Sales Quotas vs. Consultative Sales

Many of my recent blogs have been talking about the changing role of the telecom agent – from order taker to trusted adviser. I’ve covered:

• the misperception of the agent model
• agents’ need for a new image
• what defines a solutions provider
• the changing role of the tech salesperson

All of these blogs have roots in the move to consultative selling approach. So, I was particularly intrigued by a recent blog by Geoffrey James at BNET that addresses what might be a significant hurdle to creative a consultative selling environment. That is, wait for it ... the efficacy of sales quotas.

Whoa! Isn’t the quota the cornerstone upon which every sales organization is built?

One could argue that and be on firm ground. But, James (quoting a sales trainer) writes: It’s only possible to sell consultatively if you focus on PROCESS rather than on GOALS.” James then questions whether that means sales quotas are anathema to the consultative selling approach and encourage a different behavior from sales reps than is desired.

I am not a salesperson, so I can’t speak with authority, but I find this idea of no sales quotas interesting since it eliminates the stick, but not the carrot. Here’s what I mean: The salesperson still has incentive to sell because he/she still gets paid, but there is no penalty against them for the longer sales cycle consultative selling presumably requires.

Imagining this in a consumer setting, it’s easy for me to see the difference. If I’m shopping at an electronics store where the salespeople are commissioned and goaled, I am attacked immediately and “talked into” buying the 52-inch HDTV for my cozy bedroom. If I go to a store where the salespeople are salaried, I am lucky to find them in their department, let alone able to help me find the Blu-ray player with best OTT content subscriptions. (OTT? Say what?) Somewhere in between would be nice.

It seems to me the carrot works pretty well, but is it enough to make the numbers? Might it eventually be enough as a “culture” of consultative selling emerges where the norm becomes larger initial orders and more follow-on sales? Is it even logical to assume these compensating outcomes will occur as a result of moving to a consultative sales approach? Is it logical to assume that consultative selling cannot coexist with quotas in the first place?

I know a few agents who would probably argue this point with their carriers over high commit levels. I knew one agent who was an “elephant hunter” and basically met his dollar quota for the year with one sale, but was missing his quota since he is required to sell a certain amount every month no matter what. Granted, that’s not every agent’s situation, but it’s a graphic illustration of how quotas can go wrong. And BTW, that carrier is losing agents and agent customers right and left. On the other end of the spectrum, I know a master agency that will let agents sell as little or as much as they want – it’s revenue it wouldn’t have otherwise – and the company is growing even during this downturn.

I don’t want to confuse the issue too much, since there are many ways quota systems can be set up. However, as it concerns moving to a consultative sales model, how have quotas helped or hampered your company?

Comment below or take the PHONE+ POLL: Are Sales Quotas Counter to Consultative Sales?