Regardless of what industry you are in, this study of sales organizational performance change due to training is universal in that the behaviors of salespeople- good and bad- transcend all industries. Self discipline; the ability to prepare and execute; effective communications; and an inherent understanding of business as it applies to a seller-buyer relationship are all intrinsic qualities of sales excellence in any industry.

Background:

SCAN Healthplan is a Medicare Advantage plan, which is for Medicare Parts A and B persons over the age of 65. In 2003 through 2005, SCAN operated in four counties of Southern California: Los Angeles, Orange, San Bernardino, and Riverside counties.

The Centers for Medicaid and Medicare Services (CMS)- a federal agency- is in charge of distributing funds to the eleven plans (SCAN plus ten competitors) that serve these counties. CMS generates statistics regarding the market size and growth pattern that is very accurate and is reported regularly by CMS to the plans. For the years of this study- 2003, 2004, and 2005, we will focus on Los Angeles, San Bernardino, Riverside, and Orange Counties. There were a little over 1.3 million seniors in the four counties who were eligible for the Medicare Advantage plan offered by the eleven competing plans. The year-to-year growth of this population is slightly less than 1%, so any numbers that exceed this growth rate can be considered market gain due to a competitive advantage.

In 2002 SCAN was in severe financial trouble and brought in a new CEO, Dave Schmidt. Dave was a past acquaintance of ours. What Dave did for SCAN from an executive perspective is really another topic on effective leadership. But for the training side of things Dave called us and simply said this: “I’ve seen how your organization works with people. That’s how I want my people treated. I need your organization to work with our sales team.” No discussion on ROI. No discussion on meeting any numbers. Work with our people. That was it. People.  He put us in touch with his VP Sales, Roger Lapp. The objective of the training program for Roger’s sales team was boiled down to a very simple, not measurable objective: create the elated customer. An elated customer becomes a very effective salesperson, which multiplied the sales force and reduced the time to earn trust for the next sale.

Let’s look at the numbers that resulted from the macro objective: Work with our people (Dave Schmidt objective) to create the elated customer (Roger Lapp objective). What’s interesting about the numbers you are about to read is that none of these numbers were used as performance drivers. Following is a year-to-year summary of the numerical results created by focusing on the elated customer as a training objective.

 2003 SCAN Healthplan Training Results

We started with SCAN in June 2003. Our first program was sales training, designed around the needs of the Group and Individuals. This program lasted through the summer and into the fall, training all 34 salespeople. The training was a blended training concept, utilizing brief, two-hour live workshops followed up by several weeks of online application. The online version was tailored to their daily activities- the assignments were directly connected to ongoing daily sales activities. Using a Socratic Approach we were able to quickly identify who needed help in what areas as well as who needed help but weren’t willing to admit it.

Although the training was on-line, it was done at such a constant interactive frequency that it was very hands - on and we really got to know the salespeople. We found that the salespeople were focusing on three things:

1. Just get the order, which can at times sacrifice the goal of creating an elated customer.
2. They were leading the call with their strongest selling point, mainly because they were impatient to get the order. Don’t kill a fly with a bazooka.  You save your best for when you need it.
3. Third was trying to avoid getting fired. Below 27 orders per month for three consecutive months resulted in termination. That is not a good sales growth strategy or effective sales management tool- unless performing to a minimum and turnover are department objectives.

 All three of these approaches boiled sales strategy back down to the first: just get the order. Our task was to go from “just get the order” to “create the elated customer”. By working with the salespeople, we found that much of this behavior- just get the order- was an industry mind-set. While we focused the online Group Discussions on Sales Best Practices, individually in the Private Discussion we coached each salesperson on integrity selling and thinking bigger picture: create the elated customer. We had to pull them away from their industry mind-set.

To their credit, the salespeople “got it” and not only were achieving their goals, but increasing their referral base by being more conscientious about their client- a senior citizen- than just getting the order. What was the result by year-end of 2003? Without setting any numerical goals, what we achieved was:

• An average increase of 30% monthly production per salesperson. This added $6 million to the top line sales for the year. Not bad for only being on the job for six months (remember, this started in June).
• Eight of the twenty (40%) middle-performing salespeople moved up into the top-performing bonus class.
• Four of six salespeople, who were on “write-up” for termination (already below minimum quota of 27 orders per month for two months) moved up into the middle-performing group, and off of termination write-up. What is the cost savings of turnover reduction?
• Allegations- which are essentially grievances filed by the Senior if they felt there was some unscrupulous pressure sales tactics or misleading sales tactics- went down as a percentage of sales.

 2004 SCAN Healthplan Training Results

During 2004, SCAN’s sales force grew to fifty salespeople. During that time, we engaged in training programs that consisted of four modules:

• Product Training with Competitive Analysis: three weeks- two assignments per week with one quiz per week.
• New Business Development Training: three weeks- One Group Discussion per week, three Daily Assignments per week, one quiz per week.
• Sales Skills Best Practices Training: five weeks: Daily Habit coaching, Weekly Best Practices Reading and Group Discussion, Weekly Quiz.
• Sales management training (this became a three year comprehensive curriculum).

 While participating in the training was encouraged, it was not mandatory. Then, in early November, SCAN management asked us who had completed all the training programs and who had not. We could have used the rep phone list, but by coincidence, we had just printed out the rep sales ranking performance chart. Since it was a handy and complete list, we used it to highlight who had and who had not completed training. After we highlighted who had completed training, even we were pleasantly surprised at the results.

It should also be noted that the three who completed training and ranked 31-40 were trending upward in performance. Remember- training was NOT mandatory.

 This can be looked at two ways:
1. The people who took the training benefited from the training.

2. The people who took the training are naturally the higher performing people because these people are always looking for an edge.

 Either way you look at it, training was the difference. Training helped people get better, or the better people used training to stay better. A third way to look at this: If your better people aren’t getting the training they want to improve, they will move to somewhere that gives them training.

 2005: SCAN Healthplan Training Results

In 2005 we delivered a total of nineteen online training programs to the SCAN Healthplan sales force by the end of June. Programs included:

• Product training
• Service training
• Time management training- a two part program delivered in May and June of 2005.
• Presentations training

June, 2005 was a record sales month for SCAN, but the real results showed in the year-over-year comparison (2004 to 2005) of the three month period of July, August, September. Again, there was no goal set to beat 2004 by X amount or X% in terms of our training objectives. The goal was to train the sales team in areas that would make them strategically better over the long haul with the ultimate goal of creating the elated customer. As in 2004 we stumbled on a statistical comparison that popped open a few eyeballs. This occurred when we decided to compare the monthly performance statistics of the sales force over a three-month period on a year-to-year basis. The results again showed the payoff of focusing on what Stephen Covey proclaims: Do the right thing, then do things right.

 Was the market growing at the same time?

But what about the market itself? Was it growing and SCAN just growing with it? For that information, we used a report generated by the Centers for Medicare and Medicaid Services, the official government agency that pays SCAN plus ten competitors as Medicare Advantage plans in the four county region SCAN serves. The chart is on the follows.

 Data Source: CMS Monthly Managed Care Reports

Also note that while SCAN offers healthcare coverage to seniors only, Kaiser is the largest full-service HMO in the four county region, with a natural membership age-in from their existing membership that contributes significantly to their net growth numbers.

Conclusion: We are advocates of establishing and setting measurable outcome objectives for any training program or intervention. However, it is amazing how much performance can improve strictly by establishing- and focusing on- the right behaviors and habits. Three quotes come to mind:

“Do the right thing first, then do things right.”

Stephen Covey

“We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.”

Aristotle

“Do the right thing and the money will come.”

Bobby Unser