Archive for category Getting the most from your reps

Rethinking Our Approach To Rep Firms

When are PCB shops going to get it?

I send a lot of my time helping board shops with their rep issues. I spend a lot of time trying to convince these shops that they are going to have to change the way they handle their rep relationships and start treating them as partners rather than second hand citizens if they want this whole thing to work.

I am constantly amazed when the board fabricators I talk to tell me without batting an eye that they have the “best shop in the industry; that they have the best service in the industry and reps should be beating a path to their door for the ‘privilege’ of selling for them.”

I really get a kick out of the shop owners who tell me that “they are no worse than anyone else” and “that any rep should be delighted to sell for them.”

And then they go on to tell me that the reps they have not are all a bunch of “lazy bums” and if I could only find them the “right” reps to sell their terrific products everything would be okay.

When I ask them if they have a marketing plan or are doing any advertising? All I get is a loud snort and an impatient, “who needs that stuff? We don’t need any of that we just need the right reps.”

When I ask them if they have a program for managing the reps; pointing out that one of my partners offers a very successfully proven plan that will guarantee that their rep program will succeed they scoff and say, “we talk to our reps all the time and don’t need any of that.”

When I ask them if they are willing to give reps house accounts they refuse even before the words have time to pass my lips. “No way will we ever do that, they have to earn their accounts, they have to bring in new business and not even go near our current accounts.”

When I point out that it is better to serve an account locally than from three thousand miles away so they should give the reps these accounts, I still can’t budge them.

When I ask them if they would be willing to pay a small retainer or even a draw to get the reps started since it is a very expensive and long process to find new accounts, get the surveyed and qualified and get that first order and then wait another 60 days to get paid, they just about come through the phone roaring, “No way will we ever do that! We did that once and the reps screwed us!”

And here is the clincher…when I tell them I might have a pretty good rep in an area let’s say New England that I might be able to introduce to them if they want, they tell me, “Well we can’t really put in a rep in that territory because we already have a rep there but he isn’t doing anything for us right now.”

And when I ask why he isn’t doing anything and why don’t they try talking to him to get him going again, they tell me and get this, listen to this one; “well, we owe him a bunch of money and have not been able to pay it for a six months…. but he should still be trying to sell for us right?”

Okay, if you are a board shop owner and any of this scenarios sound familiar to you then good! Maybe you’ll get it one of these days. So I am going to make it easy and plain to understand:

If you see yourself in any of the above examples you need to know that reps are tired of working with your company and companies like yours.

They are sick and tired of being screwed by you. Your product is not always great and frankly neither is your service. It is not a great privilege to sell your products. And as the market gets tougher and tougher it is that much more difficult to represent you and near impossible to make any real money representing you.

Besides all of these pitfalls of representing a board shop there is always this other dilemma, the danger of being too successful and bringing in so much business that when your accounting department sees how much you owe them and are going to owe them when the next orders come in you think nothing of terminating them. Never mind the fact that reps are always at the bottom of the stack of things you have to pay and if you go out of business they are always at the top of the list of creditors who will never get paid!

Now do you get it! Those of you who continue to disrespect your reps and not want cooperate with them are not going to be able to sign them for much longer so you are going to have to find another way to sell your products.

For those of you who are willing to enter the 21st century of rep/principal relationship listen up”

You are going to have to treat your reps with the trust and courtesy that a true partner deserves. You are going to make sure that the relationship will be win/win and yes you are going to have to pay the piper and pay retainers or at least give them some accounts if you want to have them work for you.

That’s all there is to it…it’s not that hard. Its only common sense.

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Team! It’s All About The Team!

dan-5Getting your direct sales people to act as a team

For the most part sales people are lone wolves. One of the reasons they choose to be sales people is the independence, they like to run their own race. I have found that the best sales people are truly the loners. Think of Ricky Roma in Glengarry Glenn Ross. While all the other sales people were drinking together and figuring out how to screw the company to make their numbers, old Ricky just quietly went his own way always making those numbers and claiming his Cadillacs.

No matter how much your sales people prefer working on their own, it is not good for the overall company. We should find some ways to get everyone to work together. We are still sales managers and we still manage sales teams. Not Individuals. Here then are some ideas to get your sales team working together, cooperating, and helping one another so that they all make their numbers and yes, in the end, the company prospers.

Here are ten tips to help you unite your sales individuals into a strong industry leading sales force: (Please note these tips are designed for a sales force made up of direct sales people who reside in their individual territories)

  1. Hold weekly sales meeting. These meetings should be about an hour long and should have a strong and clear agenda covering not only what is happening at the company but also what is happening in each territory. This will give your sales team a chance to talk to one another, talk about their successes and challenges and exchange ideas for winning more business. This is also a great time for them to communicate with your operations and quality people and find out what is going on in the shop.
  2. Require weekly written comprehensive sales reports:  These reports should be distributed to each member of the management team, inside sales; and, each sales person so everyone can see what each of them is doing. It will also provide everyone with an overview of what is happening with key customers
  3. Develop and keep an approved vendor list: This is a list of the multi-location customer you are approved to work with. Make sure that each sales person has access to it. If the company is approved at Raytheon in Andover then everyone on the sales team needs to know this and use it to win business at their own local Raytheon location.
  4. Share good tools: If a sales person finds a sales tool, albeit CRM or data base or research tool that they find useful it should be required that they share it with the rest of the sales team.
  5. Share good ideas: If a sales person has found an effective way to penetrate a customer, then they should be required to share that with the rest of the sales team.
  6. Sales is not a zero-sum game: Always be reminding the sales team that sales is not a zero-sum game. Everyone can win and everyone should be working as hard as possible to help everyone on the team win. The better the entire sales team does the better it will be for everyone.
  7. Discourage sales xenophobia: Don’t allow your sales team to hold their cards too closely, as stated earlier this is a team sport and sharing is a key to your team’s success. Yes, there is going to be some competition and yes, the sales people are going to have to fight to get their customers in line to make delivery dates when the shop is full. But you, as sales manager must demonstrate that at all times the company, and the overall health of the company comes first.
  8. Hold salesperson-only phone meetings: Encourage your sales team to hold phone meetings one their own. Invite them to use the company conference calls to have team meetings without you. This way they can share leads and solutions to problems they are having. This will go a long way in creating good team spirit.
  9. Take one for the team: Show them that sometimes they are going to have to take one for the team. Because they are direct sales people and thus employees of the company, their base salary is the compensation for doing work for the company. This means that things like covering house accounts and doing something to support a fellow sales person are part of their job and the reason they get a base salary.
  10. Create team incentives. Of course, each sales person has is or her own individual compensation plan but create some incentives that are based on the entire team making a certain goal. Nothing will create team spirit more than this.

And finally, one more, always under promise and over deliver, have an annual sales meeting at the company and I urge at the company. Don’t spend money going somewhere cool because that is a complete waste of money and a distraction as well. Once a year bring all the sales people in for a sales meeting. It will give them the chance to meet and talk with one another. To visit with the people in the plant, to take plant tours and check out the new equipment and improvements and to get briefed in new capabilities and technologies. It will also give the sales team and the management team the chance to review the company strategy and plan for the coming year. It will be beneficial and it will go a long way towards creating a strong bond between the sales people and the management team as well. Bring everyone together at least once a year and it will money the best money you spend all year. It’s only common sense.

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Do You Have The Patience To Be A Great Sales Manager?

dan-4I once worked with a company president who hired a salesperson in a new territory on the Friday before Memorial Day weekend and fired him before the Fourth of July weekend. Befuddled, I asked him why.

He told me, “Look, the guy had not brought in a single order.” I asked if he had brought in any quotes, and he said, “Sure, he brought in all kinds of quotes but we didn’t win any of them. So what did you expect me to do?”

Guess what, folks? Four or five weeks is not enough time to try out a new salesperson. In fact, six months is nowhere near enough time to try out a new salesperson. It takes much longer than that for the salesperson to just get around his territory and introduce himself to your existing customers, and your company to all of his customers and contacts.

As sales expert David Brock says in his excellent book The Sales Manager Survival Guide,

  • Recently I heard a great speaker say that from their first day on the job to the time they leave, the average salesperson’s tenure is less than 2 years.
  • The average tenure of a sales manager is 19 months.
  • 47% of companies say it takes 10 or more months for new salespeople to become fully productive.
  • 67% say 7 or more months.

58% of all sales reps make quota.

Taken together, these figures present a frightening view of selling and of the cost of sales. Basically, we have to make our money from a salesperson in a little more than a year. That is, to get a good return on our investment in hiring and on boarding someone who takes 7-10 months to become fully productive, but who will leave within the next 14 months: we have to have them produce at least two years’ worth of business in those 14 months.

Obviously this is a serious problem that causes severe challenges, not only for our companies but also for our customers who have to train new salespeople to know what they need in a very short time. In fact, there is seldom enough time for the salesperson to earn the customers’ trust!

It gets even worse when we consider our industry, where we are selling a technical high-end customized product, since the above-quoted stats were for people selling ready-made products.

Then we have a situation where the salesperson has to come to his customers every two years with the next greatest solution, leaving those customers wondering what happened to last year’s greatest solution.

So the answer lies in patience. You must have patience to take the time to find and hire the right salesperson. Then, you must have the right amount of time to train that salesperson properly, making certain that he has the proper understanding of your products, your customers and your market, and how they all fit together.

It boils down to this: The first year is for learning and acclimating, and the second year is for really getting going. I advise most of my clients that a good salesperson should hit his desired annual run rate in sales by the end of the 24th month. And that’s the run rate, meaning that by the 24th month the salesperson will have reached the monthly sales numbers that when multiplied by 12 will equal what he should be booking annually. And then from there, his numbers should start growing at an industry-based logical rate. Then and only then will you get a good return on your investment.

Sure, there will be exceptions to these rules. You’ll find some hotshot who can deliver that huge account you have been trying to land, or the lucky guy who is in the right place at the right time. Yes, that can happen, but I warn you it rarely happens. Be very wary of the salesperson who brags that he will put you into some key accounts right away because those buyers love him and will follow him wherever he goes.

Really? Companies seldom, if ever, follow one salesperson. They do not jump from one vendor to another because a salesperson they like has jumped from one company to another. At best, this salesperson will get you some meetings, some introductions and even some quoting opportunities, but you will have to win the business on your own.

With most customers, especially the Tier One companies, you are still going to have to go through the entire gamut of surveys, qualification orders and customer visits, and that will still take a long time. Let’s face it: There are very few shortcuts in sales anymore.

So spend the time, find the right salesperson, hire him, train him, work with him and then have the patience to give the right amount of time to nurture his customer base and grow his territory. It’s only common sense.

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A Day In The Life Of A Sales Person

Dan - another pathLast week we spent a day with a sales manager, so this week it is only appropriate that we spend that same day with a sales person. This will be a sales person who has a territory away from the company, so she is operating out of fully equipped home office where she has everything she needs to conduct her business. Her required reporting is a weekly status report of her activities during the week as well as her plan for the following week. She annually develops account plans for her key customers as well as an account by account, month by month forecast that is actually measured on a daily basis by the sales manager so that by the end of the day she knows exactly where she stands.

For a sales person to know critical numbers is a key ingredient to success. I don’t understand companies whose sales people not only are not responsible for their own territory forecasts, but also have no idea what the company’s overall forecast is. How can you successfully play any game without knowing what the score is? How can any sales person or company for that matter, operate without some very public (intracompany, anyway) goals for the year?

The sales person should also have some action goals made up of the required number of live sales calls they are expected to make during the week. The key word being “live”.

So then, here is how a successful sales person should be spending his day:

  1. Lead generation: A good sales person is always be acquiring new customers. He should develop an ideal customer profile and use that when deciding which companies in his territory to go after. He should use a good sales tool like ACT! or SALEFORCE.com to track his lead generation efforts. I that is not available there is nothing wrong with at least using an Excel spreadsheet. The important thing is to keep track of his progress.
  2. Planning for the next three weeks: Yes, I hear you crying about how hard it is to make appointments, but sorry, it is part of the job, it comes with the territory, as they say. So, figure it out. Get creative. There are literally scores of books out there on making cold calls, leaving effective phone messages and other ways to get to potential customers, buy some and read them. If you have a smart sales manager he will be happy to reimburse for any sales book you buy.
  3. Strategy for winning new accounts: Once you’ve sunk your teeth into an account don’t let go. Develop and implement a strategy for winning that account.
  4. Relationship management for current accounts: In terms of current accounts, the sales person is the relationship manager. She is the one who is in front of that customer, the face of the company to that customers. She has to make sure that everything is okay at all times and communicate back to her own company when things need attention. She should know more about that account than people who work there. She should know the type of products they buy, when they buy them and what they are going to be buying in the future. It is her responsibility to be an expert on her key accounts.
  5. Territory marketing and social media: Although the company probably has a marketing plan a sales person should have one for his territory as well. He should develop a value-added newsletter for his customers and potential customers and send it out on a regular a basis. He should find the right local technical publications and convince his company to invest in advertising or at the very least submit content to those publications. He should be involved in local organizations such as SMTA and he should go to all local functions related to his industry. He should also be active on social media, from Linkedin to Twitter to Instagram.
  6. Daily reporting for the weekly report: The very worst question I hear from sales people is, “Do you want me out there in front of customers or do you want me to spend my time writing reports?” My answer to that is,” I want both, you are a well-paid sales professional you can do both, sales is not a forty-hour a week gig, and by the way ask me that one more time and you’re fired!” Work on your written report every day and it will be done on time, no big deal.
  7. Communicating with the sales manager: Communicate with your sales manager on a regular basis. Make your calls brief, concise and to the point. Tell her what you are up to and what she needs to hear. Ask her for whatever it is you need and move on. Be professional, count on her to take care of your needs but remember she is not the complaint department
  8. Communicating with the company: The same thing goes here. If you have to talk to someone in the company. Be brief and concise. Tell whoever you have called what you need and move on. Do not badger, hound or nag no matter what the problem is it will only get worse if you badger. Always be professional.

We should remember that sales is a profession, it’s a career not a job and those sales people who treat it as such and invest the right amount of time and effort into that career will always succeed.

It’s only common sense.

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Sales Managers Have To Visit Customers

dan-1

Yes, sales managers have to visit customers. In fact General Managers and Presidents and Quality Managers and yes, even owners need to visit customers whenever they get the opportunity. Why are we happy to just sit back and have our sales people do customer translations for us? Why are we happy or often unhappy with the information that our sales people bring back from our customers? Why are we okay with settling for communicating through our sales people?

Now don’t get me wrong sales people are very important, they are the face of your company, the front line if you will and yes it is vital that they act as the messenger between the customer and the management team. But that is not enough.

It’s not that the sales people don’t tell the truth about their customers because I believe that 99.9% of the time they do represent the customer in a clear and honest light. But often when their honest message is not to our liking we tend to shoot them they are after all the proverbial messenger. We tend to want to blame the sales person if she tells us that her customer is not happy or if she has to deliver some bad news from the customer. And by the way the biggest problem is that if the sales person is the only one to visit and talk to her customers they become exactly that, her customers. But as we all know they are not her customers or his customers, they are our customers and it is our duty as managers to have a good face to face relationship with our customers.

It is just too easy for a General Manager to rant about how unreasonable a customer is being for complaining that the boards got there a day late. It is just too easy for a Quality Manager to berate a sales person telling them that if they could sell they could get their customer to buy these perfectly usable boards even if they don’t exactly look great. It is just too easy for a company President to push his sales people into telling the customer he is going to raise the price even if the sales person tries to tell him that he will lose the business at this new price. It is just too easy for all of these “non-sales” people to live in a vacuum of customer ignorance and just push the sales people to get things done that well just are impossible to do.

But the most important reason for company leaders to get out and visit customers is to get to know them on a personal and first name basis. I love it when I talk to a company owner who has just come from visiting a customer for the first time; I am always amused to hear him suddenly become such a stalwart customer advocate. He comes away from that meeting enlightened and with a much better understanding of what customer is like, and what her specific needs are He goes back to the rest of his management team and uses his authority (authority that the front line sales people don’t have by the way) to make sure that the customer gets treated right, gets treated the way she needs to be treated.

The same applies to a GM or a Quality Manager for example. After even just one customers visit, the customers goes from being a hypothetical to a real life being. They learn what the customer actually needs and most importantly why he needs it that way. Once they have a better understanding of one another the relationship thickens and broadens and a long-term customer relationship is established.

All it takes is a little effort, a little time and a little patience to make sure you as managers develop a good understanding of your customers to the point of establishing a customer-vendor partner that will last a lifetime.

So Mr. President, Mr. GM, Mr. QA manager get out there. Hop in the car with your sales people and head out to your largest customer this afternoon and ask them what they need from you company and from you specifically. You’ll be amazed how that simple little act will improve everything between you and your customers.

And you know what? You’ll also have more respect for your sales people and the kind of issues they face out there on a regular basis. You get to know first-hand what your customers really think about your company, the good and the bad and yes the ugly. Remember what Bill Gates said, “You can learn a lot more from an unhappy customer than you can from a happy one.”

By visiting a customer you will also show him that you care about him. That you wanted to come in and meet her. That you took time out of your busy day to come to his office, sit down with him and ask him how you can help him. That is a very big deal. You’ll also be showing your sales person that you support her, that you respect him and that in the future you will have a better understanding of the support he needs from you and from the company, and that’s a good thing. It’s only common sense.

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A Day In The Life Of A Sales Manager

Dan 8Okay, you’re the sales manager for a 15 million dollar board shop located in the Midwest. Your sales team consists of 6 direct regional sales people and five independent sales reps; together they cover the entire U.S. and Canada. Besides managing the sales team, you also handle the company’s marketing and yes, you are also starting to dabble into social media. In short, you have your hands full, so much so that you could easily be overwhelmed if you don’t have good scheduling skills. Since I work with sales teams and specifically sales mangers I thought it would be interesting to talk about how a good sales manager spends his days.

First, a sales manager must manage just like a baseball manager, he should make sure that he is fielding the best team possible, let’s assume that has happened and that these sales people are good. Now that we have established this let’s move on to what the sales manager should be doing with his day.

Make sure that you reporting system is set up. This should consist of:

  • An annual forecast: month by month customer by customer
  • A weekly sales status report from each sales person. (reps are handled differently we’ll talk about them later)
  • A daily dashboard which shows the sales people what they book that day and where they stand in terms of their forecasts both monthly and annually. This report needs to go to the company’s other managers as well.

Touching base with your sales people daily. This is just a quick phone call to see what they are up to. Ask each sales person what they will be booking today, what challenges they are facing and what you can do to help them. This does not have to be a long phone call, just long enough to get an good understanding of what they are up to. This will also serve to keep them on their toes.

Work with the rest of the managers communicating with them and passing on what you learned from your sales people. Remember as the sales manager you are the company’s number one sales advocate with everything that entails. You are responsible for making sure that the customer is always present at the table.

Check in with your reps. I don’t recommend you call them every day but at least once a week. I would urge you to set up a weekly call with each of your independent sales reps to go over their accounts. This is also the time for you to communicate to them what is going on at the company. The true value of keeping in touch with the reps is to make sure they are working for you. Realizing that they have other principals and products to sell, you are competing for their time. The more time you invest in your sales reps the more you will get out of them.

Work on your marketing. This is more important now than it has ever been. A few years ago when we called someone a Manager of sales and marketing it meant that they spent 99% of their time on sales and 1% on marketing and what they were really doing is working on a new brochure every couple of years. Now that has changed drastically. Now a manager of sales and marketing has to spend as much time on marketing as she does on sales. Besides making sure that the literature is up to date, she also must make sure that the website is as well. She also has to work on a value-added newsletter that should go out at least one a month. She also has to be more involved in social media, keeping up the company’s LinkedIn page and sending out frequent pertinent attention-getting tweets as well.

Get in touch with some customers. This is the one that most sales managers skip and arguable the most important one. Make it a habit to call customers and ask how things are going? It’s a good way to create a one on one relationship with your customers. A great sales manager will try to develop relationships with the customers’ upper management. This will greatly benefit both parties.

And finally, cheerleader in chief. A great sales manager is also the person who talks about hope and talks about the future of the company. She will be the company’s strategist helping to set the direction of the company based on her knowledge of the customers and the market.

A great sales manager will keep these plates spinning making sure always that the company is delivering great customer service, keeping its’ customers happy and its’ revenue growing.

It’s only common sense.

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How To Make This Independent Rep Thing Work

dan-2For years now I have been working with reps acting as the liaison between them and the circuit board shops I work with. During that time I have seen the interest the reps have in working with board shops diminish as quickly as the market for fax machines. Most reps seem to have lost it for our shops. They seem to want to work in other markets and sell connectors, or IC’s or sheet metal or cables or anything that is not a circuit board.

I have spent the past few months thinking about this; mulling over this dilemma and trying to figure out what to do about it. Look, the fact of the matter is that we need good reps now more than ever. Yes we can use direct people, actually that is my preferred method of developing a sales force, but alas direct sales people are expensive, especially when you are trying to cover the entire country. So in the end we always turn towards the reps as a good solution for at least expanding our sales coverage.

But now a days this is much easier said than done. There are a lot more veteran reps out there than there are newbies, and the vets for the most part have all had it with board shops, they are tired of being treated like third class citizens, they are sick of being the last person paid at the end of the month if they are paid at all. Heck I personally know companies who owe reps tens of thousands of dollars in back commissions and whose reps are actually being held hostage by them because they know if they resign they will never get their money.

In the past year I along with some of my partners have been working diligently looking for new reps for our customers and to tell the truth we might as well be standing on the corner signing “To Dream an Impossible Dream” for the all the good it has done us.

So what do we do about this? How can we turn things around? How can we develop a package that is going to be so appealing to independent sales reps that they will be calling us up to see if we are willing to take them on. That would be a welcome change wouldn’t it? The last time a rep called a circuit board shop to see if he could represent he used a rotary dial phone.

So here are my ideas for changing things, turning things around and developing an offer that a good rep will not be able to pass up.

  1. No house accounts. It’s as simple as that, no exceptions. If you are already doing business with a major account in his territory then work it out at reduced commissions until he can grow that account past the annual average bookings number and then take him to full commissions.
  2. Pay the rep, yes pay the rep. His is the most important payment you should be making. A happy rep means a strong sales effort. And here is one that is going to curl your hair, pay him weekly. Yes you hear me. Send him his money the next payroll after you have received payment from the customer.
  3. Provide all of the right paper work, all the backup that should go with that commission check. Also provide the rep with copies of the quotes and orders and invoices. In this electronic age this is easier than ever,
  4. Treat the rep like a member of the family. Treat her exactly like one of your direct sales people. This means access to your company information. Being copied on pertinent reports and included in pertinent company meetings and phone calls.
  5. Let the rep share in all of your marketing efforts, and yes you need to have marketing, sorry it is all part of the sales game. Market for the rep in her territory. Include her in all your marketing. If you send out newsletters create a special edition for each territory. Work side by side with your rep to develop the business in her territory. It will be a win/win.
  6. Offer special incentives for the type of business you want. This can be a special incentive for new customers, or new technology, or a new service. Whatever, pay the rep extra for him to be specifically focused on selling the products, technologies and services you most want to sell.
  7. Communicate, communicate, communicate: Hold a one on one update call with each of your sales rep firms every two weeks and then a general call at least once a month with the entire sales force. Do this religiously and track the progress. Do it and yes there will be progress!
  8. Invite them to your annual sales meeting, and yes have an annual sales meeting. It’s customary for you them to pay to get there and you to pay the rest of their expenses. This will go a long way towards making them part of the family…it will be money well spent I promise you.
  9. Treat them with respect. Respect your reps as you would want to be respected, it’s as simple as that.
  10. And finally make sure your product works. Make sure that your reps have a great product to sell. They can’t your light bulbs if the light bulbs don’t work. You want your reps out there selling…not apologizing.

So there you have it. Here are ten ways that will work to make reps want to come and work with your company. But there have to be others. Oh yes there is at least one more:

  1. Listen to your reps, talk to them; ask them what they want to see from you. Ask them who they consider a great principal. Work with them to develop a good working environment one that both of you want to exist in.

It’s only common sense

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