Archive for the ‘ Setting up a fast lane sales consultancy ’ Category

 

The truck self-loading body was miniaturised to load and carry cars and lighter equipment. It was an ideal solution for car recovery at the time as cars increasingly became automatic, ‘softer’ in the front and lower to the ground.  A ‘spectacle’ frame was added to the back so a second car could be towed. Technical advantage was all about the weight of the body and payload, the loading angle and the gizmos that could be added to facilitate the task. We were lucky to have two good design engineers, Mike and Preston, which meant we could design for safety and produce repeats of the same design suitably modified to fit the range of chassis available.  The major customer group became the car recovery operators and the car associations.  Orders from the heavier equipment operators became the icing on the cake – higher values and bigger margins.

With increased cash flow, I became the Sales Director with direct line responsibility and a share of revenue. The ‘spectacle’ frame was now redesigned to fit a 3.5 tonne truck.  A fully fitted recovery vehicle with spectacle lift would sell for the same as the bigger, sliding car body.  Revenues began to soar as our speciality sellers showed their engineering competitors the way in closing out the orders.

With the new design of cars and the threat of damage, it wasn’t hard to persuade the recovery operators to move away from truck mounted cranes.  The problem was they were all scratching around to make ends meet as the car associations lowered the rates they would pay.  So the operators tended to buy just the equipment and bodge up their own bodies and lockers.  This equipment represented only a third of a fully ordinanced recovery vehicle.

At the same time, competition started to become stronger.  They couldn’t compete on the sales skills side but they could and did start cutting prices.  The recession arrived which hit the recovery trade.  Things were beginning to get tough. We put on our thinking caps and asked those vital, market-making questions: who else could use our equipment and why. Companies and people use the same equipment to achieve different purposes. For example,  Xerox makes copies. Customers don’t want copies, they want things particular to their business copied. So there is little purpose selling to a lawyer with the same vocabulary you would use, for example, with an accountant.

The answers to our questions became clear: car dealerships.  In the recession new car sales had fallen and the dealerships were looking round for ways to increase revenue.  Why not buy a fully equipped recovery truck, which would advertise your dealership, and use it to bring in breakdowns to your workshops and accident victims to your body shop?  A no-brainer. The names of the dealerships could be clearly identified and our sales team flew around mopping up the orders. Revenues had now increased sixteen fold.

The rest of the story was really about house-keeping rules. We kept marketing spend to areas like shows and activities where we could measure the response.  We had to keep our sellers amused.  We were in constant contact discussing their activities from their returns and offering such support as we could. Generally they were loners and liked to be the one there at the time the order was taken.  And they had little respect for their colleagues when it came to selling so we made a point of keeping them all fully informed who was selling what and to whom.  Otherwise we infilled with an occasional get together at to a patient hostelry so they could share their stories from the trenches and laugh at their management.

One sales tale worth a mention concerned our relationship with a car association.  We always did good business with them until one day their orders started drying up and going to a French company (which made good equipment too).  We then found we were becoming part of a self-fulfilling prophecy: being asked to quote on a very high specification only to lose on price to the same French company who then supplied at our original specification at a price higher than ours.  We had to face up to it.  There was no point sitting there year after year losing orders to a competitor for what seemed unfair reasons.  So off I went to see the boss.  I explained the situation as we saw it and hoped the Association would prefer to place their orders with a local supplier at a lower price, all other things being equal.  After I finished, he spoke these immortal words “You seem to be suggesting my managers are dishonest.” This was answered, as a good seller should, with SILENCE.  Anyway, to cut the story short, the orders started to flow again and everyone lived happily together forever after.

There are several key sales lessons in this.  You as a seller always have the right to go to the top when the shareholders’ interests are not being served by their employees.  As a maitre d’hotel of a top London restaurant once said to me “Always speak to God, never the saved”. If you are being mistreated, you must go high and face up to the hiatus.  You cannot lose an order you haven’t got.  Finally, if there is a row, there is always a tendency for the participants “to kiss and make up”.  The thing you must be absolutely sure about though is that you have right on your side.

You now have all my secrets

http://www.compellingselling.net/buythebook.htm

Instituting the right reporting process is an absolute key to fast lane sales success; and the key document is the Hot Prospect List. The rigour with which the information is gathered is a must in forecasting accurately the seller’s monthly turnover as well as the demand on production. The definition of the candidates for the list is critical too.  They must be decision makers who have said YES they will buy but haven’t signed the order for a reason out of their control, for example a meeting for Board approval or budget allocation.  So the list will include the company name, the decision maker’s name and telephone number, the item to purchase and its value and, finally but critically, the date of final approval  i.e. the day after which the seller can phone to confirm the order. Unromantically and rigorously run (i.e. excluding the temptation of wishful thinking) 60% of the value on this list will come to fruition.

The second most important list is the Good Prospect List which is the feeder to the Hot Prospects.  These are candidates who have been met, have expressed a strong interest and who, the seller has a strong ‘feeling in the water’, will develop through to a final decision. The list will contain much the same information as the Hot Prospect List except it will also show future actions to be taken by date and expected date of order.  Again, unromantically run and with strong criteria, 35% will come through to fruition.

How these two lists work together is simple.  The Hot Prospect List will show for each month the expected sales.  The seller will work out the number of names it takes to meet budgeted sales.  If the names are not on the list for this month and the next, the seller is unlikely to meet his/her target sales.  He knows clearly what he has to do to fill the list immediately to meet his budget. Maybe, in a normal month,  the seller will exhaust 6 names on the list to gain the 4 he requires.  These need to be replaced.  They will be replaced by names on the Good Prospect List or from the effort to build this list.  Let’s say he loses 12 good prospects to replace the 6 Hot Prospects he has lost. So the sales task is clear.  The seller has to do enough new calls to feed the Good Prospect List and well as find prospects who will go straight to hot or sold.  In this case he must find 12 new Good Prospects as well as 6 Hot Prospects to feed the order rate. So do the top sellers grow the stick they use to beat their own backs with.  Top sellers have one defining characteristic.  They have discipline, discipline in adhering to the framework of their sale; and discipline in the way they to plan and manage their daily activity.

The third equally important document is the Weekly Customer Contact List.  This will show the breakdown, by number only, of the range of calls he has made in the previous week.  These will be physical face-to-face meetings.  Likely categories are new calls, follow-up calls, demonstrations, customer calls, technical calls and so on.  The key call is the new call. This is the first call to a new or existing customer where new business is discussed for the first time only.  This is a key definition.  New business comes from new calls.  It’s where growth comes from.  The list will form the basis of the conversation between the seller and his manager. After the 3rd week of conversation, it becomes impossible for the seller to perpetuate any ‘white lies’ as to activity. If he/she is spending too much time shooting the breeze in the comfort of customers’ offices, it will be picked up and noticed.   The higher the number of new calls, the more successful the seller.  You should be looking for at least 6 new calls per week.

The final document is the Monthly Expenses Schedule showing expenses spend, with receipts, by day.  It gives important information like where the seller has been, how much time is spent travelling and whether he/she is using expenses to make up short-falls in earnings.  But be generous and open minded. Finance Directors who take off the cost of an umbrella bought to replace one blown away at a meeting causes annoyance for small value; and he can rest assured the charge will appear invisibly somewhere in the future!

You will see, looking at these lists, they are lists the seller should be producing for himself to manage his territory properly.  In conjunction with a diary, they will clearly show whether the territory is being managed well now and in the future. The view should be the seller is running his own business on the territory and needs the support of sales management to facilitate his success.  He/she doesn’t want the feeling of fighting for the company in the field and against the company on return to the office. Clearly, with a manger who is giving him this full support for his activity, he will only too happy to share and discuss the information in the search for different and better ways to close more business. If the manager thinks there are customers he must interfere with, it is better he makes these (few) house accounts and off-territory.

http://www.compellingselling.net/buythebook.htm

 

 

 

 

 

Setting up a successful speciality sales team means getting the working infrastructure right.  Creating territories is a matter of applying simple logic to a simple set of rules.  Territories must be neither too big nor too small, not so big that the area can’t be fully covered in the year and not so small that sales initiative is destroyed.  Territories need to the covered geographically and in terms of customer group, product range and decision cycle times.  You need to know enough to get this mix right.  Territory ‘shapes’ are likely to be determined by the direction of the motorways; and, ideally, you don’t want your sellers driving up and down the same roads.  Salesmen sell through face-to-face contact so you don’t want them spending too much selling time sitting in their cars either. If the area is big, they should be encouraged to work it in segments, overnighting in the area to improve call rates

The commission structure must be right too. I don’t like commission only.  Salesmen should not be asked to take on company risk.  Neither is salary plus commission the best way forward.  It averages down the better sellers and averages up the lesser.  It is even worse when commission is paid on annual target set by management.  This equates to management, who should seen to be supportive, punishing the successful seller for his success with higher targets next year.

Fast lane sales growth is about creating stars in your sales team who lead by example (and maybe in their new sports car) and show the path of success to their lesser colleagues.  The way to do this is indeed to pay commission only but support it with guaranteed earnings.  It is a matter of simple mathematics.  If you think a good salesman could produce 1.0 million/pa for you at a stretch and he would be worth 100,000 to you if he did so, then pay him 10%.  This is open ended. With luck and good fortune maybe he will find the way to sell 2.0 million/pa.  Then you’ll all be wealthy.  You want success, not a payment hierarchy where sellers can never earn more than their managers. Be a little careful though. Make sure the commission levels reflect your ambitions for sales for each different class of product.  One thing you can be sure of: the seller will and should be led by the commission terms to head for the simplest ways to maximise his/her turnover. He/she might, for example, decide it is easier and more profitable to sell 10 small ones rather than 5 of the big ones.

Obviously people can’t live off commission paid every once in a while. Bills come in monthly; and there are Christmases, holidays and birthdays to be paid for.  So put each seller on a guarantee to reflect worth.  Let’s start, for simplicity, at with a guarantee of 48,000pa or 4,000pm.  Maybe you decide, because you want sales participation until the customer has the product in his sticky fingers, to pay each order 50% on order and 50% on delivery. These commissions build up and, when they surmount 4,000pm, you could choose to pay 60% of the excess, in effect in advance, so the seller can taste success for the current effort.  As territory sales grow, so individual guarantees can be increased; and, as they fall, they can be decreased.  In the latter case, the seller will make up his/her own mind whether it is better to stay or go.

You think “Well how do I convert my current sales team over to the new system”.  It’s simple.  Give them the current (only) sellers the choice:  the existing 50,000pa salary and 5% or 50,000 and 10%.  I know which one I would choose. There is usually some reservation based on conversations with the wife but, inevitably, they all join in and sales begin to soar. And, by the way, send the excess commission as a cheque to land on the breakfast table.  It won’t be long before the wife is kicking her seller husband out of the house earlier.

http://www.compellingselling.net/buythebook.htm

 

The company made a truck body which tilted and slid back to form its own loading ramp.  A tailgate folded down to improve the loading angle.  It was used to load and move plant like earth moving equipment, forklifts and access platforms.  It was bought by the manufacturers of these things and the companies that sought to hire them. It had been a profitable little add-on to an engineering company that had been sold.  The son, Jaime, now set out to make the add-on worthwhile in its own right.  The company was profitable but needed turnover.

The first task was to go out with the existing salesman.  The decision had already been taken on the second one.  The objective was to get an understanding of the value of the prospect list and to evaluate the sales skills. I remember it as one of the most nightmarish days of my sales life.  I had to drive a fair way and meet in a car park somewhere in Birmingham.  We then set off in the salesman’s car.  It was like a high speed car chase, revving engines, hurtling down every street, 2 wheeling every corner.  I have never felt more car sick in my life.  And the sales meetings he had set gave no respite.  Without exception they went like this:

“Hello, Mr Customer.  My name is (blank) and I work for (blank).  I am accompanied today by a colleague who just wants to meet some of our existing and potential customers.  You will remember I wrote to you last year and I have phoned you a number of times since.  I have called in today to see if you would like to place your order.”

“No. I don’t want to do that, thank you.”

“Why not?”

“I don’t want one.  I have no need for one”

“What would you say if I gave you a discount of 10%?”

“I’d still say NO.  I’ve told you.  I don’t want one.”

“Are you saying you are happy to throw away a saving of £428 just like that?”

“Yes”

And so ended this lesson.  And the next.  And the next.  By the time we arrived back at my car, dusk had fallen.  It was dark and miserable.  I was exhausted.  I now had to drive home. Whatever else my companion was, he wasn’t a salesman.

So began the challenge of bringing together a quality sales team.  I worked behind Jaime, ostensibly as his employment adviser.  There wasn’t a lot of money to spend yet so we chose to have me in the background with Jaime as my mouth piece.  It worked well.  Not least, it turned him into an accomplished sales manager and made him sound like one too.  “Do this and say this”, I’d say. “I did but they said this back”.  “Well say this to them and, if they say this back, say this in reply”.  We ended up with a great sales team.  Without exception, they loved the chase and would work all hours for the thrill of the sale well closed.  And they were well paid for it.

Not everyone can survive the rigours of the professional sales life.  The ones that do are often one-offs, certainly memorable characters.  In particular, there was Alan I had known previously.  He took the East of England, from Nottingham shire through the Home Counties and London to the South Coast.

He was a salesman through and through.  He had walked the talk, as they say.  It was he who coined the expression “eff’em” to denote someone who was not a decision maker.  An “eff’em” would typically say: “It’s not my bloody problem, eff’em.”  So clearly not a decision maker.  If Alan ended up with the wrong person at a meeting, he had ended up with an eff’em.  If he had stopped at a Cafe Transport for lunch, he had stopped at an “eff’emry” which is where “eff’ems” ate.

Then there was Donald, a Welshman of the ‘boyo’ variety.  To the uninitiated, Donald talked absolute nonsense.  But the punters loved him and gave him their orders.  Donald always made a point of driving home to see his wife, wherever he was in the country; but he could never understand why, when he got home, he ended up having an argument.  Once too he took his new Vauxhall back to complain of clutch smell in the car. They changed the clutch and said he had been driving with his foot on it.  “It’s all nonsense,”  he said as we drove along in his car. “You see.  You can still smell the clutch now”.  “Yes, Donald.  And you’re still driving along with your foot on it.” Donald worked the west of England from Birmingham downwards.

I remember Roger too.  He worked the North East.  He taught me a valuable lesson, never again to employ someone who could not explain every year of his working life.  He had apparently spent a number of years in the SAS which he said he wasn’t allowed to discuss.  As it turned out, I suspect he had spent it in some other part of Her Majesty’s Service.

After some time, we had our agent Michel in Belgium.  He was a Walloon (French speaking) who lived near Waterloo.  I found this reassuring.  At the Brussels Motor Show, Michel refused to speak to any fellow countryman who was Flamand (Flemish).  “They’re too mean” he said. “The conversation will go no-where.  You speak to them”.  And he was right.  Almost without exception, a Flamand would go on endlessly beating you down on every aspect of the price.  Once he gets to this point he says “Now we have got to the base price, what discount will you give me?” End of conversation.  However, when I pointed out to Michel that Belgium really had no reason for existing anyway with the two communities barely speaking to each other, and suggested the country be split into two with the Flems going to Holland and the Walloons joining France, he was outraged. Such heresy!  It was he who advised me on the French translation in Sales Tales from the Trenches 6  (which will follow).

In Germany we had Hein.  Hein was a Dutchman.  He probably shouldn’t have been fiddling around as an agent.  But he had his moments.  Once at the Frankfurt Motor Show, we had two men in trilby hats and dark raincoats climbing onto our truck bodies unannounced.  They looked like spies from a cheap movie.  “Who are those guys?” I asked.  “They are probably TUV (German quality assurance licensers) men.”  “How do you know they are not Gestapo?” Apoplexy.  Gestapo is not a word you are allowed to use in Germany apparently.  Hein also introduced us to the term “ant f**ker”.  It goes like this. We had a guy deeply in conversation with Hein.  When he returned to the stand I asked him how he’d got on. “Pah. The guy’s a waste of time.  We have already sold him equipment.  We delivered it. We delivered it early.  It was perfect.  There was just one bolt missing, one bolt, and all he does is talk about that bolt.  That’s what he is.  He’s an ant f**ker: someone who bores away at small problems!”

Finally for a short time we had an agent in France.  He was memorable for a number of things.  He had been selling dustcarts to local authorities for a number of years.  And his customers were always asking for blatt, back handers.  These negotiations were always difficult. “How can I tell you what I can give you when  I don’t know the size of your order?  Is it going to be a motor cycle? Or is it going to be a house?” He said he had crossed over the Swiss border so many times the border police even knew his grandmother’s name.  He also advised, if you wished to speak French, you would get a better result if you translated the English into Chinese first; and he described sitting in the back of a French car as like sitting on an old sofa.

God Bless them all

http://www.compellingselling.net/buythebook.htm

SETTING UP A FAST LANE SALES CONSULTANCY

I was top salesman at Rank Xerox UK selling the Xerox type rental agreement.  I wanted see if I really could sell anything and left to join a capital goods company selling new technology truck washing machines both directly but, generally, through a lease agreement.  I ended up running the sales operation.  There I learned how to bring people who really could sell into markets normally sold by people like engineers who were not salesmen.  Mine were high closing speciality salesmen from my kind of background, people highly trained in establishing precise needs, proving the solution within the product benefits they offered and closing for the order, if needs be over the desk at the first meeting.  So, while the engineers were away dealing with another technical query, my guys were signing up the customers.

Not many products are so technical it takes a specialist to explain (Xerox was high technology with selenium drums to transfer images and so on.  What sold the machine was the quality of the copies it produced); and, as any professional seller knows, once the conversation gets too technical, you’re on the way to losing the order. Within 2 years we had taken over the truck washing machine market.

This then became the seed of the idea I had in forming my own business.  I would contact start-up or early growth companies with the suggestion that I should run their sales operation professionally for them, take their product to market and help them establish their own particular market segment and sales culture. This would keep me in the exciting land of new company fast lane growth through highly trained and skilled sales professionals.  I could also get away from the vagaries of commission earnings by taking a share of revenue (not profit – owners can change the profits, revenue must be recorded) which reflects both past and future sales success.

The company was set up in 1969.  In 1974, Compelling Selling was first published by Macmillan and became a best seller in its field, the first book on sales/marketing to sell back to the Americans for publishing since the War.  I had found one or two lucrative contracts. Then one day the telephone rang. The call was typical -

“Hello.  My name is Jaime T.  I run a small engineering company turning over around £250,000.  I have a couple of salesmen.  I use the term loosely.  Between them they have over 100 prospective customers, all of whom are going to place their orders but none of whom ever do.  I have 20 people on the shop floor waiting for these orders to come in so they can feed their families. I don’t want to go on living like this, hand to mouth.  I have read your book Compelling Selling which I enjoyed.  It talks about selling products into truck industry.  Do you think you can help me sort out my problems?”  Thus began a business relationship which lasted for around 10 years and a friendship that lasts to this day.

Setting up a successful sales operation requires these things –

  1. Create a strong, interactive, self-motivating sales team
  2. Establish the right territories, the commission structure to motivate and the reporting that allows the factory to be planned and the sellers to manage their own operation effectively
  3. Understand who your customers are, get the products right for the market and the market right for your products; and the interactions that keep the whole thing bubbling along

Go to SETTING UP THE SALES FORCE FOR FAST LANE CORPORATE GROWTH

 

http://www.compellingselling.net/buythebook.htm