The Rules Our Sales Guys Live By

keg

it seems to me as a 'contractor sales' novice, that perhaps there are too many appointments involved in your sales process.

keg

grumpy, do you close at a much higher percentage than most of your other reps?

keg

i want to work for grumpy

marc

[QUOTE=DamionR;214465]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.

QUOTE]



We look at the same thing. You call it (ADL) we call it (NSLI) Net sales per lead issued
We require it to be at least $2800 That's approx. 10% of the lead cost.

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Onarooftop

ADL Awesome, I like that idea

Publisher1

Hmm, my main "rule" is on the hiring process. We've developed a pretty stringent system -- lots of people apply (because of reasonable but not excessive guaranteed salary to start) but only the person likely to do well in a 'pure commission' environment actually will get hired. Then we pay the promised salary.
We have two mandatory meetings per week. One is our general business meeting; the second is the sales meeting. Both meetings must not last more than 1 hour and use teleconferencing.
Because our sales reps work from their homes in different cities, excessive structure and close supervision won't work. They are given resources but must develop their own leads -- no 'protected territories' (though I will assign company generated leads on a territorial level). I'm not entirely satisfied with the consistency of my management system but equally don't want to stifle creativity and initiative. That is why this thread is interesting to me.

Publisher1

Hmm, seems this thread has been picked up in the U.K. See here:\http://www.constructionsales.co.uk/b...ales-strategy/

Vinny

This is a little aside of the "rules" subject but getting back to what Dick was saying, I'm not sure I can corrilate Dicks view of the 2 types of sales people.

IMHO a heavily salaried materials supply sales person is, to some degree, more often an order taker than a sales person, especially at that salary. I,m sure there are times a good sales person in that capacity can bring in more dollars or make more sales via being a "sales person" but for the most part they are order takers.

Long term relationships producing repeat sales from the same client are more likely to be the result of the company providing outstading product and or service as opposed to the sales person repeatedly re convincing the same client to buy time and again.

I have this exact scenario in place at my own buisness. We take in about 1/2 of our revenue from home owners (one time clients as a driveway will last 20 to 30 years) and 1/2 of our revenue from repeat clients such as landscapers, G.C.s and excavators in need of a paver guy.

I do not, and will not pay a commision on those repeat accounts. I pay a small salary to cover this activity because I can get a monkey to measure a job and use my price list to give a number.

I will pay a sales person a commission if they bring an account in that will become a repeat account but I pay it once only. After that it belongs to me. Then its my company, and the way the account is handled that keeps it in house. If they leave over a price issue then its probably not a price issue really and something the field staff did or didnt do. And if it is a price issue, we dont want that account anyway.

As far as commission goes, I pay it on the gross ticket for a new client (property owner) sale.

To me a professional sales person is someone that can take a prospect that has some interest in your product or service but needs to be conviced your company is the one for them. The proffesional sales person can get that prospect that said "i gotta think about it" to "YES".

If that sales person cant do that, why do they deserve a hefty salary that may be half of thier annual income while your field staff is laid off waiting for them to become a "friend" to the prospect.

We need sales, not friends.

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Carport King

I must say I like this post and recieved some good Ideals. It's nice to see everyone care about there sales staff so much. Nothing happens until something is sold.

In our company we have 3 divisions. Retail and wholesale and condominium.

Our most important employee is the one that answers the phone and she sets the appointment for all sales and design staff.

Our retail is paid on commission only and 8% is there rate
Our wholesale staff that sales to pool builders and home builders get 4%

I am the only condominium sales designer and I recieve from 6-10% pending on the project size.

Most everyone makes 100,000 and more in commissions. Some make alot more even one that makes 250,000 a year.

They all our given sales goals to meet each month and they all have laptops and printers in there trucks and all trucks are have GPS units. We track everything all day long. Over all we have 130 trucks.

To do the kind of volume we have to do everyone in our company has to be accountable.From the first phone call to the sale to permitting to installation to recieving the check.

And to do all this at this scale you need to track everything and make everybody accountable. One small detail can effect everybody in the system.

All 3 divisions have different meetings through out the week and once a month when bonus checks are given out everybody is there. From the head to the tail we all meet in between.

You create your own culture within your own company and it is exciting to come to work and bring it all togeather and work everyday to outdo the day before. That is a well balanced company and we are proud to be here.

parkerfairfield

Great comment

Everyone on this site should/could take something from this.

Specifically, the person answering the call. Grumpy ... figuring a system where the receptionist (whether it's the owner, or an 18yo) can schedule a customer is not that hard. For example, pick 3 mornings a week where the sales people leave their schedules open for Measure calls.... allowing the office to schedule it.

Printers in trucks rocks! It's cheap ... get an inverter, a printer, and a good trapper keeper to keep your paper from getting krinkled. Don't forget a camera for each person. (This assumes your sales guys all have laptops).

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As an experienced professional salesman and sales manager I definitely have an opinion here. I will start with a little professional background before I get into this. At my height of working for others I was “VP of Sales and Production” for a 20+ year old flooring company here in Atlanta. We we’re very well-known as we installed or repaired all of the hardwood flooring for every house on flip this house Atlanta Editions for almost 5 years. In less than 6 weeks I took or small sales force and increased sales, profits, and incomes tremendously. Our salesmen’s overall closing ratios went up by almost 30% and deals closed at the table increased by over 60%. This was after raising all of our prices by 25%.

10% of total vs. 11% of total plus Bonus
I don’t see how either of these percentages can work well for either company. Yes, giving a percentage of the job total will provide incentive to sell more jobs. The problem you run into is your salesmen giving a job away to get a deal on the table with no consequence. This is especially true when you require them to sell so many thousands of dollars per month. Think of it this way. Your salesman closes a $10k job for $9k. They lose $100 but they still make $900. Sure, they put a deal on the board for you; but at what cost?

Suggestion:
Pay your salesmen a commission based on total profit instead. I would also require my salesmen to have a standard closing ratio (percentage of leads sold) instead of a required dollar amount. Yes, you’ll have to make sure they know actual labor and material cost. Yes, extra training or a nice excel spread sheet can cost you a little time or money upfront. The benefits are great though. Your salesmen actually become responsible for their jobs and will spend less time calling in for numbers. I assume you’re not using a dedicated person for estimation because you questioned the measure then sell technique (which I definitely disagree with) suggested by someone else. As well, your salesmen care about how much the company makes because they’re getting only a cut of that.

Example: Please remember, I pulled these numbers out of my ass. Test it with real numbers.
Salesman (A) gets paid 10% of the total job.
Salesman (B) gets 1/3 of the profit.
Cost is $4200

Project sold at $5000 (Industry Low)
(A) Salesman: $500 | Company $300
(B) Salesman: $267 | Company $533

Same Project sold @ $6000 (industry Standard)
(A) Salesman: $600 | Company $1200
(B) Salesman: $600 | Company $1200

Same Project sold @ $7000 (Industry High)
(A) Salesman: $700 | Company $2100
(B) Salesman: $933 | Company $1867

As you can see, salesman (A) and Salesman (B) have the same incentive to sell at industry standard pricing. Salesman (A) has almost twice as much incentive to sell below industry standard but not much to sell above. Salesman (B) has huge incentive to sell above standards but not much to sell below. Yes, salesman (B) is more expensive as he makes you more money but he has more incentive to make you more money too! If you want to bonus them you should pay them for increasing their closing ratio.

My opinion on one appointment to measure then one to sell
In general I think this is a waste of time and money unless you’re measuring huge jobs that require lots of pricing and data. I believe deals that can be sold on the first encounter should be. I believe in building my company brand when they call, when you show up, as you discuss the job, as you measure, as you write the contract, as you go over the contract, and as you attempt to get it signed! The only time I would agree to come back to make the sale is if I know for a fact the customer is going to get more quotes or if I didn’t have a real salesman available to measure the job. Even then I’d be worried my prospect is going to run into a real salesman while I wait and cost me the deal. Didn’t you mention that you get 80% of your customers let you back in to do a sales presentation? That’s 20 out of every 100 opportunities lost! You’re there, your customer is there, they have a need, you have the answer, and they have a check book. Why wouldn’t you go ahead and take their money today???

BDiamond

To address the profit vs what the rep gets we tier out the commission.

We have a minimum that the job call be sold at to maintain the minimum margin. If the rep sells at that price he gets 10% of the gross sale. If he sells above that minimum he gets 30% of that overage. If he sells under that minimum than he is basically negotiating his commission. (Example: Minimum is $10K and he'd make $1000 but he sells for $9500 than he gives up $500 so the company maintains their margin and the rep still makes money.

If he negotiates where he doesn't make any commission he'll still get the volume for up to a $3500 monthly volume bonus. At the end of the day you have to protect your margin. If you don't the next time you look up you don't have one.....

2 hour sales meeting once a week for everyone. Everything else is done over email, fax, and scanners.

The rep has 9 key performance indicators. (Demo Rate, Close Rate, Sales Ratio, Average Sale, Gross, Green, Gross to Green, Self Gen Sales, and Profitability Factor.) They must meet hit at least 4 to keep their job.

We are a 1 call close environment. 80% of our biz is 1 call with 10% as referrals and 10% call backs.....

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