As a person who has spent all of his adult life working in marketing, I am sold on the critical contributions salespeople make to an organization (pun intended). Despite my strong feelings about the value-added impact the sales force makes, this quote from a recent USA Today story still stopped me in my tracks:
“Sales representative is the second-hardest job to fill behind skilled trades.”
In an economy that still has not fully recovered from the jolt it felt five years ago, how could such a vital position have an employee shortage? It is not a matter of businesses shrinking their head counts in sales departments. Rather, it is a gap in trained candidates to step into sales roles to help drive business growth.
Why Avoid Sales?
Over the years, I have had many students come to my office to discuss career paths. Many of them were marketing majors, and a surprising number of them quickly announced to me “I want to work in marketing, but I don’t want to work in sales.” That pronouncement is at the same time eyebrow-raising and troubling to me as a marketing educator. My reaction is that I feel I have failed to persuade students on the merits of sales as a career path. So, what are reasons behind their reluctance to pursue a sales career?
- No understanding– Many students misunderstand how salespeople go about their job duties. Images of cold calling or door-to-door selling are just too uncomfortable for some students- they cannot envision themselves in that role. The reality is that B2B selling involves less of these activities and more emphasis on relationship building and problem solving. Once students realize that is what they would do in a sales position they are not as terrified.
- No confidence- I sense that many of the students who share with me their aversion to sales is attributable to a lack of self-confidence. They do not see themselves as aggressive or dare I say, pushy, enough to succeed at selling. And, if compensation is going to be tied to how much is sold, lack of confidence can be a huge obstacle to overcome.
- No need– Some students look down on selling and salespeople, thinking that is a position beneath them. A no need resistance to a sales career often is a no understanding or no confidence reason in disguise. These students need to be educated on the importance of sales to an organization as well as career paths that can be taken beyond an entry level position.
There is Always Room for One More
When I was a teenager, I had what would be thought of by many people as a weird habit: I read Help Wanted ads in the Sunday newspaper regularly. I could not help but notice that there were more ads for salespeople than any other type of job. I asked my father why this was the case. His response resonates with me to this day: Regardless of what a business does or makes, someone is needed to sell it. That statement guided me toward becoming a marketing major in college. And, it is a piece of wisdom I share with my students.
There is always a place in an organization for someone who can generate revenue (i.e., sell). Employees add value to a firm in different ways: Some help save money by managing processes while others support revenue generators by performing administrative services. But, as companies look to break free from the shackles placed on them by economic conditions in recent years, employees that can connect with clients, build relationships, and close deals are in greater demand than ever before.
USA Today – “Bosses Lament: Sales Jobs Hard to Fill”
Cold calling is a term synonymous with selling. The thought of contacting potential prospects with whom there has been no prior communication is unsettling to many marketing students who want to avoid a sales job requiring cold calling at all costs. It is understandable – asking total strangers to consider buying a product is not exactly consistent with relationship selling practices students learn. While many sales pros have made their fortune because of their ability to cold call, the long-term goal of salespeople should be to turn up the heat on cold calling so that reliance on it is minimal.
Sales expert Jeffrey Gitomer offers 7.5 “one a day” strategies that if practiced eliminate the need for cold calling and are 10 times more effective than making dreaded cold calls. The three ideas I like most are:
- Visit one customer a day – Too often we are so focused on making sales that we do not devote enough time to building relationships that drive future sales and referrals.
- Give one referral a day – When salespeople think about referrals it is usually in terms of how can we get customers to refer people to us. Add a twist to your thinking about referrals and commit to giving one referral a day – promote the good work of your clients by sending business their way.
- Attend one face-to-face networking event a day – Salespeople are in the relationship business. You cannot form relationships sitting in your office or driving around in your car. Be intentional in putting yourself in situations that enable you to meet other people.
Check out all 7.5 strategies in Gitomer’s article. His recommendations are a mix of old school relationship building and new media savvy. Leave cold calling to the salespeople unwilling to make the needed effort to build relationships with current and future customers.
The sales force is uniquely positioned to be the eyes and ears of an organization. Their proximity to customers should be utilized to gather insights and feedback from product users. This benefit of the sales force should be tapped to learn from people who do not buy from you. Dan Bernoske recently wrote on the Sales Benchmark Index blog that the ability to give feedback to other departments in the organization from product users should be extended to gathering information from non-buyers. Bernoske uses the term “win-loss interviews” to describe what salespeople should be doing with buyers in the post-purchase stage.
The number one benefit of conducting win-loss interviews is that the information obtained ideally can be used to improve a company’s products and services. Interviews with buyers should reveal reasons why they went with your product. Patterns of responses would suggest strengths that could be leveraged to develop new products and market existing ones. While loss interviews (conversations with non-buyers) might be less enjoyable and even awkward for salespeople, they are vital to learning from a lost customer why the decision was made to buy elsewhere.
A great deal of emphasis is put on the process of selling – persuading someone to buy. The sales funnel focuses on moving prospects through to the point of purchase. But, what about post-sale, after a customer comes out the other end of the funnel? Salespeople should not ignore customers at this point. Now is the time for the win interview. And, if the funnel springs a leak and prospects do not buy, the loss interview is useful in figuring out how to patch holes in the funnel to reduce the number of lost customers.
Dan Bernoske makes the point that although user reviews posted online are valuable sources of information to learn from buyers and non-buyers alike, there is no substitute for face-to-face conversations about a buyer’s experience with your company and products. Transform your sales force from product sellers to information gatherers and relationship builders. The win-loss interview is a methodology for making the transformation possible.
Most of my blog posts relate to current events and practices in marketing. However, as someone who has spent the past 25 years involved with marketing in some capacity, I cannot help but see parallels between everyday situations and marketing practice. Today’s post is one such observation.
My friend, Mark, is a TSA agent at Nashville International Airport. In his position, Mark encounters many different kinds of people, including celebrities. One day last week, he realized a celebrity was passing through airport security- one Justin Bieber. The teen heartthrob quickly drew attention among travelers in the security lanes, as one would expect. Mark found himself near Bieber, and he did something that no one else was able to do: he made a connection with Justin Bieber.
What was Mark’s secret? Was it the fact that Mark’s teenage daughter is a huge fan, and he used that fact to get Bieber’s attention? No, in fact, Mark said others were trying to get Justin’s attention with the expected “I’m a big fan” type comments without much success. Apparently, they did not know something that Mark did. He engaged Justin by asking him if he still played hockey. What? This guy is an international singing sensation, and Mark wants to know if he is playing hockey! Justin took a moment to answer his question and have Mark tell him about his hockey playing son before going on his way. Mark had succeeded in doing something that most young girls at the airport would have loved to have done that morning- get Justin Bieber’s attention.
Mark’s ability to connect with Justin Bieber is similar to what effective salespeople practice: develop knowledge about customers and prospects as people. A buyer is more than a party to a business transaction; he or she is a person with family, hobbies, and interests, most of which are more interesting to think about and discuss than the business at hand. One of my favorite examples of “know thy customer” comes from author and business expert Harvey Mackay. He developed the Mackay 66, a comprehensive questionnaire that salespeople complete on a buyer that captures information personal interests and their business. A foundation of understanding buyers and their needs is instrumental in building trust to advance a business relationship.
Want to connect with your customers and prospects? Make it a point to know about them and their organizations- who they are and what they do. As John Maxwell says “People don’t care how much you know until they know how much you care.” Salespeople can demonstrate caring by taking time to learn about the person across the table. If it works with Justin Bieber, it will probably work with the clients and prospects you interact with on a daily basis.
In difficult economic times, managing expenses takes on greater importance in the face of softer revenues. One expense in particular that rises to the top of the list of concerns is employee compensation. An article in the August issue of Inc. Magazine shares some ideas on how businesses can deal with this challenge. One of the issues featured in the article is managing the dilemma between product pricing and salesforce commissions. The story of Passageways, an Indiana-based technology firm that serves the banking industry, is shared as an example of one way to give motivate salespeople to protect price in negotiations with customers.
As Passageways’ clients felt the sting of the recession, they demanded greater price cuts from the company. To combat this problem, Passageways VP Paroon Chadha modified the sales commission structure, changing from a straight percentage of sales to a tiered system. Why was it needed? Salespeople who willingly reduced price up to 10% in negotiations were hurting their commissions only slightly but were costing the company much more in foregone revenues. The tiered system rewards salespeople that are more tenacious in price negotiations, paying a higher rate the closer the selling price is to a product’s list price. Conversely, the deeper a product is discounted, the lower the commission rate.
A tiered commission system like the one adopted by Passageways provides two key benefits. First, salespeople have a motivation for sticking closer to a product’s asking price. Giving ground on price is easy, too easy perhaps. Creating rewards for managing price (or inducing some pain for not managing price) is a great way to increase the salesforce’s commitment to the firm’s pricing strategy. Second, when price is not liberally discounted, you are protecting brand integrity. What does it say for a brand when its list price is regularly discounted several percentage points? It says the brand is not really worth the asking price. That calls into question the true value a brand possesses. Why put your brand at risk to have quality called into question.
Kudos to Paroon Chadha and Passageways. It is not easy to take a stand on pricing, but the fallout for not doing so can eclipse any benefits coming from an approach to pricing that is too flexible.
Inc. Magazine – “Special Financial Report: Employee Compensation”