In the April 1999 issue of this magazine (page 56) I wrote an article that started out by telling the story of one supply-house salesman and the obstacles that were constantly being thrown in front of him by the top management at his company. The subject must have struck a nerve because I had dozens of calls and e-mail letters from managers all over the country who wanted to know more. (Unfortunately, I lost some telephone messages, so if I didn't get back to you, please try e-mail next time.)
As for the salesman I wrote about, I got a message from him yesterday. He had just decided to quit and go to work for one of his dealers. He says: "Despite a good year, I'm actually making less money today than when I started with the company back in 1991. And back then they paid my automobile expenses and health insurance."
I'm sure there is great rejoicing down at X Supply tonight. I can hear what's being said right now: "I'm glad he's gone. Never was a team player. A square peg in a round hole. Always telling us how to run our business."
However, if the firm's management ever takes the time to analyze what losing a long-term salesman does to a territory and the revenue/dealer losses that inevitably occur, I'm sure it would realize that someone should have tried to work out a deal to make the territory manager happy to stay where he was.
Remember, people don't buy from companies, they buy from people. And personnel turnover at any level is almost always bad for business.
How do you find good salespeople?This was one of the main questions asked in your letters and calls. I heard a wonderful public talk on that subject by the then-president of a national HVAC manufacturing company back in 1991. The answer, which makes a lot of sense to me, is to take chances. According to this top manager, the problem with most companies is that they seldom hire the best applicants for the job, especially when it comes to sales. They almost always opt for the "safer" of the choices and end up with "post office" employees. And if they should decide to hire someone who is motivated and different, that person will probably get fired or squeezed out because such people are usually described as "square pegs in round holes." The term "team player" doesn't come to mind when talking about them. They may be unorthodox and mouthy. Frankly, the best salespeople usually have egos as big as Texas. But if you want good sales and can stand the strain, take a chance on someone who doesn't exactly fit the mold.
While on that subject, I am reminded of one special salesman who worked for the manufacturer I just mentioned. He was outstanding. In fact, several of his customers contacted me as a magazine editor and asked me to come see what he was doing. There in northeastern Ohio he was helping his customers to grow their businesses (while growing his own) by using several unique ideas. No, he didn't fit the mold of an engineer who just helped design jobs and took orders; he actually got involved in customers' businesses. Did it work? Yes! Did customers appreciate it? Yes! What happened to him? He was fired. He was described by one company manager as a square peg in a round hole. I guess that person didn't listen to the president's fine talk.
What do your customers want in a supply-house salesperson? Ask them! I did several years ago, and the majority told me, "Forget the great engineering skills; give me someone who can show me how to make money."
How much should you pay?Any flat answer to that question without knowing your company profit margins, the type of territory, whether a salesperson is selling high-profit parts or low-profit equipment, and the amount of salesperson involvement would be silly. However, about 10% of a salesperson's total sales is an average, which includes benefits. So a salesperson selling $800,000 to $1 million a year (an expected average) would cost your company a total of $80,000 to $100,000 in salary, automobile costs, insurance, etc. If that seems high, either your loyal dealer base is too limited, or you're not trying to attract top people who will bring you top sales. If that seems low, good for you!
My advice is to learn to appreciate the square pegs. Give them room to try their ideas. Allow them the luxury of making a few mistakes and failing. Pay them enough to make a good living. Reward sales growth and keep rewarding it. Make all your sales incentives positive. Hold on to your best salespeople at all costs - no matter how badly they bug you. The whole story here is that of sales, profitability and keeping your customers happy.