Okay, I am exaggerating. They probably don’t hate you. But your relationship to your own sales team can be adversarial, and it is good to talk about this in an honest way.
I spent a year working with SS&C. In 2020, Forbes listed it as one of the 10 fastest growing big companies in America. They started in the 1980s, selling software to Wall Street. After 2010, they adopted a strategy of acquisition: they bought 154 companies. Most of these were small companies with sales between $5 million and $10 million. The biggest was Blue Prism, with sales of $300 million a year. 15 of these companies were related to software automation and integration, and so these 15 were grouped together in one division.
The 15 units collectively had 400 salespeople, and with high turnover, we were constantly hiring. The best salespeople made over $1 million a year, but they were rare. SS&C had mostly adopted a "sink or swim" policy, pulling in a lot of salespeople, giving them a chance to make some sales, but if they couldn’t do it, they were let go. A problem that arises from this is that they were not especially loyal.
This is sadly common in enterprise sales: rather than investing in training, so as to develop a cadre of exceptional salespeople, most companies just pump and dump large numbers of people through their sales team, hoping that a few of them will be standout successes. This process works well enough that it is the most common strategy in business-to-business sales processes.
While it works, it has this perverse result: you end up in an adversarial relationship with your own sales team.
When I first arrived at SS&C my team focused on building a data lake so we could build reports that combined data from multiple internal business units. Once we had unified data, I noticed some surprising things.
An example:
The corporate leadership had prioritized increasing sales to existing customers. If a customer had bought licenses for a year for $100,000, and then at the end of the year they signed a "renewal" sale for the same $100,000 for another year, our salesperson would get a 10% commission on the "renewal". But if the sales person could get the customer to buy more licenses, then the sales person would get 15% on the new revenue. So if the sales person could sell the same customer an additional $100,000 of licenses, for a total of $200,000, then the sales person would get paid 10% on the original $100,000 and an additional 15% on the extra $100,000 of new sales.
However, once we had our data lake, I noticed something: some companies had bought $100,000 worth of licenses for a year, and then after just 10 months they would buy an additional $100,000 of licenses, but then 2 months later they would cancel the contract for the "renewal" of the original $100,000.
In other words, our salespeople were cheating. They found a way to get 15% on what should have just been a "renewal" of the original $100,000, for a 10% commission. Those salespeople convinced the customer to renew 2 months early, making the renewal look like an increase in sales, so the sales person could get that extra 5%.
The intention of SS&C incentives was clear, but our salespeople had found a way to game the system. And this is common: whatever incentives you put in place, your sales team is going to look at them very carefully, and try to figure out a way to bend the rules to maximize their payout. Our best salespeople made more than $1 million a year, so they had a powerful incentive to study the system and develop strategies to maximize what they could get.
You might read this and think “I’ll fire any sales person who tries to cheat like that” and you have a right to do that, but keep in mind it might be your best sales person who engages in these games, and good salespeople are rare.
Most companies pay their salespeople a minimal salary and expect them to make most of their money from bonuses paid on sales. This works but it does mean you end up with a sales team of mercenaries with minimal loyalty to you.
Other companies pay high salaries and minimal bonuses, to avoid the perverse consequences of complex incentive systems. This can also work, and has the benefit that you have more influence over the sales team, and more reason to expect them to obey your rules. But if you have a bad salesperson, you end up paying a high salary to someone who is useless.
There is no perfect answer here: no one has yet discovered the sales process that works for every company. Rather than trying to look for any one perfect formula, I would instead suggest this:
Be honest about the fact that your relationship with your sales team contains an adversarial element.
Talk about this transparently, and talk honestly about how you will respond if you find the salespeople acting in bad faith, or using the incentive system in a manner that clearly goes against your intent. Then invite the salespeople to talk honestly about what kinds of incentives would actually get them to act in the way that you want them to.
The unique difficulty of hiring great salespeople
While the “sink or swim” style is common among enterprises (hiring and firing large numbers of salespeople) some companies have a different style: they try to hire great salespeople. This is difficult to do. Lindsey Allard of PlaybookUX.com explains:
It can be difficult to hire great salespeople, because if someone is hitting all of their numbers, then the company, wherever they work now, is going to try really hard to hang on to them. Meaning the salespeople who are looking for jobs, a lot of them are not that great. Some of them seem really great, because they spend so much time trying to sell things, they get good at selling themselves. They present well. Salespeople tend to be very confident. It can be tough to figure out who is really good.
So one thing we did was a role-play. I didn't tell them that we were going to do this, but during the last ten minutes of the interview, I’d say, okay, let's do a role-play. Totally take them off-guard. This was super helpful.
Some of the people who we really liked bombed the role-play. We asked them to do a demo for PlaybookUX. Obviously, we didn't expect them to know much about our software, but we could see if they sounded natural.
For instance, there was this one guy that I really liked, until the role-play. I introduced one scenario, where I wanted them to pretend that I was a UX researcher. I'm looking for insights into how the customers react to some UX that I've designed. That was the setup for the role play. And then I asked this candidate to sell PlaybookUX to me as if I was that researcher. They came back at me with this whole pitch about how PlaybookUX is great for marketers, and he didn't even mention research or design. And so I was thinking, okay, you didn't listen. You didn't hear me when I described who I was and what I was looking for. In a situation like that, we don't expect them to know the details of our software, because they haven't been trained yet, but we do expect them to be able to listen, and then make a pitch based on who I have described.
This sounds like a brilliant process, though I suspect it is easier to do when a company is small. By contrast, when you have hundreds of salespeople, it can be difficult to put this much effort into each hire. Sales teams tend to have a high churn rate, even when you offer a good base salary, and that high churn rate militates against investing great effort in each hire. (This is different from most other forms of hiring, where typically you can avoid high churn.)
It can be useful to talk about this honestly. Talk about your churn rate, talk honestly about what you can do to support each salesperson, talk about what your real commitments are, but also talk honestly about the limits of your commitment. Give people a realistic idea about what they face if they join your company. It’s a healthy thing if you can both start with an honest idea about the expectations.