Managing your Salesmen
By Kevin Kehoe
Developing a sales machine is the most important investment a landscape contractor can make in his business. Given pricing conditions and the negative impact this is exacting on gross profit margins, generating increased revenue volume is necessary to achieve net profit dollar goals. At the heart of this revenue generation effort is the salesman. They have never been more important and the management of the sales force never more critical.
Since the sales game is a tough one and lack of success can cause even the best to get in a slump, keeping your sales staff motivated is essential. The primary motivators are (1) a need for achievement, (2) a desire to get better, and (3) the opportunity to make money. To produce these motivators a sales manager should employ the classic carrot and stick approach.
Goals and commission programs provide the carrot. Goals should be set weekly for number of sales calls, monthly for the dollar value of bids required, and quarterly for every quarter for closed revenue volume. Software such as Excel spreadsheets, SalesForce, Method, ACT and others can be deployed to manage this process. In my experience most managers set goals too low. Low goals provide little pressure, and most sales people are motivated by pressure.
Commission plans are essential. A successful salesman should be the second or third highest paid employee in the company. I prefer a first year 60/40 base/commission structure graduating it by the third year to a 40/60 with unlimited upside for the salesman. In addition I like contests where there are non-cash rewards. One company, short on revenue through August, challenged the salesman to get the company back on budget. He did and the company rewarded him with a big screen TV - as promised. It was a one-time event. Salesmen are motivated when there is something at risk. When pay is guaranteed, I don’t think they run as hard.
Dashboards and coaching provide the stick. Most contractors do a good job managing production. Yet they don’t apply this same principle to the sales. Salesmen perform better when they are focused on high return activities. The dashboard is the pipeline report and it is a necessary stick because too many sales people (1) spend too much time selling to people they know and too little to those they don’t, and (2) working on prospects that ultimately have little chance of closing. For example, I reviewed one salesman’s pipeline recently. He had 243 prospects and appeared that he had enough leads to make his number. Upon closer review it became clear that only 10 - 12 of these would likely close. He needed to spend more time developing new leads to get back on track.
Salesmen need feedback. Every good salesman has had the experience of wishing they had been quicker or smarter at some point during a call. Making joint calls and engaging in post call “curbside chats” applies the stick gently and motivates them to become better. In working with salesmen I have discovered some typical bad habits that can be easily addressed by this method. These include (1) talking too much, (2) not asking the right questions, (3) arguing with the customer, and (4) failing to ask for the business and get a signature.
No salesman is immune to these behaviors. Some years ago in an important sales presentation, a customer actually said to me more than once, “Kevin, ask me if I want to sign this contract.” Apparently I did not hear this and proceeded to provide him with proof and testimonial to my wonderfulness until he finally became adamant. He said. “Ask me!” At this point I said, “Would you want to sign this contract?” He said, “Yes. Now let’s talk schedule. When can you start?” I was so busy talking and avoiding the potential rejection that comes with “NO” that I never asked the closing question. It is a lesson I have never forgotten. Salesmen require the coaching stick.
The best salesmen, in my experience, are hard wired for the job. This is not say that someone cannot be taught to sell, but all the training in the world does not replace a natural predisposition to the task. Salesmen at their best are capitalist athletes. They like to win. At their worst, when they are not winning, they are high maintenance time wasters.