How to Tell if Your Top Salesperson is Bad for Business
Top salespeople are often put on a pedestal by their company and peers because they generate more revenue than anybody else.
This can lead to exceptional privileges as they carry the team’s motivation and spirits - even more so than the Sales Manager - since they are highly relatable and positioned in the trenches, making things happen. Their heightened status gives them access to the largest pitch processes and the ability to step into other salespeople's territories without fear of consequence.
As their book of business increases, the gap widens between themselves and the team, leading to a further imbalance of power as the company and management focus on short-term revenue, rather than the long-term impact on the business as a whole. It becomes a situation where the management must pay obeisance to the demands of the top salesperson, as the threat of losing them will damage the business.
This is a common dynamic that is heightened in teams run by a weak, ill-informed sales director who doesn't address the imbalance and purely focuses on their own short-term targets. It's a downward spiral.
To truly manage top salespeople, it is important to understand the motivations that drive them.
In my experience, these exceptional performers tend to fall into 2 categories - those in it for "themselves", and those in it for "themselves AND the company". Before we scorn the selfish quest of the former, let's see the world through their eyes.
Top salespeople know they have a finite shelf-life.
From their perspective, they are always working themselves out of a job because their success proliferates their territories, contracting revenue to the company. Once this happens, it is better managed by cheaper and less skillful salespeople, and experience has taught them this, so it is perfectly reasonable to consider job opportunities as either short or long-term propositions.
Top salespeople know their value.
The tiny percentage they take in commission is a fraction of gross revenue and the equity value they create for the company. This means that they may see a timeframe to milk the opportunity and leave everyone with their healthier company valuation. The equity holders are the real winners here, and without ever knowing the senior managements' true intentions for the business, top salespeople are focused on the only thing they can influence - their earnings.
However, the net result of not understanding or managing top salespeople can be devastating on the business. On face value, there doesn't seem to be a problem as targets are consistently hit, but it's a false economy as short-term revenue goals stunt innovation and long-term strategic growth. Product innovation suffers as the salesperson only seeks to close business and not attain feedback for future development, market share is diminished over time as the product falls behind, the sales team’s morale is shattered, and the salesperson jumps before it impacts them. The long-term consequence is that the company is run into the ground.
How do you identify this dynamic?
The problem isn't with the salesperson; it's with the misalignment between the company and the individual’s goals. This can be missed at the interview phase, or it can be a slow burner that develops over time as a salesperson gains success and learns that marginalising the team and management leads to a greater financial gain. Before it can be addressed, it must be identified, and analysis of the following three areas will give a good insight into the motivations of your top performers without asking 3 questions:
What is the impact of this person on the sales team? There is one KPI that answers this. Is this person’s book of business increasing, while the rest of the team is decreasing? If this is the case, a deeper understanding is needed of the impact of this person on the team dynamic.
What are they adding to the business as a whole? Do they add to the business in other ways than direct revenue? In particular, are they regularly sharing feedback, including ways to improve the product or service, with the aim of driving the business forward?
Do they have more perceived power within the team than their boss? This is made worse if their manager is scared or hiding behind them, because this salesperson hits their boss’s team revenue targets for them. It is a recipe for disaster and not a great place to work if you are anyone other than the top salesperson.
The Solution
I have observed this dynamic a number of times, and it takes someone with both experience and insight to address the imbalance of power in order to keep the team happy and the business moving forward. Sometimes, a short-term strategy works for both. Management want to exit the business, and the salesperson wants to earn a ton of money and leave, but the key is to ensure that these two things are aligned and the business isn't impacted detrimentally in the process.
If short-term gain isn't the goal, then the solution isn't always to cut a territory, lower a salary, or remove privileges, since you want to keep the top performer within the business. One well-managed example is that of promoting and redefining their job role to a Head of Strategic Accounts position. This way, they carry a target and manage the biggest players, but they are now also responsible for gathering team feedback on product innovation, and helping their peers to farm the smaller accounts they have released. Under this new role, there is no loss of earnings to them and the company is driven forward by the person best qualified to do so.
Aligning the motivations of top performers with the company goals can be one of the greatest challenges of a Sales Director. It can lead to great gains in revenue, market share and the continued dominance of your product, but failing to do so, can be detrimental to everybody.