There are two theories as to what sells.
One theory is that a product has a market of a certain size, and the product’s attributes and customers’ needs determine the size of that market.
The second theory is that salespeople sell. Every salesperson has a built-in (and financially motivated) need to sell, and goes out and hits the street, has lunch with prospects, hustles, and generates sales.
The more salespeople you hire, the greater your sales, regardless of product or market. Both theories obviously contain a fair amount of truth, but in my experience the second theory is the more often neglected. Most companies under-invest in their salesforce, at the expense of revenue and profit.
What does it mean to invest in your sales force?
1. Make sure you have enough salespeople (see the second theory above).
2. Make sure the salespeople spend their time with the customers, not doing administrative work or other things.
I gathered a few pieces of data. My client’s salespeople were spending 30% of their time with customers; the competition’s salespeople were spending 90%. My client’s salespeople visited customers twice a year, asking for more sales. The competitors’ salespeople visited customers (on average) twenty-one times a year: twice to ask for sales, and nineteen times to see if the customer needed any help with software, a service problem, or a report they had to write for their boss. Of course the customer is going to give the majority of his or her loyalty and sales to the competition!
3. Hire enough relatively low-paid clerical people to support the salesforce. This frees the salespeople up to spend time with customers.
This is how you build a sustainable sales team.
The third piece of data in the example above: My client’s salespeople have one support person for every three salespeople. The competition has two support people for every one salesperson. That’s why our salespeople were too busy to give customers the level of service that was needed.
4. Compensate salespeople highly variably, as a function of profits, not sales.
A hospital products company I consulted to once switched its commission system from sales-based to gross-margin-based (salespeople now got credit for the gross margin dollars of the products they sold, not the sales dollars).
Within one month, sales of high-margin products were up 28% and sales of low-margin products were down 26%. As a result, overall profits were up 50%.
5. Hire salespeople who understand how to sell and how to make a profit, not people who “know the product.” People who truly know how to sell are the rare and valuable ones; anyone can learn the product line.
6. Invest in sales training, focused on true selling and profit-making skills, not just product facts.
At too many mediocre companies, sales training consists of product people unveiling this year’s product line. Try dedicating much of your sales training to the subtle and powerful nuances of how to sell and how to price-maximize. The feedback you will receive will be, “It was really helpful—the best training we’ve ever received.”
Here’s one other simple thing to do. Get a top salesperson at three companies you admire (in industries other than your own—it doesn’t matter, because selling is selling) to speak to your salesforce about the keys to their success. Your salespeople will eat it up and the results will show in their performance.
For many businesses, the salesforce is the most important asset, more critical to the business’ success than the bricks, mortar, and machinery of your plant. Yet we spend millions to maintain the plant and skimp on supporting the salesforce. This is penny-wise and dollar-foolish.
The above passages are from Chater 75 of Double Your Profits, by Bob Fifer.
My old boss and mentor Dan Rowe required me to read this, and I’m so glad I did. Because of this, I was his top salesperson during my tenure at Fransmart, and sold thousands of franchises that helped small mom-and-pop concepts achieve impossible milestones – like going international, going public, or be acquired by public companies.
He made reading this book, The E-Myth by Michael Gerber, and The One Thing by Gary Keller to help me speak entrepreneur (which were our clients), focus on the right things, and sell better.
He got us a sales coach to help us strengthen our soft skills, pitch, and close.
He flew me all over the world to immerse myself in the culture of countries where we did business, and attend training workshops hosted by best-in-class, global organizations – like the McClaskey Institute.
He practiced what he preached, and I’d like to believe the results increased the value of his company by 1000%.
Now that you know this and can’t un-know it, lol! What are you going to do about it? Do you need to divert your investments into your people?
You don’t have to do anything expensive or dramatic. You simply need to communicate to your salespeople that they are the most important asset in the company, and make sure your actions match your words.
You can invest in a sales training program or coach (happy to be of service!), and/or technology that automates lead generation, sales process, customer service, and onboarding. You can buy a sales training book and hold an Oprah Book Reading Club type of regular discussion. You can hire support staff or a low-cost VSA to take administrative work and obstacles off of your sales team’s plate.
Let me know if you have any ideas (that I’d love to share with this community), or if you’d like to brainstorm books ideas unique to you. But hope this convinces you of the asymmetrical return-on-investment that fortifying your salespeople achieves.
There are two theories as to what sells.