Larry Heimlich: Sales Successes and Innovations
Filed under Compensation, Productivity, Quota, Sales Tips
Larry Heimlich is an experienced hi-tech sales leader for medium size entities and startups with 20 years of mentoring and managing great sales people. He has experience in a variety of markets including B2B enterprise software, SaaS, HR, healthcare, benefits, and technology. He has successfully implemented strategic selling principles and has provided leadership in companies that sold products ranging from SaaS, services, and capital equipment.
Currently, Heimlich is managing partner for Chiswick Services LLC, a consulting practice focused on sales and marketing strategies for growth companies in the technology space. Verticals include SaaS, HR, healthcare, financial services and benefits. He has successfully grown companies from $0 to $10 million in two years. Read on to find out more about his innovations and successes.
Janelle Wheel: Tell me about some of your successes in industry.
Larry Heimlich: As a chief sales officer, I’ve been fortunate to have helped a number of companies rapidly increase their revenues and profits. Two went on to successful IPOs.
One company was a Fidelity-backed HR services and benefits outsourcing start-up that went from $0 to $10 million in two years and $50 million in four years. We began with two sales reps and grew to 90.
In one case I was brought in to re-engineer a healthcare company that was stagnate at about $13 million in annual sales. In four years, we increased revenue to $36 million and market share from 8 to 25%. Over that time the sales staff grew from 15 to 59 sales reps.
Another example was a medical device company that we took from $3 million to $40 million in five years.
JW: You’ve had a lot of experience in growing sales organizations. How do you develop expertise and train sales reps?
LH: Unfortunately, many small companies provide limited training programs for new hires. If training is provided, it usually is informal and mainly related to products and not sales.
Part of the formula in growing great sales teams is to figure a way to provide, not only product training, but sales training. At smaller companies budgets for these activities is usually small to non-existent and creativity is required. It also has to be a continuing focus. You cannot develop consistent product and selling strategies with once a year or once a quarter group training. Messaging and methods need to be dynamic as you learn more about your customers and the markets. This means that communications and training needs to be on-going, regardless of the experience of the team. Look at other professions. Would you ever go to a doctor or lawyer who never took a course after finishing their formal training or education? Sales is similar. Training cannot be a one-time event. I’ve also learned that training can be accomplished with a small budget and a lot of creativity.
JW: What do you look for when hiring reps?
LH: I’ve determined that great sales people have three critical traits. They have a fierce desire to win and will work hard to be successful. They are empathetic and can understand the mindset of the prospect. Last, they are intelligent. If their personality doesn’t match these characteristics, it’s likely they will not be a top performer.
I would also prefer to hire someone who has succeeded in prior sales roles and might have had formal sales training at a large company. I place less of a premium on direct product experience. It’s easier to train someone on products or markets than strategic selling.
JW: How do you track success?
LH: Revenue at the end of the period is the ultimate scorecard but if you’re only focused on that, it’s too late. Every company needs to develop several weekly and monthly metrics that are predictive and easily tracked and published in addition to the sales results. Metrics may vary from industry to industry. Examples of useful metrics are dollar value of formal proposals, number of proposals, face-to-face meetings (where appropriate as with enterprise sales), phone calls, emails and other initiatives. You can sometimes develop useful metrics simply by observing the behavior of the top sales producers in the organization.
JW: What are some of the significant challenges that sales organizations are facing today?
LH: Having “the good leads” has always been a challenge. In some respects, it’s more challenging today with advent of Web 2.0 and social media. There are so many companies and solutions promising to provide quality prospects that it’s difficult to determine how and where to make investments. Ultimately, it’s about sales productivity. Your sales people are frequently your most expensive employees and you want them spending time at what they do best…selling. Here is where sales and marketing need to develop strong relationships and understanding of what is going to provide value which is incremental revenue divided by the investment.
JW: How do compensation planning and quotas influence sales success?
LH: Good compensation plans are important as they influence sales behavior and should reflect the goals of the company. Over the years, I’ve developed and implemented a number of comp programs. There are several design principles that I’ve used to great success.
- The more reps sell, the greater the percent commission or reward.
- There should be incentives to close business in the company’s time frame: in the fiscal quarter and fiscal year.
- Incentives should reflect desired behavior such as multi year contracts.
- There should always be incentives for closing business ASAP and no financial penalty for “sandbagging.”
- Top performers should also be recognized for superior performance other than cash. Getting sales professionals to imagine themselves receiving an award or plaque at an annual sales event in front of their peers and management is highly motivating.
- Quotas should be high performance targets but should be sensitive to the business climate. You can’t outperform the market. Warren Buffet once said, “When an industry with a reputation for difficult economics meets a manager with a reputation for excellence, it is usually the industry that keeps its reputation intact.”
JW: How do you avoid the inevitable land mines in growing companies?
LH: I’ve seen many businesses get into trouble or fail for the same missteps despite Santayana’s warning that “those who cannot remember the past are condemned to repeat it.” But landmines are also changing and are sometimes unavoidable; managing them is when there is no substitute for experience.
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