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Salesmen VS Project Managers Who Sell

 
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Old 12-14-2016, 04:50 PM   #1
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Salesmen VS Project Managers Who Sell


Been kicking an idea around for a while, wanted to see if anyone does anything along the same lines and what their feelings were on it.

Currently the GM for a mid-sized company. 7 crews/30 installers in the field, 5 salesmen, 3 office staff. We perform a broad spectrum of services that have stemmed out of our core business so there is a fair knowledge base that we expect of installers and salesmen to know.

For the last 2 years I've been underwhelmed by the performance of the salesmen and have tried recruiting additional people but it seems like I've got the best I'm going to find already. My major gripe is in personal accountability for the contracts they are writing. Anyone here that deals with the "salesman character type" will know they are only about money going in their pocket and will say/do anything to make the sale go through... all the headaches after the client signs are then mine. Well, I'm getting tired of stomping out the little fires...

My thinking is to assign the personal responsibility to the guy selling the job and with it improve customer satisfaction by having one consistent point of contact. A project manager who would inspect the potential job, write the contract, procure the materials and visit the install/perform a final walk through.

Basically thinking about a PM with one additional hat, sales. Salesmen make 12% commission right now and average about $90k/yr. I'd want to give a fair base wage with a monthly sales bonus to the PM, say $40k/yr + 5% commission on what was sold. Looking back at my middle guy for 2015 still would've walked away with $86k.

Of course there would be administrative changes putting them on as employees rather than 1099's (payroll taxes, time off, etc) but I think that would be worth the end result. I have this vision that customers would be happier, jobs wold be more efficient and up-selling would occur more often...

...but perhaps I'm wrong. That's why I posted this long rant.

[TLR]
Should I swap 1099 Salesmen for salary Project Managers for a better result?
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Old 12-15-2016, 08:16 AM   #2
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Re: Salesmen VS Project Managers Who Sell


I like when the the salesman is also involved in the project, at a minimum at the kick-off and final walk-through. And should be available if concerns arise during the course of the project. That is why I usually work with subcontractors that are smaller and the owner is actively involved in selling and managing. That being said, how much time will your employee need on both the management and sales aspects and will this allow enough time to fill up your pipeline?

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Old 12-15-2016, 08:25 AM   #3
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Re: Salesmen VS Project Managers Who Sell


There's nothing keeping you from offering a percentage bonus to your current PMs for each job they land right now.

BTW, if the PM is out selling jobs - who is minding the crews?
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Old 12-15-2016, 10:39 AM   #4
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Re: Salesmen VS Project Managers Who Sell


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I like when the the salesman is also involved in the project, at a minimum at the kick-off and final walk-through. And should be available if concerns arise during the course of the project. That is why I usually work with subcontractors that are smaller and the owner is actively involved in selling and managing. That being said, how much time will your employee need on both the management and sales aspects and will this allow enough time to fill up your pipeline?
Our salesmen typically only stop by the job if there's something additional or a question about the contract. Like I said before their mentality is "If you're not paying me to do it, I won't do it" which I understand to a point. We, at one time, offered $100 extra to be there for initial set up and then for final walk through but they all wanted more and it only removed a few issues so was not worth it.

I guess my company is the "smaller sub you're used to" because the owner and myself are active in many different functions.

I would make the new PM tasks to visit their jobs once a day, procure needed non-stock items for their jobs and estimate new projects.

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There's nothing keeping you from offering a percentage bonus to your current PMs for each job they land right now.

BTW, if the PM is out selling jobs - who is minding the crews?
SmallTownGuy, I guess I should better explain how it's currently running?

Right now the owner and I do big ticket sales as well as all of the administrative duties and project management. I work 60+ hours a week and he just works as needed (sometimes sat and nights).

3 of the other salesmen are only 1099's who go to 4 or less appointments a day depending on season and volume and location.

Each of the crews has a foreman who acts as the lead on the job. A typical installation is between 2 days and 1 week so the owner and I try to stop by once unless there is an issue that requires more attention. Biggest PITA with this is the coverage area, we go from Mt Kisco NY to Staten Island to Montauk... sometimes the crews will be spread. Honestly I'd say the 2 of us get to about 80% of the jobs to do the handshake.
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Old 12-16-2016, 08:35 AM   #5
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Re: Salesmen VS Project Managers Who Sell


I would keep the positions separate but have clear written job descriptions for each role in the company and then tie their jobs and wages including commissions to performance. It sounds like the salesmen are not writing a clear scope of work or are missing items that should be included in the project. The PM should also have some flexibility in giving small items to the client to keep them happy. You could add a 5% contingency factor to each estimate to cover these items.
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Old 12-16-2016, 10:24 AM   #6
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Re: Salesmen VS Project Managers Who Sell


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Originally Posted by NJ Contractor View Post
I would keep the positions separate but have clear written job descriptions for each role in the company and then tie their jobs and wages including commissions to performance. It sounds like the salesmen are not writing a clear scope of work or are missing items that should be included in the project. The PM should also have some flexibility in giving small items to the client to keep them happy. You could add a 5% contingency factor to each estimate to cover these items.
But... as said that's what we have now... and it's inefficient.
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Old 12-16-2016, 11:52 AM   #7
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Re: Salesmen VS Project Managers Who Sell


4 appointments or less a day.
$90k a year
Zero responsibility post sale.

Where do I sign up? 😉

Change the commission structure. Give 6% at time of signing. The remaining 6% is at completion of contract. This 6% should be tied to the project achieving the desired profit.
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Old 12-16-2016, 07:18 PM   #8
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Re: Salesmen VS Project Managers Who Sell


A good PM could be a lousy salesperson. I've been both, separately and simultaneously. It sounds like some salesperson involvement through the production process is needed and probably some sort of incentive/penalty for the accuracy of their sale.

I'd be really careful about switching to a profit based share as that can easily result in salespeople digging through your financials and making your life hell if you're not super clear.

If you're assigning the leads then you could probably devise a system where the salesperson writing the clearest contracts with the highest customer satisfaction gets the best leads and they're assigned by standing. The company culture should dictate that the companies integrity comes before sales commissions.
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Old 12-17-2016, 11:48 PM   #9
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Re: Salesmen VS Project Managers Who Sell


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A good PM could be a lousy salesperson.
and most people in the trades are lousy in sales. I'd not want to be in sales and have half of my income dependent upon something I have no control over--the process after they sign the contract.

If tradespeople do lousy work, you fire them. If salespeople are coming up with lousy numbers, fire them. If salespeople are coming in with too high of numbers, the customers will fire them.

For the OP, if you are branching out, doing more and more different things, then you are now requiring your sales people to know more and more about things they usually know minimal about in the first place.
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Old 12-18-2016, 09:46 AM   #10
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Re: Salesmen VS Project Managers Who Sell


Variable rate commission based on a rubric. If jobs don't go well they don't make much. If they go great they make more.
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Old 12-18-2016, 09:09 PM   #11
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Re: Salesmen VS Project Managers Who Sell


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Variable rate commission based on a rubric. If jobs don't go well they don't make much. If they go great they make more.
With a good system, this is the best way but it's easy to lose good salespeople with a bad system. If all works out the right way the salesperson sees the advantage of knowing their stuff and working with the PM's to sell the best job they can. If it goes south, the salespeople feel like they take a pay cut on jobs that go badly, even though it's out of their control, when everyone else, who actually messed up, doesn't. That happened to me and I almost quit, luckily they made it right.
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Old 12-18-2016, 10:02 PM   #12
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Re: Salesmen VS Project Managers Who Sell


Sales and project management typically attract two very different types of people. There are some standouts that can both well, but the reality is that most can typically only do one side well and are mediocre at the other. Different skillsets make them each successful.


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Old 12-18-2016, 10:35 PM   #13
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Re: Salesmen VS Project Managers Who Sell


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With a good system, this is the best way but it's easy to lose good salespeople with a bad system. If all works out the right way the salesperson sees the advantage of knowing their stuff and working with the PM's to sell the best job they can. If it goes south, the salespeople feel like they take a pay cut on jobs that go badly, even though it's out of their control, when everyone else, who actually messed up, doesn't. That happened to me and I almost quit, luckily they made it right.
Their is always the risk that a salesman will be blamed for the failures of production. There has to be a great and honest method to evaluate how well a job was set up. The problem is that the flip side is more dangerous.

A salesman missing out on a few thousand dollars because of errors caused by production is a bad situation. It's not nearly as dangerous as jobs being sold with half cocked plans so a salesman could make a few thousand dollars, causing production to look like they blew the budget by tens or hundreds of thousands. The reality is they didn't blow the budget, they just never had a chance.

If a job goes seriously negative there needs to be a meeting between a project manager, salesman and a manager to decide what caused the loss.

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