Posts Tagged ‘Sales Management’

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?

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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.

Outsourcing Your Sales and Sales Management Needs

February 22, 2010

I have been reading lately that temporary staffing is on the rise.

It makes perfect sense. As the economy recovers, more work needs to be done but companies are not yet confident enough to start hiring people so they bring in the people that they need to do the work they need to do. This reminds me of exactly why we do what we do.

It was the temporary staffing industry where I got the idea to start Randolph Sterling, Inc. I worked as a “selling sales manager” for an IT staffing company. We would provide temporary computer staffing support for companies. Some of my clients included AT&T, Pfizer, and Oprah’s company, Harpo Studios. What these companies realized was that they could bring in an expert to do what was needed, and then when the project was finished, they would either have that person continue on with another project or simply end their assignment. They saw that it was less expensive in the long run to pay that person to do the job they needed them to do. They didn’t have to pay for vacation time, benefits, or any of the other hidden expenses that are associated with a permanent employee.

It was this “selling sales manager” that was the original service of Randolph Sterling, Inc. We call it our Virtual Sales Manager service. We go in to our clients, who are usually companies that are growing relatively quickly and either don’t have a full time sales manager or have one that is overworked by managing too many salespeople, and help. We don’t get involved in politics, we just do the things that need to get done, whether it is going out in the field with the account executives, setting procedures, running sales meetings, hiring new staff or solving problems. We only get paid for the hours we work, no vacation time, no benefits, just a day’s pay for a day’s work.

The staffing industry was also the catalyst for another service we provide, one that has become our largest to date: our Outsourced Sales services. One thing I noticed very quickly when I sold in the staffing industry was that the busier I got, the less time there was to find new business, but in an industry where your product is a person and in an economy where companies are constantly being bought and sold, finding new business was imperative.

When I was just starting out, it was easy to reach out to 100 prospects a day to start to develop that relationship. I was just starting, so I didn’t have any current clients so I could spend my whole day building. As I started getting new clients, I was servicing them so there was less time to look for new business. The 100 prospects a day can easily drop down to 50. Talking to half the people meant half the opportunity.

Our outsourced sales service was developed to alleviate this exact problem. Let’s face it, the last thing a salesperson wants to do is make 100 calls in a day to find new opportunities so even if they do have the time, they will find other things to do. We decided it was easier if we do this for you. We reach out to approximately 100 people for every 10 hours we sell, developing relationships with the prospects that our clients want to talk to and sometimes finding out that some of these prospects really aren’t the people they want to do business with. In most of these instances, we are talking to people that the account executives were not going to, helping to bring in business that would have never walked in the door, while the salespeople focus on keeping current clients happy and building that business.

It is another service where you pay for our selling time, no vacation time, no benefits, nothing else. We also do this work off site so our people are focused on one thing and one thing only: developing relationships for you. No office politics, no getting pulled off the job to go help out with something else…a simple concept that sometimes gets lost in today’s workforce.

For more information about our Virtual Sales Manager services or Outsourced Sales, please go to www.randolphsterling.com.

When Growing Too Fast Becomes a Concern

February 10, 2010

I was sitting in a meeting one day when the topic of business growth came up. OK, so it always comes up in meetings I have with clients and colleagues because we all want to grow, don’t we?

This conversation was a little different and eventually changed the way we provide our Virtual Sales Manager Service by simply asking the question…what will you do if your growth dreams do come true?

This is an interesting question that usually is met with answers of additional benefits for employees and vacations and early retirement for business owners. But what happens when you look a little deeper? How will you maintain growth? Will you be able to provide the services that you could when you were smaller?

This scenario reminded me of a friend of mine who started a food delivery business back in the mid-90’s. They would take orders from clients and provide food from 5 different restaurants. That way if mom and dad wanted sushi and little Jr. wanted pizza, everyone was happy. The problem came when they did such a good job promoting the business and they had more dinner orders than they could possibly deliver. So much for a good sales and operations plan!

The owner of the company we posed this question to had a slightly different issue. Operationally, they had processes in place that made it easier for them to grow. The problem was on the sales side. When he looked at growth, he knew that his salespeople would eventually get too busy so he would have to hire someone else and cut the territory of the current salesperson so the new guy had opportunities. By the time we had this conversation, he had 8 salespeople selling 8 completely different ways. He was acting as the sales manager as well as the president. They were making great money, but were headed for a fall. Nobody was happy.

Most companies we work with are strong companies who are growing quickly, but prior to this conversation, most of the companies we worked with were just establishing a sales force beyond one or two people. What we saw with this company was that sometimes a company can grow too quickly by “throwing money” at a problem and really creating a larger problem by hiring a bunch of salespeople, but having no real sales structure. This holds true with companies with 2 sales people, as well as 200.

After this conversation, the client hired us to work as their sales manager, first by developing a solid sales structure which fit with the corporate philosophy, then by making sure that all of the “people on the bus” were right for the company philosophy. Some people, including the #2 salesperson, did not fit the mold and eventually were replaced. But, at the end of the day, the company had a strong, cohesive sales team all moving in the same direction. The following year, in a recession, they beat their best year by 25%.

Closing the Deal on the Go: What to Do When Your Salespeople Are Dealing with Difficult Clients: Showing Support in Difficult Times

January 20, 2010

The other day I posted an article about what to do when you deal with difficult clients. Today I thought I would write about what to do when your salespeople encounter such clients.

Salespeople can find dealing with difficult customers draining, especially if they do not feel they have the support of their management. Therefore be on their side when they are right, and be there to listen. Help them more effectively deal with difficult customers with role-playing exercises. Tell them when a customer goes over their heads to you. And let them know you will speak with them about any action you take when intervening in one of their accounts. If you do not do this, you risk damaging your relationships with both your salesperson and their client.

Also, resist taking the easy way out when a salesperson’s difficult client comes to you, even if placating them seems like it would be the best short term solution, because ultimately your people must live with the consequences of you decision, plus, that difficult customer may soon becomes your consistent problem.

This post is based on material originally published in Closing the Deal.

For more information on Closing the Deal, check it out on Amazon.

(Burghgraef, Richard. Closing the Deal: Hot Sales Strategies that Make Money. Encouragement Press. Illinois: Chicago. 2007)

Randolph Sterling Inc. Expands to North Carolina!

September 27, 2009

In my previous post I mentioned Randolph Sterling’s expansion to North Carolina . Now, some people might ask “Why NC?” Well, there are several reasons. First, I’m an east coast guy. I was born and raised in New Jersey. Next, as I mentioned in my previous post, we found we were receiving an increasing number of business inquiries from the east coast, and it made sense to open a branch there.

And, in no particular order, I like to be outdoors, I feel better when I am out in the fresh air, I am the poster boy for the winter blues, and I just don’t enjoy leaving for and returning from work in the dark, thus missing an entire day of sunlight. After years of walking from Union Station to Clark and Washington in 5 degree weather on winter days with the wind blowing off the lake and up the street, I felt I was ready for some warm weather.  

If you’ve never visited the Raleigh/Durham area, I urge you to do so and then you will understand why we picked it as the location for the newest Randolph Sterling, Inc. office. It is a growing area filled with a great mix of those born and raised there along with those who relocated, generally from a warmer climate. They both do a wonderful job of balancing each other out, which makes for a great place to live, work, and for me, one day raise a family.

You also have some of the greatest minds coming out of this area, known as The Triangle . It is bordered by the University of North Carolina, NC State University, and Duke University, forming a triangle of great businesses and great people.

So what about my adopted home of Chicago, which has served us so well over the years? We have certainly not forgotten you. While I continue to make my weekly trek from Chicago to Raleigh and back, Randolph Sterling World Headquarters still remains in Mt. Prospect and Lisa Pickens supervises the inside sales teams in Raleigh and the Chicagoland area from the inside sales center in the northwest suburbs. We are close to hiring another Chicagoland area sales rep and another sales management consultant. Things are definitely hopping.

We thank all of you who have helped and continue to make our growth possible, both in Chicago, Raleigh and in all of the places where we have clients but don’t necessarily have a local office. We have been lucky enough to be able to grow in a difficult economic time and look forward to even greater horizons while never forgetting where we came from. The core of our business is, was, and always will be to help growth companies continue to grow the right way and to develop the best salespeople possible.

Randolph Sterling Inc: Sometimes Growth Can Be a Great Thing!

September 26, 2009

Since starting Randolph Sterling, Inc. back in 2002, it has always been my goal to grow the business beyond our home base in the Chicagoland area. Back then, with no experience running a business–unless you count the lemonade stand I had when I was 7 (not the best business plan since I lived on a relatively quiet street) or the landscaping business I started one summer when I was 18—I had no idea how we were going to do it. Franchising sounded like a good way to grow.  It worked for Ray Kroc with his little hamburger venture, so why not for a sales management and inside sales company?

The problem was I didn’t know how to start a franchise. At that point, I wasn’t even sure I knew what we brought to the table for clients, so how could I duplicate it like a Big Mac and McDonald’s fries? I decided it wasn’t the time for franchising, however, keeping it in the back of my head has certainly helped me to continue to help the company grow.

When I started Randolph Sterling, we were a sales management firm. This is only part of what we do today. I had enjoyed my work as a sales manager prior to that, but realized there was an opportunity for me to help several companies, not just one. I figured that for companies who did not have a sales manager on staff, where the sales team was being supervised by the president, I could come in and offer additional sales insight. It would also give me an opportunity to broaden my scope of knowledge and be a better resource to my clients. This has changed over the years since we work mainly with companies who are growing quickly and don’t have the structure in place to handle the growth. But, the same ideas remain from those early days.

The part I hadn’t realized was that as only one person, your time is limited. When you figure in your hourly rate, then multiply it by 40 hours in a week, then by the 50 weeks a year you would work, the numbers looked good even if you did take two weeks vacation. Just one problem: there is no way you can provide this service for 40 hours a week, or at least not while billing clients, collecting payments, running the business in general, looking for more clients…you get the picture.

As I have mentioned in previous posts, we also are constantly looking for ways to expand the services we can provide to our clients. It would have been very difficult to do that while building a franchise. It would have blocked the creativity we implement within the business that allows us to continually adjust what we bring to the table to help our clients. I doubt we would be providing some of the other services we provide today if we had been building a franchise from the beginning.   

We decided it was best to grow the same way you make good barbecue…low and slow. We wanted to be smart and meticulous in our growth so that the company always maintained the same ideals it was founded on: providing our clients with the best that the sales profession has to offer in everything that we do. Plus, we realized that we could serve clients coast to coast from our Chicago office.

However, as time went by and we continued to grow, we were receiving an increasing number of inquiries from Charlotte, Atlanta, Raleigh, Washington DC, Philly, and New York. I found myself constantly on planes visiting these clients and prospects and it was getting quite costly. Finding an office in one of these locations would certainly help reduce those expenses. And, when it was time to pick a location, NC was where I wanted us to be.