David Pearson is the CEO and Partner of Level Five Selling, an organization that has mastered quality sales calls planning and execution skills that deliver top-line revenue growth for sales teams all over the globe. Prior to joining Level Five Selling, David was the Chief Operating Officer of Vistage Worldwide, the world’s largest CEO executive coaching and leadership development organization, with over 23,000 members. Looking back even further, he was Senior Vice President for TrueBlue, a $2.7 billion global talent solutions company. He led sales of a $1.6 billion business unit, leading the selling efforts of 1,000 sellers, serving over 120,000 customers. He also served as president of TrueBlue’s $100M+ aviation business under the brand name PlaneTechs.

In this episode, you’re going to hear David Pearson and George Leith discuss topics from the books; Level 5 Coaching and Level 5 Selling. So, what is the Level 5 coaching system? David walks us through how to move from a Professional Visitor (Level 1) to a Value Creator (Level 5) and how selling at levels 4 and 5 have historically brought individuals and teams a 91% increase in revenue, not to mention the immense decrease in “scrap and waste” quality sales calls. Managers need to know the levels at which their sales teams are selling, then through tactical and strategic coaching, take them to a level 5 selling. What level are you selling at?

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Introduction

George: This is the Conquer Local podcast. A show about billion dollar sales leaders, marketers leading local economic growth and entrepreneurs who’ve created their dream organizations. They wanna share their secrets, giving you the distilled version of their extra ordinary feats. Our hope is with the tangible takeaways from each episode, you can rewire, rework and reimagine your business. I’m your host and the creator of the show, George Leith. And we’re very proud to feature David Pearson. David is the chief executive officer and partner of Level Five Selling, a company focused on implementing high-end sales coaching systems that provide sales leaders with process, system, and tools to improve their coaching effectiveness and significantly improve the quality of their sales reps calls. David was the chief operating officer of Vistage worldwide, the world’s largest CEO, executive coaching and leadership development organization with over 23,000 global members. David is also an accomplished keynote speaker and led the company’s keynote speaking practice. Get ready conquerors, David Pearson is coming up next on this week’s episode of the Conquer Local podcast. Joining us this week on the Conquer Local podcast, David Pearson, CEO at Level Five Selling, all the way from San Diego. David, welcome to the show.

David: George, thanks for having me. I’m honored to be here.

What’s The Biggest Difference Between Coaching And Managing?

George: I was loving reading through the show notes that our team prepared, because I see a lot of the word coaching. And when I look at your background, you definitely have a long history as being a coach and a leader and helping organizations through this leadership and coaching motion. But I want to ask this question because I love getting folks feedback on this. What’s the biggest difference between coaching and managing?

David: Yeah, George, what we find is that coaching is all about proactively helping people to be better. Improving their activities and behaviors so they can improve their ability to be able to sell and have a good outcome. We find that managers tend to look at lagging indicators quite a bit. Look at numbers that happened three months ago, numbers that happened last month, or they’ll spend time in the funnel. We find that they spend very little time actually focusing on what we call leading indicators. What are those things that will actually change the trajectory of the funnel. And those are really activities and behaviors. When the coaching is done right, they’re proactively looking for how can I help that person be better and improve?

George: One of the things I wanted to ask you is, if we do coaching right, what’s going to happen to our revenue in your opinion?

David: Well, revenue, there’s no doubt about it. You get coaching right, revenue increases significantly. In fact, we had a customer they took half the sales organization, about 550 people, and they did a full coaching initiative. And they took the other 550 and they continue with their regular initiatives, which were all important. They found that those, and they put big effort into this. So those that they focus on, it saw an 11% increase in sales, they saw an 8% increase in gross margin, and they also saw a 50% decrease in turnover, which kind of surprised me. I guess it shouldn’t because we look at millennials, they expect that we’re gonna be developing them. But it was a pretty significant decrease in their turnover, which is really nice.

George: That turnover comment is really interesting to me in working with the sales organizations that I have the privilege of working with. It really does make sense, doesn’t it? When you’ve got a group of sellers that is looking for feedback, they’re looking for coaching, they’re looking for mentorship. And when you provide it to them, they have a tendency to want to stay with that organization.

The Importance Of A Coach: Great Questions, Areas For Development, And Being Pushed Out Of Your Comfort Zone

David: Oh, it’s so true. Well, we all desire to be better at what we do. We all go to work wanting to be good. So we have somebody, they put their effort into us, they think about us, they’re leveraging our strengths, what we’re good at, they’re looking at areas we can develop and they’re driving us and pushing us. That makes us better and we appreciate that. I had a manager one time, one of my best bosses I’ve had, he pushed me further than anybody’s ever pushed me before. But you know what he did? he asked me great questions. He didn’t tell me what to do, but if I had a hole in my strategy and he could figure it out through great questions. He was just a really outstanding coach for me. He knew where I needed to develop. And he was the best boss I’ve ever had.

George: Did you like him all the time though?

David: Well, I respected him. Yeah, I respected him a lot, and yeah, sometimes he was hard on me. And, of course I didn’t like that when that happened, but it was a place that I wanted to stay. I was growing professionally, I was getting better and he was driving me.

George: The reason I asked that question is I think back to the people that I really admired in coaching throughout my career, where I wasn’t necessarily their biggest fan at that time, it was with hindsight that I looked back and said, “that was awesome”. So I’d love to get your feedback on what a quality sales call is. What is your definition?

Defining A Quality Sales Call: How?

David: Yeah, George, when we pulled together frontline sales leaders in the same company and asked them to define what a quality sales call is, you’d be surprised. Their answers are all over the board. So my question to people is how can they possibly achieve quality? And what are they coaching to if they can’t define what a quality sales call is. So this is so important that companies need to be thinking about this. How are we defining quality? And what we’ve done, whether they define it on their own or whether they use the system that we developed, it doesn’t really matter, but it’s important to do it. We’ve developed five levels of a quality sales call, which I’ll share with you here. And this was done by viewing over 2,500 sales calls. And what we found are these five levels, there’s level one which is a professional visitor. And these are people that believe that friends buy from friends. They never really get in any deep, meaningful issues on the sales call. Now we all know that relationships are important, but we only have so many friends and it’s not an effective way to sell. We find about 10% of calls fall in that particular category. Level two in our system is a price seller. And these are the people that come in, they say, “hey, what are you paying right now? I can get you a better price”. And sometimes maybe it’s not so blatant. Sometimes they try to have a really good sales call, but customer drives them on price conversation, they don’t know how to get out of it. Level three, oh, by the way, 10 to 15% fall in that category. Level three is a technical teller. And these are people that they learn their product service and solution really well, we train them so well on that, and they can’t wait to go out and tell everybody about it. And they get into presentation mode and demo mode and it’s a spray and pray. This is where I would say, George, is a big epidemic because it’s about 40 to 50% of calls that fall in this particular category. Now, when we get one level further, level four, that’s the first level on professional selling and that’s a product service consultants. And this are people that do the things we’d expect. Ask great questions to understand what’s important to their customer, link back a solution, differentiate, gain commitment. It’s all about finding a fit for their product service or solution. When they get to level five, that’s the big jump when they get to level five. That’s the value creator. And these are people that can step out of their shoes, step into their customer’s shoes. They have good business acumen and they can understand what drives the customer’s business. And they bring insights to the table to help shape and craft a solution. Those that sell at level four and level five have significantly higher average revenue per rep and average deal size. In fact, I’ll give you one that we found just recently, a customer very recently had the analysis of all their level one, two, and three reps, predominantly sought of that level versus their level four and five. And they had a 91% increase in revenue for those that were selling at the level four and five levels versus levels one, two, and three. Understanding what quality sales call is is absolutely key in any company to achieve quality and to set a foundation for how you coach.

George: What does this coaching plan look like as you take the ones, twos and threes, and try to move them into being fours and fives? On some of them is it just a lost cause? Is it a bad hire? Or are you able to move these folks with your methodology?

David: Well, sometimes it’s a bad hire, but a lot of times it’s about coaching to get there. And you can figure it out pretty quickly if you’re coaching people and they’re not able to get there, whether you got the right person or not. What we do is we take a look at the characteristics of each of those levels. And what does it take to move somebody from a level three to a level four, level five, let’s say. When you understand the characteristics really well you can understand the characteristics that are missing in that particular individual. And you’ll know that, hey, I need to coach them on calling at a higher level, or I need to coach them on how they execute the sales call or how they open the call. You can see exactly where you need to focus on in order to get them into level four and five, when you understand each of the details and characteristics of each of the levels. But it does definitely help you determine whether they’re the right person or not.

George: Would it be fair to say that the 80 20 rule applies here, where 80% of your dollars is being delivered by those fours and fives? And then 20% is being delivered by the ones, twos and threes, but yet our time, we’re spending a lot of time with the one, twos and threes, because we’re trying to move them into being four. Is that pretty typical from what you’ve seen?

David: Oh, you’re so right. It’s like a bell curve when you look at one through five, with three being a majority of what you have. And a lot of your revenue is coming from those level fours and fives. And the goal is, the key is, how do you move those people in the middle over to level four and five? And when you do that you’ll see a big difference there. But yes, you’re right. It’s like a bell curve.

George: You’ve had a long career of coaching, because before you started Level Five, you were doing coaching for CEO’s. Do you think that today we’re more open to this type of a coaching concept than we were maybe five, 10 years ago?

David: Oh, I think we are. Yeah, I think coaching is, if people are definitely open to it. Here’s what’s interesting, is I think coaching is the most talked about initiative and the least executed upon. And when I look at why that’s the case, I think it’s just a lot of people don’t know how to go about executing on it. You have to find quality, right? You tell people to do it but you don’t tell them how to go about doing it. And there really is a logical system for how you can go about coaching people. You don’t want to overwhelm them with 50 things they need to do differently. You don’t want to be doing just only reactive coaching. You want a proactive plan for each individual person. And what are the top two or three things I can focus on to help that person get better. When you do that you see things change pretty quickly.

We Must Train Coaches And Mentors Just As We Train Individuals And Teams

George: Do you think, David, that part of the challenge that we’re having is we spend all this time building training programs for the individual contributors, for the team members, but yet we do very little training and coaching around how to be a manager and a coach?

David: Oh, it’s so true. Look, I spent many years working for a sales consulting firm. We did a lot of sales training. And the reality is people spend a lot of money on sales training, they come back, salespeople get excited, they go to it, they come back and they go back their old ways pretty quickly. In fact, by 60 days they’ve forgotten most of what they learned. And six months later you wonder if it was ever even put in place in the first place. And that’s not always the case because some people do a good job of getting their managers engaged. But the fact is without the manager engagement, you’re just not gonna, you’re wasting your money. That manager, salesperson interaction is the key to driving sales growth and sales success. It is absolutely critical to get it right. And a lot of companies don’t spend a lot of money on that. They focus on the easy way. Give them some sales training, send them off, we’ll go back and get them back to work. And coaching is not hard. You just need to know what you’re doing. You need to know you have a good system for how you do it.

George: When I was reading through your system in preparation for the episode, I noticed that you have identified two different types of coaching. I’d love to unpack that with you.

David: Oh, when you’re talking about two different types of coaching, well, it’s actually three different types. We focus on tactical coaching, which is how do you coach somebody on a face-to-face sales call? All those things that they would do to make a face-to-face sales call effective. How do you coach for that? And then there’s strategic coaching. How do you coach around the deal or the opportunity? Am I calling on the right people? How do I go about negotiating? Am I calling on the right types of customers? Those are important too. And you have to build a coach on both of those, because you know as well as I do, you can have the best strategy in the world, and if you’re not executing a great sales call, tactically you’re not gonna be successful and vice versa. The third portion that we focus on too is universal coaching, which is just how do you help somebody? How do you have a coaching conversation with somebody? And it might be that you’ve got a sales rep who’s at 120% of quota, they called you and you got a call from the back shop saying that they’re toxic and you need to take action. How do you go about doing that? How do you have that conversation? I put that in a universal coaching category.

George: And universal meaning it’s across the entire organization. It’s more around the structure of the way that you’re running the teams.

David: Right, in general how do you coach somebody individually about something generally, as opposed to about a very specific deal or opportunity that they’re working on?

David Pearson’s Advice For New Coaches

George: Gotcha, now it makes a lot of sense. And those are the components of the Level Five coaching system that you and your organization have built. The one question we like to ask, don’t ask it all the time, but I like to ask it the majority of the times, if there was one takeaway that you could give to a junior coach, you’re working with somebody brand new, you want to teach them all the right things, maybe not have them unlearn bad things, you got a green field there. What advice would you give to a brand new coach?

David: Well, aside from defining what a quality sales call is, we’ve talked about, do not overwhelm the individual with 100 different things they need to do differently. And believe it or not that’s really common. Take a look at the person and say, “what are the two to three things over the next quarter that I can focus on with that person to help them be better?” I want to leverage your strengths, understand what those are and what are the two or three areas that I can really focus on and hone in on to get better. That’s how we get better. They learn it, you spend time with them on it. You proactively spend time helping them. They can go out and they can practice over and over and over again and get better at it. And then you can add on. And I think that’s a big key in how you should be going about coaching. Have a plan for how do you coach.

George: David, we’ve heard a lot of talk about the sales organizations’ tech stack, and there’s new tech companies springing up every day that are recording calls, transcribing calls, doing analysis of key words. Sometimes they say that they’ll automate sales, although I haven’t saw that yet. What do you think this is doing? Is it making it better for coaches or is it adding more confusion? What do you think this birth of the sales enablement tech stack is doing for coaches today?

David: Yeah, George, I think those systems are really helpful. The systems that will do AI analysis on a call and say, “hey, this is how much the customer spoke, this so much I spoke, did we use certain key words?” Those are helpful. I still think that the interaction between the sales manager and the salesperson needs to happen. There has to be live interaction in order to be successful. And those are tools that can help support that interaction. So while powerful and good, and I recommend them, I don’t want to discount the importance of the actual manager themselves and how they’re working with the salesperson.

George: So if you were to put, we did a pie chart, and on one side we got coaching, and on one side we got managing, is it a simple line like that? I spent 40% of my time coaching and 60% of my time managing, how do you as you’re training a coach, we gotta keep the lights on, we got to make sure that certain metrics are beat. That’s on the manager side, but then you’ve got this coaching component. Is there an algorithm for it?

David: Well, when we talk to sales managers and we ask them frequently, how much time do you spend coaching? They’ll say, “oh, I spend a majority of my time coaching”. You’ll hear 40, 50% of my time coaching, is what we’ll hear. When we ask them, well, let’s define coaching. If we say coaching is proactive time spent face-to-face, phone-to-phone, or Zoom-to-Zoom with an individual, helping them to be better and improve their activities and skills, how much time do you spend? Well, what we find is it gets down to about 15% of the time. So when you do a coaching initiative, it is not about adding more onto a manager’s plate. That is the last thing you want to do, because I don’t know any sales manager out there that’s not incredibly busy with a million things that are thrown on their plate. It is really about how they spend that time. And if you can take that 40% average time they say that they’re coaching reactively and make it more proactive, you will see a big difference and improvement in quality that happens on your sales calls and the outcome.

George: Well, David Pearson, thanks for joining us this week on the Conquer Local podcast. Love those takeaways that you left us with around this idea of having that coaching first methodology inside your organization, defining the difference between coaching and managing, and basically that mission that you guys are on, on making coaches better. I can definitely buy into that. So thanks for joining us.

David: George, I appreciate you having me.

Conclusion

George: Well, a big Conquer Local thank you to David Pearson for sharing his stories this week. Here are our team’s top three takeaways from this episode. Leading versus lagging indicators. We’ve been learning a lot about this over the last two or three years. Managers focus on the lagging measures, revenue, didn’t hit call volume, while coaching needs to be proactive, needs to have that lens of trying to improve things in a proactive motion, rather than keeping the lights on as the managers are expected to do. Coaching is the most talked about growth strategy but the least acted upon. And it just blows me away that that is a fact, but it really is. We all say we’re coaching. We all say we’re spending time coaching. But when I go into the calendar of our so-called coaches, they can’t really tell me with data that they’re spending hours upon hours doing actual coaching. So I think we need to look deeper. I think we need to give our coaches a methodology for them to follow. We need to remember that we’re not just coaching our sales reps, we need to coach the coaches of the sales reps to show them how we’re moving forward and what good looks like. And then let’s not forget about those five levels. There’s one thing we learned from David, it’s around those five levels. Level one, the professional visitor. Level two, the price seller. Level three, let me show you all the technical goodness. Level four, the product service consultant. And level five, the value creator. We want to move our sales professionals to level four and level five. But make no mistake, a lot of them are living in level three, two, and one. If you’d like David’s episode, be sure to listen the next time you’re walking the dog, waiting in your car, or having a coffee. Episode 423, building a positive team culture, a part of our master sales series. By fostering a positive team culture, we see better performance, higher employee retention rates, increased profitability and improved employee morale. Or episode 439, the fundamentals of managing 1000 salespeople at 21 years old from Nick Kane. In this episode we go over emotion, defensiveness and handling objections, and how to reduce complacency in high performers, according to Mr. Kane. These are just two of the over 200 episodes we’ve produced in the last four seasons to help you conquer local. If you found value in this episode, please leave us a review wherever you listen to your podcasts. This feedback helps us grow and better adapt to what you want to hear in future episodes. Be sure to subscribe to the Finny award-winning, Conquer Local podcast, as we continue to welcome extraordinary sales leaders, marketers, and entrepreneurs. My name is George Leith, I’ll see you when I see you.