Dealing with Change in Sales

Many sales executives say their biggest challenge is navigating a changing market. Not only that, but fearful salespeople are giving them headaches. These salespeople take on a lot of sales tasks, but are now overwhelmed and unable to perform their due role.

Faced with such a market and sales force, enterprises need to use creative solutions in the selection and motivation of sales personnel, forecasting of sales market, formulation of sales targets, sales business model and sales cooperation.

For Doyle Miller, CEO of Optomec, the last thing you want to see happens: the company's once-great sales performance is gone, the company's laser equipment Demand plummeted. "There's no way to grow cash flow," Miller said. "It's never happened before." At the same time, the company still has to pay two salespeople. In desperation, the CEO launched an aggressive plan: Commission salespeople and eliminate their base salaries. He knew a salesperson could quit immediately because of it. He didn't want that to happen, but what could he do?

Likewise, Rich McElaney, CEO of Micromarketing, a company with $3 million in annual sales, faces a life-or-death situation. After years of double-digit growth, Micromarketing's sales also slumped, making McElney worried about the company's survival. He also developed a plan to help his two salespeople quickly shift their focus to new market opportunities for retail customers, while also starting to expand the sales force. Although McElney's plan differs significantly from Miller's, risks remain. What if the profit from the new sales opportunity is not enough to cover the salary of the new salesperson?

CEOs and business leaders have never had so many sales problems at the same time. Is there something wrong with our sales tactics? Or is something wrong with our sales force? Is our product portfolio still working? Most importantly, are we prepared to deal with unpredictable times?

Obviously, sales organizations need every help they can get. For companies just starting out, they have to face some of the toughest sales challenges:

How do you choose the best salespeople?

One of the ways to increase profitability and avoid recession is to find ways to poach top salespeople from competitors who know the business well. Otherwise, you may have to try many times to find a good, suitable candidate.

Tony Natella, an expert on recruiting sales talent, says, "The best salespeople are usually driven by the same passion as I am, and that's what I'm looking for. "Natra is a big fan of the personality-testing approach to recruiting, but it's just the first step in his rigorous talent selection process. Using this selection process, only 1 out of 30 candidates for a sales position at Natra's Diversified Communications Group will win.

Natra notes that personality tests are a "convenient way of categorizing people, but they are not absolute truths." So he compares the test results to the average scores of his best sales reps. A more important test is to give candidates 2 and a half days to call potential clients. "We listen to these calls carefully and provide feedback to test the candidate's defense," Natra explained. "The phone is a good filter, and it's hard to get past it." Many candidates don't get a few Give up after hours. It seems that the phone pass alone is not enough, and finally there is the interview pass of Natra. "Successful salespeople must be able to adapt to their role," he says.

How do you set realistic sales goals?

Many companies expect their salespeople to be able to do their jobs on their own without the help of a higher-up. Or, they'll think: Why can't salespeople sell the "Microsoft way"? Sales veteran Marty Sunde knows this. He worked at IBM for 18 years, during which time he was vice president of IBM North America. To this day, his friends in the business are still bothering him to get the "IBM solution" in sales management, and he just needs to answer some basic questions for them to help them get out of their troubles .

The first question is, are the sales goals realistic? Whenever companies complained that salespeople were being paid too much and underachieved, Sender asked them that question. "The main source of this problem," he says, "is that the executives aren't forcing themselves to sit down and say what they really want from the sales department."

He therefore recommends the following approach: "I asked the company boss or Consider the following questions at the top: Assuming you're a sales executive, ask yourself, what would you do if you devoted 100% of your time to sales? Who would you talk to? Where would you talk? Finalize an order How long will it take? How big is the order?

"I ask you to write about the sales process and what you envision potential customers thinking about the product. Do you get annoyed if you have to make so many sales calls every day? How much can one person do? In other words, you have to ask: How valuable is the repetitive sales effort to you? I had to ask company leadership to quantify these efforts. That way, they realize that if they find someone who can do 80% of the work they can, that's pretty good. ”

How to motivate people?

Currently, the best way to motivate salespeople is to establish clear company goals and reasonable sales expectations.

Training also helps keep salespeople motivated. Motivation. So don't cut training budgets lightly. "Sales training has a tangible impact," said Verdie Williams, president of Facilitek Office Furniture. "It helps keep the sales force stable. Even with business downturns, training programs can still be implemented. Training helps improve our listening skills. We're thinking of ways to help our customers, not just sell them something. "

Another key to keeping salespeople motivated: weekly or even daily incentives. Business commissions are an old practice, but they are still available. For example, Tom Sa, owner of Go-e-biz.com Tom Salonek is very concerned about the telephone exchanges and meetings between salespeople and customers. A salesperson who has worked in the company for about a year can make a net profit of 20 US dollars as long as he completes the task of contacting customers every day. Sometimes, he Teams with good performance are also rewarded with a free lunch.

“It makes the job more fun,” says Salonik. There are special tricks—such as mentioning a salesperson in the company’s promotional materials. The name of the person -- he didn't pay a penny at all. "They have the right to sell for their own benefit," he said, "and all we spend is some advertising dollars. "

How to encourage new business?

The company plan should include the goal of launching the new business. At Scientific & Engineering Solutions, "the company culture is for everyone to create business," says CEO Reggie Daniel.

He has 130 employees, the vast majority of whom are techies, not sales experts. The company's 1 small contract ended up being $700,000, driven by techie Steve Newcomb. What reward did Newcomb get? Go to the National Baseball Finals, plus a sales commission. Daniel said that he was not at all distressed by such a large bonus. "He did it alone, and sales wasn't his job," he said. Newcomb also recently got a promotion.

"I really want technical people to be able to use their talents to the fullest," says Daniel, "and at the same time, they should be involved in the business world." His 3 full-time salespeople and 15 excellent part-time salespeople can follow their A certain amount of commission or bonus is awarded for the number of sales performed by participating in the completion. While dedicated salespeople earn about 50 percent of their income from commissions, technicians earn much less at risk -- no more than 25 percent of their annual earnings. “It made them a little nervous at first,” admits Daniel, “but some people did a really good job with the bonuses.”

How to make accurate sales forecasts?

As we all know, salespeople can spout a lot of stuff that the CEO feels very comfortable with. But in a volatile market, it could spell doom for companies that rely on accurate sales forecasts. The best way to know if a salesperson is cheating on you is to experience it for yourself. Visit the sales floor as often as you can to spend time with your salespeople and watch how they make the sale. This way, you can better understand the problems they face, and you can also better understand how you should adjust your company's market position.

Keith M. Eades is president of Sales Performance International and a professor of business. He has mastered a golden rule about sales forecasting, especially in difficult times: separate sales goals from sales forecasts. "Sales targets should be motivating and surmountable; sales forecasts should be based on accuracy and predictability," Izzie said. It's encouraging salespeople and sales managers to be perfunctory and tell management the good news but not the bad. Tolerance to fraud is to encourage fraud. You have to take salespeople out of forecasting, especially in difficult times."

How are salespeople paid?

Sure, you may be in a situation where you urgently need to cut expenses immediately, but do you have to adjust your salespeople's compensation to deal with financial hardship? Steve Schmidt, a sales veteran at Abraham Technical Services, doesn't think it's a good idea from a rational standpoint. He explained, "It's tempting to reduce a salesperson's base compensation in good times and adjust it in bad times. But it creates instability in the sales force."

Without changing compensation distribution Next, you can learn from the success of the advertising sales department of the New York Times. A few years ago, the daily launched a program it calls "Striving Goals," which aims to incentivize ad sales teams in the face of wildly fluctuating economic conditions. Teams that achieve new sales goals will receive a bonus, which can be adjusted up or down depending on how good the external environment is.

Is an independent sales representative beneficial to the company's business?

For a new market or new company, independent sales representatives are very important. This is the traditional way of starting a business -- expanding sales at relatively low cost and with relatively little risk. But in the long run, most companies want more control over sales and instead hire dedicated salespeople.

"As an independent sales rep, I always felt like a second-class citizen," said Ron Tatum, a former Burroughs Corp. manager. He later bought and managed his own contract sales company. Now, as CEO of Alternative Technology Inc., Tatum is beginning to recognize the limitations of the independent sales representative model.

He said: "The reason this model doesn't work is because the manufacturer never really trusts the independent rep and never really works with the independent rep. Manufacturers often think that any reporting from the independent sales rep is in some way. To some extent, it was whitewashed, or it was for its own sake." In Tatum's view, these suspicions led manufacturers to be reluctant to share information with independent representatives -- reluctance to disclose information about new products coming off the assembly line. . At the same time, manufacturers are also suspicious of reports of customer needs and complaints made by independent representatives.

How can I partner with other companies to shorten the sales cycle?

Strategic alliances and cross-selling collaborations are very important in economic downturns and boom times. But companies seem more willing to cooperate in a downturn.

"A lot of people are looking to expand their sales through alliances, joint ventures or partnerships," says Pete Sealey of the University of California's Haas School of Business. "Today, the labor cost of a one- or two-hour sales call is Too high.” He notes that everyone wants to present themselves to potential clients in the most effective way possible.

He continued: "Everyone is sharing all kinds of clues and relationships. Even companies that never share that kind of information are starting to talk about sharing with companies they used to be dismissive of. Today, they'll say ' Let's work together to find a better way to make money'. I've found this to be true for both Fortune 500 companies and young companies."

Original Reprinted with permission from Susan Greco's What Works Now, Inc. Magazine, February 1, 2002, Copyright 2002 by Los Angeles Times Syndicate. Translated by Su Yong.