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Sales Training Gets the Hard Sell

December 13, 2007
Related Topics: Behavioral Training, Career Development, Basic Skills Training, Employee Career Development, Featured Article
In the 1944 movie Double Indemnity, Edward G. Robinson plays the boss of insurance salesman Fred MacMurray. At one point, he tries to persuade MacMurray to abandon sales for a desk job. Frustrated when the offer is declined, he proceeds to demean the entire profession: "You guys just ring a few doorbells and dish out a smooth line of monkey talk."

    That stereotype may have prevailed in the past, but competition, fueled by ever-shrinking profit margins, is forcing salespeople to acquire new skills to retain existing contracts and win new business. They must be futurists, business advisors, financial experts and consultants as well as deft negotiators who can close deals at a consistently high rate.

    That’s why companies in all sectors are spending vast sums to improve the competency of their sales forces. No other discipline received more attention from companies in 2006, with 20 percent to 30 percent of all training dollars earmarked for sales jobs, according to research firm Bersin & Associates. That represents spending of $4 billion to $6 billion.

    "Selling is one of the few areas in which companies get a very clear return on investment from their training dollars. Most companies have data showing that people who went through sales training sell more than those that didn’t," says Josh Bersin, president of the Oakland, California-based firm.

    The job of a typical salesperson also is undergoing dramatic change, says Garrett Sheridan, a managing partner with human capital firm Axiom Consulting Partners in Chicago. Salespeople seldom deal with only one person during a sales call. Closing a sale often means navigating a bureaucracy of competing agendas and having to tailor sales presentations according to each person’s interests.

    "The number of stakeholders has grown exponentially, [coupled with] companies wanting to be more responsible about their spending," Sheridan says. "Procurement is more involved than ever. You have IT users and other department heads asking questions. Being able to sell to these different interest groups requires salespeople to learn a much more consultative process."

Consultation replaces high pressure
   The Toro Cos., based in Bloomington, Minnesota, reflect these changing training priorities. Toro provides lawn-maintenance and related products and services, both commercially and for consumers. Six years ago, the equipment manufacturer launched specialized learning curricula to give sales reps in its commercial products division a working knowledge of financing options available to customers.

    Internal surveys showed Toro’s sales teams lacked knowledge of financing instruments, such as leasing and finance-to-own arrangements, especially when compared with rivals Caterpillar Inc. and Deere & Co. Unlike its competitors, Toro does not have an internal financing department. It provides financing to customers indirectly through a partnership with GE Capital.

    The need was especially critical since the commercial products division, whose customers include golf courses and public recreation facilities, accounts for nearly 70 percent of Toro’s $2 billion in annual sales.

   Paul Danielson, the financing marketing manager for the division, says Toro customers expect to be sold on more than price or product features. They also want knowledgeable salespeople who can advise them about finance-to-own, leasing and other payment options.

    "As more and more companies use financing to acquire the equipment we sell, it’s pretty much a necessity that our sales staff be able to talk that language," Danielson says.

    Toro’s sales reps are reading profit-and-loss statements and balance sheets and are learning accounting issues. The training helps them appreciate how customers feel the impact of purchasing expensive capital equipment, Danielson says.

    "We started with the accounting that drives customer behavior: how a transaction flows through their books. It all falls within our selling philosophy, which is to do what is in our customers’ best interests," Danielson says.

    Exposing them to non-selling skills makes sales reps bold enough to approach—and persuade—a widening circle of decision-makers. A salesperson may have dealt with the same golf-course superintendent for years, but now must be savvy enough to sell to people higher up the chain of command.

    Danielson says salespeople tell him that without the training, they wouldn’t have been able to get the sale. "Some say it’s given them the confidence to approach a general manager or an owner," he says.

    Getting salespeople who are used to strictly transactional selling to embrace a different approach is stressful and challenging. Sales reps at many organizations lack the necessary skills to make the transition, says Brad Thomas, a consultant with Development Dimensions International in Pittsburgh.

    For example, nearly 70 percent of pharmaceutical companies surveyed want to evolve into consultative sales organizations within the next three years. However, only about 60 percent of pharmaceutical reps are considered by their companies to possess the requisite knowledge and behaviors. Sales organizations in many other industries face similar competency gaps, Thomas says.

    "It puts greater pressure on the HR and training functions to deliver learning that is aligned with business results," Thomas says.

Demonstrating competence
   To compete, many companies are paying attention to competency development to ensure sales professionals can deliver what customers expect. Microsoft Corp. several years ago discovered a "huge disparity" between the skill sets of its salespeople, Bersin says. People who sold enterprise software to information technology departments were posting consistently higher sales numbers than sales reps who were marketing consumer desktop products.

    As it turned out, people selling to IT departments exhibited entirely different behaviors than their consumer counterparts. The desktop-product sellers were relying on purely tactical approaches, touting the price advantages or bells and whistles of the software. Conversely, salespeople on the commercial side were addressing strategic issues that were uppermost in the minds of IT directors.

    The competencies for people selling desktop software were redesigned. Instead of selling strictly on price or feature sets, desktop salespeople needed to provide added value by helping consumers understand similar strategic issues, such as how to protect their investments by downloading software patches, installing firewalls and antivirus products, creating user permissions and comprehending the byzantine language of service level agreements.

    Bersin says that required desktop salespeople to spend more time learning new skills—a critical driver if they were to meet their sales quotas and provide higher levels of quality assurance to consumers.

    Training for its 15,000 agents is a linchpin for success at Los Angeles-based Farmers Insurance Group. It has an ambitious growth target: sales growth of at least 50 percent by 2010.

   Farmers, the third-largest casualty insurer in the U.S. and a subsidiary of Zurich Financial Services, recorded $15 billion in sales in 2006. To hit the 2010 target, Farmers—through its University of Farmers—is introducing competency-based training and assessment for its independent agents and about 500 district managers who manage them.

    As Farmers looked at its growth goals, the company recognized the need to consistently upgrade the skills of agents and district mangers, with an emphasis on sales and marketing, says Jim Harwood, an assistant vice president of training and development.

    Farmers emphasized two critical goals: improving the success rate of new agents, an aspect considered to be a primary driver of sales growth, and challenging experienced agents to exceed their personal bests.

    Before designing a single training program, Farmers wanted to know what makes excellent salespeople tick. It conducted research interviews with training leaders from companies inside its industry, as well as those from unrelated industries, to identify attitudes, behaviors and knowledge associated with exceptional sales performance.

    "We identified only outside organizations that have delivered the sales-growth results that we are attempting to achieve," Harwood says, including Boeing, Starbucks and real estate company ReMax.

    Using an "inverted Kirkpatrick model," a reference to a widely used training-evaluation model, Farmers identified desired behaviors for its agents and established specific metrics for measuring success or failure. It also based its instructional design on the Kirkpatrick model, resulting in a series of instructor-led classes on marketing, sales, business planning, execution, customer advocacy and other critical competencies.

    Although Farmers’ training only began in 2007, Harwood says early returns validate the company’s effort. On average, the productivity of agents who have attended the newly created training classes is up about 20 percent on a year-over-year basis. Performance scores for district managers were even higher—about 19 percent.

    "This is year over year, so we know we’re comparing apples to apples," Harwood says.

Calling on sales managers
   Although training for many jobs is migrating gradually online, sales training is a different animal. Online modes of delivery are useful for things like product training, but classroom instruction is still the key for teaching selling behaviors, experts say.

    "Those softer skills are more effectively learned when they are role-played and observed, versus being read about," Sheridan says.

    Structuring and delivering effective sales training is only half the battle, however. The onus is on sales managers to find ways to reinforce learning. Says Thomas of DDI: "Sales managers have a responsibility to capture the hearts and minds of their people, even before training begins. Then, after the training is completed, they need to ask people what they learned and how it could be applied."

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