Sales Management Association Webcast

16 July 2013

Presented by

How Excellent Sales Competency

Models Make Excellent Sales Forces

#salescompetency

@SMAssociation

About The Sales Management Association

A global, cross-industry professional association for sales

operations and sales management.

Focused in providing research, case studies, training, peer

networking, and professional development to our membership.

Fostering a community of thought-leaders, service providers,

academics, and practitioners.

#salescompetency

@SMAssociation

Today’s Panelists

#salescompetency

@SMAssociation

16 July 2013

Presented by

How Excellent Sales Competency Models

Make Excellent Sales Forces

Sales Management Association Webcast

#salescompetency

@SMAssociation

Topics to cover

Agenda

Impact of the changing

environment on sales forces

Approach to competency

model development

Tactics for integrating

competency models

How sales force assessment

and coaching tools can

enable higher quality,

objectivity and consistency

Q&A

Objectives of

Today’s Discussion

Discuss best practices in

designing and integrating sales

force competency models

#salescompetency

ZS Associates is a global leader in sales and marketing consulting, software and outsourcing

Full range of commercial services

Broad and integrated service portfolio delivers high

impact and exceptional value

Worked with more than 700 companies in over

70 countries

Over 2,100 professionals in 20 offices worldwide

BARCELONA • BOSTON • CHICAGO • EVANSTON • FRANKFURT • LONDON

LOS ANGELES • MILAN • NEW DELHI • NEW YORK • PARIS • PHILADELPHIA

PRINCETON • PUNE • SAN DIEGO • SAN FRANCISCO • SHANGHAI • TOKYO

TORONTO • ZURICH

Books

Press

Thought Leadership in Sales and Marketing

Over 30 Years Helping Companies Grow

We work with our clients to improve the productivity of their sales organizations

SALES FORCE DESIGN

Effective & efficient coverage of the full target

account universe with a structure & deployment that best fit the value

proposition & sales process strategies

SALES STRATEGY

Customer-focused strategy targeting the best growth

opportunities with differentiated &

mutually valuable offerings

CUSTOMER ENGAGEMENT

PROCESS

Customer-focused & expertly

executed sales processes &

planning that maximize mutual value &

trust

PEOPLE & SKILLS

Sales managers & salespeople with the knowledge,

skills & attributes required to excel at their respective

roles & responsibilities

MOTIVATION

Highly motivated, performance-

focused & accountable sales force committed to “getting it done” &

“doing it right”

SALES OPERATIONS

Highly efficient support capability that provides the sales force with the information, expertise, speed-to-market & efficiency needed to achieve superior performance

Sales Force Effectiveness

Six basic conditions are required for sales force effectiveness

Sales forces are facing a challenging business environment…

Increased competition

Greater pressure on price

More knowledgeable customers

Evolving buyer

(i.e. buying teams)

Alternative buying channels

More complex value propositions

This new environment is causing firms to reexamine how they build, develop, and guide their sales forces

The changing environment demands a more nuanced sales approach

and a different skill set than traditionally required of sales reps

Firms can identify the “right” talent and encourage the desired

behaviors by moving toward a competency model approach

#salescompetency

We often find that the average sales person represents the greatest opportunity for incremental success

# o

f R

ep

s

Rep Performance

LOW PERFORMERS AVERAGE PERFORMERS HIGH PERFORMERS

Bottom 20% Middle 60% Top 20%

Implementing a sales force competency model can drive results and encourage cultural change

Firms saw changes within the sales force and

Increased focus on improving

the capabilities of the “average”

sales rep, driving significant

upside

Noticed a cultural change as

learning becomes as important

as training

Were better able to position

sales reps with the right

capabilities in the right roles

Achieved better sales results

Guiding principles in competency model design

Develop the model based on a limited number of dimensions specific to your company's strategy 1 Organize your competency dimensions around your sales process 2 Define a clear, objective, and specific picture of the knowledge, behaviors, and skills for each dimension along a continuum 3 Consistently and explicitly incorporate the competency model into each element of your talent program (hiring, training, performance reviews, coaching, rewards, and recognition) 4 Enable sales managers to leverage the competency model to increase their effectiveness 5 Adopt a top-down and self-assessment competency process to identify individual and organization developmental needs 6

#salescompetency

Customer Environment

Customer Needs

Buying Process

Competition

Socioeconomic &

Regulatory Environment

Sales Force

Strategy

Segmentation

Value Proposition

Sales Process

Sales Force Design

Competency models that are specific to sales force strategy are the foundational element for effective talent management

A sales force competency model….

Summarizes the knowledge, skills, and attributes most critical to success

Defines these key characteristics across a continuum of performance levels

Is specific to the sales force strategy and sales process, driving the desired objective for the firm

Is built based on input from key constituents including sales management, sales reps,

commercial operations, training, etc.

Influences all aspects of talent management from hiring to career progression

Competency

Model

Role

Expectations

229 132

124

123

205 150 100

113 121

104 115

103

122

102

212 120

161 101

140 107

225

226

227

111 112

106

116 130

152

160

Performance frontier analysis is used to identify top performers and determine key factors that separate the best from the rest

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

0 50 100 150 200 250 300

Sale

s (

$000s)

Sales Potential Index (Average = 100)

Sales vs. Sales Potential Index

131

Root cause diagnosis can

be achieved by measuring

differences in behaviors,

activities, skills,

knowledge, and will

Sales competencies should align around the sales process rather than general capabilities

Old: Generic Dimensions

Busin

ess A

cum

en

Com

munic

ation

Motivation &

Pers

iste

nce

Manag

ing

Conflic

t

Team

work

Urg

ency

Tim

e M

anag

em

ent

Pro

duct K

now

ledg

e

Custo

mer F

ocus

Influence

Account T

arg

eting

Org

aniz

ation S

avvy

Tools

Know

ledg

e

& U

se

Targeting, Territory & Funnel Management

Account Planning

Call Planning

Customer Needs & Opportunities Assessment

Offering & Value Proposition Development, Communication & Proof

Negotiations

Service & Support

Value Reinforcement, Account Penetration & Pull Through

New:

Specific Value-based

Selling Dimensions

1

2

3

4

5

6

7

8

Contextually woven into the new, value-based

dimensions where appropriate

Illustration

#salescompetency

Behavior-based competency dimensions should be defined across proficiency levels

Competency

Dimensions Beginner Skilled Advanced Expert

Dimension 1

Dimension 2

Dimension 3

…

Capability Levels

Dimensions are specific to the sales

strategy and are the most critical

drivers of success in the role, e.g.

Targeting, territory & funnel

management

Account planning

Call planning

Levels provide four buckets along a

sales proficiency continuum where

each competency can be described

Each cell captures the specific behavior, knowledge,

and skill building blocks required to demonstrate

success in that competency for each respective level

Aptitude Personal

Characteristics

Skills Knowledge

Behaviors

Detailed behaviors and skills associated with each competency ensure expectations are clear

Advanced Exhibits all Skilled criteria plus:

Is a visible proponent and mentor for targeting,

territory and funnel management within the

sales organization

Consistently optimizes their effort allocation

by analyzing account level potentials AND likely

win rates AND effort requirements in

combination

Always maintains a well balanced pipeline with

an appropriate number of opportunities at each

stage in the pipeline to maximize personal

productivity over the course of the year

Places disproportionate effort against the set

of accounts that will make or break their year

Executes a prospecting and account qualification

process (new accounts), and opportunity I.D.

and qualification process (existing accounts) that

consistently ensures high-quality leads within

their funnel

Demonstrates superior judgment about when

to “walk-away” from unattractive opportunities

Does not let themselves get pulled in to lower

value opportunities at the expense of higher

value opportunities

Skilled

Recognizes that effective targeting,

territory and funnel management

significantly impact performance

Maintains and regularly reviews

accurate pipeline data

Understands the concept of

addressable potential and how

to use account potential estimates

Categorizes and prioritizes

accounts for purposes of coverage

based on addressable potential

Explicitly plans and executes

an effort allocation plan across

accounts that takes into account

their workload capacity

Allocates effort to accounts,

activities and products in

accordance with the sales strategy

Spends an appropriate amount

of time with their most important

accounts

Beginner Expert Exhibits all Advanced criteria plus:

Has not had the opportunity

to demonstrate

competency

Has had the opportunity to

demonstrate competency,

but did not meet skilled

criteria

Individual Sellers

Coordinates and leads

cross channel or cross

team targeting, territory

management and funnel

management within

accounts leading to

optimal allocation of effort

team-wide

First Line Managers

Facilitates cross channel

targeting, territory

management and funnel

management with direct

reports

Coaches direct reports

on best practices for

targeting, territory, and

funnel management

Example: Targeting, Territory & Funnel Management Illustration

Sales competencies are viewed as a single continuum along which individuals will continue to develop

Competency

Dimensions Beginner Skilled Advanced Expert

Overall Rating

Targeting, Territory &

Funnel Management

Account Planning

Call Planning

Coaching

Etc.

Inside Sales Representatives Account Sales Representatives Key Account Managers District Sales Managers

Illustration

We do not expect all roles to

engage in all competencies

#salescompetency

Successful competency models are integrated into the full spectrum of sales force talent management activities

Unless fully operationalized across all activities, the model

will not drive the desired behaviors and outcomes

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Sales Talent Management

Customer

Environment

Sales

Force

Strategy

Competency

Model

Role

Expectations

A team of constituents should collaborate on how to embed the model into all activities from hiring to promoting

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

Since key constituents are involved early in the process,

support for the competency model approach is cultivated

During the hiring and selection process, the model directly informs the role profile, interviews and evaluation

Competency-based

Hiring Materials

Account Planning

Targeting, Territory & Funnel

Management

ABC Housing

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

Using the model, HR and Sales can determine a hiring strategy

based on behavior and skills to hire on versus train

#salescompetency

By organizing on-boarding around competencies, everyone understands where and how training fits

Legend Sales Rep Onboarding

ABC’s

Products

Account

Planning

Sales

Dashboard

KPI

Package Negotiation

Business

Planning

Feedback /

Coaching

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7

Co

mp

ete

ncie

s

Accountability/Perf Focus

Coaching

Performance Management

Account Planning

Customer Needs

Assessment

Motivating the Team

Hiring

“Intermediate” (“201”)

“Introductory” (“101”)

“Advanced” (“301”)

Illustration

On-boarding and early training can be customized to focus on

developing competencies identified during the hiring process

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

Once the competency model is defined, web-based tools can streamline the top-down and self-assessment process

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

Sales managers and reps assess progress on the dimensions delineated in the competency model

Sales managers construct development plans, guiding career “next steps”

based on competency development as well as results

Competency

Dimensions Beginner Skilled Advanced Expert

Overall Rating

Targeting,

Territory &

Funnel

Management

Account

Planning

Call Planning

Coaching

Etc.

Self-Assessment Manager’s Assessments

Position Expectations

Business or Country Average

Previous Period Score

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

#salescompetency

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 1.5 2 2.5 3

Quantitative performance metrics coupled with competency ratings allow for tailored development plans

19

29

27 12 21

11 20

35 1

34

13

24

14 22

5 17 3

7 8

23

32 10

31 30 28

9 6

2

26 25 15 18 16

37 37 33 36

Pe

rfo

rma

nce

“Ge

ttin

g re

su

lts”

Competency “Doing it right”

HIGH

LOW HIGH

Coaching / skill

development

Reward

and recognize

Identify

development path

Career options

Evaluate

performance

barriers –

motivation?

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

Using the lens of the competency model, sales managers provide targeted coaching to reps between reviews

ABC Housing

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

By creating tools, sales managers use the competency model

to track and guide the coaching and training of sales reps

The competency model should have consequences, guiding reps’ career progression

Competency-linked

Career Progression

Promotion

Talent Management

Program Selection

Performance

Improvement Plans

Terminations

Hiring & Selection

Process

Training

Performance

Review Content

Coaching Process

& Tools

Career Progression

Competency

Model

Role

Expectations

Coupled with sales results, success against the competency model determines the

candidates to promote into key positions

#salescompetency

Introducing ABC Housing

Situation Pain Points

Global leader in the temporary housing

market

Strong market position started to slip as the

firm faced increased competition, demand

from customers for greater amenities, and

tighter corporate budgets

Leadership felt that the “traditional” selling

approach needed to change

Hiring, training, and coaching all used

different models

Performance reviews were generic to any role

and did not align with the sales strategy

Low correlation existed between performance

evaluation scores and individual sales goal

attainment

ABC Housing revisited

Impact

Agreement around critical-to-success sales

competencies and implemented processes for

hiring, training, coaching, and evaluating talent

Favorable sales organization turnover and

improved hiring yield

Differentiated the various sales roles and provided

a roadmap for career progression

Upgraded talent of the entire sales force

Top performers stayed and thrived, and the overall

sales organization is more motivated and confident

Recap: Guiding principles in competency model design

Develop the model based on a limited number of dimensions specific to your company's strategy 1 Organize your competency dimensions around your sales process 2 Define a clear, objective, and specific picture of the knowledge, behaviors, and skills for each dimension along a continuum 3 Consistently and explicitly incorporate the competency model into each element of your talent program (hiring, training, performance reviews, coaching, rewards, and recognition) 4 Enable sales managers to leverage the competency model to increase their effectiveness 5 Adopt a top-down and self-assessment competency process to identify individual and organization developmental needs 6

#salescompetency

#salescompetency

@SMAssociation

Questions and Discussion

Kelly and Josh answer

questions from the webcast

audience.

Check out these downloads

on a related topic

#salescompetency

@SMAssociation

Q: A different model for each sales role?

Do I need different competency

models for different selling

roles?

Check out these downloads

on a related topic

Q: Giving the competency model teeth

How do you give the competency model

sufficient teeth, so that its not viewed as just

another “corporate” program?

Check out these downloads

on a related topic

Q: Implementation time

How long does it take to create and implement

a competency-based approach?

Check out these downloads

on a related topic