Posts Tagged ‘Business Trends’

A Question of Business Ethics

December 19, 2010

I was reading a LinkedIn question about business ethics recently and wanted to share with all of you my thoughts on the subject. While the question of ethics in business is not new, I feel that it is an issue that not only will not go away anytime soon, but will play an even larger role in how businesses are run in the next decade as we continue through economic recovery, and as our society seems to come more and more from a position of “entitlement” vs. “work hard, do the right thing, and you will be rewarded by a job well done.”

I believe the measure of a man is what he does when nobody is watching.

I used to work for a company whose definition of business ethics was “If what you did today was the cover story of your hometown newspaper, would you be proud or embarrassed by it?”

Interesting thought, and one that I took very seriously. Sure we all will do dumb things from time to time, but I would think about what my grandmother (who turned 91 recently) would think if she read what I did. Would she know that I, at the very least, tried my best, or would she be thinking that no daughter of hers raised a kid like that? Another friend of mine, Will Webb from Dupree & Webbin Raleigh, stated it this way “When I come home at night, my wife and my little girl will ask me how my day was. I always want to be proud to tell them about my day…every day.”

Unfortunately, posing a question like that is open to a certain amount of interpretation as I learned quickly that different people read different newspapers in the morning. Some read the Chicago Tribune, others the Wall Street Journal. Sadly, still others read the Enquirer.

What are your thoughts on business ethics, and to what level? I was talking to a client yesterday about an issue they were having with a client of theirs who said that they don’t meet with him enough. What he was really saying was that they didn’t take him out to dinner enough. I learned early on that in sales if someone does business with you because you took them to a $50 lunch, someone else will come along and take them to a $100 dinner and take the business from you. However, for some, the business dinner—or at this time of year the holiday gift—is how they develop relationships with their vendors. Where do you draw the line?

I never seemed to do well with the guy who wanted the fancy dinner or to go out to a bar on a Thursday night. Most of my clients are people who, at the end of the day, wanted to go home to their families, so it was pretty easy to find a line to draw. If you interviewed all of the people I have ever done business with, I don’t think you would find one that did business with me because of a fancy dinner I took them out to, although several would probably tell you that it was getting to know each other over lunch that gave them the comfort level to know that I had their best interest at heart.

 

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Death of the Salesman: Are Traditional Salespeople a Thing of the Past?

December 7, 2010

I recently spoke with a woman who worked for a company that “invested heavily in e-marketing and reduced [their] sales force.” She went on to say “It’s been working quite well for the past six months or so. I think that the traditional salesperson is a thing of the past. We still send people to networking events to develop personal relationships, but lead generation is happening for the most part online.”

Now, we at Randolph Sterling have seen a lot of e-marketing with our clients too. However, I don’t think I would agree that the traditional salesperson is a thing of the past.

We have a client that generates 200+ new leads a day for products ranging in price from $5,000-$50,000 through SEO, e-newsletters, etc. They had so many that their salespeople became not much more than order takers, and because there were so many leads, their follow up got bad. The attitude was, “Why call a guy back when I will have 10 more just like him tomorrow?”

But then we came in and added the personal touch by following up on all of the leads that either got skipped over or to which the reps just sent a quote and waited for the prospect to call back. In the first 20 hours of the first week, we had already sold over $300,000 of new business that the company would not have otherwise gotten.

There were two common elements to those sales:

  1. The lead generation system generated a quote to the prospect and showed it was opened. However, when we called, the prospect could not find the quote (often they accidentally deleted it) so we went over the information with them. If we hadn’t, they were going to sign off on another quote they had gotten somewhere else.
  2. The initial quote was usually for a smaller ticket item, often not exactly what the prospect wanted. But, by following up on these “little deals,” we often found that the prospect either needed several of the small pieces over the course of the year, or needed a different piece entirely.

Without the personal attention of a professional salesperson, these deals and many others would have been lost.

Technology is wonderful and certainly has helped the sales industry to change for the better, but based on my experience, my feeling is that the best formula is a strong sales team working with good technology to help attract the right prospects.

Should You Downsize Your Sales Force and Implement a More Automated and Online Marketing System Instead?

November 22, 2010

This is a question that came up in an online Vistage discussion group recently, and those who know me, or regularly read my blog or newsletter already know my answer: NO! An online or automated marketing system will never replace a strong sales force!!!

We’ve spent months and months in our Vistage groups talking about attracting more clients through online marketing systems and at the end of the day what was determined was what we already knew…some companies are sales focused while others are marketing focused, but the most successful companies integrated an approach using both.

Sales is about finding customers while marketing is about bringing customers to you. By having them work together, say by reviewing the report on who reads your e-newsletter and then calling the readers to discuss topics of interest in more detail, or offering a downloadable white paper on a topic of interest then following up with those who downloaded it, will increase the ROI of your marketing programs and reduce the sales cycle (for more details on this topic, click here).

Now, some might disagree with me on this and claim that their sales force isn’t working for them. In those cases I would say the problem is not a matter of having a sales force, but not having the right sales force. For example, if all your salespeople are doing is providing you with information that can be found on Google, fire your salespeople and get better ones (OK, maybe I am being a bit harsh with that.) Good salespeople develop relationships and find the right people for you to work with. If people only bought based on the “facts” they find on Google, anyone who wanted four wheels, an engine, good gas mileage, and a way to get to work would be best served buying a Yugo. When the salesperson digs deeper to find the true pain and how his solution can solve it…well just count how many BMWs and Hummers you pass on the way home tonight.

For companies who have a sales force that spends most of their time working with current clients, or don’t have a sales force at all and the people who do the work also sell it, a better idea would be lead generation. It allows the experts to be the expert. At Randolph Sterling, we have an inside sales force that we outsource to help develop new markets and new prospects. With it, we do not simply find AN opportunity for ourselves or our clients, but THE RIGHT opportunities. Good inside sales teams get a better feel for who your ideal prospects are and work to find you more of the people you want to do business with. You never want to incent them to find ANY opportunity because wasting your time on a bad opportunity can be more detrimental than not having an opportunity at all

 

Should You Adjust Sales Compensation in a Declining Revenue Environment?

September 14, 2010

How one adjusts the compensation of their sales force is something many people have been talking about recently, both on business oriented discussion boards online and in person, privately as well as at well attended events.

On the surface, these are simple questions with several variables. In general, I have always been a supporter of lower salaries with the majority of the upside in total compensation coming from commission, especially when the salesperson controls the sale from start to finish. However, if the product or service being sold has quite a long sales cycle, 9-18+ months perhaps, and is a pretty high ticket item, I would usually say a larger base salary is needed because people do need to eat while they are developing a long term relationship.

The deeper question though is why so many companies are considering changing their compensation. Are they paying their sales people too much up front to begin with? Has the sales cycle just gotten too long? Has their sales team started to buy into the “bad economy” excuse and lost their focus on developing new relationships and growing the ones they have? What exactly is making it a “declining revenue environment?”

In over 20 years of selling and managing salespeople, my response to a change in compensation either by the company or by the salesperson is simply “SELL MORE!” While it isn’t nearly that simple, I would look at all factors of the “declining revenue environment” before making any strong consideration on changes. Plus, we have not even begun to discuss the potential for negative reaction from the salespeople. What would they do if there was a change? Would such a change cause you to risk losing too many of the right people and put you in a steeper declining revenue environment?

What Is Your Strategy to Strive in the Recovery?

May 19, 2010

So…what is it? One thing is for certain: even if you continued to grow over the past few years, you will be continuing to look for different ways to reach new prospects and turn them into clients. Have you developed a plan yet?

One of the companies we are working with really understands this. They have been in their field for over 100 years, so they have seen it all. When they first came to us, my thought was “What can we show them that they hadn’t seen before?” This is the usual first question I have when preparing to meet a new sales management prospect. It reminds me to make sure I am asking enough of the right questions to allow us to work with them to develop a customized solution that fits their culture and growth goals. No cookie cutter solutions here.

What I found was exactly the opposite of what I expected—isn’t that always the case?

This company is at the top of their field, so while you might think they would be reaping the benefits of the “smaller guys” not being able to survive, they were seeing the little guys trying to infiltrate their turf—the larger clients. We interviewed several of the key players in the company to get their opinion about this.

“They are just worrying about price,” said one manager. “They are insured if he messes up.”

“We haven’t been writing any fewer proposals,” stated another. “But we are just not getting as many projects as we used to.”

This was a common theme among the people we talked to at the company. Our next step was to talk to their clients and prospects.

“They are top notch. We know when we work with them, it will be done right,” a long time client told us. “They are certainly not the cheapest out there, but neither are we.”

“We have worked with them for years. Sure, the number of projects we have had lately has slowed a bit, but as we continue to bounce back, they will be a part of that recovery. We need to work with good people who make us look good,” was the feedback from another happy client.

We interviewed another prospect who they had done many, many, many proposals for but had never gotten the job, so we asked why not. “Oh, they are always so expensive. We can usually find someone else for 20% cheaper,” he said.

“To do the same work?”we questioned, in hopes of finding a differentiator.

“Yep, same stuff,” was his response.

Hmmm. I’m curious. If they are always so much higher, why do you continue to ask them for proposals?” I asked.

After pondering the question for less than a second, he responded “I know they are the best at what they do, but also the most expensive. If I can get a proposal from them, it keeps these cheaper guys in check.”

We had noticed that this was now the second time he used the word cheaper.

“So what happens to you if the cheaper guy screws up?”

“We have insurance for that,” he stated.

“How often does that happen?”

“Oh, it isn’t too bad, just a couple times a year. In fact, we just changed our policy. It was getting too expensive with the old one.”

Wait…what? “You use your insurance policy a couple of times a year? That must be quite expensive, and probably a pain to keep changing policies.”

“It is. Why do you know a good insurance guy?”

“I do, but I think I know a better way for you to keep these costs in check…”

You can see where this is going. Part of the recommendation we are currently implementing for this client revolves around first looking for the right prospects, which lowered the amount of proposals they wrote but increased the number that they won, and next getting their team to be more comfortable asking more questions to get to the root of the pain of their client. They really didn’t want the least expensive person working on their job, they just didn’t see how much that lower cost option was costing them in claims, increased policy costs, increased administrative time in processing this cost and/or finding a new agent, and the potential for losing their job when they realized the bad PR they were getting by not doing it right in the first place.

By digging deeper to find a customized solution that fit their team, we were able to help them thrive in all seasons.

If you or a colleague are staring the recovery in the face and saying, “What can we do to capitalize on this?” give us a call. Our sales management team would love to talk to you about it further and see if we can be of help. For more information about Randolph Sterling’s sales management options, please contact us at 919-439-3710 or check us out on the web at www.randolphsterling.com.

You Survived the Recession! So Where Do You Go from Here?

May 17, 2010

I have been reading more and more that the recession is over and that we are finally in recovery. I decided awhile back to choose not to take part in the recession (with the exception, of course, of being trapped by a bad real estate economy, but that’s a different story entirely) and to continue to push ahead with our business. Many of my colleagues—clients, referral partners, and members of Vistage and Business Clubs of America—joined me. It is nice to see more and more people coming around.

This strategy was relatively easy for me because we are lucky enough to be in a business that can help clients in different economic times. I say “lucky” because if you know me, then you know that while there was a ton of planning that went into what Randolph Sterling does today, there has always been that entrepreneurial side that says “Sure, let’s give it a try!”

In “bad times,” we are able to help companies who need to find more clients, but just don’t want to invest in more internal staff. Being able to hire an inside sales team that gets paid only for the hours they work is a helpful and cost effective option. In the “recovery times,” we see that skeptical companies are still a bit leery about hiring on the full time staff, while others are excited to be able to increase their staff through outsourcing, and go after much more business that they had been able to before. They see that some of their competitors did not survive the downturn, which means that clients of the now defunct competition understand the value of what they do but need someone to do it for them. These companies may not be calling, asking you to do work for them, but are certainly willing to listen to the companies who, in the past, they had told they were happy with their current supplier.