The other day I was teaching a group of seasoned salespeople a handful of basic, core principles that will make even the best salesperson better and when applied, make an average salesperson excellent. As I began the workshop, I asked the question, “What are you trying to accomplish as a salesperson?” All of their answers were in the ballpark. We agreed on this definition: “The purpose of a salesperson is to bring profitable sales to the company;” simple, yet profound. We then discussed several reasons why salespeople were not as successful as they could be. I’m going to list a few reasons we discussed accompanied by my thoughts relating to each one. These reasons may seem similar to the ones that plague you and my responses may be a solution to your own sales dilemma.
1. Not enough time: There will never be enough time in a day. There will be constant challenges for the time you have and emergencies will endlessly raise their ugly heads. The only way to deal with time is to begin your day with a plan. Plan to be on time for work and leave after completing a full day. Make a written plan of all the things that must be done, along with all the things you would like to get done during the day. Prioritize and then determine how much time you will spend achieving each item on your list. Remember, the number one “time waster” in the world is spending more time on a task than it deserves. Now, move each item to a time frame. Block out as much time as each task requires. Move from one task to the next throughout the day, maintaining a constant vigilance against the ever-present distractions that will throw you off track. Don’t take the complacent attitude that you are too busy to plan. Planning takes work and application and will improve the effective use of your time by a minimum of twenty percent. Once you have made your plan, do everything within your power to avoid distractions and strive to stay on course.
2. Don’t have enough prospects: Make prospecting a major part of your daily activity. Even during the busiest day, dealing with all the detail and drama of selling, make sure that you still spend even fifteen minutes prospecting. Stay in the habit of daily prospecting. The definition of prospecting is to engage yourself in those activities that will allow you to discover profitable sales opportunities. The most effective source of prospecting centers on your current and past customers. To be effective you must know their business as if it were your own. Look for opportunities to solve problems through the use of your products or services. If there are no current sales opportunities with current or past customers, ask them for referrals. Also, make sure that you have a current letter of recommendation from each customer that can be used to influence other prospects.
3. There are too many distractions throughout the course of the day: Guess what? There will always be distractions. You can avoid the majority of them through the daily practice of planning and scheduling your day. You must make a constant effort to stay focused on the achievement of your daily plan. Success doesn’t just happen, and luck is not a component of the success process. Planning and then following the plan is the main ingredient of success. The perfectly executed day, void of any distraction is about as rare as a colorless, flawless diamond. Be vigilant, constantly on alert for those distractions that will move you off course.
4. I’m really busy but not making much progress: Probably the most common words spoken by a salesperson refer to always being busy. That may be true, but busy has nothing to do with profitable. The solution is to set goals. Sales goals must be realistic, challenging and achievable. Every sales goal must be time and date specific and should have a list of activities that, when completed, will result in the achievement of the goal. You can monitor your performance by the completion of the goal activities. If you are not doing the activities, you are not making progress and if you are not making progress you will not achieve your goals no matter how busy you are.
Now that you understand the four plagues of sales success, you can apply the solutions and enjoy even greater success. Remember, it is not what you know, but rather what you do with knowledge that makes a difference.
Wednesday, March 30, 2011
Wednesday, March 23, 2011
True Salesmanship Is Focusing On The Prospect, Not Yourself
If there is any one secret of success, it lies in the ability to understand the other person’s point of view and see things from his eyes as well as from your own.
Action springs out of what we fundamentally desire and the best piece of advice which can be given to would-be persuaders, whether in business, in home, in school, in politics, is: first, discover in the other person an eager want. The person that can do this has the whole world on his side. The person who cannot, walks a lonely path.
If you want someone to do something, give him or her what they want. They don’t care what you want; their only concern is achieving their wants and desires. When you go fishing, you bait the hook with what the fish wants, don’t you. The fish couldn’t care less what you want to put on the hook; it only cares what it wants to eat. If you want to catch fish, bait the hook to suit the fish. Dealing with people is exactly the same. People are only interested in what they want. They don’t care what you or I want. The only way in the world to influence another person is to find out what they want and then show them how to get it.
Everything you or I have ever done in our lives was done for just one reason; we wanted to do it. You might be thinking that you were forced to do something. It might seem that way, but you chose to do one thing to avoid another. In other words, even though your choices might have been limited, you wanted to do one thing instead of another. In the world of sales, when you put your efforts into trying to persuade someone to do something, you should stop and ask yourself this question. “How can I make this person want to do it?” Finding a “want “ or a “need” in the other person is much easier and more successful in the world of selling than trying to cause someone to do something you want. No one cares what you want! People only care about one thing and that is, what they want. When you promote your agenda, it is similar to pushing a rope on a flat surface, which can be frustrating and ineffective. Discovering what the other person needs and wants is like pulling a rope, which is easier and more effective.
Every day millions of salespeople are pounding the pavement, tired, discouraged and underpaid. Why? Because they are thinking of just one thing – what they want. They don’t understand this one fundamental truth. Prospects are only interested in one thing and that one thing is what they want. They don’t care that a salesperson wants to make a sale in order to pay the mortgage, put food on the table, gas in the car or to put shoes on their children’s feet. People don’t want to be sold, but they do want to solve their problems. If salespeople can help other people see how their products and services can solve problems, then they don’t need to sell, people will want to buy.
Salespeople might struggle their entire career trying to persuade prospects to buy when all they need to do is understand the prospect’s problems and needs and then show them how the product or service will solve their problem. Once they see your product as a solution, they will gladly buy. It is all in your approach, just like moving a rope along a flat surface. You can try to push it, similar to focusing on your own needs by trying to sell someone something, or you can pull the rope, which is analogous to focusing on the needs of the prospect and showing them how your product will solve their problem. Instead of struggling through your sales career by focusing on yourself, take the easier and more successful approach of focusing on the other person and solving their problems. When the prospect is happy, you are both happy and you will be able to pay the mortgage, put food on the table, gas in the car, put shoes on your children’s feet and build a strong financial future.
Action springs out of what we fundamentally desire and the best piece of advice which can be given to would-be persuaders, whether in business, in home, in school, in politics, is: first, discover in the other person an eager want. The person that can do this has the whole world on his side. The person who cannot, walks a lonely path.
If you want someone to do something, give him or her what they want. They don’t care what you want; their only concern is achieving their wants and desires. When you go fishing, you bait the hook with what the fish wants, don’t you. The fish couldn’t care less what you want to put on the hook; it only cares what it wants to eat. If you want to catch fish, bait the hook to suit the fish. Dealing with people is exactly the same. People are only interested in what they want. They don’t care what you or I want. The only way in the world to influence another person is to find out what they want and then show them how to get it.
Everything you or I have ever done in our lives was done for just one reason; we wanted to do it. You might be thinking that you were forced to do something. It might seem that way, but you chose to do one thing to avoid another. In other words, even though your choices might have been limited, you wanted to do one thing instead of another. In the world of sales, when you put your efforts into trying to persuade someone to do something, you should stop and ask yourself this question. “How can I make this person want to do it?” Finding a “want “ or a “need” in the other person is much easier and more successful in the world of selling than trying to cause someone to do something you want. No one cares what you want! People only care about one thing and that is, what they want. When you promote your agenda, it is similar to pushing a rope on a flat surface, which can be frustrating and ineffective. Discovering what the other person needs and wants is like pulling a rope, which is easier and more effective.
Every day millions of salespeople are pounding the pavement, tired, discouraged and underpaid. Why? Because they are thinking of just one thing – what they want. They don’t understand this one fundamental truth. Prospects are only interested in one thing and that one thing is what they want. They don’t care that a salesperson wants to make a sale in order to pay the mortgage, put food on the table, gas in the car or to put shoes on their children’s feet. People don’t want to be sold, but they do want to solve their problems. If salespeople can help other people see how their products and services can solve problems, then they don’t need to sell, people will want to buy.
Salespeople might struggle their entire career trying to persuade prospects to buy when all they need to do is understand the prospect’s problems and needs and then show them how the product or service will solve their problem. Once they see your product as a solution, they will gladly buy. It is all in your approach, just like moving a rope along a flat surface. You can try to push it, similar to focusing on your own needs by trying to sell someone something, or you can pull the rope, which is analogous to focusing on the needs of the prospect and showing them how your product will solve their problem. Instead of struggling through your sales career by focusing on yourself, take the easier and more successful approach of focusing on the other person and solving their problems. When the prospect is happy, you are both happy and you will be able to pay the mortgage, put food on the table, gas in the car, put shoes on your children’s feet and build a strong financial future.
Wednesday, March 16, 2011
Romancing The Sale
Several years ago as I left the office of one of my clients, I hollered back into his office, “Don’t forget to romance this week.” His administrative assistant turned to me and said, “How do I enroll in your training program?”
Romancing the sales has proven to be one of the most effective selling principles applied by my clients. The number one reason that salespeople aren’t as successful as they could be is due to the lack of professional skills. Just to verify this point, how many of you have a degree in sales? The number two reason for lack of sales success is due to poor follow-up. Most salespeople don’t know when to follow-up or what to do if they follow-up. Either they follow-up too often and bother the prospect or they don’t follow-up often enough and lose the sale to the competition. Further, very few sales people understand the principle of romancing the sale which is very similar to the courting process leading to marriage.
Let me explain the process of romancing and then leave you with several lists of items that will be helpful as you embrace this most essential element of the sales process. Romancing is different that following up with a prospect. It has a much deeper meaning that focuses on the relationship between you and the buyer. Romancing takes only a few minutes and should not exceed three minutes with the prospect unless they invite you to stay longer. Romancing is best when it involves a personal contact, but can also be effective if your sales process only involves phone contact due to time and distance constraints. Romancing always involves the leaving of a physical gift of knowledge or benefit. When romancing by phone, send the gift of knowledge or benefit via fax or email and then discuss it briefly with the prospect over the phone. The romance is planned and schedule by you but is typically not a formally scheduled contact between you and the prospect. It is presented as a “drop in” to leave the prospect some information that will help them make the proper buying decision.
5 Reasons to romance:
1. People buy from people they believe, like and trust (BLT).
2. Your competitors don’t romance.
3. Romancing creates the opportunity for dialogue and dialogue promotes sales.
4. Romancing promotes understanding.
5. It is the most successful means of building a relationship with the buyer.
10 Things romancing can achieve
1. The average business –to-business sale requires seven contacts before the sale is closed. Romancing provides those contacts.
2. To build trust, you need to delve below the surface where most sales people never venture. Romancing allows the forum to learn what your competitors will never know.
3. Romancing involves bringing gifts of knowledge to help the prospect make informed decisions.
4. Romancing puts you in the middle of the decision making process
5. When you are walking your prospects through their concerns and resolving their questions, that means your competition isn’t.
6. Romancing allows you to assume the role of assistant buyer or partner in making the buying decision.
7. Romancing confirms your commitment and concern for the buyer’s well being.
8. Romancing puts you on the inside while most salespeople wait patiently on the outside for a decision.
9. Everyone likes to be romanced so your prospects will like you.
10. If you don’t make the current sale, you are well positioned to make the next one because you have the “buyer’s ear.”
How often should you romance?
1. If the purchase is to be made within 30 days, romance 2 times each week.
2. If the purchase is to be made within 2 months romance every week until the last 30 days and then romance 2 times each week.
3. If the purchase is to be made within 12 months, romance 1 time per month until the next to last month and then romance 1 time each week until the last month and then romance 2 times each week.
The types of gifts you should leave with your prospect when romancing:
1. A list of high profile customers you have done business with.
2. Company brochures and cut sheets.
3. Letters of recommendation.
4. Industry articles that promote your products and services.
5. Information about your company and affiliates.
6. Pictures and success stories
7. Videos of products, uses, applications, demonstrations, etc.
8. Hard copy of monthly newsletter.
9. Company honors and recognition, press releases.
10. A list of high profile sales of your products and services.
11. Any information relating to the buyers hobbies or interests.
12. Referrals or introductions that can benefit your prospects business.
Romancing the sales has proven to be one of the most effective selling principles applied by my clients. The number one reason that salespeople aren’t as successful as they could be is due to the lack of professional skills. Just to verify this point, how many of you have a degree in sales? The number two reason for lack of sales success is due to poor follow-up. Most salespeople don’t know when to follow-up or what to do if they follow-up. Either they follow-up too often and bother the prospect or they don’t follow-up often enough and lose the sale to the competition. Further, very few sales people understand the principle of romancing the sale which is very similar to the courting process leading to marriage.
Let me explain the process of romancing and then leave you with several lists of items that will be helpful as you embrace this most essential element of the sales process. Romancing is different that following up with a prospect. It has a much deeper meaning that focuses on the relationship between you and the buyer. Romancing takes only a few minutes and should not exceed three minutes with the prospect unless they invite you to stay longer. Romancing is best when it involves a personal contact, but can also be effective if your sales process only involves phone contact due to time and distance constraints. Romancing always involves the leaving of a physical gift of knowledge or benefit. When romancing by phone, send the gift of knowledge or benefit via fax or email and then discuss it briefly with the prospect over the phone. The romance is planned and schedule by you but is typically not a formally scheduled contact between you and the prospect. It is presented as a “drop in” to leave the prospect some information that will help them make the proper buying decision.
5 Reasons to romance:
1. People buy from people they believe, like and trust (BLT).
2. Your competitors don’t romance.
3. Romancing creates the opportunity for dialogue and dialogue promotes sales.
4. Romancing promotes understanding.
5. It is the most successful means of building a relationship with the buyer.
10 Things romancing can achieve
1. The average business –to-business sale requires seven contacts before the sale is closed. Romancing provides those contacts.
2. To build trust, you need to delve below the surface where most sales people never venture. Romancing allows the forum to learn what your competitors will never know.
3. Romancing involves bringing gifts of knowledge to help the prospect make informed decisions.
4. Romancing puts you in the middle of the decision making process
5. When you are walking your prospects through their concerns and resolving their questions, that means your competition isn’t.
6. Romancing allows you to assume the role of assistant buyer or partner in making the buying decision.
7. Romancing confirms your commitment and concern for the buyer’s well being.
8. Romancing puts you on the inside while most salespeople wait patiently on the outside for a decision.
9. Everyone likes to be romanced so your prospects will like you.
10. If you don’t make the current sale, you are well positioned to make the next one because you have the “buyer’s ear.”
How often should you romance?
1. If the purchase is to be made within 30 days, romance 2 times each week.
2. If the purchase is to be made within 2 months romance every week until the last 30 days and then romance 2 times each week.
3. If the purchase is to be made within 12 months, romance 1 time per month until the next to last month and then romance 1 time each week until the last month and then romance 2 times each week.
The types of gifts you should leave with your prospect when romancing:
1. A list of high profile customers you have done business with.
2. Company brochures and cut sheets.
3. Letters of recommendation.
4. Industry articles that promote your products and services.
5. Information about your company and affiliates.
6. Pictures and success stories
7. Videos of products, uses, applications, demonstrations, etc.
8. Hard copy of monthly newsletter.
9. Company honors and recognition, press releases.
10. A list of high profile sales of your products and services.
11. Any information relating to the buyers hobbies or interests.
12. Referrals or introductions that can benefit your prospects business.
Wednesday, March 9, 2011
Every Salesperson Can Learn A Lesson From Bill Porter
In one of my sales training workshops, I ask my clients to list the most difficult products and services to sell. Often, those that comment refer to their own product as the most difficult product to sell. Admittedly, after hearing of some of their products and services, I tend to agree with them. I silently express thanks that I sell training; after all, I could be selling something really difficult. I then conclude the thought by asking the question, “is the product impossible to sell or just difficult”?
Several years ago I was introduced to the story of Bill Porter in a segment of the popular news program 20/20. He was a door-to-door sales person working in Portland, Oregon. After hearing Bill’s story, I made a firm resolve in my life that nothing was impossible and that I would forever be grateful for my life with all it’s unique challenges and obstacles.
When introducing the segment on Bill Porter’s life, ABC’s 20/20 host Hugh Downs said, “This is a simple story about a simply remarkable man.” Born with cerebral palsy, Bill was told by many that he was unemployable. With the continual support of a dedicated mother and the indomitable spirit that is his trademark, Bill Porter has supported himself for decades selling household products door to door for the Watkins Company. While the people on his route didn’t always need what Bill was selling, they grew to understand that we all need people like Bill Porter in the world.
In her book, Ten Things I Learned From Bill Porter, Shelly Brady who worked with Bill for more than twenty years, writes about ten specific character traits that guided Bill Porter’s selling career. These ten characteristics should become a foundation for every salesperson. With all the physical advantages we enjoy in our sales careers, applying these ten characteristics should allow each of us to achieve greater success than we ever imagined possible. Here they are with my own annotation.
1. Follow your passion. When you follow your passion you can’t help but be successful. Passion is contagious! Develop a passion for selling, for your products, for your company and for your customers. Passion has the ability to overcome every challenge.
2. It doesn’t matter how you got here, only where you are going. We must have direction in our lives to achieve the full expectation of our careers. We all need to spend more time focused on achieving success and less time talking about it and thinking about it.
3. Mother knows best. How can you argue with that principle? When you do the right things (our mothers would never lead us astray), you get the right results.
4. Persistence pays off. While recounting some of his more than five hundred regular customers, Bill Porter identified thirty-four of them that told him after his first visit to never come back.
5. Don’t take no for an answer. An astonishing 84% of all people who eventually say “yes” to a sale said “no” before they said yes.
6. Know your limits and reach beyond them. The problem with most salespeople is that they have no idea what they are capable of achieving. They have never reached far enough to know the power that lies within.
7. Be a team player. There are two meanings to this simple principle. The first, no salesperson can be successful alone. It is through the support of every employee of the company that allows you to have the success you enjoy. Second, be part of the buyer’s team. Become a partner with the buyer to help them achieve their objectives.
8. If it isn’t broken, don’t fix it. When you find those things that are successful in your sales process, apply them consistently. Write down your success stories so you will remember them and make them a regular pattern in your life.
9. There are no obstacles. The human character and will to achieve demonstrate a pattern throughout history that nothing is impossible. When we focus on a thing that seem impossible, we soon discover a way to make it possible. Selling is difficult but it is not impossible.
10. Live your values. We all need to sell within ourselves. We can’t be someone else and expect to be our best. To truly be your very best at selling you must have integrity in all you do and say.
Bill Porter graduated from high school at the age of 22, having to first go through a special school for the disabled, even though his disabilities were physical, not mental. Rather than receive disability assistance from the state, he sought a job and eventually was hired by the Watkins Company as a 100% commissioned salesman. He took on a territory no one wanted in order to close the deal. Bill went on to become the top producing salesman at the Watkins Company in Portland, then the Northwest and ultimately for the entire United States. If Bill Porter could achieve that level of performance with all of his physical challenges, what might each of us accomplish in our sales careers if we consistently apply the same ten principles he practiced?
Several years ago I was introduced to the story of Bill Porter in a segment of the popular news program 20/20. He was a door-to-door sales person working in Portland, Oregon. After hearing Bill’s story, I made a firm resolve in my life that nothing was impossible and that I would forever be grateful for my life with all it’s unique challenges and obstacles.
When introducing the segment on Bill Porter’s life, ABC’s 20/20 host Hugh Downs said, “This is a simple story about a simply remarkable man.” Born with cerebral palsy, Bill was told by many that he was unemployable. With the continual support of a dedicated mother and the indomitable spirit that is his trademark, Bill Porter has supported himself for decades selling household products door to door for the Watkins Company. While the people on his route didn’t always need what Bill was selling, they grew to understand that we all need people like Bill Porter in the world.
In her book, Ten Things I Learned From Bill Porter, Shelly Brady who worked with Bill for more than twenty years, writes about ten specific character traits that guided Bill Porter’s selling career. These ten characteristics should become a foundation for every salesperson. With all the physical advantages we enjoy in our sales careers, applying these ten characteristics should allow each of us to achieve greater success than we ever imagined possible. Here they are with my own annotation.
1. Follow your passion. When you follow your passion you can’t help but be successful. Passion is contagious! Develop a passion for selling, for your products, for your company and for your customers. Passion has the ability to overcome every challenge.
2. It doesn’t matter how you got here, only where you are going. We must have direction in our lives to achieve the full expectation of our careers. We all need to spend more time focused on achieving success and less time talking about it and thinking about it.
3. Mother knows best. How can you argue with that principle? When you do the right things (our mothers would never lead us astray), you get the right results.
4. Persistence pays off. While recounting some of his more than five hundred regular customers, Bill Porter identified thirty-four of them that told him after his first visit to never come back.
5. Don’t take no for an answer. An astonishing 84% of all people who eventually say “yes” to a sale said “no” before they said yes.
6. Know your limits and reach beyond them. The problem with most salespeople is that they have no idea what they are capable of achieving. They have never reached far enough to know the power that lies within.
7. Be a team player. There are two meanings to this simple principle. The first, no salesperson can be successful alone. It is through the support of every employee of the company that allows you to have the success you enjoy. Second, be part of the buyer’s team. Become a partner with the buyer to help them achieve their objectives.
8. If it isn’t broken, don’t fix it. When you find those things that are successful in your sales process, apply them consistently. Write down your success stories so you will remember them and make them a regular pattern in your life.
9. There are no obstacles. The human character and will to achieve demonstrate a pattern throughout history that nothing is impossible. When we focus on a thing that seem impossible, we soon discover a way to make it possible. Selling is difficult but it is not impossible.
10. Live your values. We all need to sell within ourselves. We can’t be someone else and expect to be our best. To truly be your very best at selling you must have integrity in all you do and say.
Bill Porter graduated from high school at the age of 22, having to first go through a special school for the disabled, even though his disabilities were physical, not mental. Rather than receive disability assistance from the state, he sought a job and eventually was hired by the Watkins Company as a 100% commissioned salesman. He took on a territory no one wanted in order to close the deal. Bill went on to become the top producing salesman at the Watkins Company in Portland, then the Northwest and ultimately for the entire United States. If Bill Porter could achieve that level of performance with all of his physical challenges, what might each of us accomplish in our sales careers if we consistently apply the same ten principles he practiced?
Wednesday, March 2, 2011
Let Salespeople Sell
Management makes a big mistake when they interfere with a salespersons ability to sell. One of the biggest errors a company makes is to promote their top producing salesperson from selling to managing. It is very seldom true that the best salesperson makes the best sales manager. They might possibly make a great sales manager, but so might someone else who is not a top producer. You lose a big book of sales with the hope of stimulating the performance of the other salespeople. It rarely works as planned. The typical end result is reduced overall sales, disappointment in the performance of the sales manager and a sales team that is frustrated with the unreasonable demands of a mediocre manager.
Another common mistake made by management is to require top sales performers to get involved in other, non-sales related tasks and assignments. One of my clients asked their top salesperson to handle all of the company’s IT and computer issues. It so happened that he was the most qualified person within the company to handle those issues, but at what cost to the company. They were looking to save money by not hiring an IT Technician or to bring in a consultant. An IT professional hired full time might cost the company a minimum of $80,000 and they would only need his services twenty-five percent of the time. To hire a consultant might cost $85.00 dollars per hour for five hundred hours per year at an annual cost of $42,500.00 per year. Facing those two possibilities, management is looking to save a big chunk of change by assigning the task to someone within the company. Let’s take a look at what it is really costing the company to take their top sales person out of the sales arena.
The numbers I’m using may not be accurate for your company, but use the formula and substitute your own numbers. Let’s assume that the salesperson to whom you have assigned other duties is selling $1.5 million to total sales. The margin on sales is 23%, making the gross margin $345,000.00 dollars. Assuming the salesperson is spending twenty-five percent of his time solving computer issues, we can reduce the total sales and gross margin by twenty-five percent or $86,250.00. This calculation assumes that the salesperson, turned computer technician, can solve problems as quickly as the professional. In reality, it may take the salesperson a lot longer to do the work of an IT professional. It will never make financial sense to take salespeople out of the sales arena. The lost sales and profit is far greater than their contribution in other areas.
At The Business Performance Group, we deal with the salesperson, sales manager dilemma every day. Do you promote great performance? Do you provide training “in house” because we have been raised in a culture that suggests that “you should never hire someone to do something you are perfectly capable of doing”? The best salespeople are not always the best trainers and managers. You must consider what you really want to achieve and evaluate what it will actually cost you. If you are looking for ways to reward a top salesperson, it may be to leave them in sales and to allow them to write their own paycheck in the form of commissions. As far as sales management is concerned, selecting someone who is a great manager of people, with skills in the area of goals, accountability and achievement may be the best choice. Very few sales managers know how to teach and train sales and even fewer actually do it. Hire a qualified professional sales trainer to work with your salespeople. They will produce far better results on a consistent basis, day in and day out. The investment will be less than the cost of doing it within and the return on your investment will be far greater. In fact, the difference in cost and the subsequent increased results between in-house training and hiring a part-time sales trainer, will pay for the training many times over. Let salespeople sell, that is what they are best at and that is where you will find your greatest profitability.
Another common mistake made by management is to require top sales performers to get involved in other, non-sales related tasks and assignments. One of my clients asked their top salesperson to handle all of the company’s IT and computer issues. It so happened that he was the most qualified person within the company to handle those issues, but at what cost to the company. They were looking to save money by not hiring an IT Technician or to bring in a consultant. An IT professional hired full time might cost the company a minimum of $80,000 and they would only need his services twenty-five percent of the time. To hire a consultant might cost $85.00 dollars per hour for five hundred hours per year at an annual cost of $42,500.00 per year. Facing those two possibilities, management is looking to save a big chunk of change by assigning the task to someone within the company. Let’s take a look at what it is really costing the company to take their top sales person out of the sales arena.
The numbers I’m using may not be accurate for your company, but use the formula and substitute your own numbers. Let’s assume that the salesperson to whom you have assigned other duties is selling $1.5 million to total sales. The margin on sales is 23%, making the gross margin $345,000.00 dollars. Assuming the salesperson is spending twenty-five percent of his time solving computer issues, we can reduce the total sales and gross margin by twenty-five percent or $86,250.00. This calculation assumes that the salesperson, turned computer technician, can solve problems as quickly as the professional. In reality, it may take the salesperson a lot longer to do the work of an IT professional. It will never make financial sense to take salespeople out of the sales arena. The lost sales and profit is far greater than their contribution in other areas.
At The Business Performance Group, we deal with the salesperson, sales manager dilemma every day. Do you promote great performance? Do you provide training “in house” because we have been raised in a culture that suggests that “you should never hire someone to do something you are perfectly capable of doing”? The best salespeople are not always the best trainers and managers. You must consider what you really want to achieve and evaluate what it will actually cost you. If you are looking for ways to reward a top salesperson, it may be to leave them in sales and to allow them to write their own paycheck in the form of commissions. As far as sales management is concerned, selecting someone who is a great manager of people, with skills in the area of goals, accountability and achievement may be the best choice. Very few sales managers know how to teach and train sales and even fewer actually do it. Hire a qualified professional sales trainer to work with your salespeople. They will produce far better results on a consistent basis, day in and day out. The investment will be less than the cost of doing it within and the return on your investment will be far greater. In fact, the difference in cost and the subsequent increased results between in-house training and hiring a part-time sales trainer, will pay for the training many times over. Let salespeople sell, that is what they are best at and that is where you will find your greatest profitability.
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