events?
•    Has the proposal been defined?
•    Has implementation plan been developed and is it biased to us?
•    Are their configurations finalized?
•    Have we demonstrated the product?
•    Have we achieved the business proof?
•    Has risks been assessed and addressed and can it be minimized?
•    What is the total time frame?

–    Agree upon technical evaluation process                        40%

•    Are they willing to negotiate a process?
•    Has the technical proof been defined and addressed?
•    Are their resources adequate?
•    How long technical resources will be needed?
•    How long consulting services will be needed?
•    Has our relationship improved with them?

–    Obtain internal support & engineering resources                    45%

•    Do we have resources for evaluation?
•    Has responsibilities been assigned?
•    How much internal resources allocated?

–    Identify customer’s budget availability                        50%

•    Are they prepared to execute the sale?
•    Has funds been approved and allocated?
•    What is the ROI?
•    Has the sign-off been authorized?
•    Do they have budget and what is it?

Get Customer Committed

–    Complete technical evaluation                            55%

–    Obtain internal approval on business proposal                    60%

•    How big is the opportunity?
•    How much for product purchase?
•    How much for consulting & services?
•    What are other costs to them?
•    What are the list price and the discount level?
•    What are other add-ons?
•    What are sales terms & conditions?

–    Submit preliminary proposal & pricing quotation                    65%

Get Customer’s Purchase Order

–    Negotiate a win-win deal                            70%

•    Is “price” the only obstacle between us?
•    What’s most important to both of us?
•    What will constitute a “win-win”?

–    Achieve final agreement from customer                        80%

–    Obtain verbal commitment for PO                            90%

–    Obtain hard copy of purchase order                        99%

Get 100% of Money                                    100%

Note: For each step of the process, there are questions associated to make sure those steps have been reached. These questions only need to be answered by a “yes”, “no” or “no need” answer to move on to the next stage. You can decide on the actual qualifying amount of “Yes” to the questions to be considered completion of the stage.

 

Image: renjith krishnan / FreeDigitalPhotos.net

Once the general sales management guidelines are set up to follow your overall strategies, you need a set of explicit and strict sales rules to control the sales force’s actions and focus. This type of sales operational tool is a necessity and can not be taken lightly. You need to be clear and strict on the following of these rules or else your salesforce will take your organization apart. A strong and organized sales force is like a well oiled army marching onto the battlefield leading your country to victory. If you can not control your army completely, chaos will follow.

Sales rules need to be straight-forward and precise with a single objective in mind (Close deals and make money!). It has to be established and enforced across the board to everybody in the Sales organization including management. Again the Sales rules should be reviewed annually and not be changed too often or it loses its purpose and effect. Of course, when establishing your sales rules different industries, size of organization, public or private comes into play, but the basic nature of it all remains the same. In setting up your Rule book, it is wise to remind your Sales Organization the basic core values of your corporate culture. Whenever there is a chance, just keep pounding those values into your people’s minds. Sooner or later it will soak into their minds whether they know it or not.
The Sales Rules I’ve used in the past primarily consisted of 3 basic disciplines. When you hear it, you will think it is so basic and strict that it doesn’t even apply to your situation. However, please bear with me and think about it with an open mind. There are many ways you can implement something similar and more consistent with your own industries, but the basic principles remain the same, “You need to make sure your sales organization is efficient, productive and controllable.”

3 Basic Disciplines

  • Working hard and effectively, you will make tons of money!
  • Missing quota for 2 consecutive quarters, you will be terminated! (Sales Executive can waive)
  • 3 major violations of these disciplines, you will be punished! (Sales Executive can waive)

If you can effectively balance this method of highly rewarding your strong sales and effectively disciplining the weaker ones, you will create a competitive and effective sales force while weeding out the ineffective and lazy ones. This method seems harsh, but actually in my 14 years of managing sales we had rarely needed to terminate a salesman because of not meeting their quota. Usually, sales executives and managers are aware of the sales situations like if the sales cycle takes longer or the deal will close but the time is extended in which the sales rules states that the termination can be waived. Usually, these types of rules keeps weaker or lazy sales from joining your organization and bad sales people in your organization will usually resign if they know they cannot achieve their targets because of their lack of ability.
Now, going on to the more detailed aspects of the sales rules like, pricing models, discount approval levels, booking credits, commission structures, maintenance structures, and sales terms & conditions.

Pricing Models are extremely important to your organization and will mean the success or failure of your business revenue goals if you do not set a strategic and clear pricing scheme. This pricing model once set, needs to be communicated to the sales force in a straight-forward and clear manner. It should be simple and easy to follow, where there will be no room for misunderstanding or manipulations. It needs to be stated very clearly to the sales force that no other pricing models are allowed and that the company will not honor any non-discipline-conforming deals.

Discount approval levels should also be conveyed and considered very carefully, because it is money from your pocket that goes out the door when it is given. Whatever discount scheme you come up with based on industry trends, cultures, traditions, etc; it needs to be stated clearly and enforced diligently throughout the sales organization. Here is an example of a typical discount approval level scheme:

  • COO / President                                                           > 40%
  • Sales Division Head (Executive)                               40%
  • Sales Department Manager (2nd line)                    25%
  • Sales Section Manager (1st line)                               20%
  • Sales Representative                                                     10%
  • No maintenance discount!

Once the sales have been closed and the deal is being processed as booking, there needs to be distinct guidelines as to how this booking will be credited. It is imperative to create a structure in which the credit will be assigned and distributed to prevent any arguments and misunderstandings in the sales organization. Here are some possible guidelines used as booking credit scenarios for reference.

  • PO is accepted as booking only after the license agreement is signed off, the order is recorded by Booking Management and signed off by the COO / President
  • Booking credit applies to rentals, time licenses (not maintenance), permanent product licenses (not maintenance), and services
  • Distribution of booking credit and commission split for all POs within one division are decided by Division Head and put in writing
  • For multi-division or multi-business POs, distribution of booking credit and commission split are decided by COO / President and put in writing
  • No accepted-POs (booking or revenue) can ever be canceled by any employee of the organization; Violation will result in job termination!

Commission structures are the most important aspect of sales rules to the salesforce and are also the most sensitive, since it is dealing with their livelihood. Commissions need to be generous enough to lure and keep great sales people but not too easily attained where it allows for people to get fat and lazy. So remember, don’t be too stingy on the commission structures and if you give a great deal, demand a great deal back. Great sales people are resourceful and resilient; they can be pushed very far to achieve great things as long as they are well compensated.

Commission structures need to be well defined in the areas of how (How much?), when (When do I get paid), what (What types of commissions?) and where (Where is the money?).  In defining these areas, you can state something along the lines like:

  • No Permanent License inheritance from resigned or fired Sales Rep,
  • No commission pre-collection due to territory change, or sales assignment change
  • No commission can be collected after resignation or termination
  • Permanent License deal payment:

1.    First 50%:  within 30 days of revenue recognition
2.    Remaining 50%:  within 30 days after the 100% of money collected

  • 15-month Subscription License with payment within the first 12 months:

1.    50% of 85% of total amount (product portion only) within 30 days of revenue recognition
2.    50% of 85% of total amount (product portion only) within 30 days of collection of 100% payments

  • 3-year Subscription License (product portion is 70% of total amount):

1.    The 30% of 70% of total amount’s commission will be paid within 30 days of PO acceptance, the remaining 70% of total amount’s commission will be paid within 30 days of collection of incremental payments

  • 3-year Subscription License (maintenance portion – 30% of total amount):

1.    The first-year maintenance commission (10% of total amount) will be paid within 30 days of collection of incremental payments

  • Subscription License Restriction:

1.   3-year deal must be > $3 million per deal
2.    For the case of longer than 3 years, commission for the $ amount beyond 3 years will not be paid to salesperson

  • Salesperson commission kicker:

1.    Below 150% quota, pay 1.0X base rate
2.    At 150% quota, pay 1.5X re-collectable back to 100%
3.    At 200% quota, pay 2.0X re-collectable back to 150%

  • Sales Associates (GL20):  No kicker

1.    No GL20 can be promoted within the first 2-year assignment

  • Sales Manager’s (Department Head & Section Head) commission kicker:

1.    For incremental amount beyond 100% sales quota, they receives 2X straight commission

After defining some of the basic requirements of the commission structures, there are special circumstances that need to be addressed clearly so that misunderstandings do not arrive and infighting can be reduced. It is best to put these situations down in your rule book and avoid any possible confusion or manipulations by the sales force or sales management. I have listed some examples of special commission situations where it was best to put down in writing ahead of time:

 

  • Only Division Heads and Department Managers are allowed to participate in the discussions regarding commission split or commission change due to configuration remix, however, they have to be extremely careful;  No Sales Rep is allowed to discuss deal splits
  • For large sales contract within one section, Division Head will split the account and purchase orders into multiple territories, and divide booking quota credit as well as commission to all staffed and open positions
  • For account with >$5M potential, Section Managers have to assign more than one sales rep on it; if Section Managers don’t do so, all unassigned territory’s commission goes into Division’s pool and to be distributed to those districts which meet their hiring targets
  • At year-end, all unpaid commission within a division may be used as discretionary bonus by the Division Head
  • When a junior sales rep is assigned to a senior sales rep for the same territory, the senior one will receive an additional 1% of commission from the junior one’s sales results.

In some industries, maintenance contracts are a large source of income and revenue and should be considered in the sales rule book. Maintenance is usually charged to the customers as renewal licenses for the upkeep of the product, support, updates and fixes. This type of sales should be treated differently than from the mainstream orders and should be separated from the commission structure. Various organizations treat Maintenance contracts differently and the way they define their guidelines will reflect these types of differences. However, it is best to state clearly in the sales rule book how the organization defines the maintenance portion of the revenue and how it is reflected in the commission structure. In the past, we differentiated the maintenance portion of the revenue and separated it out from the sales commission structure as follows:

  • No maintenance contract is shorter than 1 year; No discount on maintenance; if you discount without prior written approval from COO/President, you will pay for it! (i.e. deduct from your paycheck)
  • No booking credits on any maintenance deals
  • No commission on maintenance renewals
  • New maintenance & new “others” PO use the same commission rate as new product license sales, but no commission kickers will be applied
  • In all geographical areas, maintenance collection organizations (compensated by straight salary with discretionary bonus) have to be established and they are responsible for booking quota on all maintenance (both new and renewal); All Sales Executive’s performance measurement includes this maintenance revenue

Another important area of concern when dealing with the sales organization is the process of sales terms and conditions (T&Cs). It is mostly a legal concern about liability and protection for the organization in dealing with sales deals. It is too easy for the sales force to promise the sky in order to close the deal, so the necessary guidelines and rules need to be in place to protect the organization from any liabilities or bade deals when it comes to terms & conditions. These are the types of concerns you need to be aware of and here are some sample guidelines for reference:

  • Any proposal or sales quotation for >$5M (total proposed price) requires prior written approval from COO / President before being presented to the prospect; otherwise, the company will not honor the deal (either verbal or written)
  • All sales contracts & license agreements require prior written approval from both Sales Legal and Finance Organizations, but the sign-off process has to be completed within 24 hours;  Any forms of special or deferred payment require prior written approval from both COO / President and Finance Head; No contingent PO is accepted as booking
  • No sales executives, manager, or reps are allowed to sign-off any sales contract or license agreement on behalf of the Company.  Only the authorized personnel from the Sales Legal can sign-off the document, and then the booking can be accepted by Booking Management.  No sales contracts are allowed to be distributed outside of the company.

 

 

Image: jscreationzs / FreeDigitalPhotos.net

In my last article I summarized some basic strategies and tactics for building an effective Sales organization. I mentioned the importance of setting up and enforcing those strategies into the sales organization through strict polices and rules. These operational tools are imperative to your successful sales organization and should be incorporated into your day to day sales operations. One of these important sales operational tools is the Sales Management polices, in which you state clearly your organization’s vision and guidelines for the sales management and field sales. When creating a sales management policy, make sure you at least cover these types of categories:

1.    Section for general guidelines
2.    Roles of the Sales Executives
3.    Roles of the Sales Managers
4.    Rules of conduct
5.    Sales Meetings guidelines
6.    Most important of all, Compensation Policies.

In the section for general guidelines, you must make it apparently clear that the entire Sales organization must follow the published Sales Rules and Policies that the Organization puts forth. Here are some examples of general guidelines I have used in the past.

General Guidelines

•    The President is responsible for booking control. (Depending on industry and size of Organization it may be a different position that controls booking. However, a specific person, not group; needs to be responsible and accountable for the accuracy and privacy of the numbers)
•    Except for the President and GM of Sales, no other Employees and Managers are allowed access to the booking data of the Company. (This is even more important if your organization is a publicly listed company)
•    Only the CEO, President, and Lawyers, can sign off and approve any legal contracts among customers, distributors, and Group Companies. (This is extremely important these days!)
•    All Project Leaders are also accountable for their own booking performance

In the next couple of sections, you need to list out the important roles and guidelines for your Sales Executives and Sales managers. In this way, there can be no misunderstanding on their authority and responsibilities.

Sales Executive Roles

•    Only the Sales Executive (SVP, VP) can approve the giving of gifts to customers.
•    Only the Sales Executive (SVP, VP) can approve the following: booking split across Subsidiaries, Regions, certain discount approval levels (see Sales Rules), and types of evaluation licenses.
•    Only the Sales Executive (SVP, VP) may approve University Programs; No salesperson or employee are allowed to grant any product to any University or College. (Of course this one is industry specific and depends on situations)

Sales Manager Roles

•    The Sales Manager (Dir, Dist Mgr) decides the hiring and firing of salespeople, with the Sales Executive having the final approval.
•    While the Sales Manager (Dir, Dist Mgr) is responsible for territory assignment, it is the Sales Executive who determines the sales quota and commission structure, in accordance with the published Sales Rules.
•    The Sales Manager (Dir, Dist Mgr) and each individual Sales Representative must update the sales forecasting system accurately and weekly.
•    The Sales Executive and the Sales Manager (Dir, Dist Mgr) need to be very careful when dealing with the commission split of Sales; Sales Representatives are not allowed to attend or negotiate any commission split discussions. (see Sales Rules)

The section “Rules of Conduct” is probably the most important part of your Sales Management policy. This section sets the tone for your Sales Organization along with the published Sales rules. This part of the policy can be seen as the Standing Military order from command and can not be wavered from at all. Here is a list of examples you can draw from.

•    No salesperson is allowed to give or loan any product to any customer, institution, or outside organization without prior approval from the Sales Executive (SVP, VP).
•    All Sales territory cannot surpass a radius of 1-hour traveling distance (by airplane).
•    All salespeople will follow the same Sales Rules.
•    Each salesperson will follow the two-quarter rule, which can only be waived by the Sales Executive (SVP, VP). The Two-quarter rule means that a salesperson has to meet their given quota within two quarters or else face termination.
•    When a Sales Rep misses one quarter’s quota, he/she has to make it up in the following quarter; otherwise, he/she will be terminated, but the Sales Executive (SVP, VP) can waive the job termination.
•    Sales Associates (Junior Sales) have to stay on their assignment for a minimum 2-year period before they can qualify to be promoted into a regular Sales Representative position.
•    The expense report for a salesperson’s activities only covers the salesperson’s travel, entertainment meals, and cell phone expense. A cap, approved by the Sales Executive (SVP, VP), is imposed on the amount of money that a salesperson can submit in his/her expense report.
•    All Sales Expenses Reports must be submitted for processing within a month after expenditure. All expenses that are submitted after the month deadline will not be accepted for reimbursement.

The next section is about Sales meetings. In my opinion, sales meetings should be kept to a minimum and be extremely efficient. Sales need to be on the street closing deals rather than being held up in bureaucratic meetings. So usually in this section, I would just state organizational meetings, for example:

•    Weekly Sales update meetings will be held by each (Territory, Group, Region, etc) on every Monday morning and run by either the Sales Executive (SVP, VP) or Sales Manager.
•    Except for the Annual sales meeting, each (Territory, Group, Region, etc) will hold its own quarterly sales meetings at their own locations.
•    All quarterly sales meetings are held during the first month of each quarter. All sales persons are required to attend without exceptions.
•    The Annual sales meeting is held on April 3rd through April 6th of each year regardless if it falls on a weekend.

Finally, the Compensation section of the Sales Management Policies. This section is extremely important to the Sales force and should be carefully crafted and executed. If done correctly, your sales force will be extremely motivated and your revenues will show for it. If done incorrectly, morale will be low and it will be difficult to increase revenue. Of course, industries vary and the size of companies, whether they are public or private will influence compensation trends and practices. But remember, once you set the compensation, do not change it around often, at least not more than once a year. If you do, you will negatively effect your sales organization and the mistrust it creates will be very difficult to repair. Please take a look at some examples of compensation polices that I have used in the past.

•    The compensation of each salesperson is commission based (see Sales Rules), while that of sales management is based on salary plus bonus.
•    Base Salary of Sales varies based on local cost of doing business, Commission rates are uniformly based on Grade levels of each Group Company.
•    Sales support personnel (Tele-sales, Maintenance collection, Secretary, and others) are paid a straight salary with a non-fixed bonus.
•    Customer Product Engineers are centralized & geographically distributed. They are paid a straight salary with a non-fixed bonus.

 

Image: jscreationzs / FreeDigitalPhotos.net

Many years ago, I heard a saying that “Sales is a form of art and Sales Management is science.” There are countless books, articles and seminars out there that teach methods and practices on the art of selling and even sales management. The true successful salesmen have a natural ability to sell which is innate to their personality, much like the natural artist that can paint, sculpture, and perform superbly. People can learn the mechanics & methods to sharpen their sales skills, but will never achieve the success of the natural artistic salesman in which selling comes as second nature. However, sales management is definitely a science in which you can follow successful guidelines and processes to manage an efficient winning salesforce. Unlike direct selling where the natural Salesman shines, Sales Management needs to be run extremely efficiently and methodically for grand success. Sales management does not need the artistic values to close deals, it needs to be stringent and effective for the organization, making sure sales are in line and revenue streams are constant and growing. Effective Sales Management needs structure and rules in order to keep Salesman in line and productive. The Sales Organization also needs a decisive strategic focus in which to rally the force and funnel all resources and efforts to one common goal which is to win deals and increase revenue. In coming up with a solid strategy for your sales organization, one must consider some basic aspects of competitive strategy, organizational & operational strategy, and good common business sense.

When developing a competitive strategy, you need to know yourself really well and know your competition. Here are some fundamental values you should think about when developing your strategies:

• Know your market, customers & competitors real well (Research, Intelligence)

• Develop a solid plan based on your situation & strengths

• To win over customers, you must understand their needs first & always keep your commitments to them

• Continuously develop new products & improve on existing ones

• Use innovation to penetrate markets and then occupy & expand your market

• Maintain strong price/performance on all products

• Use service & support as additional strategic weapons

After establishing some of these fundamental values, there are also many types of tactics you can use to achieve your competitive strategy. Depending on your market environment, competition, market share and size of organization; will determine what type of successful tactics to incorporate into your strategy. I will describe some basic tactics that are universal in nature and quite effective when established correctly.

Competitive Tactics (Organizational Perspective)

• If your organization is weaker, attack your competition from their vulnerable spots, avoid head-on or direct confrontation; However, if you are stronger, surround your competition and destroy them completely, don’t ever give them a chance to recover or re-group

• When you attack or confront your competition, use a path which they are not watching for or protecting, move fast and hit hard; during attack, avoid their strengths and attack their weaknesses.

• By using a flanking strategy, identify vulnerable niches or leaking holes and conduct a surprise attack very swiftly

• Destroy your competition’s morale and fighting spirit from within, use (intelligence) extensively

• By using a relentless non-stop surprising attack on your competition, you will always be able to keep market leadership

• Be flexible in changing tactics, including position, packaging, price, promotion, selling, etc.

• Remember this “Attack First, Hit Hard, Move Fast, & Be Merciless!”

• Establish fear and respect among competitors

• Publicize winning accounts and success stories for the sales team

• Build a complete sales database and network on prospects and customers

– Sort, analyze

– Track inter-relationships and moves (jobs/companies)

– Know the people (position, background, family, schooling, hobbies)

• Develop and maintain sales-assisting activities

– Ads (Digital and/or Traditional)

– trade shows

– promotional events

– buy or trade customer lists

• Emphasize post-sales support

• Focus on Major Account Management

– Form special “tiger teams” (e.g., 10 person teams) to conquer certain major accounts

– Completely and systematically cover the entire market area

– While not ignoring any prospects, focus on the key target accounts making up the old “80/20” rule

– Use 1-to-many sales tactics to supplement the usual 1-to-1 sales techniques (e.g., prepare multiple pens for simultaneous PO signing — make it a ceremony)

Competitive Tactics (Individual Perspective)

• Always create a win-win situation in any deal

• Fully understand your prospect before launching your sales effort

– Conduct a systematic and thorough investigation on all prospects

– Find the key spot or vulnerable point and penetrate using it

• Build trust with customers

• Focus on prospects with high buying power

• Focus on prospects with high marketing value

• Express appreciation to your customers

– Give a Gift after concluding a sale

– Pass along positive comments especially to supportive individuals

• Know your Contacts well

– Pay attention to the greeters (e.g., receptionists, secretaries, security guards)

– Check out their internal publications (e.g., get yourselves and your team into their internal publications)

– Get involved with their trade associations

– Check out their signs, bulletin boards, websites, blogs, etc.

• Remember a great salesman never leaves a customer empty handed; he either gets the PO or sucks the customers brain dry (gathers important intelligence for future use)

After setting up a decisive competitive strategy, your organizational and operational strategies must align together to support and drive the organization to achieve those goals. In preparing the sales organization, you must envision your group as a vast solid Oak tree growing and deepening its roots laying down the solid foundation for a powerful effective sales force. As a leader you must understand that your people’s hearts become the core of the business and that you should learn how to leverage their strengths along with your management group’s wisdom to win over your competition. In order to build that strong sales organization, you need to take any necessary steps to formulate the organizational & operational strategies into a cohesive and effective organization. Here are some examples that will guide you in that direction.

Organizational & Operational Suggestions

• Make sure you hire good and strong leaders. Whether they are VP of Sales, Sales Directors, Sales Managers or even Senior Sales reps, successful strong leaders also attract and motivate great people.

• Make sure you hire more than enough Sales people (More feet on the Street, more area covered, however, make sure the sales are deep harvesting their territories and not just cherry picking low hanging fruit)

• Walk around and talk to employees directly

• Communicate with all managers

• Interview departing employees (Good source of internal information)

• Liberate middle management & empower them to improve productivity (source: GE)

• Spend at least 40% of your time on “people”

• Develop a strong Culture that focus on Sales and values it.

• Focus primarily on numbers: revenue, cost, and profit

• Don’t make money through political or government power circles, if possible (Unless that is your business)

• Tightly control costs but spend money wisely; right place, right way, right time

• Insist on cash, don’t make deals on credit

• Emphasize credit checks and background investigation BEFORE concluding deals.

• Know your customer inside and out: family, background, schooling, hobbies, and finances.

• Always be prepared for future downturns and surprises. Build backlog and have a savings cushion

• Treat your (sales organization) people well (Respect them, Promote them & their function, give them glory)

• Motivate, lead by example

• Manage using a military style

– You are either on the team or you are not.

– Team members must have the will to stay, fight, and win.

– Train your sales person as though you are in a real war.

• Set extremely high targets

– Give high financial reward

– Attract top-notch sales talent

– Set a high 3-year sales goal

– Drive sales

– Measure overall performance on a quarterly basis

• Objective performance evaluation

– Use numbers to evaluate, control, track, reward, and punish

– Must be as objective as possible

– It’s the only defensible position

• Stretch your people, challenge them

– Put each person into tough situations to stretch them

– Burn their bridges so there’s no retreat (e.g., checking into a luxury hotel without cash; the successful cash sale creates the cash for the hotel tab)

– Punish non-performers swiftly [give them one chance for redemption]

– Pass along positive comments between supervisors and subordinates

• Attitude

– Attitude is all important

– Know your product & competition

• Learn your product well before selling it (know the ins and outs)

– Persist

• Sales begins with rejection

• Be polite but be persistent

• Set high goals for number of contacts before giving up is acceptable

• American Sales Association Statistical results:

• 48% of sales people withdraw after the 1st rejection

• 25% withdraw after the 2nd

• 12% after the 3rd

• 5% after the 4th

• The remaining 10% of the total sales people account for 80% of the total sales deals

– Always be in selling mode

• You are not selling just a product

• You are selling hope, a bright future

• You are selling the ability to contribute to society

– Work hard

• Be dedicated to reaching your goals

• Sell day and night

• Sell in the prospect’s or customer’s office and home

• E.g., sleeping on the train at night to save time at home for selling

• Work efficiently

• Fight to the end

• Grasp opportunities as they appear

– Have an optimistic and aggressive attitude (e.g., selling ice in Antarctica, selling underarm deodorant in China)

– People will respect you only when you respect them

– Find solutions to seemingly hopeless situations; Be creative and innovative; Think out-of-the-box; Always try new tricks.

– Never quit until you’ve closed the deal

– Never quit until you’re #1 (e.g., Selling into New Year’s Eve)

– Never quit until you win

– Be #1 by a wide margin

Once your competitive strategy is decided upon and your basic organizational & operational strategies are locked in cohesion, you need to make sure that your sales organization understands these strategies and have clear and precise orders to follow. In order to make sure your salesforce complies and efficiently carries out your strategies, an organization needs to develop and publish a clear set of Sales Management policies, a strict rule book for the salesforce, and an organized accurate forecasting system to keep track of key data. These operational tools need to be strictly enforced and communicated regularly to make sure all important situations are covered and accounted for. Once these policies and rules are enforced, the Salesforce can now clearly focus on their tasks of generating income and revenue for their organization. Hopefully, once you have worked out the kinks of these operational tools, the salesforce will have no room to play any games or try to get creative in bypassing the system. Remember, these polices are for the best interest of the organization and not for the interest of the salesmen. I will go into more details about these operational tools in my following articles, where there will be examples on types of Sales management polices and Sales Rules to incorporate into your own organization.

One last thing, please remember that Salesman should be encouraged to be 100% selfish and greedy for their commission. Make sure they are extremely well compensated for their successes and then they will perform, but if they fail, punish without mercy as an example to others for failure. Sales Managers should be encouraged to be 50% greedy for commissions and 50% for the organization, whereas Sales executives should be expected to be 100% for the Organization. If you can achieve this type of mentality then you will see your revenues grow.

 

 

Image: jscreationzs / FreeDigitalPhotos.net

In my 14 years of management experience, 4 key principals were deeply ingrained into my very existence. These principles were taught to me as I was groomed and trained to lead successful businesses by my Father whom also is my cherished Mentor. These principals consist of 4 simple & basic concepts; however, achievement of these principles takes determination and strength to push through the ranks of your organization. You must constantly remind yourself and your people to follow these guidelines and periodically check your organization to make sure these principals are adhered to and met with unquestionable tolerance. Now onto these 4 Principals, which are Culture, Attitude, Behavior and Style.

So the first principal is Culture and it is the most important principal that needs to be established without fail. All companies whether they are great or lousy has some kind of corporate culture. It is this culture that defines you as a company and will either lead you to great success or great failure. This culture is deeply defined by the company’s leaders and how they run their organizations. Culture is consistent with their personalities, habits, the way they carry themselves and the way they treat their employees. The more clearly you define a set of guidelines for your culture the better understanding you will get from your employees and the positive effects on morale will definitely increase your operations’ productivity and efficiency. Your employee needs to be molded and guided on all aspects of their daily lives within your organization. You can think of it as being a cult or a finely tuned military machine. In either case, strong guidelines are set on their organizations’ culture and their people are effectively led to achieve their organizational goals.

What makes up a successful Corporate Culture? Successful corporate culture needs to align the people to the organizations long term strategic goals and needs to allow people to clearly understand that without fail. This Culture does not need to make everybody happy but it does have to be clear and precise. It also has to be applied to everybody equally. If you can achieve this basic underlying fact with your Corporate Culture, then you have achieved probably at least 98% success.  In my past experiences, we have always defined our Culture from these basic vales and made sure everybody was aware of these: Customer, Technology, People;  Integrity; No politics, bureaucracy, OPM (Other people’s Money) spending & empire-building;  Productivity & Efficiency;  Loyalty & Performance;  Decency, honesty, & fairness; Ethical, moral, & legal.

The second principal is all about attitude and the importance it has on the well being of the organization and its members. Attitude is very important in that it sets the stage for these principals to work successfully. Once you can guide your organizations attitude into one that is positive and productive, anything is possible. Remember positive attitude can be guided and developed, but negative attitude needs to be quickly nipped in the bud so that it does not grow and fester. Once the correct attitude is fostered, people’s behavior and styles will fall in line with the overall Culture you are trying to achieve. Here are some specific attitudes we have fostered in our past organizations like: Making sure we take pride in our Quality on everything; Have pride in yourself but don’t discriminate; Believe our Customers are the King & make sure we keep all of our commitments;  Take calculated risks;  Be persistent;  Be competitive;  Understand that change is normal and stability is only temporary; Work hard & smart, but also play hard;  Use your brain power & consistently break your own records; Can –Do, Will Win attitude; Be competitive and have a never-quit fighting spirit; Don’t say it’s difficult or impossible – just do it; Demonstrate leadership throughout the organization;  Be humble & willing to learn;  Don’t be cocky or arrogant; Make sure your humble, read more and willing to learn; Be Positive; Have a sense of ownership & treat the company as your own; Take care of Stakeholders.

The third principal is Behavior and its key to the overall success of your organization. Behavior is clearly observable and should be monitored at all times. Much of the behavior will go hand in hand with the attitudes you are trying to reflect in your organization, however, you should it make clear what is acceptable behavior and what is not. Correct behavior should be rewarded and incorrect behavior needs to be dealt with by severe discipline. These are some successful examples of correct behavior guidelines that should be stated and developed: Straightforwardness, don’t play games or try to protect face (ego);  The keeping of high standards;  Fight all battles & win; Be extremely focused;  Fast in action;  Don’t be too comfortable, be paranoid about survival; Strong Teamwork; To sum it all up we have  3 main category of behaviors; “Communication, Motivation, & Relationship-building .”; 3 primary acceptable organizational behaviors which are, “ agree & commit, disagree & commit, disagree & disassociate.”; 5 character flaws to eliminate, “Ego, Emotionalism, Recklessness, Timidity & Over-concern for Popularity.”

The fourth and last principal is Style and how it ties the other 3 principals to give you an effective overall Culture. Style is how you go about in achieving your goals through Culture, Attitude and Behavior. It defines who you are and the methodologies you partake in achieving the greatness you desire. Style sets you apart from your competition and will tie your organizations morale and identity to your Culture. Effective style will allow you to win in the marketplace, increase your revenues, raise your stock price, and gain the productivity and efficiency you need to win. Our style has helped us achieve these goals and allowed us to gain the needed successes in which I will share with you here: Make sure your people are Self-learning;  Effective Training;  ROD (Re-engineering, Outsourcing, De-layering) action;  Try to achieve a Flat organization;  Management by culture, system, & discipline;  Maintain entrepreneurship & start-up fighting spirit;  Speed of implementation;  Be disciplined & persistent; Be extremely focused & fast in action; Make sure your customers are happy;  Push for Technology breakthroughs;  Ensure Product competitiveness;  Recruit superstars & take care of key people;  Always create win-win situations;  Globalization, decentralization, & diversification;  Decision-making has to be simple, fast, & risk-taking;  Accountability, responsibility, & authority;  Balance between “Technical-Excellency” and “Business-know-how”;  Be thrifty, waste nothing; Support charity & return-to-society; and lastly keep your working environment neat & clean.

C.A.B.S is an effective guideline to build up your company’s culture and hopefully my brief summary can give you some insight or ideas on ways you can improve on your own current situations. I would also like to go into a little bit more detail on executing these guidelines for the specific areas of; Customer, Technology, People, Operations, Organization and Business. The following is a quick outline of these areas of execution.

CUSTOMER

  • “Customer is the King”, we must always remember that our bread & butter comes from our customers and we need to be constantly reminded of Customer centric principals and service. The most important concept here is, “Don’t make casual commitments; once made, deliver without fail!”
  • Compete on every deal like your life depended on it. Fight on all benchmarks and product evaluations. Win every deal.
  • Form strong teams to specifically fight every competitor in the marketplace.
  • Make sure you provide all the necessary tools, products, training, methodologies, and resources.
  • Select & establish solid strategic partnerships whether it be in sales, technology and or resources.
  • Always, always improve on Customer Support efficiency.

Technology

  • Develop and implement a clear and precise technology & product road-map.
  • Strive to consistently achieve & maintain market leadership of all your products & services
  • Continuously recruit & develop superstars
  • Provide sufficient R&D resources for key products & services
  • Continuously strengthen your core technology
  • Place specialty centers in strategic locations (near key customers)
  • Move mature or maintenance products to cost-efficient locales.
  • Achieve Software quality & knowledge retention via strict disciplines.

People

  • Make sure your Leaders have these qualities (decency, honesty, integrity, fairness, simplicity)
  • Maintain entrepreneurship and start-up fighting spirit no matter how big your organization gets.
  • Promote and reward your people who are driven & can win
  • Enforce C.A.B.S (Culture, Attitude, Behavior & Style) & Global Policy throughout the organization.
  • Fill-up vacancies & have back-ups for all management
  • Recruit & train younger (in spirit) & qualified leaders
  • Emphasize & reward loyalty & stability in your organization
  • Quickly eliminate non-performers & lazy-bones
  • Consistently enforce an environment with No bureaucrats, politicians, and money wasters.
  • Reach out and touch someone, don’t hide behind computers (except R&D).
  • Be a real doer & team player – not empty talker or ass-kisser.

Operations

  • Constantly improve on productivity & efficiency in all aspects of the business.
  • Make sure No financial games are played & there are no waste of financial resources.
  • Aggressively collect maintenance income & give no discounts on these incomes.
  • Make sure you keep a stringent policy on price integrity through packaging & sales disciplines.
  • Decentralize all geographical operations; however, you must maintain strict cost control in these locations with innovative checks and balances.
  • Grant autonomy to subsidiaries & form joint ventures to strategically tackle different sectors.
  • Carefully manage all cash flows & pay specific attention to the treasury function.
  • Balance your assets portfolio carefully & conduct smart investments to better your financial diversity.
  • Improve stock performance via litigation removal, strategic marketing, and running investor relations like a sales force with a quota. (Public Companies)

Organization

  • Globalize & squeeze brain-juice from everywhere you can.
  • Allow local people to run local things & govern their own local lands
  • Achieve decentralization & have subsidiary autonomy
  • ROD:  Re-engineering, Outsourcing, De-layering
  • Have a flat organization with maximum 3 management layers below President.
  • Crash Headquarters mentality & central-control work style
  • Emphasize management accountability & delegate authority
  • Allocate sufficient R&D resources worldwide
  • Build-up an efficient & well-compensated sales force.
  • Recruit & take care of superstars, motivate, train, & develop employees
  • Utilize Operations as check-and-balance, but not micro-control.
  • Have an open space & interactive environment, no private offices (except President).
  • Emphasize both loyalty & performance, personal values are more important.
  • Develop people, communication, networking, & leadership skills (not running a popularity contest).
  • Get rid of bad people and poor performers regularly.
  • All managers have no titles (except President) and are reassigned every 2 years (rotating between line, staff, and technical positions).
  • Identify successors, have back-ups in all positions.
  • Know the differences between accountability, responsibility, and authority.
  • Create a non-paper environment, reduce management reports, use e-management.
  • Keep meetings less than 45 minutes (except work sessions) & have follow-up actions.

Business

  • Globalization to combine both centralization and decentralization.
  • Take calculated risks, but move fast & precise.
  • Maintain high standards & keep non-stop improvement.
  • Must have sufficient R&D investment & maintain a start-up mode.
  • Continue M&A activities for needed technologies & resources.
  • Aggressively invest into new business areas.
  • Share company wealth with all stakeholders.
  • Make money, not just give money to people & spoil them
  • Use money to reward existing employees & hire fresh blood.
  • Make sure your Product Line Heads are responsible for business results.
  • Balance “technical-excellence” and “business-maturity”.
  • Make “Business-know-how” a must for all management.
  • Knowledge retention through documentation & discipline.
  • Implement management development & appraisal system.
  • Maintain a strong sales channel & branding, fight all battles thoroughly, create win-win situations, & make all customers happy.
  • Productivity through quality on everything & sound business models.
  • No corruption, bribery, kickback, or stealing of company’s resources.
  • Say No! to non-essential spending, conservative financial management.
  • Efficiency through tight cost control & streamline process.
  • Share profit; reduce company-sponsored fringe benefits.
  • Pay close attention to external marketing, PR, legal, & litigation.

 

Translate this Page

© 2011 John H. Hsu, All rights reserved. Suffusion theme by Sayontan Sinha

Fatal error: Allowed memory size of 94371840 bytes exhausted (tried to allocate 1048582 bytes) in /home/johnhhsu/managebits.com/wp-includes/functions.php on line 435