Another round of Sales Management questions. In this episode, I answer:
- How transparent should I be with the business numbers? (challenge can be that employees will see the top line number and think they should be paid more, but they don’t realize all the costs – staff, overhead, marketing)
- Should I cap the commission of my salespeople so they don’t unfairly earn more than my other workers?
- Marketing is sending us leads that we can’t close. I talked to the owner about it but he doesn’t believe me. What should I do? My team is getting upset.
Episode 50 – Transcript
In this episode I answer more sales manager related questions to try to help out the people listening who are leading sales teams, as well as give insight to sales reps into what their managers might be thinking.
Welcome to Episode 50 of The Sales Experience Podcast. I’m super excited, because 50 is kind of a milestone number no matter what you’re doing, big 50. I had originally started this podcast with the goal no matter what, no matter how it goes, no matter if anybody listens, or no one listens, my goal was to do 100 episodes.
And just see from there, if I was enjoying the process, if it was fun for me, if the feedback was good, if it was making any kind of impact with any sales people, or any managers or any businesses listening. And I’m halfway to that goal, I’m having a blast, I’m having fun. Hopefully, you are as well. I’m really enjoying these question and answer style formats, because it’s letting me talk.
Now, the one downside, and I apologize for everyone who’s expecting 10 minutes or less, which is my expectation that I is that sometimes I get on a roll like yesterday, literally eight and a half minutes, I think it was to answer one question. And so sometimes I’m getting over the 10 minute going to 11ish minutes. And for that, I semi-apologize, hopefully, it’s still valuable.
If you’re like me, you listen at the podcast at one and a half speed anyway. And it’s only taken me five-ish minutes to get through it and so it’s really not that bad.
But I’m going to try to keep it shorter if I can, and keep giving these podcasts all the tension, value, effort that I can, and hopefully you’re appreciating it back. So, let’s jump into some questions and see how many I can get through today. So this is sales manager related.
The first one, which I’ve seen a lot is how transparent should I be with the business numbers?
Like how much should I share with my sales reps, with my staff? It could be non sales related, how much do you share with them, how much you share with everybody? And I think there is a tough balance.
Because if you know me, if you’ve listened to these episodes, you know me, I’m all about transparency, full disclosure, full honesty. But it’s tough from a business perspective because if you go full disclosure and honesty with all of the business numbers, unless you’re a public company, and you’ve got to share it.
One of the challenges is that a lot of employees, a lot of sales reps, and some of your sales reps listen to this might have seen this before, felt this come up, is you look at the top line number that a business or management or ownership is sharing and you look at that big number and you go, I should be making more, we should be making more.
Why aren’t we making more? Why are we getting more commissions? Why aren’t there more bonuses? Why aren’t we taking more trips? Why aren’t there free food in the dining room for lunch? Why aren’t we getting fed all the time?
And the thing is, is that a lot of people don’t realize all the expenses, all the costs, the overhead, you know, the rent, the healthcare, and then there’s the staff cost, then there’s marketing. If you’re in the sales team, and you’re enjoying your nice, luxurious inbound calls, from some source, there was money that was spent to generate that.
And so when it comes to this question, from a business side, how much should you share, I think it’s important to share it as long as the culture of the company understands everything that’s involved and/or you show them that accounting, so they understand at the end of the day.
Now, that may not make sense and so really, what’s important is show the transparency of what the sales team is doing, everything that’s involved and how they’re doing it. Because here’s the fundamental thing, the smart people in your group, the people who can do the math, and run some Excel formulas are already calculating and figuring out how much the business makes because they know how much they’re selling, they know how much everyone else is selling and they can do the numbers.
So you might as well be transparent, have a conversation with them, share whatever you can that make sense, and helps everyone see when it’s going well, and when it’s not going well. And then also, hopefully, you also believe in sharing that with the people. So, sharing some of that winning with everyone such that they are winning when the company’s winning by some fractions.
Now, the thing is, is that as a business owner or a sales manager, you know that the risk is on the company side and you can’t share it all. But I believe in a fair amount of disclosure and the right people who want to stay, the right people who want to win, and the right people will know that they’re getting paid well as they’re winning and it will do well.
If you have the wrong people or it’s more of a commodity sale or it’s a commodity sales team or people just come and go a lot, then it’s probably a lot less transparency because it’s not such a long term thing for the people you have in play.
All right, next question which I’ve seen this one in play. I’ve only seen a few people ever ask it, but I’ve seen this play out, which is should I cap the commission of my salespeople, so they don’t unfairly earn more than my other workers?
And this is always one of those battles. Salespeople end up being some of the highest paid people within an organization. And it can be a struggle sometimes when customer service or processing or collections or somebody else isn’t making as much, and they don’t feel that’s fair.
Now, the argument to that always is, hey, if you want to get on the phone, and you want to sell go ahead, and most of those other people realize they would rather do anything in the world than to get on the phone and sell and they’re usually okay with it.
Now, should you cap your sales people? That really depends on your product, on your service, on your on your fee structure, what that looks like. I think it’s always important to make sure that your sales people don’t hit a ceiling or a limit or they stop working. If you cap commissions, then there could be a point where your top reps are then just cruising.
They’re on cruise control, because they’ve hit the ceiling and there’s no real reason for them to keep busting their ass, and trying harder because whatever it is in that day, in that week, in that month, the quarter, whatever it is, they’ve hit that ceiling in that period. And there’s no reason to do any extra work short of sandbagging and lining things up for the next period where they can instantly win, and then they’ll go into cruise control again. So, it’s important not to cap it.
Now, obviously, you want to make it relative, you want to make sure the company’s still winning. But if you’ve got someone at a LeBron James, Steph Curry, Tom Brady caliber player who can win and keep winning and keep on winning, there’s no reason to cap what they’re earning if they’re still giving the company value.
All right. Question number three, marketing is sending us leads, we can’t close. I talked to the owner about it and he doesn’t believe me, what do I do? My team is getting upset.
So, good question from a sales manager who’s in that constant struggle that you see a lot in organizations, where it’s sales versus marketing, sales versus ops, sales versus somebody else it always seems like. And really what can you do in this situation?
The key is with this is you want to make sure there’s a strong relationship between sales and marketing. Both of them need each other, both of them will tend to point the finger at the other group for any failures that are taking place. And it’s really upon ownership and top level leadership to bridge that gap, to bring both parties together, put them in alignment, and have them both working towards the same goals instead of different goals.
And of course, one side will always think the other one can’t function without them. “Well, marketing needs us because we’re sales. And if we don’t close their deals, then they don’t have anything. And then marketing is saying, “Well, if sales didn’t have our leads, they wouldn’t have anything to close so they need us.”
So, everyone always feels self centered, like the other group, other party needs them. However, for things to grow, for groups to be successful, for teams to win, for the company to win; it is important to settle that aside and play on the same team.
Instead of its marketing versus sales, its sales and marketing versus the world. That’s really what it’s about. Upper level leadership, ownership needs to bring those two groups together. And my suggestion always is that somewhere in the org chart, at the top of the sales and marketing pyramid, is somebody who’s in charge of both and not just the owner.
The owners in charge of everything, and is busy with everything depending on the size of the organization. But somebody needs to be a VP of Sales and Marketing, or the CMO who’s also in charge of sales. Wherever it is, there needs to be somebody who’s bridging that gap, the one person in charge of both, and then they can bring everyone together.
Because unfortunately, if that’s not the case, it will always be the VP of Sales versus the VP of Marketing, unless it falls under one person. If that’s the case, it’s just going to be a constant battle for the whole time that you’re in that organization.
Now, does that mean you should stop? Does that mean you should quit? No, you just have to keep that in mind and always be able to have the data and the facts to back up everything you say. Here’s the challenge with salespeople, salespeople, and again, if you’re a sales leader listening to this, you already know this or you might not know this because this might apply to you.
Sales reps, you know this as well, but salespeople sales managers who used to be sales reps, they’re really good at selling. They’re really good at explaining things, talking about things and their goal is to persuade the other party, whether they have data or not.
I’ve had a lot of sales managers who have worked for me, I’ve seen a lot of sales managers at organizations who just want to get their way and want to sell management, sell the owner on why it’s not their fault, or why it’s somebody else’s fault, or why it’s not their responsibility, or they’re not accountable. And it’s all about sales, but not the data to back it up.
So, my number one tip to sales manager, sales leaders out there is make sure you have the data. If marketing is sending you 100 leads, and you can’t close any of them, have the data and not just they sent us 100 and we can’t close any of them and pointing the finger. But here’s the 100, here’s the breakdown, here’s the qualifications for each one, here’s why they weren’t a pre-qualified lead, or a market qualified, a sales qualified lead. Like here’s what was missing from all those 100 people. And here’s why this doesn’t work and here what we need instead.
So, instead of pointing the finger, blaming, and trying to sell your way out of why it’s all your fault, have the data to back it up, and then have solutions or adjustments of what could be done and what would help.
And when you dive into that data, you’re going to find times where you look at it and you go, “Wait a second, they send us 100 leads, my reps only called 50 of them. The other 50 they never even called back, they never even got in touch with they didn’t follow up with.” That’s not marketing’s fault. That’s my fault. That’s our responsibility as a sales team.
And so you may find as you’re diving through the data, it’s partially marketing, partially sales. That will really bridge the gap too if you can step back from the sales tendency, the ego side that everyone has, where it’s like, “Hey, I’m not at fault here.” And you can look at the numbers and you can present that clearly to the people above you. Whether it’s your responsibility or not, that will really help, that will go a long way because you can’t dispute the facts.
You can’t dispute what happened with the marketing, what happened with the leads, what did the sales reps do with it, and whatever story that shows whatever picture that paints, that will be the truth, and then upper level ownership, they can make decisions from there and that’s the best way to bridge that gap.
Just bring the truth, bring the data. Don’t bring stories, don’t bring sales, don’t bring persuasion, don’t bring excuses, just bring the facts and then go from there remembering that the goal is to work together as a team and help the company win and be successful.
That’s it for another episode. Episode 50 is in the books. It’s done, finishes out another week. This is week nine of the sales experience podcast. Again, make sure to subscribe, rate review, send me comments, send me feedback. I love hearing from people and as always remember that everything in life is sales and people will remember the experience you gave them.