Fixing A Broken Salesperson

mattysilva

I'm looking for some suggestions regarding a continuous habit my company has of letting a salesmen go too long without a sale. The contract that each sales person signs at the start of their employment breaks it down as far as what is expected for perfomormance.... the bottom line of that being that we willl accept no less that a 30% close ratio. The problem is that it says nothing as far as what happens if a salesmen goes below that 30% mark.
I'm hoping that there are some suggestions out there as to how other remodeling company's are handling the situation to correct and fix a sales person, what systems you have in place to run your business by the numbers and catch it before it spins out of control and what they have in writing to their salespeople regarding performance vs corrective action.
thank you

Grumpy

I was in the same situation you were in not long ago. New company policy for sales reps.

January & February are freebies, there are no minimum sales quotas. March - Decemeber the monthly minimum for "Residential" sales is $35k per month.

If one month goes by that the minimum is not met then the sales rep is on probation. If two months go by then the sales rep is relased from employment.

I post a data sheet at the end of the month showing each rep's sales so everyone knows who is selling what.

marc

Grumpy,

What if the sales rep ran 25 leads in March with no sales but sold 35K on the 26th lead? Is that OK?

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Marc

mdshunk

I've noticed too many people trying to "fix" broken employees of all sorts. I think it's a pride thing... too proud to admit that they were just a bad hire in the first place. Maybe not the case in your situation... maybe the guy was a star at one time. A bad hire is not worth the effort to try to fix... fire them and hire someone who can, does, and will do the job.

mattysilva

You are correct. I am told that he was a star at one time but frankly I feel Like I'm looking at a car wreck when I hand him a lead (which we have stopped doing by the way until he is fixed or he leaves)
The majority of us agree that this guy needs to go and he will. But I definitely want to make sure that is says exactly what happens if you don't perform so future sales people know.

Mike Finley

How does a sales person survive financially month after month if he isn't selling and isn't making more than the legal requirement of you having to pay them minimum wage?

Oh, I guess you are paying him for not selling?

You don't have to fix a bad salesperson if you don't over pay them when they aren't producing if you have a pay plan that rewards the productive and punishes the unproductive, they will weed themselves out quickly.

Grumpy

marc, there are a ton of what-ifs and nothing is ever set in stone. This is simply the guideline I use, but ever situation is different.

In this hypothetical you pose to me I would have to say that in a $35k sale the rules of the game change. The commission is changed from a net sale based structure into a gross profit based structure. I do however understand the question.

The answer would be simple to me. I would retain them. I would let them know that I knew they could do it, and other various words of encouragement and I would encourage them to keep up the good work.

I would continue to watch them.. but the bottom line is numbers never lie. If I am losing money on them, one of us has to adjust or they have to go.


A big problem I have is the sales guy starts aggressive, then starts to slack once his first BIG pay check comes in. My sales cycle is a 2 month cycle on average so for two months their sales go down, then they get broke and get aggressive, and you can see the pattern. So setting the monthly minimums helps combat that.

Another thing that helps combat slack from big payout is retaining them commission if they get a big pay check. Let's say theya re getting paid for 7 jobs on one pay check, but their check is for $4k... well maybe I pay them for only 6 jobs instead of all 7. I'd pay them for the 5th job on the next check.

It's a friggin jig-saw puzzle managing and motivating sales people, because each one is different. There is no one size fits all solution.

mdshunk

Oh, my! How's that working out?

Grumpy

If yoau re trying to set an example then allowing them to fade away by no longer giving leads won't accomplish that. You need to sit them down, release them from employment and be profssional about it. Call a meeting the next day to either set or reinforce your company policy regarding sales quotas. Don't talk about specifics of the rep you just fired, just speak in generalities. They'll get the picture.

Grumpy

Haven't had a problem with it yet. They are getting most of their money, I am not stiffing them. If they make a stink about it, they'll get paid on it... but so far nobody has made a stink. I try very very hard to be fair to everyone I do business with and that requires an open line of communication. I may ask them instead of telling them, but the end result is the same.

Called Bill on Wednesday and asked him "Bill I am doing payroll right now. I owe you $x.00. Do you need all of that right now or can I pay half make it up to you on the next check?" Well Bill told me, "Yeah don't worry about it. Just give me a draw and I'll be fine." Obviously I have previously earned bill's trust. he knows he's going to get paid.

mdshunk

That's good to hear. I've always tried to never monkey with a guy's money, if it's due him. You've obviously got a system worked out that's okay with him/them. Granted, I don't pay salespeople, so I'm probably speaking out of turn. Interesting to learn about, just the same.

Grumpy

MD at my last job. I only recall ever asking my boss for a pay check once, and that was after I bought my first piece of property and literally sunk all my money into it. The rest of the time I kept a log of all my sales and crossed them off the list when I was paid for them. I got a spreadsheet with each check detailing which jobs I was being paid for.

I trusted him, he paid me fairly, and I didn't mind if he kept a few of my dollars for a few weeks. I had no doubt I would eventually get it.

Be fair to me and I'll be fair to you. I try to be fair to everyone and I expect the same in return.


If you think about it though, wouldn't a guy who needs all his money immediately each and every pay day be a sign of a larger problem? I mean yes it is his money and it is due to him, but for someone to manage their money so poorly or have zero trust in ME... that's a problem.

If they are due the money they will be paid. Make no mistakes about that.

mdshunk

Maybe, but to me, it's not so much that a person needs it as much as it is theirs. After all, the pay is the fundamental reason most people work. Payday is when it's dispensed. I'll be the first to admit that I realize that the ups and downs of a salesperson's pay may warrant a non-traditional method of dispensing pay. My personality would dictate that even if I handled money well and trusted you implicitly, I'd still want all my pay on payday. I can put it in my own account just as easily as you can hang onto it until next week.

Grumpy

Which is exactly why I said...The problem lies in the fact that it seemes that when a saleman's banks account gets too full they slack. This is not true for all salesmen, only the lazy ones. Everyon's got their own comfort zone and once someone is in their zone they relax.

If I were a larger company and NOT providing leads by spending $12k per salesman per year on advertising, I'd have no problem with the ups and downs of the individual salesman. However truth be told the company relies on the efforts of the salesman, which means I have to keep that up and down balanced and steady some how.

mdshunk

Do salespeople exist who have no comfort zone, and always want more?

marc

In 21 years of business, I've only met 1

BTW, The guy Matty was talking about is 3 sales for 42 leads. Personally I think he needs to go and so does Matty. He is well over $35K though. But I think a sales reps quota should be $100k per month. I don't know how anyone could live off commisions of $35K whether you pay him 10% or 11% or 20%

Grumpy, Is Rogers Roofing near you?

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Marc

Grumpy

Rogers roofing is a direct competitor.

I pay 11%. 11% of $35K is $3850 per month or $38,500 per year. Can you live on that? Sure ya can but not high on the hog. Hell when I was single and lived with my brother $40k was great.

That's why it is a minimum though. Truly my guys are above it, especially at the end of the year. However any less and I lose money.

MD, everyone has a comfort zone.

marc

We want all of our guys to make a minimum of $100K
That is the quota that they have to hit. We pay 10% so that means we want them to sell $1,000,000
It's not that dificult to achieve.
Ed Rogers did twice that last year. His nephew John is doing a great job at running the comany.

I sold over $800,000 last year and I'm also running the company
One of my business partners sold $1,200,000 and he is also the sales manager and trainer.
Seems to me that if your only job is to sell you should be able to sell $1,000,000 easily. All you need is 6 leads per week and a closing ratio of 30% at an average price of $11,000.
We give our sales reps more than that every week.
Our only problem is that we won't let them go fast enough and we waist leads in the process.

I have to tell you that NO I couldn't live on that. Maybe in 12 years when 2 of my mortgages will be paid off but not at this point.

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Marc

Grumpy

Marc, you could live on $38k a year, you'd just have to give up alot of the comforts you've become accustomed to. Hence your comfort zone is above that $38K. Though people can and do live on $38k a year, especially if the wife also works, just think about what some of your less experienced laborers might earn.

Our average sale is less than $11k. It's actually just above $5k. I was doing nearly 1 mil myself when I was a full time salesman, at half the average sale price by running more leads and closing at a higher percentage. You're preaching to the choir. Everything you claimed can easily be done. However I don't mind if they don't want to be top earners, as long as they meet their minimums. That's why they are minimums. My minimums will go up as my overhead goes up.

When I am interviewing a new sales rep, I ask them what they want to earn. I show them our average sale, use 25% as their closing ratio and show them how many leads they need to run per day. If I am ok with what they want to earn, and they are ok running the leads they need to run then we move onto the next phase of the interview.

LOL we totally pulled this topic off subject!

Tscarborough

The simple answer is, "No, you can not fix a broken salesman". A real salesman wants the money, but he sells because that is what he does.

You can certainly Break a salesman, though, by requiring them to answer to beancounter bullchit.

The only thing that a salesman should have to answer to is this: Are you selling. It doesn't matter if he closes 80% or 10%, so long as he meets goals. I don't care if he works 80 hours a week or 5, so long as he is meeting the sales goals required. Sales involves selling, and the methods to achieve that end can not be quantified to a system, and requirements for quantification are a hindrance for a real salesman, and a crutch for a poor one.