retention

How Sales Management in Pro Sports Can Catch Up to Corporate America

kirk_wakefield 2018, About S3, Integrity, S3, Sales Management, Sales Training, The S3 Program, Tickets , , , , , , , , , , , , , 2 Comments

Why do parents, teachers, politicians, managers and salespeople continue bad practices? Four reasons and the ways we express them are:

  1. We do what was done to us and assume it was best practice.
    • “Look at me, I turned out OK didn’t I?”
  2. We lack the depth and breadth of relevant education to recognize bad practices.
    • “See, you can succeed with any background!”
  3. We judge outcomes based on the exception rather than the rule.
    • “Look at her, she started here and is now vice-president!”
  4. We lack the courage to meet the demands of reality.
    • “I know this isn’t working, but I can’t change what I’m doing now.”

Sports sales recruiters often ask applicants, “Why do you want this job?” The wrong answer is, “I just love sports.” The irony is when it comes to pay, work hours and benefits, they literally bank on the applicant’s love for sports to compensate for, well, real compensation.

How Do We Know the Sports Sales Management Model is Broken?

Sales 101

First, consider some basic 101 principles of sales management. These quotes are directly from a leading sales textbook 1

  1. To attract and keep the best talent compensation must be uniform within the company and in line with what competitors’ salespeople receive.
  2. Salespeople who perceive the system as unfair may give up or leave.
  3. A constantly changing system may lead [salespeople] to constantly change their activities but never make any [more] money.
  4. Companies that do not emphasize service or do not anticipate long-term customer relationships typically rely heavily on commission plans.
  5. Salespeople working primarily on commission have little company loyalty and certainly are less willing to perform activities that do not directly lead to sales.

Inside sales reps in sports do not receive compensation in line with what they can get anywhere else. Top salespeople often see the system as unfair (given effort & reward) and leave as soon as a client sees how good they are (and offers multiples of current pay). Teams frequently “play with the lights” changing compensation systems in ways that rarely favor the rep by making the rep more money. The shift toward service-only reps leaves inside sales reps relying heavily upon commission and sacrificing customer welfare and service. As a result, few have loyalty and are certainly unwilling to do non-sales related activities.

Turnover

Second, consider the effects and costs of turnover. Average sales turnover across industries annually hovers around 25%. 2 Typical sports sales practice is to recruit a new class of inside salespeople every 4-6 months, suggesting something closer to the average turnover among car salespeople (~70-75%). 3 Some are promoted (internally or externally), but most leave the industry voluntarily or involuntarily.

Costs of turnover are estimated between $75,000 to $200,000 per salesperson4, taking into account recruiting, training, and lost sales. You can calculate yours here. The NBA estimates third-year reps generate 3.4 times the revenue as first-year reps. Unfortunately, relatively few get to the third year.

If I fail over half of my students each year, you wouldn’t say I’m a good teacher. In our program, we can’t blame the students. We recruited them. The same is true for teams. If annual turnover is anything much more than the non-sports corporate average (25%), at some point we must have the courage to start looking at the system and grasp the reality.

Training

Most sports sales managers are interested in training. The problem is the low proportion of these with any professional training in personnel management, compensation structure, leadership, and other sales management responsibilities. Many make great effort to learn to compensate for the lack of formal training (i.e., business management-related degrees). A few have had professional selling courses. A few have MBAs. Most were selected on the basis of being great salespeople, rather than management skills–which are two quite different things.

Sales students not taking the sports route are often hired by companies like Oracle, IBM and other major corporations who offer starting pay closer to $100,000 than $30,000, even while spending months in training before ever making a sale. We don’t expect teams to be on par with Oracle. But, $10-$20 an hour and first year commissions won’t attract the best talent among graduates who just spent tens or hundreds of thousands of dollars getting an education and accruing student loans.5

A New Model

Sales executives and managers (in sports) routinely bring in motivational sales speakers and hold weekly pep talks. Why? Because the nature of the role and associated benefits of the job aren’t intrinsically motivating on their own merits.

One of our partners, Spurs Sports & Entertainment, decided to do something about it with the support of leadership, including Frank Miceli and Tim Salier. Lindsay Beale, Director of Business Development at SS&E, walks us through the four steps they undertook.

Step 1: Look at the hard truth

We studied our sales work force and realized we were recruiting talent, investing resources into their professional training and development and they were leaving our organizations for other local corporations in sales roles.  We thought we had the hiring and recruiting figured out. We found individuals who really wanted to sell. For years we felt our compensation was competitive to other sports organizations. This helped with recruiting, but when you hire talented salespeople, they have opportunities outside of the sports & entertainment business.

Corporations look for talented salespeople from reputable organizations. They use aggressive recruiters, signing bonuses, high base salaries and competitive compensation packages to attract them.  We realized we couldn’t compete with them–specifically with our representatives with under 3 years of tenure.

We worked with finance and HR to evaluate our current sales structure to establish a plan to address our top concern of retention.  Through our research it was also clear compensation wasn’t the only place sports sales are behind the corporate sales world.  We are currently in the process of addressing sales retention by reviewing three areas: compensation, sales enablement and culture.

Step 2: Create competitive compensation

Teams may think their compensation is competitive with other teams, but that is the wrong comparison point if the goal is to retain talented salespeople. We restructured in four ways.

  1. Supplement commission in the first few years with a higher base salary to provide stability while the sales representatives build their books of business. [Among S3 partners moving in this direction, this ranges from $30,000 up to $42,000 for base pay.]
  2. Restructure commission to reward all sales revenue. We realized our commission structure heavily rewarded products that more tenured representatives were selling but weren’t incentivizing newer representatives.
  3. Provide a strong upside for top sales representatives, with clear rewards and recognition for high achievement.
  4. Hire sales representatives at a full time, full benefits position. No seasonal positions.

Step 3: Give them the tools

We established a Sales Enablement strategy applying digital tools, analytics and strategic processes to allow our sales team to excel in their jobs.

  1. Utilize data and analytics.
    • Lead Scoring
    • Appending data to sales leads to target individuals for specific campaigns
      • Examples: Outer markets for weekend plans or high net worth individuals for premium events.
  2. Invest in technology to improve sales efficiency.
    • Conversica, artificial intelligent sales assistant
    • Zip Whip, texting platform
    • ZoomInfo, business to business prospecting tool
    • Linked-In Sales Navigator
  3. Train and develop adaptive selling skills.
    • SS&EU: Classes are offered during work hours, are hands-on, and cover a variety of topics. They are facilitated live by in-house experts to encourage the cultivation of ideas and relationships across departments. SSEU is supported at the highest level of the organization and every executive teaches a different course.
    • Internal and external sales trainers
    • On the job sales training

Step 4: Create a people first culture. Really.

  • Provide a clear path for internal promotions.
  • Recognize each seller has an individual selling style. Coach, develop and set metrics to fit each representative.
  • Promote work life balance for everyone.
    • Eliminate the following phrases from management vocabulary:
      • Grind.
      • First one in, last one out.
      • Outwork everyone else.
    • Focus on quality of work and their commitment to the sales process, goals and team.
      • Commitment (you want) vs. Compliance (you must)
  • Allow flexible hours that still meet business needs.
  • Increase self-empowerment. Encourage reps to make their own decisions on how to manage time and activities to reach goals rather than micromanage to the numbers.
    • Coach reps to improve each day and strive for stretch goals they set for themselves.

Conclusion

We believe the S3 program can recruit more and better talent to the major the more teams buy into the new model aimed at development and retention. Just because teams can recruit people to fill each sales class with low wages and benefits doesn’t make it the right thing to do–either for the candidate or the team’s welfare. Basic sales management principles show us how we can do better.

Some teams are taking the lead. Since word has gotten out, others have reached out to say they are following suit. Do you want to join them? Are you in?

  1. Selling: Building Partnerships, 2014, Castleberry & Tanner, New York: McGraw-Hill. Quotes straight from the book are in italics. ↩
  2. https://www.ringdna.com/blog/work-to-retain-sales-reps. ↩
  3. https://www.wardsauto.com/dealer/maxdigital-out-stem-74-turnover-rate-among-dealer-salespeople. ↩
  4. Sales Management: Analysis & Decision Making, 2012 Ingram et al., London: Sharpe. ↩
  5. Even if it isn’t a private school (average ~$35k/year), public school still costs at least $10k/year for tuition/fees alone. ↩

Sales Management: Why Process Trumps Talent

kirk_wakefield 2014, Lead, Sales Management, Sell, Tickets , , , , , , , , 0 Comment
Sales Management: Why Process Trumps Talent
by Flavil Hampsten – June 2014

Which matters more: Process or Talent? That’s an easy one.  Process always trumps talent.

Before you get upset and start defending how talented your staff is and that you couldn’t generate the numbers that you do without them, imagine how much more productive they would be if you gave them leads that close at four times the normal rate?  Or if you have sales events for them that routinely lead to $100,000 days?

I’m not going to completely define what process should be in place, but I will say that as a sales manager, process always trumps talent. Here is why.

#1 Talented Individuals Are Simply Not Enough

Sales managers need to hit a departmental goal.  There needs to be method to maximize revenue from each individual on the team.  Therefore, a process should be devised to assist everyone in order for the department to achieve goal.

I’ve never spoken to a sales manager who claims to have all A+ sales talent on staff.  Most have a mix of A+, A, B, and C sellers.  However, most have an A+ revenue budget to achieve.  Having a great process can bump the level of each seller and give the department a better chance to achieve goal.

#2 Talent Comes and Goes, Process Stays Forever

[dropshadowbox align=”right” effect=”lifted-both” width=”250px” height=”” background_color=”#ffffff” border_width=”1″ border_color=”#dddddd” ]Brent StehlikHaving the right process in place has been an important element to the success of the teams I have managed throughout my career. The hiring process, sales process, lead-gen process….even convincing sales people to fall in love with the process of becoming great. They might not believe it right now, and I don’t think I did when I started my first job in sports, but process and persistence almost always trumps talent. ~Brent Stehlik, EVP/CRO Cleveland Browns[/dropshadowbox]With the ambitious nature of today’s sales executives, the average life of a sales executive is approximately two years.  With no guarantee to keep top talent, the only method to ensure that you keep results is to have a process that maximizes each opportunity, regardless of which salesperson in assigned to it.

Why only two years? Generally speaking, the A+ sellers are the ones who can leave first, simply because other teams recruit them away with money and titles.  Most times, sales managers hands are bound with budgets and departmental structure making it difficult to match the offer and the salesperson leaves.  However, the departmental goal does not change.  If a superior process is in place, the current salespeople will continue to deliver at a high rate, a new top salesperson will emerge, and the new salesperson will generate top numbers quicker.

#3 Talent Pool is More Like a Talent Puddle

Hard fact, but with the amount of positions to fill, the low pay, and extremely long hours in sports, it’s nearly impossible to hire all A+ sales talent.  Therefore, by default, to keep your positions full you must hire a mix of talent levels in order to achieve sales results.  A process is the only way to make this happen.

Even if you have one of the best recruiting and inside sales programs in sports there will be times where positions are empty or when talent is lagging.  As a sales manager, you owe it to your company and your career to protect yourself from these times.  The most foolproof way to do this is to engineer and implement a superior process that maximizes revenue regardless.

With work and deliberate practice talent can be created.  However, superior talent cannot be created without hard work and deliberate practice while in a superior process.  More importantly to a sales manager, you cannot have a successful sales department without a process to make everyone better.  The talented individuals are simply not enough; you need to create and train talent to optimize performance.

Want more on good processes? Read Flavil’s, No More Cold Calls

Cover photo courtesy of Rosemary Demirkok

How to create a successful university season ticket holder retention program

kirk_wakefield 2013, CRM, Luxury Suites & Premium Tickets, Relate, Sell, Tickets , , , , , , , 0 Comment
How to create a successful university season ticket holder retention program
by Bryce Killingsworth – September 2013

Connecting Fans

What is customer service?

Customer service is taking an ordinary situation and making it extraordinary. At Oklahoma State University, we implemented a newly developed retention program to build long-term relationships while providing supreme customer service.

The retention program includes four representatives focused on (1) connecting with the fans, (2) moving fans through the buying funnel, and (3) cultivating fans for life. We believe our best marketing plan includes a superb customer service plan.

[dropshadowbox align=”right” effect=”lifted-both” width=”250px” height=”” background_color=”#ffffff” border_width=”1″ border_color=”#dddddd” ]

Bill Sutton
Bill Sutton

“As a three time graduate of Oklahoma State University, and as an academic leader and consultant in the area of sport marketing – particularly as it relates to sales and retention, I am excited to see OSU Athletics realizing the importance of retention activities. OSU has decided to keep its sales and retention activities in house and is taking responsibility for the revenue generation necessitated by that approach. Having dedicated retention specialists, much like the majority of pro sport franchises, shows the Cowboys’ commitment to their customers and shows a deep understanding and strategic approach to not only customer satisfaction – but customer happiness.” [/dropshadowbox]

How we do it

The stadium sections are divided among the four reps. Each rep takes full responsibility for providing customer service for the assigned fan base and increasing renewal rate percentages. By assigning specific sections we can target more personal messages toward customers. We provide a personal touch by:

  1. Personally calling or e-mailing every season ticket holder as the first touch point.
  2. As relationships build, we make arrangements to meet season ticket holders at their tailgates on game day and bring them a small gift (poster, lapel pin, etc.) as a gesture of appreciation.
  3. This season we are leaving a personal thank you card on the seat of season ticket holders to display appreciation. Reps will provide their business card inside the note to personalize the relationship.
  4. We invite football season ticket holders over for a basketball game with complimentary tickets. When they come in to retrieve the tickets we offer refreshments, adding another touch point.

Anytime we have an opportunity to meet a fan in person is an advantage for us, as we provide that personal connection and increase the level of the relationship between the fan and Oklahoma State University.

Seizing first impression opportunities

Last season, I helped a dad buy single game tickets to take his son to his first ever football game on his birthday. I took notes of their names and seat locations and just before kickoff I went up to their seats to introduce myself and wish the boy a Happy Birthday. I also gave him a gift bag that included an OSU poster. Both the father and son were overjoyed. Seizing first impression opportunities produces a significant impact on the buyer’s connection to the program.

Results

[dropshadowbox align=”right” effect=”lifted-both” width=”250px” height=”” background_color=”#ffffff” border_width=”1″ border_color=”#dddddd” ]“To me, the best part of the program is that it falls perfectly in line with our long term approach to relationship building. We want our fans to feel connected to our program and our university. This is just another aspect of how we do this.” Adam J. Haukap [/dropshadowbox]The most notable benefits from the program?

  1. Decreased complaints. That means not only happier fans but also saved time by administration not putting out fires. The complaints are virtually non-existent at this point.
  2. Improved process for dealing with issues. Problems still come up. But with the retention program each one is addressed in a timely manner with full communication throughout the process with the fan. The issues are managed at the lower level and rarely need reach the AD. This creates a great working environment for everyone. Fans are able to speak with a rep instead of feeling like they are battling an organization.
  3. Increased interaction. One indication our program is being productive is our direct lines ring more than our general office line. Customers directly reach out to their reps rather than dialing the 1-800 line.
  4. Increased referrals. Customers voluntarily give out referrals of friends, family, and co-workers on a regular basis to help extend the Oklahoma State family. This translates into less reliance on finding new leads each off-season to reach department goals.

We now have better quality data when making decisions and developing strategies in our retention program as we continue to increase our renewal rate percentages. OSU just broke their personal record of public season ticket sales for the fifth time in six years, in large part to increased motivation of our reps in providing great customer service in-season and out-of-season to the OSU fan base.

How to build trust in relationship selling

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How to build trust in relationship selling
by Dan Rockwell – July 2013

All successful relationships require trust

Good salespeople build relationships because organizational success depends on it. If trust is something “they” do, you are the problem.

Research shows three important consequences related to trust and performance.

  1. Overall business performance for organizations is higher when salespeople trust their managers.1 
  2. Individual sales performance is better among salespeople who engender high trust.2 
  3. Employee retention is higher in organizations with high manager-employee trust because the quality of life in the workplace is better.3

How do sales managers and salespeople build strong, resilient relationships?

You learn to behave

Stephen M.R. Covey, says, “Relationship trust is all about behavior … consistent behavior.” (From: “The Speed of Trust.” Today, seven years after publishing, it’s still #2 in Business-Life, Ethics, on Amazon.)

Covey explains 13 behaviors common to high-trust individuals:

  1. Talk straight. Let people know where you stand. Use simple language.
  2. Demonstrate respect. Genuinely care and show it.
  3. Create transparency. Tell the truth in a way that can be verified. Err on the side of disclosure.
  4. Right Wrongs. Apologize quickly. Make restitution where possible.
  5. Show loyalty. Give credit freely. Speak about people as if they were present.
  6. Deliver results. Don’t overpromise and underdeliver. Don’t make excuses.
  7. Get better. Thank feedback and act on it.
  8. Confront reality. Take issues head on, even the “undiscussibles.”
  9. Clarify expectations. Disclose, reveal, discuss, validate, renegotiate if needed, don’t violate, expectations.
  10. Practice accountability. Take responsibility for results. Be clear on how you’ll communicate.
  11. Listen first. Don’t assume you know what matters most to others.
  12. Keep commitments. Make commitments carefully. Don’t break confidences.
  13. Extend trust. Extend trust abundantly to those who have earned it. Extend trust conditionally to those who are earning it.

Do you want to move up?

Axel Köster
Axel Köster

Axel Köster, General Manager for the Manhattan Group, recruits executives and managers for premium properties such as the Peninsula, Regent, Hilton and others around the world.

“No matter what the industry,” Axel shares “at the top level of any successful organization you must have someone you can truly trust. If you want to move up in your organization, the most important thing you can do is build a reputation for trustworthiness.”

The bottom line is success in relationships and relationship selling depends on your trustworthiness. And so does the trajectory of your career.

Getting started

How do we improve trust? By being intentional about it. Make a copy of Covey’s 13 behaviors. Put it in front of you at work. Find a peer who wants to do the same thing. Keep each other accountable. Practice being happy.

Bill Yates
Bill Yates

Bill Yates, Senior Associate & Partner at the Sports Advisory Group, adds, “Provide solutions to their problems and you’ll be rewarded with trust.”

Continue building trust with colleagues and clients and whether you move up the career ladder or not, at least you’ll be one of the happy ones.

 

Sources

  1. “Making things happen through challenging goals: Leader proactivity, trust, and business-unit performance,” Crosley, Cooper & Wernsing (2013), Journal of Applied Psychology.
  2. “The interrelationships of empathy, trust, and conflict and their impact on sales performance,” Plank & Reid (2010), Journal of Marketing Management.
  3. “Trust your teammates or bosses? Differential effects of trust on transactive memory, job satisfaction, and performance.” Gockel, Robertson & Brauner (2013), Employee Relations.