Did you know that New Hire Salespeople have something in common with Canadian Hockey Players? Timing is everything. In fact, for new sellers it can make or break their career. Come check out my presentation on Sales Onboarding at the 2015 SAVO Sales Enablement Summit on Wednesday, June 3 at 1 p.m. CT.
Does Company “Seasonality” Affect New Hire Sales Performance?
Malcolm Gladwell, in his book Outliers, introduces an interesting fact: a disproportionate percentage of elite Canadian hockey players were born in January, February, March, and April with the bulk of them born in January. How is that possible you might wonder?
It’s simple, really: the cut-off date for little league hockey is December 31st. Meaning that if a boy is born on Jan 2, he has almost a year’s growth over someone who was born on Dec 29th. Because the “Jan 2” boy has more time to develop physically, he gets picked for all of the travel teams. Because he gets picked for all the travel teams, he gets better coaching, more ice time, and tougher competition. Because he gets more coaching, ice time, and competition, his skills develop faster than the poor boy that was born on Dec 29th, who might be “genetically” perfect to play the game of hockey.
In other words, hockey success comes to the boy born on Jan 2nd simply because of the timing of when he starts in the world. Some academics call this the “relative-age” effect.
I think we do the same thing to Sales New Hires.
Let that sink in for a moment…and ask yourself the following questions:
Has your company “institutionalized” sales support and planning activities in ways that are designed to help reps with their “greatest perceived” need at specific points throughout the year and that do not happen later?
Do you have quarterly (or annual) reviews that force a seller to think strategically about leveraging all of a company’s resources in order to improve the chance of managing and closing an opportunity? What happens when a seller doesn’t have one?
Do you generate a disproportionate number of “active” leads early in your fiscal year versus the second half, especially because most of your nurturing webinars occur in the early to middle part of the year?
Do you have any sense of how many leads a new hire manages in their first year? What happens when a new hire starts in June versus January? Is there a significant difference in the number of actual customer interactions they both have in their first, “formative” year?
I believe that we affect our new sales hires’ year two and year three revenue performance based on WHEN they start with our company. In fact, I believe that the dominant percentage of seller churn can be directly linked to the timing of their initial hiring. When sellers “miss out” on this seasonal activity, it negatively affects their revenue performance, AND subsequently “compels” them to leave the organization.
The purpose of this three-part blog series is to introduce a concept called the “Relative Engagement Effect”. This is the belief that the alignment of a company’s fiscal “seasonality” improves the overall training for those sellers that are hired early enough to benefit from it and negatively impacts those that miss out. The intent of Part 1 is to answer the following question:
Is there a “seasonality” to selling?
Yes, we’re supposed to generate leads all year round. Yes, we should be addressing our Franchise Plan throughout the year. And yes, we should be conducting strategic deal reviews based on the buyer’s timing, not ours. But, clearly, there are “waves” of events that happen in very specific time periods during a fiscal year.
Franchise Planning & Lead Generation (First Four Months)
The amount of planning that salespeople conduct at the beginning of the year is probably under-appreciated. Between territory or account planning, they are responsible for guiding pre-sales and marketing efforts inside their franchise.
Sales Kickoff: At the SKO, not only is that year’s sales strategy introduced, but the “rationale” behind that strategy is explained. For new hires, this is a tremendous developmental benefit, because they not only gain a better understanding of “why” they are doing what they’re doing, but they also hear questions from more senior reps, questions that often drive to a deeper discussion and insight.
Territory Planning & Account Planning: While the process of Territory or Account Planning is a requirement for ANY new sales hire, the “formal” Managerial Review Process for tenured reps happens at the beginning of the year. New sellers have the opportunity to dialogue with tenured sellers who are going through the same process. This is a huge learning opportunity when new sellers have the chance to listen while senior reps go through their planning,
Field Marketing Planning (Webinars, Seminars, Lunch & Learns, etc.): In many cases, the field marketing team gathers input from the sales team to develop account targets based on Territory or Account Plans. This discussion, even if the new seller is just observing a more senior rep manage it, is a tremendous learning exercise, because it helps the new hire verbally connect the dots between “account potential” and “prospecting execution”.
Planning Meetings with Inside Sales Reps: Hopefully, a regular dialogue occurs between the seller and their inside sales team throughout the year. However, it is generally early in the year when the inside sales team has a calendar of marketing events that they can use to drive attendance and interest. This increases the number of leads that are generated and actionable.
Opportunity Management (Mid-Third)
There are all kinds of marketing and nurturing events that occur in the middle of the fiscal year (especially if your company uses a calendar year). Each of these events represent a chance for a new seller to listen to different viewpoints on the business challenges that your company professes to resolve.
Executive “Meet & Greets” & Marketing Roadshows: Even just the process of writing email invitations allows new hires to verbalize business challenges and executive value. And, of course, attending these events continues to offer the new hire insights into the type of questions that are asked, the types of answers that are offered, and, of course, the types of value that seem to resonate most.
Industry Conferences, Partner Events: These events verbalize thought leadership in different ways and serve as another training ground for new hires to hear solution “proof points” and value “explanation” from a business perspective.
Quarterly Territory Reviews: This formal process forces reps to present their year’s primary accounts or opportunities. Account engagement strategies, sales support resource options (including partners), executive alignment options, and competitive assessments are all discussed. New Hires can participate in the process and learn from their teammates.
Executive Alignment (End of Year Activities)
At the end of the year, the focus shifts to strategic deal reviews and negotiation strategies. Reps are required to develop close plans and manage executive engagement tactics focused on aligning senior leaders from their company with their customers.
Annual User Conference: The ultimate combination of “reference stories” and “executive alignment” event. New Hires can listen to customer presentations, assist the networking of their prospects (and overhear both the questions and answers that are exchanged). And, of course, they have the opportunity to socialize and develop personal relationships with their contacts.
Executive-to-Executive Meetings: Aligning executive teams may be the most important closing activity, and learning opportunity, in your selling process. The dialogue in these meetings is at a far different level than any meetings before this. Options for aligning the two businesses, like executive sponsorship, customized customer support, customer advisory board consideration, mutual press releases, and numerous other options become available in these discussions that new hires may not have known were even possible.
Strategic Deal Reviews: This formal process ensures that sellers are on track for reaching their revenue targets. Observing the thought process and consideration that a tenured rep goes through is a tremendous learning opportunity. But going through the process with your own opportunity has an even bigger learning impact.
Close & Negotiation Planning: While this should happen throughout the year, typically, there is a big “push” at the end of the year. In addition to the rep’s manager, an expanded roster of sales support team members like the Deal Desk, Contracts, Partners, etc. are also involved. And those new hires, who have opportunities, can learn a lot listening to and thinking through the questions they are asked to validate their pricing and proposal strategy.
Part 1 Summary
If the list of events above resonates with many of the “seasonal” activities that reside on your company’s calendar, then you too may have a not-so-obvious seasonal impact on your new hires. If that’s the case, then you may want to conduct some analysis like the chart below.
This chart is based on actual seller data from a High Tech company. The chart shows the revenue performance of sellers during the first full fiscal year AFTER their 90 day onboarding process was completed. Each data point is the average annual revenue of reps hired in that particular month (the orange line representing the average across all of the new hires).
What this chart shows is that new hires brought into this organization during the June through October time-frames lag behind the other months. I believe that this is not an isolated incident, and I believe I can explain how this “relative engagement effect” is negatively affecting not only your mid-year new hires but your company’s total revenue and long-term growth.
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