by Andris A. Zoltners, PK Sinha, and Sally E. Lorimer
Harvard Business Review-http://blogs.hbr.org/cs/2011/07/forced_rankings_salespeople.html
A vice president of sales recently told us that he drives sales growth by publishing a monthly forced sales ranking of all salespeople. “Salespeople love the competition. They like to see where they stand, what it takes to be #1, and who they beat. Ranking really drives the competitive juices!” But one of the VP’s salespeople had a different view of published forced ranking: “My territory covers a large geography that has less opportunity than other territories. The salespeople in big opportunity territories are always at the head of the leader board. Everybody sees my ranking, but do they ever consider how tough my territory is? I’m sure I’d be close to the top if I had a better territory.”
Many sales organizations force rank salespeople on metrics such as sales, sales growth, or quota achievement, and use the rankings not only to motivate the sales force, but also to weed out the lowest producers, and reward the best. Forced ranking helps managers differentiate talent and deliver honest news to salespeople about where they stand.
Most sales leaders agree that forced ranking has value, but what’s the best strategy for communicating ranking information? Some, like the VP we spoke with, believe adamantly in publishing ranked lists for the entire sales force to see. Others feel it’s best to tell each salesperson his rank privately while publishing only the top of the list. Still others believe that rankings are useful for determining promotions and awards, but that rankings should be kept confidential.
Published forced rankings have motivational power. Advocates of publishing say:
• “Salespeople are competitive. Just like in sports, everyone wants to know where each team or individual stands.”
• “Forced ranking makes it clear to everyone what is considered excellent, average, and poor performance.”
• “Salespeople will work harder to move up in the rankings. We had one salesperson move from #73 to #56 to #23 to #3 in just three years.”
• “We don’t have to deliver bad news. People at the bottom know where they stand on the ‘wall of shame.’ They get embarrassed and many leave of their own accord.”
Yet publishing forced rankings of salespeople has downsides. There are visible winners and losers. This can create internally focused rivalry, as salespeople soon forget that the competition is out in the marketplace, not within the company among peers. An “every man for himself” attitude develops, hindering the teamwork needed to serve customers effectively and beat competitors. Most salespeople feel unsuccessful unless they are ranked at or near the top. Published rankings make a large fraction of salespeople feel like failures in a visible way. This risks alienating the “middle” performers (75th to 25th percentile), a large group important to company success. And published forced rankings can diminish the importance of sales manager coaching. Weak managers can allow rankings to deliver the bad news to underperforming salespeople, instead of summoning the managerial courage to have frank discussions that help those salespeople improve.
Whether published or not, forced ranking should always be based on clearly articulated objective criteria and metrics that are accurate and fair to all salespeople. Yet complete fairness is almost impossible to achieve. Too frequently, rankings are impacted by the territory more so than by salesperson performance. When metrics don’t account for territory differences, rankings won’t reflect true performance differences and can demotivate the sales force.
We believe in the power of force-ranking salespeople and suggest managing the downsides by:
• Ranking all salespeople but publishing only the list of top performers. This publicly acknowledges outstanding performance and sets up an elite group as a model for the rest of the sales force.
• Asking managers to share personal ranking information with all salespeople who report to them, and to coach individuals on strategies for improving their rankings.
• Keeping the time period for rankings short so that salespeople can recover quickly from a low ranking.
• Encouraging fairness in rankings by using a variety of metrics that give salespeople many ways to win while highlighting the success of those with different strengths and types of territories. For example, one company publishes monthly rankings of its salespeople on five metrics:
1. Total sales favors the large sales territory.
2. Sales growth favors the small sales territory.
3. Market share rewards the best performance relative to the competition.
4. Market share growth favors the salesperson who is able to grow share in a territory that is underpenetrated.
5. Varying monthly or quarterly metrics (such as individual product growth or new product sales) focus attention on specific short-term priorities.
Salespeople are competitive. They like to see how they are doing. But they want their ranking published only if they are at or close to the top. A “rank and publish all” strategy risks alienating and possibly losing too many good salespeople.
As a buyer looking for a home, there are many ways to find your new house. Your Real Estate Agent, a friend, the internet, and yes some people still drive around looking for “For Sale” signs in the yard. Finding a home is an exciting and sometimes stressful process. There are many emotions and decisions to be made.
In my opinion, especially lately, the stress comes when it comes time to make an offer on a home. What is in an offer? The price, deadlines, included & excluded items to negotiate, closing costs, etc. Asking for the fridge or the washer and dryer isn’t that stressful. Asking for a home warranty isn’t that hard. Negotiating when to do home inspections and close on the home isn’t bad. However, the price of the home is most stressful lately for my buyers. Why?
This is a buyer’s market, which means there are more home on the market than buyers. So buyers have more choice and usually flexibility in price negotiations. Have you ever been to Tijuana, Mexico? It is a fun place to go and buy random things from pottery to sombreros. One of the fun things about the city is your ability to barter with the seller. You ask, “What is the price of those “real” Oakley sunglasses?” All along you know they aren’t real brand sunglasses, but fake ones. You still want them regardless. The seller says “$20″. Then the negotiation begins, you say 5$, he says $15, you say $7, he says $12 and so on until you reach an agreed price.
Sometimes, making on offer on a home doesn’t work this way, even though some feel the need to barter. This is why I say the listing price of the home doesn’t matter. We shouldn’t use the list price as a starting point to negotiate. Why not? That price could have been totally made up by the seller. The listing agent has done some research on homes that have sold recently in the area, but the list price is not science.
Instead of focusing on what the home is listed for, we use data. As your agent, I am able to see every home actively listed, under contract, and sold. We generally only go back 90 days on a sold price within the neighborhood or surrounding areas of the focus property. This is the only way to see if you are “getting a deal” or paying too much. Just because the home is listed at $250,000 and you buy it at $240,000 doesn’t mean you “got a deal”. If a home is listed at $400,000 and you pay $399,999, that doesn’t mean you paid too much. The market data will support the price.
To summarize, the true value of a property is what a buyer is willing to pay for it and what a seller is willing to sell it for. The market will supply the data necessary for you to determine what you could pay for the home. However, as the buyer, you are always in the driver’s seat. Just remember though, if you were a seller and someone came and asked you to give them $30,000 out of your pocket, how would that make you feel?
Dallas Jensen
Associate Broker
The Jensen Group Real Estate-Utah
801-706-2481
Here is a link from the Salt Lake Tribune on the latest numbers. Thanks!
Selling Your Home? Get Rid of the Cat Smell….
Posted: July 9, 2011 in Uncategorized
Recently, I showed a great looking home. When we went into the home, the smell of cat pee was overwhelming! I would advise that you remove all animals when showing a home. Not everybody likes dog & cat hair, pee, and such in their carpet. The other issue is the smells. People can detect the presence of a cat or dog just by the smell. Even if it is a “clean” animal and hasn’t used the kitchen as a toilet. Many people are allergic to pets.
This is a deal killer for many buyers, even when they are pet owners. Have the carpets cleaned really well and take your animals with you when a buyer is walking the home.
Dallas Jensen
The Jensen Group Real Estate Utah
‘Freon huffing’ on the rise, posing danger to teens-KSL.com
Posted: July 7, 2011 in Uncategorized
SALT LAKE CITY — When you turn on your air conditioning, you’re also fueling a dangerous new trend among teenagers.
Many are now huffing chemicals out of AC units.
The practice is not only potentially deadly for teens, it can destroy an air
conditioning unit in a matter of minutes.
Ryan Rentmeister owns Rentmeister Total Home Service and this is his
company’s busy season. Hot temperatures have people turning on their air
conditioners, but many aren’t working because their Freon is gone.
“We’ve had four cases just in our company over the last week,” Rentmeister
said Wednesday. That includes his own brother’s AC unit and his mom’s.
Rentmeister took KSL News along to his mother’s house as he installed a
special lock. Before he did that, he ran a quick test.
“Someone may have gotten to it in the last couple days and got a little more,
‘cause it appears to be a little low,” he said.
So what’s happening? People are huffing refrigerant, or Freon, inside the air conditioner. Surveillance video recently posted on YouTube captured teens visiting an air conditioning unit three times to get high.
But huffing refrigerant is not only dangerous, it can be deadly. A year ago,
Idaho teenager Cody Liedle, an expert swimmer, drowned. Police say he had
huffed Freon right before he went swimming and it contributed to his death.
“This is a trend we’re seeing and we’d like to get a handle on it,” said
Syracuse police Lt. Tracy Jensen.
Jensen says two churches near Syracuse High School have been hit more
than once, but catching the teens is usually easier than prosecuting them.
“It’s something that’s in their system for 15, 20 minutes and it’s gone,” Jensen
explained. “It’s not like alcohol or marijuana where [it] stays in their system.”
Rentmeister suggests everyone install a lock on their AC units. The locks run
$40 to $50 but could end up saving you much more.
“You cannot deter everybody. But if your system is a little more secure, you
could deter some people — and some of those people might be your kids,”
Rentmeister said.
The AC locks can be purchased by contacting your air conditioning
technician. Rentmeister says they’re very easy to install and very difficult to
remove.
July 6th, 2011 @ 9:37pm
By Sarah Dallof
Recently, my Broker went on vacation and I had the chance to cover for her. One of her buyers was purchasing a home in Salt Lake City. This home happened to be in foreclosure.
As a buyer, you are always advised to do a Home Inspection. What does this include? An inspector will rate: plumbing, heating & air, foundation, roof, electrical, etc.
However, there are many tests that are not included in your standard Home Inspection. One of the most important is a Meth Test. I would encourage everyone, regardless of the age or condition of the home you are purchasing to order a Meth Test.
When tested, the results were OFF THE CHARTS! Which meant they were not only using meth in the home, but cooking it as well.
Click here for a fact sheet about the effect of meth http://health.utah.gov/meth/docs/PDFs/FactSheetOct2008.pdf
Here is link to a company that will do the test for you and it is affordable. I am in no way affiliated with this company, but it is a simple way to do the test. Please call me if you have any questions.
Go to the bottom and click on the link: Methamphetamine Sampling Kit Order Form
Dallas Jensen
The Jensen Group Real Estate Utah
What You Must Know About Home Appraisals
Posted: July 6, 2011 in Uncategorized
1. An appraisal isn’t an exact science
When appraisers evaluate a home’s value, they’re giving their best opinion based on how the home’s features stack up against those of similar homes recently sold nearby. One appraiser may factor in a recent sale, but another may consider that sale too long ago, or the home too different, or too far away to be a fair comparison. The result can be differences in the values two separate appraisers set for your home.
2. Appraisals have different purposes
If the appraisal is being used by a lender giving a loan on the home, the appraised value will be the lower of market value (what it would sell for on the open market today) and the price you paid for the house if you recently bought it.
An appraisal being used to figure out how much to insure your home for or to determine your property taxes may rely on other factors and arrive at different values. For example, though an appraisal for a home loan evaluates today’s market value, an appraisal for insurance purposes calculates what it would cost to rebuild your home at today’s building material and labor rates, which can result in two different numbers.
Appraisals are also different from CMAs, or competitive market analyses. In a CMA, a real estate agent relies on market expertise to estimate how much your home will sell for in a specific time period. The price your home will sell for in 30 days may be different than the price your home will sell for in 120 days. Because real estate agents don’t follow the rules appraisers do, there can be variations between CMAs and appraisals on the same home.
3. An appraisal is a snapshot
Home prices shift, and appraised values will shift with those market changes. Your home may be appraised at $150,000 today, but in two months when you refinance or list it for sale, the appraised value could be lower or higher depending on how your market has performed.
4. Appraisals don’t factor in your personal issues
You may have a reason you must sell immediately, such as a job loss or transfer, which can affect the amount of money you’ll accept to complete the transaction in your time frame. An appraisal doesn’t consider those personal factors.
5. You can ask for a second opinion
If your home appraisal comes back at a value you believe is too low, you can request that a second appraisal be performed by a different appraiser. You, or potential buyers, if they’ve requested the appraisal, will have to pay for the second appraisal. But it may be worth it to keep the sale from collapsing from a faulty appraisal. On the other hand, the appraisal may be accurate, and it may be a sign that you need to adjust your pricing or the size of the loan you’re refinancing.
Need I Say More?
Posted: July 5, 2011 in MiscellaneousTags: Foreclosure, short sale, utah real estate
