Selecting Salespeople: How to Select and Set Compensation to the Specific Sales Position
Posted by John Marshall on February. 12, 2016
Not every sales professional is well-suited for every sales role. Hiring managers and employers must keep this in mind while hiring, and also when determining the appropriate compensation structure.
To get the best performance and retention, you must select the right type of salesperson for the specific sales role, and set compensation accordingly.
The three main categories of sales positions are:
- Competitive Sales: Requires the salesperson to engage in a great deal of front-end sales generation, with an emphasis on closing the sale.
- Relationship Sales: Typically involves opportunities coming to the salesperson (e.g. in retail) and requires the salesperson to build a relationship with clients and cross-sell over time.
- Service: Does not necessarily involve sales, but may present cross-selling opportunities. Requires the person to service the customer’s needs.
Naturally, there is a great degree of overlap; a specific sales position may be somewhere in between competitive and relationship sales, for example.
Sales Professional Continuum
The Sales Professional Continuum is a helpful way to conceptualize the differences between salespeople and sales roles. It is a continuum because, as discussed above, many sales roles don’t fall completely into one category or another.
As you can see, competitive sales and relationship sales are linked in the continuum, demonstrating the potential nuances of sales positions between the two types; however, service is at the other end after a break.
From our research, we have discovered that the people best suited for service roles – those who are likely to perform well and stay in the job – are very different from those suited for sales roles (whether competitive or relationship). The skills needed for a service role are dissimilar as well, requiring someone who can help clients and fix issues rather than sell. We have found that attempting to transition someone suited for a service role to a sales role – even a relationship sales role – is not effective.
While in reality we see a continuum between competitive and relationship sales, it is valuable to examine each as a distinctive type. From this analysis, we can better understand what makes a successful sales professional in each type of role, which allows us to select salespeople effectively and compensate them in the way that motivates them most.
Our 35+ years of historical data and predictive analytics allows us to accurately pinpoint the characteristics of successful competitive and relationship salespeople. We also have research which establishes the ideal compensation structure for both.
Selecting and Compensating Competitive Sales Professionals
As we discussed in detail in a previous post, the top three characteristics of successful competitive salespeople are:
- Self Management: Highly driven and able to direct their own activities.
- Achievement Orientation: High achievement orientation and motivated by money/challenge primarily, as well as people service/recognition.
- Independence/Coachability: Middle to high independence is ideal for most competitive selling environments.
With these characteristics, competitive salespeople are proactive, high energy, and very independent. In some cases, they may be willing to sacrifice the relationship with the client in order to close the sale.
These people are attracted to, and thrive in, a compensation structure that does not include a base salary.
Selecting and Compensation Relationship Sales Professionals
People suited for relationship sales roles have similar characteristics to those suited for competitive sales – after all, they are both salespeople. Relationship salespeople differ in small degrees from competitive salespeople, as they have more of a focus on the ‘people’ or ‘client’ side of the sales process.
The nuances for each of the three characteristics are as follows:
- Self Management
Relationship salespeople should not be quite as strong in self management as their competitive counterparts, as they generally have prospects coming to them rather than having to seek them out.
In fact, our data shows that it can be difficult to retain a salesperson in a relationship sales role who is too high on self management. They will want to generate prospects and move prospects along faster than the relationship allows.
- Achievement Orientation
While competitive salespeople are motivated primarily by money/challenge, relationship salespeople are motivated primarily by people service/recognition. This usually manifests in a warm personality and a stronger focus on nurturing the relationship with the prospect or client.
Their job is to build a relationship and develop trust with the prospect. They do not focus as heavily on closing and will never sacrifice their relationship with the prospect for the sake of a sale. When they build an ongoing relationship with clients, they earn the right to cross-sell, upsell, and keep the customer coming back.
Relationship salespeople tend to be slightly less independent than competitive salespeople, which makes them more comfortable in the types of structured environments where the customers come to them.
The best relationship sales people often add a bit of their own prospecting and front-end generation of traffic to this mix, moving a small degree toward “competitive sales” on the continuum.
These people are typically best compensated with a base pay supplemented by a bonus or commission override. Relationship salespeople are more risk averse than competitive salespeople, and are therefore not as attracted to or comfortable in roles with a commission-only salary.
Match the Salesperson and Compensation to the Role
To achieve the best performance and retention from your sales professionals, you must first understand where along the continuum the role falls (fully competitive selling, somewhere in the middle, fully relationship selling?) and select the candidate with the most suitable attributes, characteristics, and fit with your company.
SMG has over 35 years of data and research on the characteristics of top performers, particularly in sales roles. Our popular POP™ profile is designed specifically to select successful sales candidates. Contact us to learn more.
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