Archive for October, 2009

Apple’s profits soar by 47% in face of recession

Apple shrugged off the global downturn to report the company’s most profitable quarter thanks to record sales of iPhones and Macintosh computers.

An updated iPhone in June and a new version of its operating system for its Mac computers in August helped the company to raise profits by nearly 50 per cent on the same quarter a year ago. The net profit was $1.67 billion (£1 billion), or $1.82 a share, in its fourth quarter to September 26, up from $1.14 billion, or $1.26 a share, in the year-ago period. Analysts were expecting a profit of $1.42 a share. The results sent Apple’s shares to a new high of $204 in after-hours trading, up 7.5 per cent.

iPhone sales from July to the end of September jumped to 7.4 million, half a million more than last year, despite a lack of stock in some countries. The company sold 3.1 million Macs, a 17 per cent rise from the same period a year ago. Revenue rose 25 per cent to $9.87 billion, well ahead of the average Wall Street estimate of $9.2 billion.

Apple weathered the economic meltdown better than most other consumer electronics companies, Peter Oppenheimer, Apple’s chief finance officer, said. He added: “For the full year, we grew revenue by 12 per cent and net income by 18 per cent in challenging times.” International sales accounted for 46 per cent of the quarter’s revenue.

Steve Jobs, Apple’s chief executive, said: “We are thrilled to have sold more Macs and iPhones than in any previous quarter. We’ve got a strong line-up for the holiday season and some really great products for 2010.”

•The proposed search engine alliance between Microsoft and Yahoo! has received backing from the heads of the four largest advertising agencies, as the pair aim to compete with Google, the market leader. The American Association of Advertising Agencies sent a letter to the Department of Justice, co-signed by the heads of Publicis Groupe, WPP, Interpublic and Omnicom. It said that the alliance “enhances competition” and should take place as soon as possible. In the proposed ten-year deal, Microsoft’s new Bing search engine would power searches on Yahoo!’s sites.

Source : The Times

Tuesday, October 20th, 2009 Carlene
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Sales Managers faith in his product

Many of us will remember that old TV ad with Victor Kiam, who liked Remington electric razors so much that he bought the company…. Now, Mazda national sales manager Floyd Timms has decided he liked his own company and products so much he’s invested in the brand and bought Lodge Garage in Kingswood, Aylesbury .

 

From team leader to dealer principal

Timms, 55, worked for Mazda UK for 13 years, rising through the ranks to lead the marque’s team of business managers and has now decided to become a dealer himself.  He is also the first Mazda employee to set up his own Mazda dealership as a private individual.

‘I had the option to look at other brands, but knowing what I know about Mazda as an insider, it was the franchise of choice for me,’

Jumping through hoops

‘They probably made me jump through a few more hoops than an outsider to secure the franchise, but I always felt that if the right opportunity came along I would go back into retail.’

Timms said that since the launch of the Mazda6 in 2002 – the car that revitalised the brand – Mazda has been a brand ‘in the ascendancy’.  He also feels that new small Mazda2 has done for Mazda what Yaris has done for Toyota and Jazz for Honda, bringing new, younger buyers to the brand.

Early trading

He took over at Lodge on 1 September, trading as Buckinghamshire Mazda Ltd. Lodge has been a Mazda dealership for 30 years but had failed to embrace modern retailing, he said.

Early indications are that the gamble will pay off. ‘September has been a record month for Lodge with 62 new cars sold and 12 used.’ Lodge’s previous best was 40 new car sales in a month. 

It’s an encouraging start and one of Timms’s aims is to strengthen the used-car business, switching to an all-makes policy.

‘Half of our business in the first month has been with customers new to Mazda and we also have very loyal customers who are coming to us. There are strong shoots of recovery.’

Source : Modern Selling

Thursday, October 15th, 2009 Carlene
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Young jobless total falls

The number of young people out of work has fallen as overall unemployment rose by a less than expected 88,000 to 2.47 million.

The Office for National Statistics (ONS) said that the number of 16-24-year-olds out of work fell from 947,000 in the three months to July to 946,000 in the three months to August. Today’s figures confounded analysts who had forecast the number of young people out of work would soar to one million.

However, young jobless numbers remain close to the record high of 947,000, which is the highest since ONS records began in 1992.

Overall, the rate of unemployment remained unchanged at 7.9 per cent, below analysts’ expectations of a rise to 8 per cent.

The number of people claiming jobless benefit rose by 20,800 in September, which was less than forecast and the smallest rise since May 2008.

Analysts said it now looks less likely that unemployment will rise as high as three million in 2010 as had been feared. Howard Archer, chief UK and European Economist at IHS Global Insight, said: “The deepest job losses are now almost certainly over.”

Philip Shaw, chief economist at Investec, said: “It does suggest that the pace of deterioration in the jobs market is easing quite sharply which is encouraging for the outlook for a sustainable recovery.”

Paul Kenny, general secretary of the GMB union, said the figures showed “some tentative signs of a very fragile recovery in the economy.”

The data was unveiled amid rising hopes that the British economy will soon climb out of recession.

Last month, Mervyn King, Governor of the Bank of England, said there were signs that the British economy was growing again though he added that the strength of recovery remained “highly uncertain.”

A European Commission study concluded that British and European economies would return to growth by the end of the year while a study from the National Institute of Economic and Social Research, a leading think-tank, said Britain was climbing out of recession.

Economists have warned though that a period of stagnation could follow any emergence from recession.

A recent report from KPMG, the accountancy firm, also suggested that the future for the jobs market was looking brighter. The study found that permanent job appointments had increased for the first time in 17 years.

The unemployment rate among 16-24-year-olds remained static in the period at 19.7 per cent.

Children’s charities said that, despite the fall, young people were still in desperate need of help. Martina Milburn, chief executive of the Prince’s Trust, the youth charity, said: “There are still 946,000 young people who need support so there is no room for complacency. The monthly price tag is £100 million but the human cost is immeasurable.”

Yesterday, Sir Terry Leahy, the chief executive of Tesco, the nation’s largest private employer, criticised educational standards for failing to prepare teenagers for the workplace.

He said standards in school were often “woefully low” and that the education system left it to employers to “pick up the pieces.”

The group complained that it spent time training recruits in basic numeracy and writing.

Teachers, he said, were distracted by red-tape and bureaucracy from their main task of teaching the children.

His comments were embarrassing for Gordon Brown, as he is a member of the Prime Minister’s Business Council for Britain.

Source : The Times

Wednesday, October 14th, 2009 Carlene
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Co-op’s food sales beat supermarket rivals

The Co-operative Group, Britain’s largest mutually-owned retailer and the country’s fifth-largest food retailer, today reported a 17 per cent rise in first-half profits to £229 million, buoyed by its acquisition of Somerfield and strong comparable sales growth at its convenience food stores.

Like-for-like food sales grew by a market-leading 7.3 per cent, excluding fuel and VAT. Tesco recently reported a rise in like-for-like sales over the same period of 3.7 per cent, with Sainsbury’s up 5.7 per cent.

Peter Marks, Co-op chief executive, said that the group’s concentration on “value and values” rather than on price alone had helped it win market share.

He said that sales of the value range, which was relaunched and extended under the “Co-operative Simply Value” label in March, were up almost 80 per cent year-on-year, while Fairtrade products experienced growth of 35 per cent.

He also said that the “Blowing in the Wind” television campaign in February helped bring back customers signalling that the Co-operative Group “was once more a force to be reckoned with”.

The chain has sold 200 of the 400 Somerfield stores it bought in February to meet competition rules and has so far converted 29 to Co-op outlet.

The group’s funerals and electricals business also saw “robust” performances, while Co-op travel and pharmacy performed well in markets that are “extremely challenging”, according to Mr Marks.

He added: “In spite of our recent success, it would be naive to think that we are immune to the recession. That said we are pleased with our half-year performance, the second half has started well and we look ahead to the future with renewed confidence.”

The group said that although it had not yet been affected by the recession to the same degree as its rivals. “we do expect the latter part of 2009 to be challenging for a number of our businesses”.

Co-operative Financial Services (CFS) grew underlying shareholder profit by 11 per cent to £81.4 million, helped by growth in customer deposits and customer lending and new insurance sales. Since the end of the first half on August 1, it has taken over Britannia.

Co-operative Pharmacy raised operating profits 8.7 per cent to £14.8 million. Co-op Funeralcare operating profit grew 17 per cent to £28 million, but Co-operative Travel’s operating profits fell from £7.9 million to £2.5 million, hit by the recession.

Monday, October 12th, 2009 Carlene
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Halfords sales on the up.

Halfords reported sales growth for the second successive quarter today after warm weather and the weak pound led to increased numbers of “staycationers” using their cars, bicycles and camping equipment during the summer.

The car, cycling and camping products retailer said that sales increased by 3.8 per cent in the 13 weeks to last Friday.

Sales growth for the same period on a like-for-like basis was 2.2 per cent. This follows a rise of 1.3 per cent in the first quarter.

David Wild, the chief executive, said: “We are pleased with our performance in the first half year. We have further increased share in our strong markets, managed margins tightly and controlled costs effectively while making selective investments to support future growth.

“Our service initiatives, particularly fitting, and halfords.com are performing ahead of expectations and well above last year.”

Although revenues from satellite navigation devices continued to decline, profit losses were mitigated by improved sales of other car products such as the “wefit” car accessories range.

In a statement, the group said that it was confident it would be able to deliver half-year pre-tax profits of between £59 million and £61 million.

Shares began to climb this morning, up at 388.4p in early deals after closing yesterday at 364.3p.

Halfords will announce its interim results on November 19.

Source : The Times

Thursday, October 8th, 2009 Carlene
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Sales Director Profile – Hugo Mahoney, LexisNexis

When Hugo Mahoney took on the job of Sales & Marketing Director at Lexis Nexis three years ago he knew it was going to be a challenge. The company had been selling books, journals and other information to legal and tax professionals for over 200 years, and, in simple terms, it needed to change.
 
“We have an excellent pedigree in selling those traditional forms of information,” explains Mahoney. “Our aim over the past three years has been to maintain excellence in that area while developing our technology offering. This is where we provide large corporates with information that is embedded in their workflow. Basically this means an accountant, rather than having to look for the information he needs in one of our journals, can access it on his PDA.”
 
These contracts are obviously major pieces of business and have the potential to generate significant long-term revenue for Lexis Nexis, so it is easy to see why they have been so keen to develop that side of the business. However, when Mahoney joined three years ago it was clear that it would not be easy to make the shift.
 
“We’ve had to transform the entire department,” he says. “We had a team of salespeople who had only ever done transactional selling. They were great at selling books, but they struggled when it came to accessing senior corporate decision-makers, understanding their needs, providing suitable solutions, and building that all-important rapport. My challenge was to change the people, the systems, and the culture of the entire sales and marketing department.”
 
A career on the tough side
 
It was a job for which his career up until that point made Mahoney ideally suited. “I’ve always been attracted to the tough side of sales,” he claims, and his CV seems to bear witness to the fact. When he left university 20 years ago he joined the labour market during a recession that was almost as fierce as the one we’re currently experiencing. He knew he wanted to work in sales, but almost the only sector that was hiring salespeople in the last 1980s was pharmaceuticals.
 
So, he cut his teeth cold calling in the tough world of pharmaceutical sales, before moving to Coca-Cola to take on the sales department of an under-performing division in the South of England. There are few sales roles that are more competitive than pharmaceutical sales, but with the drink vending industry Mahoney managed to find one.
 
He stayed at Coca-Cola for several years, moving to international accounts and then to sell to pubs, bars and restaurants, before joining Energis. It was a telecommunications provider that had got into trouble in the dotcom boom, and Archie Norman was assembling a turnaround management team. It was where Mahoney first became interested in the process of transforming businesses.
 
Energis was eventually sold to Cable & Wireless for 2005 and shortly afterwards Mahoney moved to his current role. He now heads a team of 150 salespeople and another 150 in marketing, PR and customer training.
 
Finding the right people
 
He believes that, three years later, while he has not reached the final destination of where he wants to take his department, he is making good progress. He says: “We’ve created a fresh, vibrant culture and on every important metric we are showing good improvement. As part of Reed Elsevier we don’t release individual business unit performance, but I can tell you that we have increased our activity by 30%. That’s people working 30% harder and so creating more pipeline and input.”
 
He says he achieved that increase in activity simply by telling people that that was what he expected from them. “If you set the bar higher, people will achieve it,” he says.
 
He has also focused heavily on recruiting the right salespeople. “The quality of our people is crucial,” he says. “We run a rigorous selection procedure, and we look not only for traditional factors such as knowledge of the market, a talent for networking and excellent communications skills, but also for certain qualities. We want people who are curious about how their customers work, how they make money and how we can help them make more. We need people who are driven, who are flexible in how they approach sales, who take measured risks, and who show a sense of urgency in their work.”
 
How to get to the top
 
While those are the qualities that, in his eyes, mark out the top salespeople from their ordinary colleagues, from those who can move from basic transactional sales to relationship-based sales, he has further advice for those who want to make it to the very top of the tree in the sales profession.
 
“Don’t be afraid of hard work,” he says. “I’m here at 7.20 every morning, despite living in Oxfordshire. There’s absolutely no substitute for hard work in this game. I don’t believe in lucky breaks.”
 
He continues: “You should also get yourself a coach or mentor. Look for someone who has around ten to fifteen years more experience than yourself, and go to them regularly for advice on what you’re doing, where you should be heading, and the choices you should be making.”
 
“Remember also that life and your career should be about continual development,” says Mahoney. “You never win with last year’s result, so take every opportunity for training and development that you can. Finally, don’t hesitate to use your personal network. When I began here we went round every manager and asked them to list all the people they knew who were managers in large corporates. It generated a fantastic list of prospects for us.”
 
The future
 
Looking ahead, Mahoney knows he has much work still to do at Lexis Nexis. His immediate focus however is getting through the recession. “We didn’t see it coming,” he admits. “Who did? And there’s no getting away from it, it’s tough out there. Our customers are trying to do more with less, and so we need to demonstrate the value we offer. Ultimately they’re asking us to help them justify the investment to their colleagues. We need to rise to that challenge.”
 
He concludes by pointing out that the recession is not an entirely bad thing. “It is presenting new opportunities,” he explains. “Many contracts that our competitors had held onto because their clients were too apathetic to look elsewhere are now coming up for grabs. As and when that happens we intend to be right there, ready to show those customers how well we understand their businesses, and how our range of products can benefit them.”
Source : The Sales Pro
Thursday, October 8th, 2009 Carlene
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Tesco half-year profits top £1.4bn

Tesco, Britain’s largest grocer, unveiled modest UK sales growth in the first half of just 2.7 per cent to £20.6 billion while overall profit before tax edged up just 1.5 per cent to £1.42 billion.

Sir Terry Leahy, the chief executive, said the supermarket giant was successfully tackling the “challenges of recession”.

“Last year’s acquisitions — Homever in Korea and Tesco Bank — are already making good contributions to sales and profits,” he said, although he acknowledged that the overseas stores had been hard hit.

“In International, the markets with the greatest growth potential for the long-term have been some of the hardest hit in the short-term but we have nevertheless delivered a good performance against strong headwinds,” he said.

Trading profit in Europe fell 5 per cent to £191 million, hit by economic problems in Hungary and Ireland, and at its fledgling US chain, Fresh & Easy, losses increased by 42 per cent to £82 million.

“Our UK business is delivering solid growth and improving volumes,” Sir Terry said.

He said UK like for like sales growth of 2.7 per cent, or 3.7 per cent excluding VAT, was “converging” with figures seen across the grocery industry, driven by strong volumes.

But he admitted that sales growth had moderated in the second quarter — June, July and August — compared with the first, reflecting reduced inflation.

Tesco is raising the interim dividend by 9 per cent from last year to 3.89p per share.

Sir Terry said that he was renaming Tesco Personal Finance — which offers insurance and credit cards from larger stores — as Tesco Bank to reflect “our longer term objective of creating a full-service retail bank for Tesco customers, offering a range of banking and insurance services through branches in store and online”.

The Government hopes that Tesco will be among those showing an interest in buying the branch network and mortgage origination services of Northern Rock which it intends to put up for sale.

Tesco set up Tesco Personal Finance as a joint venture with Royal Bank of Scotland but bought RBS out of the venture last year.

In the past six months Tesco Bank made £115 million trading profit on a £420 million turnover. Sir Terry said that this was a “good performance” in a challenging retail banking market, despite extra costs as it relocated to its own offices in Edinburgh and builds its team “in preparation for a faster rate of growth”.

It grew the total number of customer accounts by 300,000 in the past 12 months to more than 6 million across all product lines and Tesco is now the seventh largest credit card issuer in the country.

But bad debts increased to £92 million, though Sir Terry said this was better than the banking industry average.

Speaking about the group as a whole he said: “This progress across the group, combined with our strong financial position funding continued investment in new space and new businesses, means we’re well-placed for the global recovery.”

Tesco has had a raft of promotions in recent weeks in what some analysts have seen as a sign that it was desperate to keep its comparable sales growing.

Dave McCarthy, an analyst with Evolution Securities, began coverage of Tesco with “sell” advice yesterday saying “Having lost momentum in the UK, sales are underperforming the industry average, marginal returns are falling and importantly, the industry is returning to adverse differential inflation (costs rising faster than sales), which could be bad news for all.”

Source : The Times

Tuesday, October 6th, 2009 Carlene
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The Sales Revolution

Britain’s largest profession needs an effective institute to see it safely into the 21st century.

Looks like there’s ‘trouble at mill’ at the Institute of Sales & Marketing Management (ISMM) – Britain’s only ‘professional’ membership organisation for salespeople drawn from across the commercial and industrial spectrum.

When veteran ISMM chairman, Sheila Watson-Challis rang up ModernSelling.com headquarters a few weeks ago to bemoan the loss of yet another boss of the institute, we couldn’t help thinking that the organisation must be having rather a torrid time. As they say, to lose one director is unlucky; to lose two is careless; but to lose three in as many years…  what does that say about your organisation?

Strong institute

It is a pity that things have come to this pass. Whatever readers might think about the quality of the ISMM as an organisation, the UK sales profession really does need a strong institute – probably more than one – to represent and promote the interests of Britain’s largest grouping of business professionals.

From the outside, the ISMM has appeared to be an organisation in decline for some time now (even back in the 1980s one questioned its solidity and wondered whether it existed to serve its members or was more self-serving – Ed) and if, it does continue to slide, we will be left with a vacuum.

What organisation will represent the interests of sales professionals in the business world and with government? Who will promote a common syllabus of education and training for salespeople and their leaders? How will we prepare school leavers and graduates to enter a tough and demanding profession?

These are just some of the questions that need answering. Already there are signs that some fledgling organisations are aiming to enter the space, but of those which have gone public, none has yet presented the credentials to suggest it has the experience, track-record or credibility to create a truly professional institute capable of representing the interests of hundreds of thousands of UK sales professionals.

Support

Our view – for what it’s worth – is that we would be happy to support any organisation with the vision and a convincing plan to represent the interests of UK sales professionals, so long as the individuals involved are credible and the funds and support are available to make the institution solid. We’d be happy to support more than one. We’d be happy to support a re-vitalised ISMM or an entirely new organisation – or both – because, currently, the vast majority of sales professionals are not represented at all.

Salespeople have always liked to do things their own way: independence is practically encoded in the DNA of the salesperson, one might say. However, while there’s no denying that salespeople are fiercely independent – they don’t take to being organised – they’re also intensively conservative (with a small ‘c’) – and don’t necessarily adapt to change easily. But adapting to change is exactly what salespeople are going to have to do right now and for the foreseeable future: the world of sales is going through fundamental changes.

Immense changes

These changes are going to be immense – let’s be clear about that! And sales professionals could do with a strong, collective organisation to help them through what amounts to a sales revolution.

For instance, technology not only promises great innovation – social networking, webinars and teleconferences – but it also presents enormous challenges: information overload through inappropriate use of email and the proliferation of blogs and new channels to market or the converse problem of legitimate communication being stifled by catch-all spam filters and voicemail, to name just a couple.

Salespeople are losing control of the sales process: global competition, time and cost restraints conspire to make the life of sales professionals much more difficult than it was even 20 years ago. They’re finding it harder and harder to locate prospects, let alone talk to them and, when they do, many are finding that buyers and decision-makers are not interested in what they have to say.

Out-of-date skills

Unfortunately, many of the skills and ideas being used today actually originated 20 or even 50 or more years ago. Fortunately, today’s successful salesperson has moved on, while the budget-beater of tomorrow will be an entirely different beast, even if she shares some of the drive, attitudes and attributes of her predecessors.

The motor industry and the aviation sector are in chaos – as oil supplies dwindle – forcing us to reassess whether it is economic to travel on business in the same way that we used to. Technology from the web is rushing in like a tsunami to fill its place: we can talk and present to many people across the country (or around the world) simultaneously; consumers are flooding on line to discuss and buy the latest products and services; competition is rampant.

The rep on the road clutching a catalogue and a sample case has largely been consigned to the pages of history. He’s quite simply too expensive to employ and equip, in all but a few specialist cases.  

New techniques

It’s no easier for office-based salespeople. Familiar tools like telemarketing are starting to look outmoded and increasingly ineffective. Legislation and controls are, quite rightly, reining in the worst excesses, while voicemail is the bugbear of every salesperson. Instead, we’re quickly coming to grips with new techniques like social networking, micro-blogging and mining data from the internet.

Yes, selling is quite simply going through a revolution right now.

Diversifying skills

Effective salespeople are rapidly becoming technological ‘jacks-of-all-trades’, tracking down prospects online and learning enough about new web-based marketing channels to re-open the doors which prospects have been slamming in their face, while retaining enough of their telephone and verbal presentation skills for when they do actually get to speak to a buyer in person. But, a jack-of-all-trades has traditionally been ‘master of none’, and that’s not really good enough in the 21st century business world.

Master of all trades

That’s why we need some intervention in the form of a strong sales institute – possibly backed by legislation – to ensure that salespeople (and future sales professionals going through higher education) become masters of all the necessary skills to make them effective in this century’s supremely competitive business world. And such an educational system needs to be a continuing process to ensure our salespeople keep their skills up to date.

Salespeople need to part of this revolution or, alternatively, we can stand by and watch as spectators… and be overwhelmed. We need to understand the processes and techniques that will help us; we need to be ethical and modern in our approach; we need strong professional organisations to support us and ensure we’re equipped with the right attitudes and skills.

Source : Modern Selling

Tuesday, October 6th, 2009 Carlene
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What Motivates Our Sales Teams?

Largest survey of sales professionals in the UK is published by Aaron Wallis Sales Recruitment

We’ve just completed the largest survey of sales professionals in the UK and it has produced some really positive and fascinating results. The survey of 70 questions covered all aspects of sales from remuneration through to sales targets to key motivators to work-life balance and everything in-between.

The survey was fully completed by 642 sales professionals and partially completed by a further 140. This has enabled us to provide a powerful insight into the ‘State of Sales in the UK in 2009’ and the report is the most substantial survey of its kind. The aim of the survey was to give us all greater understanding on how to manage and motivate our sales teams through tough financial times and beyond.

Overview

The survey was launched in late July 2009 and was live for 6 weeks. It was promoted across a wide range of media including major sales job boards, sales forums, social networks and sales related magazines. The survey was also promoted by our survey partners that included sales trainers, sales training companies and specialist job boards. The survey was similar to another that I commissioned back in 2007 so it has been a great exercise to compare attitudes and perspectives between the buoyant economic times of 2007 and the tougher ones of 2009.

The response was a generous spread across all industries and across the whole of the UK; relevant to this publication 18% of responses were from the South East, 8% from the East Midlands and 9% from London. 6 out of 10 respondents were experienced sales professionals with over 10 years experience and 84% earned in excess of £25,000 p.a. The responses were from a general spread across all industry sectors.

Key Findings

• 96% of the respondents enjoy working in sales. Of the remaining 4% only 1 in 10 had planned to embark on a career in sales.
• Getting clients to make decisions, cold calling and sales admin/paperwork were cited as the 3 most difficult aspects of selling in 2009
• A whopping 72% judged their career to date to be ‘7 out of 10’ or more
• The two biggest motivators to keep sales staff (or what they’d look for in a new job) , was i) opportunities for progression/career development, and ii) Their employer’s products, reputation and competitive edge
• The way that the respondents personally measured success was i) ‘being respected by friends, boss and peers’ followed by ii) ‘loving relationships’ and iii) ‘peace of mind’. Status and material wealth was deemed as the major success measure by just 13% of the sales professionals surveyed.
• 70% of those that were unemployed had been recently made redundant
• Only 11% of those in employment felt that their employer was dealing well with the financial crisis
• Over 4 in 10 of the female respondents were Sales Managers, Sales Directors and Managing Directors, almost a two fold increase on 2007’s results. However all respondents that earned over £100K in the last 12 months were male.
• 53% had been 100% honest in every interview they have attended throughout their career
• 44% were educated to HND or higher
• Despite the economic situation 52% were given an increase on their 2009 targets
• 56% of respondents felt that sales was the most influential department/division of their business
• An impressive 31% are currently over target. And as 28% of respondents were non-targeted that left only 41% that were either ‘on target’ or ‘below target’
• 65% felt that they could perform their line manager’s role more effectively than them (84% of these were male!) even though more than 8 out of 10 described their relationship with their boss as average or better!
• Surprisingly three quarters of respondents did not feel that an increase in green initiatives by their employer would have any positive increase on sales
• More than 8 out of 10 of respondents considered themselves to regularly work under stress levels of medium or higher.
• 79% of respondents typically worked in excess of 40 hours per week with a third of the total working in excess of 50 hours
• ‘Aggressive and Dictatorial’ were the most popular words to describe their line manager’s style though this was thankfully followed by ‘Supportive and Empowering’
• 58% felt they did not receive enough training in their role and 36% had not received a single day of training in the last 12 months
• The majority, 64%, would prefer the opportunity to earn £10,000 in commission than a straightforward £5,000 basic salary increase.
• Half would not accept a 50% pay rise if it would severely impact on their ‘work-life’ balance
• ‘Better management and direction’ was cited as the biggest way to make a salesperson more successful (2nd was ‘Increased Marketing’, 3rd ‘Better Work/Life Balance’ and 4th ‘Training’)

What can we learn from the survey results?

Sales professionals are hard working, looking for stability and looking for companies that respect the contribution that they make to their organisations. They are looking for reputable employers with good management and solid direction that offer good products/services that are backed by a genuine ‘competitive edge’.

Over half of the sales professionals surveyed have taken on the responsibility of increased targets in tough times and a third is exceeding them. Despite what the media likes to portray only 41% are either ‘on target’ or ‘below target’! 44% felt that their employers should increase their sales and marketing initiatives to see them through the current economic situation and 45% would take on additional responsibilities without additional pay to enable this. Thankfully, 3 in 4 of the respondents had not been asked to take a pay drop or a cut in benefits in the last year.

It still astounds me that many employers feel that sales people are solely motivated by money, material status and their potential to earn. Sure, sales people to a large extent have to be ‘money motivated’ to ensure they have the drive and purpose to put themselves on the ‘front line’ each day. However, for the majority it is the thrill of the sale and the achievement and recognition that they’ll receive as much as it is about the reward.

The survey highlights that the best way to motivate and retain your sales staff is to offer training and development together with opportunities for career enhancement. There is an undeniable and obvious link between ‘training days received’ and ‘performance against target’ yet it’s incredible that over half of the sales professionals surveyed had less than two training days over the last year. This is particularly poor bearing in mind the various government initiatives available to most employers to fund training. The top three training requirements cited were ‘new business generation/cold calling’ (26%), ‘Time Management and Planning’ (15%) and ‘Motivational Training’ (12%).

Having met thousands of sales professionals looking to leave their employer the most commonly cited reasons for leaving are ‘not being recognised’ or ‘not being respected for the contribution that they make’. This is once again corroborated by the 2009 Survey and backed up by other similar surveys that I commissioned in 2007 and 1999. A little recognition and the occasional ‘thank you’ go a long way to ensure your sales team upbeat and engaged with your business!

Our fear was that companies would have become more ‘finance led’ over the last 12 months so it was great to see that 56% of employers were still deemed to be ‘sales led’ and that the ‘sales department’ is retaining its status of being the most influential department within a business.

To conclude, don’t think that bonus and financial incentives are the sole way to motivate your sales teams. Rather invest in training for your sales staff, regularly appraise them and recognise the hard work and long hours that contribute to your business. Remember that a regular ‘thank you’ and the occasional ‘slap on the back’ of recognition costs little and goes a long, long way.

The report ‘The State of Sales in the UK, 2009’ is available for free download by visiting www.survey2009.info

Aaron Wallis is a specialist sales recruiter that offers the best recruitment service available to UK employers that’s backed by a 12 month rebate scheme. To find out more call 01908 764280 or visit www.aaronwallis.co.uk.

Tuesday, October 6th, 2009 Simply Sales Jobs
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Can Bonuses ever be justified again?

With the country suffering through the worst recession in living memory there has been understandable public dismay at large bonus payments to senior executives. When those bonuses have gone to executives who are widely seen as responsible for creating the financial crisis, that dismay has tipped over into anger.
 
Sir Fred Goodwin of the Royal Bank of Scotland, commonly known as Fred the Shred, has been at the centre of all this, having pocketed a pension fund worth more than £16 million, despite bringing one of the UK’s oldest and most respected banking institutions to its knees. In March he became the victim of an anti-banking group called ‘Bank Bosses Are Criminals’ who vandalised his home.
 
In February, Royal Bank of Scotland, now 70 per cent owned by the taxpayer and which has received £20bn in public funds, cut its planned £1bn bonus pool by 90 per cent after pressure from the Government.
 
In the US, President Barack Obama has expressed anger at $165m bonuses pledged to executives of bailed-out insurer AIG, calling the payments “an outrage”. “It’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay,” he said.
 
Yet despite this, City workers have continued to pocket their bonus payments. survey conducted by the City recruitment consultancy Morgan McKinley revealed that 73 per cent of those working at 200 banks and other financial institutions in the UK received bonus payments in 2008. 16 per cent said their bonuses had actually increased.
 
All of this has served to put the issue of bonuses firmly under the spotlight. While the issues have centred on bonuses awarded to bankers, it has led some in the sales profession to think about the bonuses that they receive and pay. Can bonuses be justified, and if so, how should they be awarded?
 
Questioning sales bonuses
 
Leigh Ashton, MD of The Sales Consultancy, a company which provides training and advice to sales teams at SMEs and large corporates such as Barclays, believes that bonuses have little power to motivate salespeople. She says: “A common error many sales managers make is to see bonuses as a motivation tool. The trouble is that people are rarely motivated by money. There are others sticks and carrots you can use for that.”
 
She does believe that bonuses are important, but only because they are traditional. “Salespeople are used to receiving bonuses,” she says. Yet, few finance officers will be satisfied with that explanation for such a large debit on the balance sheet. Bonuses, if they are to be justified, need to have a clear, beneficial effect on the sales and profits of the company.
 
Most observers agree that bonuses can do this. The promise of significant bonuses can help to recruit top salespeople, and it can be an effective tool encouraging certain behaviours and outputs – tell a salesperson that they will get a 10% bonus if they visit one extra prospect a week and chances are they will find a way to do so.
 
The problem is that many bonus schemes for salespeople are not devised or implemented effectively The company might find that the salesperson is visiting an extra prospect a week, but it produces no extra sales because the salesperson is rushed in that meeting. Or they may have no way of actually telling whether or not the meeting ever took place.
 
Recent research from consultants OpenSymmetry found that 63% of UK sales directors worry occasionally or frequently about the accuracy of commission payments to their sales staff. 44% of respondents regularly see commission payments at their organisation beset by errors of 5% or more. Only 28% say their commission scheme is effective in motivating their sales force.
 
Time to get it right
 
Not only is this a widespread problem. It is an increasingly important one. Bill Schuh, VP Europe at Callidus Software, a provider of sales performance management tools, comments: “Despite the current backlash against executive compensation, now is the perfect time to be introducing robust, company-wide pay for performance schemes as they will help organisations meet challenging market conditions.”
 
He adds: “Pay for performance is an incredibly powerful lever to change employee behaviour, but organisations need to think through the consequences of targets and have the ability to translate them into specific, measurable objectives that they understand and can control. In a recession pay for performance is the perfect model to ensure staff are supporting business objectives and positioning the company to emerge from the downturn in stronger shape than the competition.”
 
As anyone who runs a sales team knows, devising and implementing a successful bonus scheme is a difficult task that requires specialist skills and long-term attention. You can though make a good start by following these ten steps.
 
Ten steps to a successful bonus scheme
 
1) Know what behaviours and outcomes you want to encourage.
 
This is the most vital step. Encourage the wrong behaviours and outcomes and your bonus scheme will be ineffective at best, and destructive at worst. So begin with a clear idea of your objectives, then investigate fully to identify which behaviours and outcomes from your salespeople will produce that result. It could be arriving on time, making 100 calls a day, or reaching certain sales targets – whatever it is it must link to your broader business objectives.
 
2) Ensure that the scheme will be self-financing
 
Be careful you don’t end up paying more in bonuses than you generate by introducing the scheme. Ultimately the bonus payment should be a percentage of the additional profit it generates.
 
3) Consider profit and long-term customer relationships as well as short term sales
 
Too many sales bonus schemes reward only short-term sales. They produce salespeople who have little regard for their company’s reputation, little interest in their longer-term sales pipeline, and little enthusiasm for post-sales customer service. Make sure your scheme encourages sustained sales success.
 
4) Make targets ambitious but achievable
 
Targets that are too easy for your salespeople to reach produce too little benefit for you and fail to develop their skills and experience. Targets that are too difficult to achieve just demoralise your salespeople, and render the scheme ineffectual.
 
5) Invest in accurate measurement systems and technologies
 
It’s no good basing bonus payments on the achievement of something you cannot measure. If you have no system for counting the number of times a salesperson picks up the phone, then you will have to rely on your employees’ word for it, and you may find yourself paying everyone a bonus! There are consultants who can advise you on how to measure performance, and technologies that can help you do it – make the necessary investments in this area.
 
6) Get the balance right between individual and group bonuses
 
While you want all your salespeople to be aiming to achieve their individual sales targets, you also want them to work together as a team. They need to encourage each other, share best practice, work together on leads, and so on. By making part of the bonus payment dependent on group performance you can create a team which is more than the sum of its individual parts.
 
7) Don’t use bonuses to motivate
 
Bonuses are useful tools for recruitment, retention and encouraging certain behaviours and outcomes. They are not a replacement for proper management.
 
8) Communicate it well
 
Designing your bonus scheme is only the first stage. You also need to implement it successfully. To do that you need first of all to ensure that everyone knows about it and understands what they need to do to earn a bonus. Hold a meeting to announce and discuss it. E-mail information to all salespeople. Meet salespeople individually to discuss what it means for them.
 
9) Provide progress reports
 
As well as monitoring progress towards bonuses in individual appraisal meetings, hold regular team meetings to update the entire department on individuals who are performing well, and progress towards team targets. Never under-estimate the power of a sales board.
 
10) Review frequently
 
Your priorities will change over time, so plan to review your bonus scheme at least once a year. In this way you will ensure it continues to produce the results you need.
Source : The Sales Pro
Monday, October 5th, 2009 Carlene
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