Archive for category Sales

Yes, You Do Need Salespeople

dan-5Man, how many times I am going to have to say this? For those of you loyal readers who have been checking out this column for years I apologize in advance and won’t blame you if you want to sit this one out because you’ve read it all before right here and yes too many times. But I can’t help myself; every time I think that people have gotten the message I am proven wrong. Every time I think the times they are a changing I am disappointed, discouraged and then finally angry. Angry because some people still are not getting. So here we go…and I wish I could promise you that I am going to say this one last time, but I somehow doubt it. Instead all I can promise is one more time for now. Yes you need sales people! The biggest problem that every board shop I talk to has is lack of sales, not enough sales, not enough customers. Not enough new business, not enough backlog, not enough new customers. But then when I ask them how they are selling they say things like, “Oh word of mouth.” Or “People know who we are.” Or this beauty, “We’ve had the same customers for years they are not going to leave us.”

When I ask them about sales people they will tell me that they have had some in the past but they just didn’t work out. Or they don’t believe in sales people. Or my personal favorite as soon as they buy a drill or a router or a press they will hire some sales people. And then I sit there scratching my head wondering how that is going to work?

Let me see. You don’t have enough business so instead on spending some money on sales people you are going to buy a piece of equipment for the same amount of money of two or maybe even three good sales people for a year. Then I have to wonder, what are you going to do with the equipment? You don’t have enough business now but you are going to spend from a quarter to a half to three quarters of a million dollars for a piece of equipment that is going to sit idle because…can we say it all together you don’t have enough business!

Now you guys who sell equipment don’t get your knickers in a knot I am a great believer in investing in your company by buying new equipment. But you have to admit it would be nice if your customers had the right amount of business to use on that new equipment. Maybe your customer base would be up around twelve hundred like it was in the good old days instead of a little over two hundred a number that is so small that some of you are leaving and going to China and the rest of Asia like those proverbial rats of that sinking ship.

Look guys it doesn’t take a rocket scientist, and now that I think of it some of you are probably rocket scientist to figure this out. If you don’t have enough sales you have to hire some sales people…or at least one to get the ball rolling. And I mean a real sales professional a man or woman who has a proven success story a sales professional who is going to be able to get you some business. And frankly a sales professional you are going to have to pay like a professional. Don’t try to skimp, don’t try to convince them to work on commission only for a while until they get some business and then you’ll give them a salary….really?really? That is just plain stupid. Would you ask that of a production manager? Would you ask that of an engineer? Would you ask that of well of yourself? Then why the heck do you think a sales person would be willing to take that deal? It just doesn’t make any sense.

So now listen to me and listen very closely because if you do and you heed my advice I won’t have to write this one more time, maybe this even will be the last time. Ready? Okay hear I go, here are my pearls of wisdom:

You don’t have enough business. I to get more business you need to have sales people, feet on the street, people calling companies and getting them to buy your products. And the good ones costs money. They will not work for minimum wage, they will not work for commissions only, and they will not work at a salary for six months with the promise of it being cut in half in six months. No they are professionals, they need to be treated as professionals, they need to be paid as professionals and they need to be respected as professionals. And guess what if you hire a good professional sales person you will get some business… and yes that’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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Elevating The Conversation With Your Customers

dan-1

So we all think we are doing a pretty good getting to know our customers right? We think because we know what market they are in and what they build and have some sort of idea of what they need we are in pretty good shape right? Well I hate to break it to you but we haven’t got a chance. We are just not even at a point of scratching the service of working with our customers when it comes to the new world order of sales. If we are going to be successful in this world of complete customer engagement we are going to have to elevate our conversation with our customers.

According to a new book by Steve Andersen and Dave Stein called Beyond the Sales Process: 12 proven strategies for a customer-driven world. A book that everyone in sales, hell everyone in business should be reading right now we are going to have to go much deeper down the road of customer engagement to ably serve our customers both today and in the future.

Companies think our customers are going to be relying on us more than ever to help them to succeed. In fact they are going to start asking us to help them with their issues and challenges. They are going to start telling us things like, “based on our volume we believe we should be receiving more value from your organization that we’re getting right now.” Or “Our customers expect more from us than ever before, so we need to get more value from the suppliers we do business with.” Or “Our network of partners is vital to the health of our business, and we need to create value for the organizations that compose that network.”

So think about that for a minute. What are you going to say…what are you going to sow when your customer hits you up with these statements…and guess what she is going to.

Give up? Well it’s a good thing for you that I’m reading this book because straight from that book here is what you are going to do:

You are going to tell your customer these kinds of things applicable to specific situations and customer needs:

  • We’ll make it easier for you to do business with us. And then be prepared to tell him what you are going to do differently.
  • We’ll make it our business to learn more about your business.
  • We’re going to continue our focus on listening to you.
  • We’ll consult with you and help you solve your problems.
  • We’ll commit the resources and expertise required to help you meet your objective.
  • We will provide special pricing and terms to help you through a difficult situation.
  • We’re going to ensure that your people know who to connect with on our team, and how to best engage with them.
  • We’re strategically committed to our relationship with you, even when you are not buying. This is a big deal…never burn a bridge and never be a fair weather vendor. Assume they will be back buying from you.
  • We’re prepared to engage in planning activities so that we can chart a successful future together.
  • We’re interested in developing more peer-to-peer relationships between our senior leaders and yours.
  • We will invest the time to ensure that you understand the value that we propose to deliver.
  • We’re prepared to have our performance measured, and will help you develop the metrics to evaluate our success.
  • By pursuing the type of value target with other customers. We’ve gained knowledge, and we’d like to share some of our learnings and best practices with you.
  • We’re willing to establish a central focal point within our organization to make your strategy and decision making easier and faster.
  • We have identified a sponsor within our organization that will advocate in your behalf.

So are you ready to start making these kinds of commitments to your customers? It is different isn’t it? But it is the way of the world as we know it today. Customers are expecting this kind of commitment from their vendors and it is up to the vendors to provide it.

But there is an upside to all of this actually a huge upside and that is by helping your customers, by devoting your people, company and resources to your customers in some of the way listed above you are creating a bond that will be very difficult to break. In fact you are creating through this kind of committed partnership a customer for life and that’s the very best asset a business can have.

Its only common sense.

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What Customers Really Want

dan-1When it comes to what customers really want there is one big secret. They think that they want our products or services. They think that they want us to deliver good products on time. They think that they want good quality. They think that they want a great price (or “great value” as they would rather put it). They think that they want this product when they want it. They think that if they can get these things from a vendor they will have everything they want, everything will be right with the world and yes, they will be happy.

To a certain extent they are correct, they do want all of these things and it is our job to give them these things. But in the end this is not what will make them happy and it is most certainly not what will delight them. No, the thing that will make them happy, the thing that will delight them, and the thing that will send them running down the street excitedly telling anyone who will listen how great your company is…the experience.

That’s right, the experience of doing business with you. Experience, that intangible that can make all of the difference between a good vendor and a great vendor, experience that certain “je ne sais quoi” (roughly translated: a quality that cannot be easily described) that makes Nordstrom, L.L. Bean, Disney and Apple the super great companies that they are when it comes to delighting their customers.

It is the delightful experience of doing business with your company that will motivate buyers to actually pay more just for well, for the delightful experience of doing business with your company, even if you are selling the very same product with the very same quality and delivery as the other guy. In the end it is always the experience of doing business with a company that wins out.

What is experience? What is this illusive intangible that we are talking about? Well that’s it exactly, experience is made up of all those intangibles that you do for your customers. It’s all those small but extremely important little things that you do that a customer does not even realize you are doing until he does not get them anymore. These are the things that are as they in the commercial, “priceless”. “The things that people cannot buy at any price, from anyone else, but that they really value.” To quote Seth Godin.

Here is a list of some intangibles as listed on one of Seth’s blogs from his new book,

Participation: Brainstorm with the customer about how you can work together to create the thing they need. Participation is priceless. After all if all you’re doing is meeting my spec, why exactly should you be rewarded?

Enthusiasm: You’d be amazed at how much people value enthusiasm. Genuine transparent enthusiasm about the project you’re working on.

Speed: Don’t forget speed. If you are overwhelming faster than the alternatives, what’s that worth? For some people more than you can imagine.”

Focus: Focus and personal service are invaluable.

Generosity: Generosity is remembered for a long time. People remember what you did for them when you didn’t have to do a thing, when you weren’t looking for new business, when it was expensive or costly for you to do it.

Peer Pressure: Peer pressure is another silent intangible. What will my friends think if I choose you? What if I don’t choose you? Is it fashionable to pay a lot? How hard are you working to establish a connection across your market so that choosing you is the right thing to do, regardless of the price?

Hope: Hope is probably the biggest. Do you offer hope for something really big in the future? Maybe it is just around the corner, but perhaps in the long run. What does it look and feel like? Are you drawing a vivid picture?”

And there is one more, and this is the one that I feel in our business, and maybe in all businesses for that matter is the most important intangible of all and that is how you handle things when you mess up. How you deal with the situation when you make an error. There is actually a huge opportunity to deliver a great customer experience especially in a business to business setting. If you examine the relationship you have with your very best customer I can guarantee that somewhere along the line you have a problem with that customer’s product and the way you handled that problem is what formulated the great relationship you have with that customer today. Great business relationships are often forged by the way the vendor handled a problem.

If you want to be a great company, if you want to be that company that your customers brag about, then just delivering good product on time is not nearly enough. You have to deal with these intangibles. You have to give your customers this great experience that they won’t want to live without out. You have to be priceless. It’s only common sense

 

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