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In addition to the preceding key criteria, three tips to establishing sales
territories are:

1. Ensure that each sales professional has his or her own “patch,” or ter-
ritory. You don™t want a sales structure that leads to territory competi-
tion between peers.
2. Make sure that each sales professional has the same number of
buyers to call on. Over time, be open to changing territories to
match chemistry between the sales professionals and the prospects.
Take a hard-to-crack account and give it to a new, enthusiastic sales
representative.
3. Divide territories along geographical lines where feasible. Travel is ex-
tremely expensive, and this is the economically sound approach to sales
organization.


While these tips are straightforward, it is important to note that the as-
signment of territories is a science. Managers have an inclination to assign
large territories to generate increased market penetration. To the contrary,
making territories smaller is often the right answer.
86 The Front Office: Driving Sales and Growth

When Less = More
While I was a sales professional with a large data processing company,
our territories were assigned by Dun & Bradstreet (D&B) breakdowns.
During my first year, I was handed 1,000 D&B cards with all of the
companies in my territory that might buy our services. Every year, sales
management took away some of my territory and raised my quota, and
every year, I sold more than the previous year. During my last year with
this company, my territory had dwindled to only 200 D&B cards, 25 per-
cent of what I had my first year, and yet I sold four times as much as
when I had five times as many prospects!

The message in this story is that if a sales professional focuses on some-
thing, he or she gets results. The ability to go broad and deep within the tar-
get base is important to good selling. On average, you can get about 20
percent revenue growth by totally serving your current clients and selling
more services; however, you can™t get 30 percent. Your job, as a manager, is to
coach your sales professionals on how to go broad and deep within their tar-
get market and add new accounts at the same time. You will likely find that
your sales professionals will often ask for larger territories, especially when
they are new. In response to this, give them as many targets as they ask for
and tell them that, over time, together you will reduce the list. Let the sales
professional feel some control of his or her territory.


Determining the Size of Your Team
The size of your sales organization will depend on many variables, including:

• Budget: How much is firm leadership willing to invest in the sales orga-
nization? An effective sales organization is not created by headcount
alone; you must have the supporting budget for recruiting, commission
schedules, training programs, and marketing activities.
• Market potential: What will the market bear? Is the market growing, or
is demand for your services declining? How many potential buyers are
there for your services?
• Revenue potential: What quota is attached to your organizations? How
many sales professionals are required to generate that level of new
business?

In the initial stages of salesforce development, I recommend that you start
small and focus a handful of sales professionals on a number of key territo-
ries. This first phase of your organization development is aimed at gaining
traction in the marketplace and demonstrating your worth to the firm™s lead-
ership. As the support for the sales organization grows, the budget, market,
87
Sales Management

and revenue potential variables can then drive your decision on sales num-
bers. However, as you build your organization, over time, it has to be of suffi-
cient size to be effective. Sales professionals juggle many responsibilities,
from prospecting and closing to generating proposals. Make sure that there
are enough sales professionals to be effective in a target region or industry
marketplace.


Creating a Compensation Plan
According to research conducted by the Society of Human Resource Man-
agers (SHRM), a solid sales compensation plan:7

• Creates a beneficial relationship for both the company and the employee.
• Can expand and contract, depending on economic conditions.
• Focuses on increasing profit, not just revenue. This is a slight difference
that is sometimes difficult to measure but much more advantageous to
the company.

A poor compensation plan may have the following problems:

• Inf lexibility/inaccuracy in quota setting
• Quotas that are inconsistent with company goals
• The absence of a clause allowing the company to make changes or to re-
spond to exceptional events

A poorly designed pay plan causes salespeople to focus on the wrong things
or causes them to stop selling completely”either because they have sur-
passed their goals or have no realistic chance of attaining them.
The preceding research provides some guidelines for developing your total
compensation plan. However, structuring a sales compensation plan within
the professional services firm is more intricate. It is a uniquely challenging
subject, primarily because the sales professional and the professional consul-
tant, or service provider, are asked to share the account and the revenues
generated by that client. Who gets credit and who pays are the biggest chal-
lenges in securing practice leader buy-in. Patrick Strong, managing director
at FTI Consulting, Inc., termed compensating the salesforce as the single
biggest problem8 in securing practice leader buy-in. Sales is not free. On av-
erage, 7 percent of the client professional fees go to supporting the sales or-
ganization. While practice leaders will be fine with paying for found
revenue, or new revenue that is brought in by a sales professional, it becomes
more complicated when sales professionals begin working with veteran
clients or when a consultant uncovers a lead and the salesperson accompa-
nies that consulting professional on the sales call.
88 The Front Office: Driving Sales and Growth

Understanding this delicate terrain is essential for the manager in a pro-
fessional services firm. Before covering actual commission schedules and
structured compensation plans, here are three management techniques to
help in this challenging environment:

1. Get buy-in from consulting practice leaders. Demonstrate the value
add of sales, and lead practice leaders to feel confident in their deci-
sion to “purchase” the sales service. In other words, sell-in sales before
introducing your commission schedule.
2. Clearly define the rules of the game. Territories and commission
schedules must be clearly detailed, simple enough to understand, and
directionally correct. The schedule should be based on revenue and
should fit your firm™s culture and comfort level.
3. Everyone should operate in his or her “sweet spot.” Let the sales pro-
fessional create the “at-bats” and manage the sales process, and let the
professional consultant close the deal. Let each player deliver his or her
greatest value. Allowing consultants to close deals ensures that the
client-consultant relationship can form at the early stages of the project
and gives the consultant some ownership of the process. Then, while
the consultants are providing outstanding client service, the sales pro-
fessional can be looking for more “at-bats.” This encourages a true part-
nership between sales and client service.

COMMISSION SCHEDULES. The most important thing in setting commis-
sion schedules is to be directionally correct”the schedule should be simple
and should fit your firm™s culture and comfort level. In the end, the firm must
arrive at a commission structure that the client services and sales profession-
als are comfortable with. If the salesforce is organized correctly and the firm
has established a culture in which your sales professionals work for the entire
company and are viewed by the client service professionals as partners, com-
ing up with a commission schedule will be relatively simple. However, if a
true partnering mentality has not been formed between the sales organiza-
tion and the practice areas, agreeing on a commission schedule will likely be
marked by conf lict. In a true partnership, your client service professionals
will respect the sales professionals and will be comfortable with their earning
the same amount of money or perhaps even more. If the client service profes-
sionals think of the salespeople as less valuable to the firm or capable at their
specialty, a true partnership does not exist. In this situation, the professionals
will want to control the salespeople through elaborate commission schedules.
This is the wrong place for client service professionals to place their control,
and legislating behavior through commission schedules will not benefit your
firm or your clients.
As you strategize your commission schedule, know that there are many
ways to structure a total compensation plan. Your guiding objective should be
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Sales Management

to develop a plan that provides the fewest obstacles for professionals to part-
ner with salespeople. At FTI, first-year sales professionals are compensated
with an annual salary, plus a management-by-objectives (MBO) bonus. After
the first year, sales professionals are on a straight commission plan. A straight
commission compensation plan makes using a sales professional relatively
risk-free for the practice leaders; the sales professionals pay for themselves.
FTI™s commission plan includes three elements:

1. Highly reward self-originated business. If the sales professional does
the heav y lifting and finds business the organization would not have
found easily on its own, this is worth a lot and is rewarded the highest.
The commission schedule is up to 7 percent of any professional fees
realized.
2. Reward for value added. If a client service professional brings a sales
professional into a meeting, the sales professional is rewarded for his or
her value added, specifically in helping to develop the client team,
managing the sales process, and so on. The commission schedule is 2
percent of any professional fees realized.
3. Account growth incentive. Each year, FTI identifies client targets that
are key to the firm™s growth strategy. These targets are accounts in
which the firm is already engaged and wants to grow. Each year, one to
three accounts within each salesperson™s territory are targeted as VIP
accounts. Sales professionals are paid a bonus, usually a 2 percent incen-
tive on the aggregate revenue growth over the prior year, for growth in
those accounts.

Remember, the compensation/commission plan is not simply a question of
whom you pay for what. Compensation plans are designed to motivate people
toward the right behavior, in this case, to sell more. Your goal is to organize
your sales compensation/commission plan within the parameters of what
your firm is comfortable spending in order to drive the most revenue into
your organization.


Building and Managing
Your Sales Team
Success is not the result of spontaneous combustion. You must set yourself
on fire. To be a successful sales manager, you have to believe that everyone
comes to work wanting to be successful, wanting to play at the top of his or
her game.
Your job as a sales manager is to remove the obstacles that stand in the way
of your sales professionals and enable them to be their best. Once this is ac-
complished, then look out; the sales team will deliver for you. This section,
90 The Front Office: Driving Sales and Growth

dedicated to building and managing the sales team, focuses on providing the
insights and tools to recruit and staff the sales organization and to train and
coach them to do their very best. It also provides insight into the nature of
the sales professional to help you understand how to motivate your team and
thus succeed in the marketplace.

Recruiting
Recruiting the best talent for your sales organization is one of the three pil-
lars of your role: recruit, train, and coach. It is too common for managers to
be drawn into desperation and time constraints when filling a sales role”
they react to the fear of an open territory with the philosophy that any warm
body will do. While this might offer a stopgap solution and at times might
even result in a successful hire, it is not a good approach to recruiting. The
“Coming Out” story at the beginning of the chapter depicted a firm that, in
a desperate need for new revenue streams, selected current employees who
were outgoing and friendly and assigned them to a sales role. Without pro-
fessional sales management, those friendly folks were destined for failure be-
cause the sales profession is not solely personality driven; there are specific
qualities and characteristics that are common to successful sales profession-
als.
To help establish your recruiting processes, this section reviews a standard
sales job description and details the core skills and competencies that are
common to successful sales professionals. This will help you to understand
whom to hire. Next, this section details where you can look for these candi-
dates and, finally, how to evaluate them through the interview process. Al-
though there is a data-driven approach to recruiting a sales organization,
don™t get buried in mechanics and forget to use your “gut.” Even more im-
portant than evaluating your candidates along set competency lines, the most
critical thing to ask when recruiting a sales professional is whether he or she
is ready to “bust a move.” Try to find people who are at a point in their career
where they have enough experience but are blocked by something, for exam-
ple, an income cap or no prospects for advancement. Hire people who will
take responsibility for their own success. If you follow this philosophy, you
can™t go wrong.

JOB DESCRIPTION. The first step in recruiting professionals to join your
team is the development of an employee job description. The job description
documents a job™s major functions or duties, responsibilities, and /or other
critical features, such as skills and attributes required, education require-
ment, and position classification. Based on your organization™s needs, the job
description may be specific and detailed or generic and general. The job de-
scription is an important recruiting tool, because it ensures that the candi-
date clearly understands the duties and expectations associated with the
91
Sales Management

Position Title
Employee Status
Employee Name
Office Location
Department
Supervisor
Effective Date

Primary duties: Develop and implement sales plans for assigned
accounts, create prospecting campaigns, maintain sales
activity in CRM tool, negotiate and close deals

Additional duties: Act as client advocate, communicate client needs effec-
tively to staff, perform client satisfaction audits, other
duties as assigned

Skills required: Proven consultative selling skills, excellent verbal and
written communication skills, superior organizational

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