Get 'Em In Gear
It's the bane of sluggers and salespeople alike: the slump. Things that once came naturally suddenly seem torturous. No one returns phone calls. That killer instinct to close a deal disappears.
Like a baseball manager, you can wait for a player to snap out of it. But wait too long, and your revenues will get whacked. And if it's not a single rep losing motivation, but your whole team, waiting is far too risky. "If your sales force is not functioning properly, then the rest of the business almost doesn't matter," says Alan Rigg, an independent sales consultant in Scottsdale, Ariz. "If you don't have orders coming in from customers, what do people have to do?"
When sales take a dive, it's time to take action. If the decline is the result of a few reps getting lazy, firing the offenders will send a message to the rest of the team that such behavior doesn't fly. But often the problem is more complex than that.
To help you get back in the swing, we've taken a look at the strategies and successes of four small business owners who have managed to energize their sales teams and bring them out of a slump. These entrepreneurs have examined not only individual reps but also their companies' selling processes, trying to figure out if the right reps are in the right positions and if they're using their time wisely. The result: creative solutions that have stemmed turnover and boosted -- even doubled -- revenues.
Now that's motivation.
#1 SMART HIRING
Scott Johnson needed more reps like Guido Russo. "Guido's the kind of guy who could be 180% over quota and still make a cold call on his way to work," says Johnson, vice-president of sales and alliances for Ensynch, a Tempe (Ariz.) information-technology consultancy. In 2003, three years after its launch, Ensynch's executives worried that the 90-employee company was too dependent on a few big clients. And its four-member sales team had a 50% turnover rate. Ensynch couldn't clone Russo, of course, but it found a way to hire more reps with similar drive and skills: It started giving job candidates an assessment test to get a window into their sales style.
Such tests can help companies make better hiring decisions, says Lou Adler, an independent recruitment adviser in Irvine, Calif. Still, you need to be careful about how you use tests. "If you are hiring an experienced salesperson, you want to see a consistent pattern of sales success," says Adler. "If you then give the test, it will confirm what you've done in the interview. The test shouldn't be used to predict performance."
At Ensynch, Johnson says the test results are about 25% of his hiring formula. Since he started testing sales recruits, turnover on his eight-member sales force has been slashed to 20% from 50%. Revenues jumped from $12 million to $19 million last year, and Ensynch now counts 150 customers, up from 65.
Not bad for a pretty small investment. Ensynch spent about $2,000 to develop its 400-question test with Profiles International, a Waco (Tex.) company. Most questions aim to measure verbal, reasoning, and learning skills. About 50 of the questions focus specifically on selling skills. One example: "If you're standing in line at a store and someone cuts in front of you, do you approach the person or let him go?" That answer, says Johnson, "lets you see how accommodating [the candidate] is, which isn't always a good thing if you're a salesperson, or if they're up for negotiating a fair deal."
Candidates take the test on Ensynch's Web site. Alan Rigg, the consultant who suggested the company use the tests, analyzes the results for a $250 fee. Johnson lets candidates see the results. (Only 1 of 14 candidates has refused to take the test.) Todd McGregor, who joined the sales team in February, says the test was "fairly accurate," adding that "overall it reinforced what Scott [Johnson] knew about my selling style. I'm more of a long-term relationship selling executive, and my job at Ensynch is to grow relationships within an existing account."
So is Johnson now managing a team of Russos? Not entirely. He realizes he doesn't need to, either. "You don't want everyone to be the same," he says. "But they should have some of the abilities that will produce results for the company." And it's a whole lot easier than cloning.
#2 EVERYONE'S IN SALES
In retrospect, Jeffrey Green admits the compensation plan he created in 1995 when he founded 80-person Datatrak International just wasn't fair. Salespeople got a commission on every sale -- including renewals -- of the Cleveland company's software, which helps pharmaceutical and biotech companies track clinical trials. But Datatrak's product and data managers griped that they weren't getting credit for their role in renewals, even though they were the ones who actually worked with clients. The complaints bothered Green. So did the fact that his sales staff was starting to do so well with renewals that they weren't motivated to find new business.
That's a common problem, says David Cichelli, a specialist in sales compensation at the Alexander Group, a consulting firm in Scottsdale, Ariz. Cichelli suggests telling reps: "We're not going to pay commission below a certain revenue level on existing business, only on new revenue."
Green did exactly that. In 2003 he rolled out a new plan he thought would drive growth and be fair to all employees. Reps would get commissions only on new business, receiving $10,000 or $20,000 depending on the deal's potential to bring in even more revenue down the road. Project managers and data managers assigned to a customer would get a quarterly bonus of 2% of the value of the accounts they handled -- often as many as 15 projects worth an average of $300,000 each. "I'm a team player," says Green. "You live and die by the team."
The change was dramatic. Five sales reps soon quit or were fired. But their replacements have a different outlook. Says Craig Tobey, who joined Datatrak early this year as West Coast sales director: "Under the plan, all that matters is, if I work hard and do my job, I can hit the income that will make me satisfied." Martijn Princen, the company's director of business development for Europe, says the plan is very motivating. "If you bring in 5 to 10 new customers a year, you can double or triple your [base] salary." That attitude explains why Datatrak has gone from 16 clients to 28 since Green revamped the compensation plan. Revenues have more than doubled, to $15 million from $7 million. Best of all, Green says, no one is complaining.
#3 BUILD THE BASE
Although many of Kellyanne Conway's clients are political campaigns, she had to learn firsthand a well-known rule of politics: Don't neglect your base.
Conway founded the Washington research firm The Polling Company in 1995. The 11-employee outfit had grown mainly through referrals and by working with its client roster to find additional applications for its products. But by 2001, Conway was concerned that about 30% of her company's revenue was coming from a few big customers. "If your clients' need for that much research disappears, then there could be trouble," says Conway. She launched an aggressive effort to bring in new clients. The results weren't at all what she'd expected.
In December, 2001, Conway purchased WomanTrend, a boutique Washington research firm that specialized in analyzing women's issues and selling its research to corporate and media customers via a quarterly subscription-based newsletter. Conway's three salespeople had new products to pitch, but sales in the post-September 11 economy were sluggish. She pushed her staff to search for new customers through targeted mailings and cold calling.
The sales team grew frustrated, sending about 10 pitches a week and having little to show for it.
"I could see it wasn't generating a ton of new business, and the salespeople seemed slightly demoralized," says Conway. She also realized the strategy was taking sales staff away from what they did well: working with existing customers to determine their needs and how they might take advantage of the company's expanded product mix.
Conway reversed course in 2003, and her sales team refocused on selling additional products to existing customers. It has paid off nicely. Lifetime Network, for one, originally a subscriber to WomanTrend, now uses the polling services. Revenues have gone up 20%, to more than $2 million. And Conway is all the wiser. "If you are going to expand," she says, "don't abandon your core."
#4 PROSPECTING ONLINE
Running a no-growth company wasn't Paul Brancaleone's ambition. But when he bought Foster's Promotional Goods in 2001, the Marblehead (Mass.) company had been stagnant for several years. Brancaleone needed to find more prospects than his three salespeople were turning up via cold calls. He placed ads on a local radio station and in the Yellow Pages. But those well-worn paths were costly and didn't bring in much new business for the seven-employee company, which makes promotional items for corporate customers. Then Brancaleone tried e-mail.
Early in 2004 he began blasting e-mail alerts to about 3,300 names in his reps' database, including existing customers and prospects they'd called or met at trade shows. That did the trick. Foster's 2004 revenue was up 30%, to $609,000, over the previous year. The growth has come cheap -- especially satisfying for a company with little to spend on marketing. Brancaleone writes the e-mail copy, and his vice-president of operations, Jim Frontiero, designs the piece. "I don't think I've gotten one call from our phone book ad in four years," says Brancaleone. "And that costs me $1,200 a year."
The e-mails work because they prompt customers to take quick action. The quarterly blasts include product photos and copy proclaiming special offers. "Whether or not they like the ideas, at least they can see how a product can be used," explains
Brancaleone. An October e-mail, featuring a model wearing a sweatshirt emblazoned with "Your Logo Here," offered discounts and reminded customers to place their holiday orders early to guarantee timely delivery.
Foster's salespeople are happier, too. "These days people don't have time to take cold calls," says Barbara Day, an account executive. "The e-mails aren't intrusive, and we often get immediate feedback." A recent mailing led a new customer to place a $12,000 T-shirt order within days. For Foster's, that's a home run.
By Charles Butler