Predicting Future Sales Performance

 

MacIver’s Algorithm

 

The most accurate predictor
of Future Sales Performance,
and it is FREE, my gift to you.

 

It can be used to Recruit and Select, to Promote

or to Identify your Future Top Sales Performers.

I am prepared to state that this is more accurate
and has higher validity than any Psychometric ‘test’
or any Recruitment Agency.

 

 

This simple three-factor algorithm will substantially out perform any and all ‘Tests’,
and will do at least as well, but usually far better,
at predicting Future Sales Performance than any Expert.

a.) Average (%) of Annual (actual) Performance against target (last five years.)
                (Reduce the total by twenty per cent for each year less than five years)

b.) BEST Quarter’s (%) MINUS WORST Quarter’s (%) Sales Performance (last five years)

c.) Current Sales Velocity (%)   (Last quarter´s Performance against target)

EXAMPLE:

Average last 5 year Annual performance = 87% 

Best quarter 137% minus worst quarter 48% = 89% 

Current Sales Velocity = 115%

 

(A times B times C) 87% times 89% times 115% = 89%

   

Then, 89% is the PROBABILITY of this Candidate achieving Target in their first 12 months; redo figures to predict year two when year one actual figure is achieved.

 

Thanks to Jeff Michaels of Intended Results (@IntendedResults) for encouraging me to Blog this.

 

Update 04/2013:  I have received a number of direct comments, and I am always happy to receive them here as well.  Based on this feedback and in particular some of the questions I have to caveat the USE of the Algorithm, not the Algorithm, but its use!

Possible fundamental limitations of predictive model based on data fitting

1) History cannot always predict future: using relations derived from historical data to predict the future implicitly assumes there are certain steady-state conditions or constants in the complex system. This is almost always wrong when the system involves people.

2) The issue of unknown unknowns: in all data collection, the collector first defines the set of variables for which data is collected. However, no matter how extensive the collector considers his selection of the variables, there is always the possibility of new variables that have not been considered or even defined, yet critical to the outcome.

3) Self-defeat of the algorithm: after an algorithm becomes an accepted standard of measurement, it can be taken advantage of by people who understand the algorithm and have the incentive to fool or manipulate the outcome.

Wikipedia

.

Sales, Jobs for life!

 

Nobody has a lifetime Contract of Employment,

which is strange because Employers want Customers for life.

 

How do we understand a “Job for Life” in 2013?

I believe it is found in the concept of “EMPLOYABILITY”

An ‘employable’ person is one who has desired Skills and Competencies,
which they can use to generate Value for their Employers, they are always in demand.

 

 

As a Sales “Employee” you have the right that your Employer shall at least maintain your current employability.

It is to their current benefit
and it is of vital future importance to YOU.

Employability, for a Salesperson, is having a Portfolio of transferrable Selling Skills,
which will enable you to bring Value to your Employer whoever that is.

 

 

 

 

 

If a Salesperson’s Selling Skills are developed and maintained,
then I believe they will have a job for life.

Selling skills, FUNCTIONAL Selling skills, serve as a good foundation for Management and a great foundation for General Management.

Insist that your Selling skills, hence your future EMPLOYABILITY are at the highest level.

If your current Employer will not do this, then before you lose what employability you have.
Leave and find an Employer willing to maintain your Selling skills.

In all events, recognise that YOUR future employability,
YOUR Job for Life, rests in YOUR own hands.

Take actions to safeguard your employability, do it for yourself!

The Secrets of Sales Success in 2015

 

Many of you will be planning your 2015 Kick-off,

here is your BIGGEST Challenge for the sales Year

A 12% Sales Target hike!

 

“In 2015, you are going to have to produce
the work of 9 Salespeople from 8 Salespeople!”

So, BMAC what are my options?

There are only TWO options
Train or Coach your existing team!

 

Your are going to have to make existing Salespeople
both More Effective and More Efficient.

 

I suggest that you begin by Sales Assessment of your current Team,
what do you think?

Here are some ideas of what to look at:

http://brianmaciver.blogspot.com/2010/12/what-makes-top-salesperson_01.html

 

Having Assessed your Team into Top Performers, Average performers

and Low Performers, then I suggest you overboard poor performers:

PRESS HERE

 

http://brianmaciver.blogspot.com/2010/10/over-boarding-poor-performers.html

You will fail to meet Target again in 2015 if…. 

You do not take this action NOW!

http://brianmaciver.blogspot.com/2010/09/how-long-do-we-as-sales-managers-accept.html

Organise the Sales Training they need, but don't do it yourself,

unless you happen to be a Sales Trainer working as an interim Sales Manager.

Here is WHY YOU should NOT be the Sales Trainer:

http://brianmaciver.blogspot.com/2011/10/major-problem-in-selling-has-been.html

 

After the Sales Training YOU MUST do the Sales Skills Coaching

Here is how you can be a GREAT Sales Coach:

http://brianmaciver.blogspot.com/2011/10/true-secrets-of-sales-coaching-for.html

Well if you stuck through all that,
things are looking a lot better for 2015:

You will have finished ALL your Recruitment by August 2015

You will have a performance improvement of 25% by June 2015,

You should easily make your Sales Target by November 2015.

 

Congratulations and
HAPPY NEW YEAR in 2015!

A Philosophical Criticism of The Challenger Sale

The Greek word “Mimesis”, from which the English word “Mimic” is derived,
literally it means “Representation” or Imitation.

The Challenger Sale describes five “imitations” of reality.

They are reflections of Salespeople, but in only a few dimensions and
not the full multi-dimensional Truth.

If the reader accepts the “Imitation” as a reality, then their minds are harmed, by confusing the “reflection” for the reality. Salespeople have to inoculate themselves by knowing the multi-dimensional true nature of Selling.
When a Writer depicts reality it is from their own perspective. If we view a bed from underneath it is still a bed, but its appearance is a distortion of the reality. Better to use a mirror if we want to examine or represent reality. But, it is still a reflection. If you had the only mirror then you would be a marvel who is able to “copy” everything!
The writer, looking in the mirror makes a representation. The less the Reader knows of reality the more “REAL” the Writer’s imitation appears. And, that is the danger, that an imitation or “Representation” is mistaken and believed to be a Reality.

The art and the science of the writer in depiction is
a long way from reality.

When we mistake a representation for a reality it is because of our inability to distinguish knowledge, ignorance and representation. This is like the child who tries to eat wax fruit and is surprised at its character.

  Seller→ belief→ collection→ analysis→ view→ report

Writer→ Seller→ belief→ collection→ analysis→ view→ report

Representations (like Hunter/Farmer) are easy to reproduce without any knowledge of truth, because they are “appearances” not realities. Suppose that we could make either the reality or the refection, then would we devote the same energy to both or would we focus on reality?

If instead of Salespeople, the five descriptions applied to Doctors of Medicine which would we choose to heal us? Or, if we were Doctors which would we chose to imitate? This leaves us with the question: From reading about a “Representation” are we capable of judging the behaviours to imitate this representation?

The final Validation or the final Criticism of The Challenger Sale will be resolved in results.
When companies change or reform to “The Challenger Sale”, in part or in full will the Sales Community be better off?
Or, can any success be attributed to The Challenger Sale or to the advice given? 

Have the authors proven its effectiveness by Selling using their own methodologies?

The final thoughts we have to ponder is
has The Challenger Sale brought real insight or does it merely represent it? 
Are we persuaded by their admirers and ardent follower or by their insight to truth?
Which assumption should be made,
that it is again no grasp of truth but instead a mirrored reflection –
the clothing but not the substance or the truth.

When the Painter paints shoes can he do the Cobbler’s job?
Or, when the Writer writes a recipe can they replace the Chef?
The Writer is no less, they depict what is seen but they do not reproduce reality! 

Describing the steering wheel, brake and accelerator, however accurately, does not meet the skill of those who manufacture the real thing. Yet, even those who build them are only pleasing those who drive. The real purpose is neither in description, nor manufacture but in use!
The Car Driver will know of the defects or merits of both description and manufacture.

Only the Driver feels the steering or the forces of Acceleration and Braking.
The Builder will have a belief about the merits of his work,
but the reality can only come from The User.

However, the Writer on Selling Skills has neither knowledge nor correct view of the function or dysfunction of the things that they represent.  Nevertheless, they write, Readers read and Sellers adapt and fit.

The five Sales “types” are metaphors, not reality. 
Any “type” is a reflection of a stereotype, not a prototype.

We are all parts of all types, and the better for it!

In Sales we aspire only to do the right thing, in the right way,
at the right time in the hope of the right outcome.

Hunters and Farmers 2013

One of the most popular misconceptions in selling is:
that there are two kinds of Salespeople,
Hunters and Farmers, there are not.

 

If you believe that there are, and if you put this misconception into practice,
then you are losing much of your Revenue Opportunity and all of your Profits.

“Hunters”

e.g.  “New Business Development Executive”
“Hunters both prospecting and
qualifying sales opportunities.”

Farmers

e.g.  “Account Manager”
“Farmers servicing existing customers, identifying and closing NEW sales opportunities”

This has been used for about 35 years (maybe more).

Anyone that researches Hunters and Farmers Model finds that:

http://www.mckinseyquarterly.com/Using_your_sales_force_to_jump-start_growth_2781

By definition Sales “Hunters” take Business from Sales “Farmers”,

I would like you to think
of the whole idea differently.

It is NOT salespeople who are ‘Hunters’ or ‘Farmers’ with 'Buyers' as “food”.

In fact the TRUE MODEL is that:
BUYERS who are either “Hunters” or “Farmers”
and it is Salespeople who are their ‘meals’!

 

Do not confuse my use of the word ‘BUYER’ as a “Professional  Buyer” in the Purchasing Department,
I use the word ‘Buyer’ here in the context of ANYONE who a seller may sell to. 
ANYONE. Technical, Financial or User. 

Anyone in the Buying/Decision Making Model whatever their role,
could be either a Hunter or Farmer.

I have researched “Effective” Buyers, in Retail, High Tech, Financial Services and Government.
Using the model of “success” as the best outcome including Product Application, Cost of Acquisition and Ownership, and successful on-going relationship (for the buyer). 

These three criteria determine Buyer Success

• Cost, Application and Relationship.

Using the terms “HUNTER” Buyer and “FARMER” Buyer is not pejorative it is descriptive,

BOTH of these Buyer Types are doing a great job for their Company (and themselves!).

“Hunter Buyers” are predators; they are always looking for new ‘victims’. 

Their staple diet is inexperienced sales people, who think they have “found” a sale. 

The Buyer commences to eat the ‘Seller’ for breakfast!

 

 

“Farmer Buyers” have found their
‘meal ticket’ and nurture their
Account ‘Manager' with small gifts
(small orders). 
Meanwhile, ‘training’ the Seller to bring
best offer best pricing, special deals and
‘all in costs’ to “Keep the Relationship”.

 

When you run a Customer Profitability Analysis across your Customer base,
then some of the poorest performers are:

Long term Customers with a ‘Farmer’ (long tenure Account Manager)

or the new accounts brought in by your ‘Hunter’ sales people on a “Loss leader sale”!

Profitability ‘Pereto’ usually shows that 20% of your Customers are delivering 80% of your profits.  These Top Performing Profit Accounts have a newly appointed “Account Managers”,
or a Margin incentivised Hunter-Gatherer Sales people!

I have carried out extensive Behavioural Analysis on Buyers (3,000) sales calls.

Their Behaviour, verbal behaviour that is, follows clear patterns.

I have devised 4 categories over the years Hunter, Farmer, Poacher and Skinner.

The real question is:
how do I match my Sellers
to these Buyer profiles?

I will continue to Blog on this.

The FIVE biggest mistakes in Sales Recruitment

 

 

1. “In my image”    

This is for the Sales Manager who is looking for themselves, but 10 years younger. They believe in “cloning”, they want to use the same management process, which “worked for me”. This is such a limitation. The market and the product, as well as the sales channel has changed so much, maybe YOU would not make it anymore. When they succeed in their recruitment aims, you end up with a mediocre sales department, and a huge recruitment bill.  Diversity Sells!

2. “I never hire a.....”   

this is prejudice run wild they exclude on the grounds of nationality, gender, race, shape and size, shoe colour, CV spelling and grammar, age, golf club membership, old school attended, university attended or not attended or previous employers. They give credence to the Groucho Marks’ line
“I would never work for a Company that would employ me!”

Keep an open mind, use evidence not prejudice.

3. “Best of a bad bunch” 

Having read a couple of CV’s, and seen two candidates in interview a job offer is made “to fill the spot quickly”. These managers do not believe in anything but luck, and mostly they are unlucky, especially in recruitment. Their ‘new hire’ never seem to work out; they were only the “best of a bad bunch”.

Recruitment is an on-going process; continually try to attract the best people.

4. “Jump to Conclusions”

With five more candidates still to see, you decide this is the one.
Let us make a job offer before somebody else does.
Somebody else will make a job offer! So, see the other five candidates,
make a short list, make the job offer and press for a speedy reply.

Alternatively, you eliminate a candidate for a simple error early in the process.
A poor covering letter, spelling error in the CV, late for the first interview, green tie and blue shirt, we all make ‘mistooks’, don’t we?

Do not rush to judgement gather all the evidence first, then weigh it and decide.

5. “Not accepting less than ‘perfect’”

You have extended the recruitment cycle, hundreds of CV’s, tens of interviews and yet you have made no offers. Wasting ‘good enough’ candidates, wasting your own time and having an empty sales territory. Review your process Job and Person specifications.

Loosen the criteria, get second opinions, change your sources of candidates and get a move on!

Final words, why does selection fail?

 

Selection fails either because YOU did not get the information
(Interview - Assessment Error)

 

or it fails because YOU did not use the information you had.
(Error of Judgement)

Personality Testing in Recruitment

 

 

There is no point in using Graphology or MBTI in Sales Recruitment.

They are unreliable and lack validity

In defence of Dr. R.Meridith, or he of the Belbin Teams then it is quite a different matter. Belbin’s original concepts have been peer reviewed, are intellectually rigorous and academically respectable. His studies were, and are, validated by successful prediction, and Belbin Team Types have had wide use and great success.

 

 

It should NEVER be used as the basis of recruitment, or promotion. Indeed, BELBIN decries its misuse in the fable of the "Apollo Syndrome” and “Negative selection”. This preferably self-administered and self-interpreted instrument uses self-perception, which gives the individual and the team insight into the contribution range and preferences of the individual. Its basis is in valuing “difference”, in that the ‘Team’ will always outperform the ‘Individual’. Belbin Team Type insight enables the individual to serve the team best, and recognising preferences enables the team to be best served by the individual.

When training Belbin to Managers or to Sales Teams I use the Movie “The Great Escape”,
which highlights individual types, working together to achieve what individuals could not achieve alone.
All of the types are present and easily identified in the film.

• Shaper (Steve McQueen multiple failed escapee),
• Resource Investigator (James Garner the scrounger),
• Plant (James Coburn the manufacturer)
• Completer Finisher (Robert Desmond the tailor),
• Implementer (Charles Bronson the tunnel king)
• Specialist (Donald Pleasence the forger)
• Team Workers (David McCallum and Gordon Jackson dispersion and intelligence)
• Coordinator (Richard Attenborough Big X).
  
  However that rarest of Types:
• Monitor Evaluator was played by the Hannes Messmer the Kommandant.

So sit back next Christmas and enjoy a classic Movie, but this time with a twist in Perception and Judgement. Apply the lessons back in the workplace, and watch Teams out perform expectations by a mile.

If you insist on using Graphology in recruitment, then combine it with only offering jobs to Monitor Evaluators and Plants, there is at least a correlation between success and them!

Recruiting B2B Salespeople

 

For the last 20 years, I have been Recruiting, Selecting and On-boarding B2B Sales people, working with about 20 different Client Companies.
I DON'T have a 'List of Questions', per se.
I DO have a Job Specification (Description) and a People Specification for the role.

Each CV or Resume is carefully read and cover letters 'ignored' (they are salespeople!)
CV's that do not have 'essential' factors: location, qualification, experience, etc. are quickly disposed of. A few 'interesting' ones, usually special skills Languages, unusual talents or living in improbable locations are kept on file for other jobs.

 

 

Telephone interviews for the remainder are arranged;
20-40 minutes to review the CV/Resume for accuracy and relevance to role.

This is an inclusive process, not elimination.
About 50% leave at this stage due to exaggeration or falsehood.
I always thank them for their application,
but advise them to change their CV/Resume.

We start with a “soft introduction” about the company and position,
and then I ask if they have any questions for me!
If they do NOT have any questions then it is minus 5 points.
A Salesperson with no questions is unlikely.
With their questions 'handled' then, I begin.

 

FIVE areas on their CV/Resume interest me, for B2B Sales.

1. Knowledge of their current Product/Market, their Sales Channel and Sales Process.
   
   
2. Skills: Selling Skills, People Skills, and Negotiation Skills.
   Do they know what they are, can they use them and do they use them.
   
   
3. Activity: Revenue Generating Activity (RGA) versus Non-Revenue Generating Activity (NRGA),
   here I do have a list, not of questions, but a proprietary check list of areas sales people spend time on.
   I do a ratio RGA/NRGA if better than 50% plus 5 Points.
   
   
4. Attitude: why have they left jobs, what attracted them to new jobs, why are they thinking about this job.
   How do they feel about Clients, Products, Markets, Sales Managers, and greatest success, biggest failure?
   What would be their Ideal job?  (If its NOT Sales, then why are they looking at us?)
   
   
5. Strategy: For B2B selling, I examine their use of SFA and CRM, Pipeline Management, Prospecting and Territory Coverage. Preferred style Farmer or Hunter? (I also use two propriety categories 'Skinner' and 'Poacher').  You may want to read my Blog on Hunters and Farmers to see a twist! http://brianmaciver.blogspot.com/2011/01/hunters-and-farmers-2011.html
   

    

The Interview Telephone call is recorded; I do a Behaviour Analysis on ME on 1 call in 5. I check for my total talk time less than 30%, and my Question types: Open/Closed, Leading, Rhetorical, Multiple and a special category Nonsensical! These audio audits keep me honest, avoid prejudice, and maintain a level playing field. I notice repetition and occasionally I do like a question that I ask. The process is about 10% preparation and 90% improvisation as each candidate is different.   Both you and they have to respond and interact with one another. Borderline Cases will also be audio reviewed, and best and worst may be reviewed with the Client.

Scoring for each of the five categories as Red, Amber or Green. A single Red eliminates the candidate. There is an overall Score of 1-10, 7+ are called to Face to Face interview and assessment. Candidates are told to bring their ‘Diaries’ for an Activity audit, their stock presentation for current Product/Market and to be available for up to 4 hours.

How successful is this?
Just over 70% of selected candidates succeed in their first 12 months.

The others leave of their own accord 15% and are fired 15%.

This compares to 'Industry' figures of
about 30% success rate in first 12 months.

The Customer’s View of Salespeople

 

 

When Clients talk of a 'good' relationship with their Sales Executive or Account Manager they talk of their bringing value and minimising risk.

 

When I ask Clients, about what their 'preferred'
sales people actually do they reply understand

• my situation,

• my plans,

• my doubts,

• my opportunities.

 

 

 

The Client's expected outcomes were

• Reduced or eliminated risk, by managing uncertainty 
  
• Achieve personal goals and
  
• Achieve Corporate Goals.
  

When I sit with CEO's, CSO's and CMO's  I hear them talk about

• Out-dated strategy,
  
• Failure to cooperate,
  
• Weak development and
  
• Poor product management,
  
• working at cross purposes and
  
• Short time horizons.
  

When I ask Top executives, what do they want in their salespeople?

• Strategic
  
• Solution orientated
  
• Consultative
  
• Value Seller
  
• Experienced
  
• High energy
  

So, Client's clearly state that Interpersonal Skills correlated to the bottom line,
yet we continue to recruit to “attributes”.

BMAC Consultants like to respond in the same way
as your HELP key in software applications.

We deliver Context based Sales Support,

Process Based Consultancy embedded in the Sales Operation.

BMAC are Client Centric, You and Your Client Centric.

Recruiting and Selecting Sales Managers

I am reposting this after reading todays Harvard business review:

http://blogs.hbr.org/cs/2013/01/want_success_in_your_sales_org.html?utm_source=Socialflow&utm_medium=Tweet&utm_campaign=Socialflow

McKinsey defined front line Sales Management as the critical function to Revenue Performance. The Task of the Sales Manager is to Generate Revenue. They are some of the easiest people to measure in the whole firm. Total monthly revenue, quarterly revenue and Annual revenue are the key measures. Then we pyramid ratios and compare them to other Sales Managers, Revenue per sales head, and percentage of sales people hitting monthly, quarterly and annual sales targets, as well as Staff retention.

When all is said and done, every time I find a sales centre of excellence at its centre is an excellent Sales Manager. Sales Centres of Excellence exceed targets on a regular basis; they have more top performers than poor performers. They are the place where future Sales Managers are grown and it is the best place to have New Sales Hires start work.

This paragon of worth the 'ExSellent Sales Manager' does three things well:

Leader, Manager and Coach and ALL are MEASURABLE.

• Management first; this is Performance Management, activity, pipeline, territory allocation and control, Customer satisfaction and most importantly Sales Discipline and Standards of Performance. Show me a Sales Manager without Standards of Performance and I will show you a failing Sales Manager.
  

• Leadership, I use the great model developed by Ken Blanchard from the One-minute Manager series, Situational Leadership II.  Easy to understand, behaviourally based, adaptable and MEASURABLE.
  The rules are simple: treat everybody DIFFERENTLY; treat the same Person differently for different tasks. Sales Leadership skills are measurable for both different styles Capability and Flexibility and finally the fit between need and style given.
  

• Coach, have individual Personal Development Plans, show regular activities based on Sales Development, being coached themselves (Coaching the Coach) looking for opportunities to develop their team and themselves. The Skills and Activities of successful Sales Coaching are measureable.
  

I recruit against this job description.

“Manager show me your methods and systems for Performance Management.”

“Give me examples of your Leadership styles.”

“Talk me through the Personal Development Plans for the individuals in your team.”

Finally; I verify all I gathered at interview with an Assessment Centre, composed of making a 30 minute sales call to sell their current product or service (to assess selling and presentation skills); then a 1 hour Problem Solving group exercise with other candidates 4-5, where I observe their Interactive Competence, Decision Making and Leadership Skills. The session concludes with a 30-minute feedback session, identifying strengths, weaknesses, and a Personal Development Plan for each Job Candidate.

This is a detailed what to do, but not a how to do it. BMAC Consulting has developed seven Key Performance indicators for Sales Managers, based on over 30 Constructs or measures, which are built from over 100 sub-constructs. In measuring several Hundred Sales Managers, our conclusions were Tenure is NOT a success indicator, Success in one people; product/market is NOT a success indicator in a different People, Product/Market situation.
Only Sales Managing, Leadership and Coaching behaviours gave a clear success indicator.

The most expensive mistake in Sales is Recruiting the wrong Sales Manager; it can devastate Sales in their team. If you would like to used a validated method, then please contact Brian MacIver brian.maciver@gmail.com