The Rules Our Sales Guys Live By

 
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Old 03-17-2007, 09:23 PM   #1
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The Rules Our Sales Guys Live By


In talking with Marc in another thread it got me to thinking... What rules do you force your sales guys to live by?

Marc and I were discussing mothly minimum sales quotas. His guys must sell 100k a month, mine only $35k. However his are paid a flat 10% and mine are paid 11%, but bonused for hitting monthly sales targets.

I worked somewhere where all reps had to be in the office every day no later than 7 am, and if not they had to clear it with the sales manager the day before.

I allow my sales guys to show up at 8 am, because the office is small and it allows all the production guys who come in early to finish up their meetings and be on the road. I also allow the sales guys to come in every other day, only requiring them to come in every day at the beginning of their training.

I provide my sales guys with office space, infact I prefer if they come into the office. Some people want their sales reps to work from home and fax in orders.

Some companies have mandatory weekly sales meetings where all the reps must attend, I find these to be a waste of time and only call such meetings when something of great importance much be discussed.

That was just an example of how companies vary, just curious what rules and regulations you force on your sales people?
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Old 03-18-2007, 04:57 PM   #2
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Re: The Rules Our Sales Guys Live By


I would like to have some salesman running out for me, But its just me running appointments and Im trying to change that. I just thought I would respond to this Grumpy, even though I am not answering your question, I thought your post should get a response since your always willing to help people with your sound advice.

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Old 03-18-2007, 05:23 PM   #3
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Re: The Rules Our Sales Guys Live By


Those rules and wages may be fine for the retail/boiler room/short term quota system, but all you get is the run of the mill people to accomplish what you want.

A revolving door runs in 360 degrees. Of those that go out, some go down and some go up. A good salesman will be gone quickly.

It takes little management skills if you use quotas and rules and that is why there are so many average to slightly sucessful organizations.

I would never hire a person for such a low salary, becuase the numbers just do not work if you want real profit instead of some volume.

Any decent salesman in the construction industry will never work for less than about $75,000 ($60,000 bases plus at least $15,000 incentives for an average performer) for a start. He should also have the potential to make 150K/year or more. The short term (3 to 6 months) is balony unless you want to replace with someone else for so-so sales. Management is what makes sales and profits.

I woulf love to have a salesman make $150,000/year because that means profit if the incentives are stuctured properly for the future.
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Old 03-18-2007, 05:31 PM   #4
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Re: The Rules Our Sales Guys Live By


A salary is money given to do a job regardles sof hours or effort. A commission is something deifferent. I don't give a salary, and sales should NEVER be a salaried position.

So Dick, what are the rule you set upon your sales guys?
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Old 03-18-2007, 06:20 PM   #5
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Re: The Rules Our Sales Guys Live By


oops, messed up on editting.

Last edited by Brian; 03-18-2007 at 06:22 PM.
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Old 03-18-2007, 06:20 PM   #6
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Re: The Rules Our Sales Guys Live By


Quote:
Originally Posted by Grumpy View Post
A salary is money given to do a job regardles sof hours or effort. A commission is something deifferent. I don't give a salary, and sales should NEVER be a salaried position.

So Dick, what are the rule you set upon your sales guys?
I agree, and would argue that the same essential idea should apply to production. Effort and results matter more than anything.

I pay a 10% commission for sales. I haven't been setting monthly quotas. When I hire a salesman we discuss his desired income. If that is high enough to meet my needs, I figure he won't be around if he isn't making his income.

Having said that, I don't have an issue with quotas. A salesman must perform, or he's burning leads.

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Old 03-18-2007, 07:24 PM   #7
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Re: The Rules Our Sales Guys Live By


I never thought of it as rules but I guess they are.

We use a 2 step selling process

Measure call (this is to measure the job and measure the prospect) we will do this with just 1 person (the goal of the measure call is to become the expert in the home-owners mind) we want the home-owner to tell his or her spouse/lover/partner when they get home "Honey, we met our contractor today. I just hope we can afford them."

Sales call. (This is when we will only visit with ALL the decision makers.) This is when we will tell them our company story, show them samples and finally give them a written (ESP) Effective Selling Proposal. We will ask for the job at least 5 times unless the say yes on the first or second time. When they say yes, it's time to shut up and get a signature and deposit.

We require the sales rep to set the sales call appointment.

We require sales reps to call the office after a measure call and give us the sales call date and time.

We require sales reps to call the sales manager after every sales call and discuss what happened.

We require the sales reps to be at a weekly sales meeting every Tuesday at 10am.

If we need help at an event the sales rep is required to work it. We try not to have reps at events because they try to qualify, but sometimes we are short handed and the reps are required to work. They are told to work, not asked. The leads that they set are theirs though. They are not given to anyone else.

Our minimum sales requirement is $1,000,000 but not all sales reps hit that. (this is an area that we need to fix)
One of the questions in our interview is how much do you want to make. Anything under $100,000 is a red flag and we don't hire that person. IF you send us a reume and it says anything less than $100,000 we wont respond.
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Old 03-18-2007, 07:36 PM   #8
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Re: The Rules Our Sales Guys Live By


Quote:
Originally Posted by marc View Post
We require the sales rep to set the sales call appointment.
I require the same. Do you measure your shrink? I have found that quite often we can't get a call back when trying to set appointments. I sometimes set the appointments for the sales reps but I prefer to give them freedom... however I know that freedom is costing me money.

Or am I misunderstanding and you are saying someone sets the measure call and then the sales guy sets the sales call? Do you have a shrink here, where you don't always get to present to those jobs you measure, and if so what do you do? Also who does the measure, the same sales rep?
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Old 03-18-2007, 08:14 PM   #9
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Re: The Rules Our Sales Guys Live By


Grumpy -

We operated in a different world than you. There is a difference between peddlers and professional salesmen. The thought of no salary was rediculous and could not worked in any way in our situation.

My salesmen sold materials and called on established contractors and not on the public using referals. They had a reputation to build and maintain, so the time frames were different. Because of this, pride, success, friendship and accomplishment became very important. They were also a part of a team, so the two of them were not the only reason for $12,000,000 in annual sales.

When we were sold out, one was told to use his golf membership every day (avoid problems), but he still ended up on jobs we were supplying and on jobs supplied (poorly) by competitors in order to be ready for the next year or two. The other did not want to entertain cutomers, so he went fishing on the customers boat. Both sold by making money for the contractors after they got the jobs and by getting them new jobs.

They had a more difficult separating business from pleasure on their expense accounts than I did when it came time to approve them.

When I used the term 'professional saleman", I was not being critical, but defining the position. On one $400,000 project that we were not the low bidder on, one salesman and my self did some work and justified getting another 15% from the GC due to labor savings. After the agreement and five minutes of talk, the salesmen tore up the revised agreement and got another 5% from the G.C. that felt it was worth it. - That is a salesman!
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Old 03-18-2007, 08:29 PM   #10
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Re: The Rules Our Sales Guys Live By


My experience is more in line with ConcreteMasonry's, with one exception: I always pushed for 100% commission based upon GP as I always felt I made more money that way. Base is nice, but is not needed so long as all expenses are covered and not nickled and dimed. My definition of "business expense" is thus: Anything I did that I would not be doing if it was not business. The fact that I like to golf or hunt or fish does not mean that I am not working when those activites involve a customer.

My self imposed guildlines were always more strict than any company I ever worked for:

At work by 6:00 AM on jobsite, or 7:00 AM at the office.
At least 1/2 a day in the office per week.
10 jobsite/office calls a day, minimum.
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Old 03-18-2007, 09:01 PM   #11
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Re: The Rules Our Sales Guys Live By


Quote:
Originally Posted by Grumpy View Post
I require the same. Do you measure your shrink? I have found that quite often we can't get a call back when trying to set appointments. I sometimes set the appointments for the sales reps but I prefer to give them freedom... however I know that freedom is costing me money.

Or am I misunderstanding and you are saying someone sets the measure call and then the sales guy sets the sales call? Do you have a shrink here, where you don't always get to present to those jobs you measure, and if so what do you do? Also who does the measure, the same sales rep?

I'm not sure what your talking about when you say shrink. I have a marketing manager and office manager that set all of the measure calls. I won't let a sales rep do it because IMO they will try to qualify it. By doing that, all they do is disqualify. They do set the sales call and are required to set it during the measure call. We expect that 80% of measure calls will become sales calls. There are some jobs that either we don't want or can't do. We stick to what we can do best and leave everything else. All non sales are called back by our marketing manager to see if we can possibly save the sale or to find out if the rep is doing his job correctly.
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Old 03-18-2007, 09:13 PM   #12
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Re: The Rules Our Sales Guys Live By


Given that it is a different market, I would not work for you for a week:

"All non sales are called back by our marketing manager to see if we can possibly save the sale or to find out if the rep is doing his job correctly."
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Old 03-18-2007, 09:28 PM   #13
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Re: The Rules Our Sales Guys Live By


Shrink = the ammount of customers who make a contact for an estimate but a presentation is never made (either first or 2nd presentation). For example. Joe Smith calls, and Joe says he wants an estimate. I tell Joe that Bill will call him back to set the appointment. Bill exercises our 3 day rule and tries to call joe each day and email him as well... but Joe never calls back. That is shrink.

I would also define shrink as Bill goes and meets Joe and measures the job then tells Joe he will be back and bring the proposal, but Joe either misses the appointment or refuses a 2nd appointment "Just send the proposal" that sort of thing.
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Old 03-18-2007, 09:41 PM   #14
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Re: The Rules Our Sales Guys Live By


[QUOTE=Grumpy;212493]Shrink = the ammount of customers who make a contact for an estimate but a presentation is never made (either first or 2nd presentation). For example. Joe Smith calls, and Joe says he wants an estimate. I tell Joe that Bill will call him back to set the appointment. Bill exercises our 3 day rule and tries to call joe each day and email him as well... but Joe never calls back. That is shrink.
QUOTE]


If you have Joe Smith on the phone, why wouldn't you just set the appointment with him? Do you honestly think he wanted to hear, "Well I'll have Bill call you to set something up"? Nevermind that Bill is just going to try to disqualify the guy.
Personally I think he called expecting to set an appointment. I would have to think that you lose a lot of business this way. One lost appointment would drive me out of my mind. I've got to tell you. I hear a lot of good things from you but this isn't one of them.

To me that would be like doing a home show and just taking names. Why not set the appointment? Everyone else is taking names. Seperate yourself from them.
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Old 03-18-2007, 10:19 PM   #15
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Re: The Rules Our Sales Guys Live By


The answer is simple. When ever I set an appointment, I would say 50% of the time I end up running it because I end up double booking someone and nobody else is available to run it. In addition I don't have enough time in my day to do what I already have to do, setting appointments for 3 guys besides myself just isn't going to happen.

When I had appointments set for me, I ended up spending way too much time driving because someone with zero time management skills and perhaps totally geographically impared sets the appointments. I hated it having someone else tell me where to go and when to go there.
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Old 03-19-2007, 07:20 AM   #16
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Re: The Rules Our Sales Guys Live By


i only have two salesman but i require them to bring in 30% of thier own leads. never had to worry much about closing % because they are both doing fantastic however i do keep track of them with charts graphs and meetings the leads i do issue them are set by them from thiert home office. 1 makes 15% commish the other 12% they are in constant competition with each other. sometimes when they are overlaoded right now for example 1 guy is booked 2-3 aday for the next 2 weeks so he faxed up his schedule and my girl at the office is now sitting the appointment for him. but he wil;l take back over if things slow down. we only shoot for 2 a day around here rural area take times to get from piont a to b hope this helps
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Old 03-19-2007, 10:06 AM   #17
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Re: The Rules Our Sales Guys Live By


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i only have two salesman but i require them to bring in 30% of thier own leads. never had to worry much about closing % because they are both doing fantastic however i do keep track of them with charts graphs and meetings the leads i do issue them are set by them from thiert home office. 1 makes 15% commish the other 12% they are in constant competition with each other. sometimes when they are overlaoded right now for example 1 guy is booked 2-3 aday for the next 2 weeks so he faxed up his schedule and my girl at the office is now sitting the appointment for him. but he wil;l take back over if things slow down. we only shoot for 2 a day around here rural area take times to get from piont a to b hope this helps
Are they generating their own leads via refferals and door to door?
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Old 03-19-2007, 01:50 PM   #18
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Re: The Rules Our Sales Guys Live By


both but to tell the truth i don't care how they gen leads as long as they do it!
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Old 03-21-2007, 10:11 PM   #19
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Re: The Rules Our Sales Guys Live By


Here's an idea that you guys might wanbt to think about... instead of quota's... or closing percentages...

look at the Average Dollar Per lead (ADL).

If I give a salesguy 30 leads a month... and he sells $90K in gross.. his average dollar per lead would be $3000. That means that no matter what the circumstances... the good, the bad, the whatevers... I know the company will bring in $3000 for every lead we give the salesperson.

The other nice thing about this is it eliminates false numbers. If I close 80%... but every job I sell is undercut with little profit - would you be happy? If I sell super-fatjobs with lots of profit - but am sparatic in my closing - would you be happy?

This number tends to be a much better indicator of true performance in your sales staff.

Something to think about....
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Old 03-21-2007, 11:47 PM   #20
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Re: The Rules Our Sales Guys Live By


Quote:
Originally Posted by Grumpy View Post
I require the same. Do you measure your shrink? I have found that quite often we can't get a call back when trying to set appointments. I sometimes set the appointments for the sales reps but I prefer to give them freedom... however I know that freedom is costing me money.

Or am I misunderstanding and you are saying someone sets the measure call and then the sales guy sets the sales call? Do you have a shrink here, where you don't always get to present to those jobs you measure, and if so what do you do? Also who does the measure, the same sales rep?
less 'measurment calls' would not turn into 'sales calls' if the right person would do some appropriate selling the first time around, correct?

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