Sales and Sales Management Blog

April 14, 2011

A Tale of Three Villages

Filed under: business,Economy,management,sales,Sales Failure,Sales Management,sales training,selling,small business,team development — Paul McCord @ 2:42 pm
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This was related to me by a sales executive—I’ll refer to him as Robert–who swears it is a true story.  Although I have his permission to use his name, I’ve chosen not to for as you will see, the story is not complimentary to the company he was working for (and it’s too pleasant a Spring to worry about a law suit).

Like many other companies, Robert began, we had gone through a terrible year in 2008. 

I had joined the company as chief sales officer at the beginning of 2007, just a very few months before the economy really began to hurt our sales.

During the course of the year we had cut back on everything—even to the point that office supplies were monitored, hourly employees were forbidden to work overtime, a hiring freeze was instituted which not only meant that no new positions could be created but if someone quit or were terminated we couldn’t replace them.  There were no merit raises, and, of course, there we no bonuses.  Travel, training, meeting, and other “non-essential” budgets were greatly reduced if not entirely eliminated.

We in the sales department were under a great deal of pressure to bring in business—any business.  At first, profit margins were watched with an eagle eye, but after a few months the goal was to get a sale at virtually any price.  The entire sales staff was working under tremendous pressure.  Two satellite sales offices were closed during the year as well as one branch office.  The national and all regional sales meetings were cancelled.

Despite the emphasis on bringing in business at any cost, sales were still down by almost 20% for the year—and 2009 looked like it would be even worse.  The company posted a loss for the first time in almost 15 years and we knew that the following year would be an even bigger loss the way things were going.

During the first quarter of 2009 all the department heads and executives were called in for a strategy meeting.  The goal was to figure out what could be done to stop the bleeding.  I was to lay out in detail what was needed in the sales department. 

When it finally came my turn to present, I started with an overview of 2008’s sales and the current projections for 2009.  I then wanted to make a case for funding an aggressive training program starting immediately.  During the previous year our one in-house trainer had quit and wasn’t replaced.  We instituted some training during weekly sales meetings but that was totally inadequate.  For several years prior to the recession when business was really good the company had cut back on the amount of training it provided.  Business was coming in and frankly they didn’t see a reason to spend the dollars.  As I said, we had a company trainer but he wasn’t really a sales trainer although he had gone through one of the major sales training systems and was our “official” sales trainer so to speak, supplemented by our branch and regional managers and on occasion me.

Rather than giving a straight forward argument for increased training of the sales team and the associated expenditure, I decided to tell a story that I thought might illustrate the need better than simple facts.

I stood up and started:

“Around the mid to last half of the 19th century in the Midwest farming was becoming the backbone of communities.  Small farming villages were constantly forming as more and more farmers developed their farms.  Often these communities were founded on a river.

“In one area in particular at about the same time, three farming villages were founded, each on a fork of the same river. 

“Each village was thriving as more framing families moved into their area.  Over the years, additional commercial interests began to move into each community.

“For many years life was good.

“But from the beginning, each community took a different view of the fork of the river they lived on.

“The first village understood that the river was the source of their livelihood.  The village council made sure that the river was well maintained.  Any trash that was found in the river was removed.  If sand, silt, or rocks began to build up around the banks of the river, it was cleared out.  About every couple of decades they dredged the river if they needed to.

“But the elders of the second and third villages didn’t see a need to pay much attention to the river as the river was always there.  Sure, over the years the silt and sand had accumulated.  The river was shallower than it had been but it was also broader, so it had just as much water as ever.  They thought the first village’s efforts to keep their fork of the river narrow and deep a silly waste of time.  Life was good–why invest in something that didn’t need to be done?

“But then a year of drought came.  The first village barely noticed that the rains had ceased as their river still ran strong and deep and provided all the water they needed.  But the other two villages began to see their forks of the river begin to dry up.  At first it was just a bit of bigger semi-sandy beach.  Then there were mud flats that seemed to go for hundreds of yards before there was any water.

“The drought didn’t break in the second or the third years. 

“By the end of the second year the first village had seen a noticeable decrease in the flow of their fork of the river.  Even so, they had plenty of water and had no fear that if the drought lasted another year or even two that they’d be in any real trouble.

“The people in the second and third village were in very different shape.  Their forks of the river were on the verge of drying up completely after the years of neglect. 

“The village councils of both villages finally had no choice to face the crisis. 

“Both villages talked about their options—they could sacrifice and pay the price to do the work they should have been doing all along and invest in getting their fork of the river in shape to handle the drought, they could give up and move out of the village, or they could stay and hope that the drought relented before they were driven out.

“The people of the second village debated and debated and finally decided that as much as it would hurt short-term, they had no choice but to hire someone to come and help them save their fork of the river.  The sacrifice was painful—and it wasn’t quick, but finally it began to pay off and the water began to flow, each day the flow of water seemed to increase. 

“The people in the third village decided that the cost to deal with the river was just too great to bear.  They believed that the drought would abate and they would be able to delay any repairs to the river until times were better. During the fourth year of the drought the final residents of the third village moved away, leaving their small village and most of the surrounding farms to decay.

“Unfortunately, we have several competitors who, like the first village, didn’t fritter away the good years.  They maintained a high level of training for their people even though for many, us included, it seemed a waste of time and money.  They are now reaping the rewards of that investment.  Some have even seen their sales increase during this downturn.

“We now have to decide if we’re going to be like the second village that was willing to pay the price in the short-term to rectify past neglect–or whether we’re going to hope against hope as the third village did that somehow we’ll make it through.

“It’s our choice—and our responsibility.  Where do we go from here?”

 

I’d like to say that my little story had the desired effect, Robert said.  It didn’t.  We limped along through 2009 and most of 2010.  The loses grew larger each month. 

I eventually left out of disgust. 

The company is still hanging on but is looking for someone, anyone, to purchase them.  Most of the executive group that was there for my story is gone also.

Would things have been different if we’d made the decision to ratchet up our training?  Of course I can’t say for sure, but I’m willing to bet they would be very different.  We had a good product.  We had some good salespeople.  We didn’t have the right support in terms of training and coaching to help them at a really difficult time.

Since then I’ve changed my focus, Robert ended.  My team is 100% focused on gaining and implementing skills—and every manager is required to learn how to coach their team members.  No longer will I get myself in a situation where my river is going to silt over and die.

 

I thought Robert’s story both timely and relevant to many a company right now. 

I hope if your company didn’t follow the example of the first village that you at least joined the second village in digging deep and sacrificing to dredge your river to get the saving water flowing again.  If you’re with the third village, well, good luck.

February 17, 2011

Reality or Unfounded Hope? SalesDog.com Poll Finds Salespeople Optimistic About Sales In 2011

Filed under: Economy,small business — Paul McCord @ 9:50 am
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 ****I wasn’t thinking when I posted this, so let me now clarify–The first half of this is my analysis, the last half (after the dashed line) was taken straight from a SalesDog press release.  Sorry for not making the distinction earlier–sins of slothfulness, trying to hurry rather than taking time to do things right.  Thank you, Michel and Gary, for your comments which got me thinking about the need to make sure SalesDog’s analysis wasn’t mistaken for mine.****

A recent poll conducted by SalesDog.com discovered that an incredible 93% of salespeople surveyed expect an increase in their sales volume in 2011.

With such a high positive response rate, the natural question is: were their sales so low in 2010 that they can’t do anything but go up, or do they really believe the economy will strengthen enough that increased sales will be the natural result?

Unfortunately, SalesDog didn’t ask that question, although they did find that only 50% of respondents have had a decrease in sales volume in the past 12 months.  However, since the recession started three years ago, it would have been helpful had they inquired about what the impact on their sales has been since the recession began.

Be that as it may, their optimism is at least partly fueled by an increase in lead generation efforts by their company.  According to the poll, seventy-one percent of respondents say their companies have increased lead generation activities.

———————————————————————————————-

Despite the rosy outlook for 2011, seventy-three percent of survey takers said their overall compensation has been negatively affected by the down economy. This may account for the fact that thirty-six percent of respondents are considering an occupation change.

According to those polled sixty-nine percent want their companies to provide more sales training.  That comes as no surprise given that sixty-seven percent are dissatisfied with their current compensation.

The poll also revealed that despite the plethora of internet selling options, sixty-nine percent of salespeople make the majority of their sales in person rather than over the phone or online, suggesting that in a business world increasingly ruled by technology, salespeople are still using old school selling methods. For complete survey results visit: http://www.salesdog.com/newsletter/2011/nl0508.htm#survey

May 10, 2010

Now Is Not the Time to Let Down Your Guard

Filed under: business,Economy,management,sales,selling,Uncategorized — Paul McCord @ 4:26 pm
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The stock market is climbing back to eleven thousand, jobs were created last month, President Obama says the worst is over; many are beginning to heave a sigh of relief.  I encourage you not be one who does.

I’m not an economist but I have eyes.  I can read.  I’m old enough to have lived through a recovery or two.  I’m not buying the worst is over pitch. 

It’s not that I think Obama is lying.  It isn’t that I think some giant scheme is behind the increase in the stock market.  And it isn’t that I don’t think almost 300,000 jobs were created last month.  I think Obama believes what he says about the economy—I just think he’s wrong.  I believe investors are buying stocks—I think they might rethink those purchases shortly.  I believe jobs were created, even if some 60,000 were short-term government jobs.

But I also see a significant lack of confidence in the economy by some pretty important groups—energy companies for one.  Living in the energy patch (no longer is West Texas just the oil patch– it is a major source of natural gas as well as wind and solar energy) and being friends with many oilmen, I’m exposed to a number of concerns oil producers have such as what impact the healthcare bill will have on them and if a carbon tax is imposed what impact it will have.  Until they have answers many are reluctant to invest huge sums and commit to a large hiring program right now.  The executives and owners of many small and mid-size companies I speak with have the same concerns and the same hesitancy to hire and expand.

With the concerns producers have, combined with the loss of production in the Gulf of Mexico, four dollar or even five dollar gas is not out of the question—in fact, the surprise will be if gas doesn’t balloon out of control.  We saw a couple of years ago what four dollar gas does to the economy and if it comes, it will have the same impact this time around.

Our housing issues are far from over.  Fannie lost thirteen billion last quarter and Freddie lost eight billion.  Many economists and real estate analysts think we’ve not really seen the worst of the commercial real estate meltdown.  If we haven’t, we’ve got another round of bank issues to go through. 

The mess in Greece is, according to many economists, only the beginning of Europe’s financial meltdown, with numerous countries facing the very real potential of bankruptcy and the subsequent potential depression.  The EU put together a trillion dollar fund (with no telling how many billions of our taxpayer dollars thrown in) to bailout countries as they come close to defaulting on their debt.  Certainly, the international markets are so closely intertwined that if there were a collapse in Europe, it would pull North America down along with it; just as if one started here we would take Europe with us.

Our debt crisis won’t begin for several years, but some are predicting it could start as early as 2013—and there is no reason to believe that Congress is anywhere close to stopping the outlandish spending spree they’re on.  Apparently Vice President Biden is not the only one in Washington who believes “we have to go spend money to keep from going bankrupt.”   Don’t blame Joe; logic and reason have never been the strong suit of either party in Washington.

We live in economically dangerous times.  We are far from solid economic ground.

What does this mean for business owners and sellers?  Do we crawl in a hole and hope the big bad economic wolf goes away?

No.

But we can’t let our guard down either.  We can’t think that we are entering anything remotely resembling a normal economy.  Restraint and well thought out investment in our business must be our focus.  We cannot afford the luxury of thinking that we can spend dollars willy-nilly and that by doing so we’ll book some business. 

Although we all hope for the best, we must prepare for a potential reality that none of us want.  If the worst doesn’t come, halleluiah, we’ll rejoice.  If it does and we’ve prepared well, we will be among the few who are prepared to thrive even in the worst of times.

What actions should you be taking?

  1.  Solidify your client relationships.  You should have done this prior to the current recession, but if you haven’t, do so now.  In a weak economy, your existing clients will likely be your primary source of new business, either through new sales or through word of mouth and referrals.
  2. Evaluate Every Expenditure.  Don’t waste money.  But don’t be penny wise and pound foolish.  In tight economic environments it is common to see companies cut those things that can help them increase their financial stability while not cutting expenses that contribute little to the bottom-line. 

    Examples are plenty such as cutting training for the sales department while not re-evaluating the dollars spent on shipping and communication.  One company I visited with recently had eliminated their entire training budget for the year ($775,000) but had never even evaluated their shipping expense ($6,300,000) or phone, fax, and other communication expenses (about $11,000,000).  They quickly quashed what they felt was an unnecessary luxury—training the people who bring in revenue, but didn’t question the expenses that produced nothing in and of themselves.  Of the 17 million in shipping and communication expenses how much could they save?  I don’t know.  5%?  That would pay for their training expense.  10%?  More?

    Don’t shortcut your business by depriving your critical functions, and certainly don’t throw money out the door because you haven’t thought to evaluate the expense.

  3. Prospect Aggressively.  Don’t let business slide by.  Out hustle your competition.  Get out and build relationships now—you may very well need them in the future.  Every minute you sit in the office is a minute you could be in front of a prospect.  If your primary prospecting method is through the phone, have the phone stuck to your ear.  If it is face to face, get out of the office.  The relationships you begin to build now will be your new business in the future.
  4. Sell Value, Not Price.  In a tight economy the temptation is to slash prices.  Selling price is a deadly game.  Unless you are one of the three or four biggest players in your industry and market, trying to sell on price is a losing game because you cannot continually be the lowest priced.  If you commoditize your product or service, price becomes the only criteria in determining who gets the sale.

    As Tom Reilly points out in Crush Price Objections, price is not the primary concern of the majority of buyers.  Sell value, knowledge, service–not price.

  5. Focus on Your Primary Markets.  Concentrate your time and money on your primary, most profitable markets.  Certainly if you see opportunities elsewhere, take a serious look at them, but don’t become distracted from your primary markets.  When you’re fighting for your life is not the time to take a flier on a ‘maybe.’ 

What if you do the above and the economy continues to show signs of recovery?  You still win.  The above suggestions will produce just as well in a strong economy as in poor one.  You’ll have lost nothing but have gained much.

Times are dangerous and no one knows what will happen two weeks from now, much less two years.  Use your time and money wisely; prepare for the worst while hoping for the best.  Take the necessary precautions to thrive when your competitors are dying and you’ll be prepared no matter what’s ahead of us.

September 10, 2009

There’s Light at the End of the Tunnel–But It Isn’t the Time to Celebrate

Filed under: attitude,Economy,sales,selling — Paul McCord @ 9:49 am
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Slowly we’re beginning to hear about an improved bit of economic news here, a better than expected economic thing there.  Some of the sellers and sales leaders I’m speaking to are asking about when I think the markets will really pick up and what are other clients saying about their sales and what they see on the horizon.  The feeling of deep gloom is beginning to get edged out by a feeling of at least a modicum of hope.

That slight feeling that the weight of the past year may be easing brings a bit of a sense of relief and in many cases a good deal of hope and joy. 

Don’t get carried away. 

No celebrations are in order. 

The fatted calf gets to live another day–or another week, month, or maybe even for another year before being slaughtered for the great celebration of the return of good economic times.

We sellers can’t allow ourselves to let up in the least.  As most of us know, contracts are still elusive and hard to nail down; competitors are still willing to cut profit margins to the bone; management is still fretting and in many cases micromanaging to their and our determent. 

Having had the advantage of living and selling through previous recessions, I’m well aware of false bottoms; of long, slow, hard recoveries; of the sometimes almost irresistible urge to take a breath, to come up for a bit of a break after an exhausting run. 

We see a bit of light.

The air begins to smell a little bit fresher.

The days begin to have the hint of spring after a long, hard winter.

A break seems to be not only in order, but very well deserved.

We relax.

We lose momentum, and once we’ve lost momentum, we may find it almost impossible to regain it.

We’ve all gone for a year, many of us for almost two years, fighting tooth and nail for even the smallest of sales. 

We want a break. 

We need a break. 

Our body and our mind are demanding a break.

Don’t buy into it.

Most of us won’t see an uptick in business for some time to come.  Others may already be seeing signs of increased business.  Either way, now is not the time to relax.

Those of us whose markets aren’t in the process of turning—that’s most of us—must continue to aggressively work to generate business.  Our survival depends on it.  We are still in survival mode.  If we let up, we risk more than just losing ground, we risk putting ourselves in a position where we cannot recover.

Those lucky few of us whose markets already appear to be in recovery cannot afford to relax either.  Now is the time to continue to push.  Your competitors are feeling the same urge to take a bit of a break after a hard run.  They also feel that they deserve—and need—some down time.  Let them have it while you aggressively go after the little bit of new business that is coming into your market.  Take this time to expand your sales business while your competitors are sitting back congratulating themselves for having survived.

Whether we’re still in the midst of  a bleak market but are beginning to feel a bit better based on some of the economic news we’re hearing or we are in a market where we actually see some relief from the past downturn, our focus must be on charging ahead. 

Yet, we can all take heart knowing this won’t last forever.  Those of us who lived through the terrible Ford/Carter years of the 70’s and the Savings and Loan debacle of the 80’s can attest that no matter how bleak things may appear—and, boy, 18% interest rates and seemingly every S&L executive in the country going to prison made things look awfully bleak–the light does eventually shine through. 

Don’t let your guard down but don’t despair either.  You can get through this.  The demands of slogging through this recession and then taking aggressive advantage of an improving market won’t last a lifetime (although it may seem that way now).  You’ve come a long way in the past year or so.  You’ve done what so many haven’t—survived a terrible recession. 

No, it isn’t over. 

No, you can’t let up.

But you’re winning the battle and when the economy does recover, you’ll be in a position to expand your sales business—and your income. 

Take five minutes to congratulate yourself for your endurance, your determination and commitment to succeed.

OK, now back to work.

April 22, 2009

Guest Article: “I Think It’s Time for Me To Call It Quits,” by Tim Wackel

Filed under: attitude,Economy,motivation,sales,selling,success — Paul McCord @ 7:41 am
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I Think It’s Time for Me To Call It Quits
by Tim Wackel

I don’t know about your experience but I’m hearing so much economic doom and gloom that I think it must be time for me to give up and quit. The newspapers and television networks have convinced me (and almost everyone else) that we’re in a hopeless situation. I really wanted my business to prosper and grow in 2009 but I must be an idiot for believing there is any chance for success. I guess it’s time to turn off the lights, lock the doors and wait patiently for the economy to improve.

Or is it?

Maybe business development professionals everywhere need to answer these four questions (honestly) before tossing in the towel.

#1. How does this “recession” actually affect you? The National Bureau of Economic Research defines a recession as three quarters of falling real gross domestic product. This might be fascinating stuff to some people, but I can’t directly correlate “real gross domestic product” to my sales effectiveness.

Can you?

Even during a recession companies still have to buy goods and services. They may buy different, they may buy less, but they still have to buy. If you can’t convince prospects that what you’re offering is a solid investment with meaningful return, then maybe the problem lies closer to home.

#2. Do you really believe you’re on your customer’s speed dial? Customers are nervous just like everyone else; they’re reading the same headlines that you are. Sitting in the office waiting for them to call you isn’t going to help you meet your goals.

Reach out and contact everyone you’ve ever done business with. Show up with valuable ideas, offer help, look for referrals and ask for their business. This isn’t open season to “call and check-in” but it’s a great time to reconnect and nourish all of your existing relationships.

This may sound like a lot of work because it is. Very few people ever drift into greatness; it requires action.

What are you waiting for?

#3. Are you as good as you could be? Many sales people think that once they’ve taken a professional selling course, they’re essentially done with learning. That may be OK if someday your closing question becomes: Will that be paper or plastic?

Success as a sales professional requires skill, knowledge, attitude and purpose. If you’re not consistently developing yourself in these areas then you’re going backwards. There is no status quo.

There are more development tools available for today’s sales professional than ever before. Books, podcasts, tele-seminars, live training programs, webinars, personal coaches, downloads, sales portals and much more.

You can’t wait for your boss or organization to take responsibility for your success. It’s up to YOU!

It takes courage to admit you can be better and confidence to believe you can change. It takes nothing at all to create excuses.

#4. How much energy are you wasting on things you can’t control? The world surrounds us with headlines about inflation, bailouts, credit crisis, mortgage fiasco, recession, debt, jobless claims and on and on.

Are you concerned? I know that I am. But I don’t have much control over what is happening in the headlines, so why get tied up in knots?

This is a valuable lesson I learned as a kid on the farm. It’s a tough life and it sure doesn’t get easier if you worry all the time about whether or not it’s going to rain. All you can do is take care of the equipment, prepare the land, plant the seed, fertilize the fields and wait for the harvest.

And running your sales business isn’t much different.

  • Take care of the equipment (invest in yourself)
  • Prepare the land (make yourself known in all of your accounts)
  • Plant the seed (add value with every contact)
  • Fertilize the fields (take care of your customers)

Wait for the harvest (if you do everything else right, the business will follow)

Tim Wackel is hired by sales executives who want their teams to be more successful at blowing the number away. Tim’s “no excuses” programs are insightful, engaging and focused on providing real world strategies that salespeople can (and will!) implement right away. Sales teams from BMC Software, Cisco, Fossil, Hewlett Packard, Allstate, Thomson Reuters, Raytheon, PricewaterhouseCoopers, Catalina Marketing, Philips Medical Systems, Red Hat and TXU Energy count on Tim to help them create more success in business and in life.  Vist his website

March 10, 2009

Don’t Count on Your Company for Training in 2009

Filed under: business,Economy,management,Meetings/Conference,sales,Sales Management,sales training,selling — Paul McCord @ 9:58 am
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Brainshark,  a leader in on-demand presentations, has just released a survey of how companies will be handling training, travel and conference budgets this year.  For those who have relied on company training sessions and conferences for the bulk of their training, the survey doesn’t look good.

Brainshark found that about 40% of companies plan on significantly decreasing meeting and conference costs.  Worse, 67% of large companies surveyed plan on cutting meeting and conference costs.  Over 60% are cutting travel and almost 30% are cutting incentive trips.

What do these staggering numbers mean for you?

More than likely it means you’re on you own.

Certainly, some companies will fill the void with webinars, tele-conferences, or on demand training presentations.  Many others, if not most, will simply pocket the savings.

There is a whole generation of salespeople who have never sold in a declining market.

Even those of us who are grizzled and tested have allowed our skills to rust as we’ve sold in a strong market these last years.

What has been working isn’t.  What we relied on yesterday isn’t generating results today.

If we want to survive and possibly even thrive today, we have to adopt more productive strategies to find and connect with prospects.  We have to learn to engage prospects in ways they will respect and respond to.  We have to learn how to approach prospects that put us and our products in a position of strength.

If we simply do more of what isn’t working, we’ll simply get nowhere faster.

That’s the reality of today’s marketplace.

Salespeople and Sales Leaders

Unfortunately, Brainshark’s survey indicates that very likely your company won’t be helping you do that.

In 2009 you’re on your own.  And this isn’t the year to be kicked out of the life raft.

Sales Leaders and Meeting Planners

There are cost effective ways of getting your sales team ready to tackle this market.

No, you don’t have to spend a fortune on meetings and conferences.  The hard costs you save can be millions, while the soft costs tens of millions.

Whether you’re a salesperson looking for help and guidance or a sales leader or meeting planner looking to change your team’s fortunes, give us a call and let’s see how we can get your sales moving and your bottom-line flooded with income.

Call me at 432-853-8685 or email me at pmccord@mccordandassociates.com

February 26, 2009

Panic and the Rise of Micro Management—Killing Sales From Within

Filed under: business,Economy,management,sales,Sales Management,selling — Paul McCord @ 4:10 pm

I’m hearing more and more frustration from both salespeople and sales leaders as the slow economy increases the panic on the part of senior management.  Sales are slowing dramatically, profits are down or have completely evaporated, and the pressure is increasing on all levels to produce, produce, produce.

Along with the pressure to produce comes the micro managing of the sales team and its leadership.  Managers are having daily pipeline meetings with the members of their team.  Increasingly these meetings are getting uglier and uglier with increased threats if sales don’t increase.  Middle managers are having daily calls-in some instances two or more calls per day–with the managers under them as they want an accounting for each team member’s activities, including reviewing the sales status of each and every prospect.  Management is demanding detailed reports for each prospect.  If a salesperson deems a contact to be a non-prospect, managers are demanding the salesperson continue to pursue the contact in hopes of turning them into a prospect.

Each minute of the day must be accounted for.  Management is accepting no excuses for not closing a sale-bad credit, not a reason, get them to pay cash; no need, not a reason, create a need for them; want to wait to see what the market will do, not a reason, convince them that now’s the time to buy; cash flow issues, not a reason, get them to factor their receivables to get the cash to make the purchase. 

As salespeople get bombarded with threats and each second of their day is micro managed, they resort to discounting and trying to include as many incentives to purchase as they can in an effort to get sales to get management off their back.  They quickly discover that even if that creates a sale, it creates a new set of problems as they get a lecture about how the company doesn’t discount and their job is to maintain gross and if they can’t, the company will find someone who will.  Many managers resort to writing all proposals for their sales team to insure that they control every aspect of the sale.

 As morale declines and sales lag even further, senior management gives more and more directives, demanding greater control and more ‘accountability’ on each employee’s part.  When today’s demands don’t create the desired result, they’re added to or changed tomorrow, spiraling in a seemingly never-ending series of demands and threats, each more ominous than the last.

And sales plunge even faster than before.

Once management panics it seems impossible to stop the downhill flow of negative consequences.  The more pressure management feels, the more they try to spread the pressure downward, believing they can demand production via force. 

The process inevitably produces nothing other than a bigger hole from which the company must emerge.

If micro managing is such a negative force, why do managers resort to it?  They surly don’t teach these tactics in the top online MBA programs or top ranked campus program. The root cause may be panic, but the belief they need to micro manage their team is based squarely in a distrust of their employees-a belief that their salespeople and managers aren’t working hard enough, that the sales team doesn’t care enough, that their team is intrinsically lazy and is only looking for the low hanging fruit, not willing to get dirty and dig for the hard to find business.

If sheer force and threats don’t work, what can the management team do to stabilize-or maybe even increase–sales during this time of economic stress?

1.     Don’t panic.  Of course, this is easier said than done.  But panic leads to overreacting and bad decisions.  We need look no further than the US government over the past 6 months to see the consequences of panic-squandered opportunities, a diarrhea of ineffective spending in an effort to ‘do something now’ with little regard to the future, and a massive list of decisions that upon reflection many-even those involved in the initial decision making process-wish had never been made.

2.     Make an honest evaluation of the situation and communicate it to the entire team.  Employees are not stupid.  They are aware of the economic situation and they not only wonder what impact it has on the company, they speculate–and most often their speculation is far worse than the truth of the actual situation. 

Employees-and in particular the sales team-perform best when they know and understand the company’s goals and objectives and the obstacles standing in the way of reaching those goals and objectives.   The more clearly each sales team member understands the company’s needs and concerns, the more clearly they can not only understand where they fit in, but what they can-what they must -do to help address those needs and concerns.    If team members sense that the company isn’t communicating honestly with them, they begin to retreat into themselves, resisting the company’s entreaties and even the most dire threat falls on deaf ears.

3.      Formulate a comprehensive and workable plan that includes participation by all parties to address market conditions.  History is replete with examples of monarchs and generals who when faced with tough opposition retreat into a bunker mentality.  They become increasingly overwhelmed with circumstances, they become delusional, they begin to distrust even their closest friends and companions.  In short order they are totally isolated.  Their plans and orders have little to do with reality.

This same phenomenon happens in the executive suite. When faced with potential crisis, senior management will often retreat to their own mental concrete bunker.  Rather than seeking the wisdom and cooperation of their employees, they barricade themselves in, shouting orders through the barred door.

In our current economy where quality prospects are difficult to find and sales must be fought for, gaining the cooperation and commitment from staff is critical.  Senior management cannot survive on their own.  If they and the company are to survive, it will take the active participation of all the work force.  Consequently, the more ownership in the solution to overcoming the company’s obstacles each member of the team feels, the more committed to the solution-and to their individual contributions to the solution-each will be. 

4.      Commit the company to giving the needed support to accomplish the goals and overcome the obstacles.  When panic sets in, the cost cutting butcher knife comes out.  Management looks at every expense as a waste.  Can we use a shorter, less expensive screw here; can we make that piece of metal a little thinner?  Do we really need that much money in our marketing budget?  Slash sales training, its never done any good anyway. 

As the butcher of the executive office is in the midst of a budget-cutting orgy, critical resources for sales stability-much less sales growth-are apt to be gutted also.  While belt tightening is necessary when business slows, a finely honed scalpel is necessary, not a meat clever. 

Creating sales takes money.  Salespeople need the same resources in slow times to create sales as they do during hot markets.  Certainly gratuitous expenses such as client dinners and games of golf may be legitimate areas for trimming, but training, travel, clerical support, and other expenses that lead directly to or support the closing of business are not to be cut indiscriminately.  In fact, when it comes to training, prospecting, lead generation, and client retention expenses, the slower the economy, the more funds should be directed to those areas.

Times are tough.  That doesn’t mean that it is time for a management meltdown. 

There are solutions to slowing sales. 

Resorting to micro management and threats won’t produce anything other than disgruntled employees and slower sales.  However, gaining the trust, cooperation, and commitment of your team to address the issues facing the company-and by extension, themselves-can give your company the coordinated effort by all to weather this economic downturn. 

 

January 5, 2009

2009–The Year of the Hunter

Filed under: business,career development,Economy,prospecting,sales,selling,small business,success — Paul McCord @ 6:19 am
Tags: ,

If you’ve been selling for the same company or in the same industry for a number of years, you’ve probably ‘advanced’ from being a hunter to being a farmer.  You’re probably quite comfortable with hoe in hand, turning the fertile soil of your client database, getting the occasional referral, mining the network you’ve built over the years.  Life is good.  Maybe you’re not a top producer, but you’ve reached a point of security and comfort with a predictable income.

Likely, your days of trudging the open plains with shotgun in hand, seeking any viable prospect that wanders within sight are over.  You leave hunting to the youngsters.  Those days of leaving the comfort of your office in the morning wondering where your next meal will come from are long gone.

If this is you, you may be in for a shock this year.  You may well find that the fertile fields you’ve been plowing aren’t quite so fertile this year.  You may discover that no matter how hard you hoe, you can’t keep up with the weeds that grow like-well, weeds–in what used to be well groomed fields.  This year the soil may be rocky, the irrigation insufficient, the sunlight too scarce to generate the crop you have become comfortable with.

You might have to put on your hunting boots, take up your gun, and hit the trail once more.

And it might be the best thing that could happen to you.

Many of us take great pride in having developed our business to the point we no longer have to be hunters, constantly prospecting for new business, turning over every rock, looking behind every tree, spending countless hours cold calling and roaming the halls of networking events hoping to corner a live prospect.  That, we believe, is for new salespeople, those who don’t have a ‘real’ sales business, who must scratch and scrape for a commission check.  We are beyond that.

Sure, we get new business–not a great deal, and certainly not by hunting.  Our business is found by existing clients coming back for new products or services, or a client sending a friend or colleague our way.

New salespeople are faced with the challenge of creating business.  If they want to eat, they have to go out and find their food.  To this end they must spend the vast majority of their time hunting their next commission check.  They hit the phones.  They haunt the networking events.  They stick their business card on bulletin boards in cafes.  They desperately email spam, fax fliers all over creation, and do anything else they can think of that might produce a prospect.  They are hunters by necessity, not by choice.  They’ll take business wherever and whenever they can find it.  They’ll take good business or bad-and often it’s mostly bad.

Farmers, on the other hand, have made a choice-a choice of comfort and ease.  Farmers are comfortable   Farmers have reached the point where they work with those they want to work with and pass on those they don’t.  They knowingly, willingly, pass on business because they don’t want to engage in the activities they would have to engage in to generate new business.

But in economic environments such as we face this year, farmers run a very real risk of discovering their fertile soil has been blown away by the current economic dust bowl, leaving their fields insufficient to generate a full crop.

Farmers have three choices in today’s economy:

Move On: Like the proverbial Okies of the 30,s, a few will choose to move on, looking for the Nirvana of California, in this instance, another industry or another career.

Dig In: Others will try to dig in, work the soil harder, tighten their belt, and determine to just survive.  If the recession is short enough, they just may succeed.

Return to Hunting: Others, hopefully you and I, will relearn to become aggressive hunters once again.  We must reacquire those once well honed prospecting and hunting skills that originally got us where we are today.  We must step off the comfortable farm and get back into the hunt to grow our business.

Although the idea of becoming a hunter once more may at first be unappealing, there are a number of benefits we can realize by hitting the hunting trail once again:

  • Expand our business.  For most of us, no matter how large or well tended our farm, we could always do with more business.  Our business hasn’t grown as quickly as in the past because we’ve moved from a growth oriented salesperson to maintenance oriented account manager.  It isn’t that the business hasn’t been there, it’s that we’ve chosen not to pursue it.  And new business is there in today’s marketplace also-we just have to go get it.  And when our clients recover as the economy recovers, our original farm of business will still be there, ready once again to buy, only the farm will have been expanded, giving us more income and greater security for the future.
  • Sharpen Our Sales Skills:  Many of us have lost some of our selling skill as we’ve shifted from hunter to farmer.  During this time when we must once again become hunters, we must sharpen our selling skills also.  Not only must we polish those skills we’ve allowed to rust, we must learn new skills.  Many of us will have to catch up to a new world of social media, more sophisticated and critical prospects, and new opportunities to find and connect with potential prospects.  These newly acquired and polished skills will go with us as the economy improves–and if we’ll continue to use these skills as the economy improves, we’ll be able to grow our farm much quicker than we have in the past.
  • Serve Our Clients Better:  Whether we like to admit it or not, many of us farmers have become far too comfortable with our level of product knowledge-comfortable to the point that we are now lagging well behind many of our competitors.  In today’s environment as we hit the trail hunting for new business, we’ll have no choice but to sharpen our product knowledge.  We will be forced to become experts once again.  And that will allow us to serve our existing clients even better than we have in the past.

This year will be tough.  It will challenge even the most well established salespeople.  If we want to thrive instead of just survive, we’ll have to get our butts out of the office; we’ll have to become salespeople once again.  But if we do it, we’ll find that our business-and our clients-will be thankful for the changes it brings about.

November 27, 2008

In These Challenging Times, There’s a lot to be Thankful For

Filed under: attitude,business,Economy,motivation,sales,selling,success — Paul McCord @ 9:05 am
Tags: , , ,

As Bob Dylan said, the times they are a-changin.  My generation is entering what may be the second major cultural change era of our lifetime.  Much of the change that came out of the first era, the 60′s and early 70′s, didn’t turn out so well.

The first major era of change was brought about by my generation’s rebellion to the status quo.  This second era of change, if it happens, will not be brought about by President-elect Obama, but rather by the financial mess we’re facing.

No one knows what or to what extent this economic crisis will bring fundamental change to the US and the rest of the world.  Most of the predictions are dire, some catastrophic, and like most predictions, they will probably miss the mark by a wide margin.

Nevertheless, it looks like the table is set to see some very fundamental social and economic changes as we go forward.  Like all change, we’ll eventually find as we did in the 60′s and 70′s that some of the changes were good, some were terrible.

On this Thanksgiving, we face significant challenges.  Some have lost their jobs, many are wondering if they will lose them.  Home values are declining; the stock market fluctuates at a dizzying pace; everybody and their dog is lining up for a government handout.  Investment and retirement accounts have taken a tremendous hit.  Fear and indecision now rule in many homes and businesses.

For many of us in sales, the current selling environment seems hopeless.  We dread getting up in the morning.  We have to work harder to find prospects, work harder to earn their business, work harder to meet their demands.

It seems fruitless.  I know the difficulty each salesperson is facing.  I work primarily in the financial services industry.  Over the last months, I’ve seen over 60% of my major clients either go out of business, be absorbed by another company, or cancel contracts because they don’t have the funds for outside training.  Companies like Countrywide, Wachovia, Washington Mutual, Merrill Lynch, UBS, and others are no longer in existence in their original form or are drastically cutting costs, including training.

Yet, we have much to be thankful for.

We in the US live in a country that despite the economic situation is still one of the strongest economies in the world, an economy that has weathered many other crises, from the Great Depression to the 18% interest rates and double digit inflation or the 70′s and early 80′s to the real estate/savings and loan debacle of the late 80′s, as well several small recessions.

Companies are still making purchases, signing contracts, doing business. No matter what we sell, there is still a tremendous amount of business out there-we just have to find it.

Much, if not most, of our competition is getting weaker. Our competitors are facing the same obstacles we face.  They have the same issues, the same depressing news, the same tendency toward hopelessness and lethargy, the same inclination to pull back on prospecting and marketing.  If we overcome the tendency to slow down and feel sorry for ourselves and instead pick up the pace and become more active, we have the playing field almost to ourselves.

We have the opportunity to build a strong sales business that will create a lifetime of superior income and security. For those of us that persevere, aggressively seek out business, and build strong relationships built on honesty and trust, these economic downturns are an ideal time to build our business.  We must stay focused.  Instead of pulling back, we must increase our prospecting and marketing, sharpen our selling skills, improve our customer service and account management skills.  We must cut out the fat while increasing our investment in business building areas.  While the competition is going into hibernation, we must strike out with a well thought-out, aggressive expansion plan.

Business is tough, no one will deny that.  But the business is still there and we have the opportunity to build our business while our competition sleeps-and we should be very thankful for that.

November 4, 2008

Sell a Service? Now’s the Time to Shine

Filed under: Economy,marketing,sales,selling — Paul McCord @ 9:32 am
Tags: , , ,

Home sales-down.  Auto sales-down.  Travel for pleasure-down.  With the economy in its current mess, people aren’t spending on big-ticket items, at least not in the numbers of the past several years.  And it isn’t just consumers who are holding onto their dollars, businesses are also.   That means fewer copiers, high dollar software programs, plant and equipment expansions and acquisitions, and other significant outlays are being put on the back burner.

For Realtors, auto dealers, travel agents, and manufacturers, that’s bad news.  But bad news for one group is always good news for another.

If you’re in a service related business, your time has come. 

Car and truck sales down?  That means more business for repair and body shops. 

Fewer homes being sold?  More business for remodelers, painters, and fix-it companies.

Companies not investing in copiers?  More need for fast copy companies and copier repair companies. 

Even companies whose sales of new products are down can take advantage of the current economy.

Car dealerships can increase the promotion of their service, parts, and body shop divisions.

Software resellers can increase their training and support billing as more and more companies retain and upgrade their current systems instead of installing new systems.

HVAC companies can promote their repair services to help homeowners get another year out of their heating systems. 

The temptation in today’s economy is to pull back on marketing and promotion.  Cutting costs is paramount-but not at the expense of gaining new business. 

Instead of cutting your marketing expenditures, redirect your marketing to take advantage of the new market reality-people and companies will make due with what they have instead of purchasing new.  But when they decide to make due, they spend money on repairs and upgrades they wouldn’t have thought of investing in previously.  They don’t stop spending money on their car, home, or business, they just spend differently.

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