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As I’m talking to sales leaders in a variety of industries who are absolute best in class and working with top-shelf branded clients, they are still committing these party fouls when approaching new prospects:

• They run test-proof cycles for the most basic products and services.
• They waive engineering, design, drawing, setup and installation fees for first-time buyers on small orders.
• They fulfill tiny initial orders as a way to “prove” themselves.
• They agree to long “try, wait and see” cycles.

Why are you holding on to them? Are you scared of their relationships with key clients? Do you feel guilty that you haven’t given them all of the tools, training and attention they needed to be successful? Is the process of hiring new salespeople so painful that you would rather hold on to these people than go look for new ones? All of the above and more?

Never show fear to animals, children or sales people — they can sense weakness and they will take advantage of it.

Let’s get rid of the fears first:

You have more power than you think. Remember “Jerry Maguire?” Jerry gets fired and tries to take all of his clients with him — and almost none go. Why? Sales people have a distorted picture of the power in the relationship they have with customers. Just like Jerry’s boss, all you have to do is pound the phones – you’ll preserve the accounts, take over the relationships and move on. If you don’t have relationships with your company’s key accounts, fix that. Regardless of how good the sales rep is, you’re the CEO and you need to know your company’s key account contacts personally.

Forget about fault. You cannot own the issues of success and failure with your sales person. If he is not hitting his production goals, you don’t “owe it to him” to give him one more chance. If you weren’t good at developing him in the past, you won’t be any better in the future. This just isn’t the place for him to be successful. Let him go bloom in someone else’s garden.

Affection follows performance. Love your producers, loathe the rest. After an appropriate and defined on-boarding period in which you invest heavily in a new sales person, your time and attention should follow the winners. Create a great place with great products and services. Bring on good people, launch them well and then let them run. If they don’t hit their marks according to schedule, part ways.

So how do you know when it’s the right time for a separation? Follow these three steps:

1. Look at the milestones and minefields. From now on, when you hire a new sales person, I want you to draw up an expectations agreement. It’s rather straightforward: Specify what you want by what dates. Break it out into 3-month, 6-month and 12-month milestones. Usually, I like revenue numbers from current clients that they will be managing, new revenue that they are responsible for generating, and some target clients we want to land. Mutually agree upon it and review it at those dates. I don’t know any CEOs in the thousands I have spoken to who lay out a performance expectation agreement with numbers for the first year, which is crazy because it is the most important year in knowing what that person’s future performance will look like.

2. Review two quarters in both directions. After a sales person has been with you for a year, review the last two quarters and the next two quarters on a quarterly basis. It’s a rolling review and keeps your sights on recent performance and near-term performance. Don’t evaluate performance as an “end of the year” event. Don’t evaluate each year with a “clean slate.” Run this rolling evaluation quarterly and you will know your sales person’s real performance.

3. Don’t Be Sold. There is a reason why I advocate an objective sales process: It’s measurable. Sometimes the highest close ratio that sales people have is internally, with you. They convince you that deals which are dead are just about to land, that their pipeline is robust and that the big one is coming in. Are you going to believe someone who’s paid to be persuasive and convincing? Let the numbers do the talking and you won’t go wrong.

I rarely find people who have parted with a sales rep and felt like they did it too soon. We usually hold onto people out of hope and fear. We hope that they will get lucky and land something; we fear that getting rid of them just leads to a risky process of trying to find someone to replace them. I get it. But the real fact is that managing sales people to the numbers and according to the process takes away a lot of the uncertainty.

As to the fears — get over them. You probably need to turn over 20-35 percent of your sales people every 12-18 months. Get used to that idea, build a plan for active recruiting and work it into your leadership and management process.

This post by Tom Searcy was originally published on CBS’s BNET blog.
Date Published: November 16th, 2010
View this blog post on BNET