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In this episode of the CPSA Sales Compensation show, we'll discuss tactics and strategies to develop top sales talent.
Our guest is David Johnston. David is the founder and CEO of Sales Resource Group Inc., a leading consulting company with extensive experience in the design and development of sales compensation programs for organizations across North America and around the world.
Listen to this episode of the CPSA Sales Compensation Podcast and discover:
* Why is it important to develop sales talent from within?
* What are the critical elements in a successful development model?
* What do you look for in the recruitment of development candidates?
* When creating a development model, how do you set expectations?
Want to hear more? Check out these bonus insights:
* What are the important competencies for candidates to develop within this model? How do we establish those?
* What role does compensation play in the development model?
* Why is this type of model so important to the business? What results can the business expect from this investment?
Read the edited transcription:
Neil Kumar: Our guest today is sales compensation expert Dave Johnston. Dave, welcome to the Sales Compensation Podcast show.
Dave Johnston: Thanks very much, Bill.
Neil Kumar: Dave, tell me, why is it important to develop sales talent from within? Would it not be easier to find sales people in the market with a record of accomplishment and success and just hire them?
Dave Johnston: You know many organizations try and hire people from outside that have a successful resume that speaks to their industry. The difficult part is that what made them successful with their past employer may not be the same circumstances as the new organization. It doesn't mean that you don't hire successful salespeople, it just means that you have to look at it in terms of whether or not this person's going to fit within the organization that you have.
Just because they've been successful in the past doesn't mean they're going to be successful going forward. The important part of that is the fact that successful salespeople have a track record because of the support that they've had around them as well. It's important that you hire, you develop people who are used to your culture, and also have, you know, a history of success within your organization.
Neil Kumar: What are the critical elements in a successful development model?
Dave Johnston: Having a very clear competency model for the sales role you're developing for is essential. You need to have the training programs in place. It's not just around product training anymore, it's about training your salespeople to be good consultants, people who can analyze the customer's business as well as their product needs. Then you also need to have management on board who are trained and able to coach and mentor sales people through the development process.
Neil Kumar: What do you look for in the requirement of development candidates?
Dave Johnston: You need people who are good thinkers, people who are analytical. Today, sales is a lot more than just having an engaging personality, and understanding the product. Today, it's about the ability to analyze complex situations within the customer organization, look at it from a variety of different perspectives, come up with a solution that's going to meet the needs of the customer and help them be successful.
Neil Kumar: When creating a development model, how do you set expectations?
Dave Johnston: Well, you start by looking at what your expectations are of the fully qualified salesperson. Then you have to temper that with length of time that you are going to run your development model or set the expectations for someone new coming into it, to the point at which they're fully qualified.
You have to look at the number of levels that you have within your particular job family as well, so if I have a fully qualified sales rep, and looking at developing trainees up to that level, how many steps do I want to have in there before they get to a fully qualified stage and how do I differentiate between those levels?
Neil Kumar: And is it just the training program that we're talking about? Haven't we been training people in sales all along? Like how is this different?
Dave Johnston: Well, training is only good if it results in sales results. So, the training or development process should be more than just training, it should be part of the expectation setting, it should be part of the coaching and mentoring process. It also looks at experiences, could be giving a salesperson a particular customer opportunity and then monitoring how they handle that opportunity and whether or not they use the methodology that you're looking for within your development process. And so it is more than just training, it requires a lot more management time during that development process.
Neil Kumar: What are the important competencies for candidates to develop within this model? How do you establish those?
Dave Johnston: As I mentioned before, consulting skills have become an essential element. Along with business acumen, so that I'm not just looking at the customer and saying what products can I sell them? I'm looking at the customer and understanding their business, understanding what it is that they're trying to achieve, and I have the competencies to be able to analyze their circumstances and come up with a solution that incorporates the kinds of products and services that we have to offer, as well as any other requirements in order to make the solution a success for the customer.
Neil Kumar: And what role does compensation play in the development model?
Dave Johnston: You know, you get what you pay for. If there's no compensation implications within the development model, salespeople don't see the rewards coming back for what they're executing on your behalf. So, as part of the development model, I think it's important at different stages where you want people to be rewarded for achievement against the development model, there needs to be a compensation implication. That could be a change in target compensation, and if you have a fixed base incentive, that means their base and their incentive goes up each level within the development model.
Could be that you're keeping base salaries fixed, and you're adding more to the incentive opportunity because people, as they move through the development model, have more capability to deliver and are earning more on the incentive side. So definitely there has to be a compensation implication, what this is depends on the nature of your model and the kinds of things you're trying to achieve with it.
Neil Kumar: Dave, tell me, why is this type of model so important to the business? What results can the business expect from this investment?
Dave Johnston: Organizations today are experiencing a skills gap. Demographically we're getting fewer salespeople going into sales, and the customer marketplace is becoming more complex with different cultural, business, and performance expectations of salespeople. So, bringing in salespeople from outside, at a higher level, is important to fill out your roster of salespeople, but if you don't have that development model internally, then you're always trying to find the hired gun that's going to help you achieve your targets.
And those things rarely ever work out. So it needs to be a combination, much like a sports team, you've got to have the farm system and the development model in place in order to grow from within, and then you supplement that with some key performers that you might bring in, you know, to help you overall.
Neil Kumar: Dave, thank you for your time and joining us on the show.
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