Category: Business

Successful Selling in One Area Does Not Universally Apply to All Others

By Peter Lyle DeHaan

Frank had a successful sales career in one industry, but his desired career path wasn’t an option at that company. To pursue his dream, he needed to change employers. He soon landed a job as a sales manager, the next step in his career path.

Frank looked to apply the selling paradigms he learned—and successfully applied—at his prior job to his charges at his new job. When he told me his plan, I was skeptical. It struck me as impractical and unworkable at his new company—even though it had served him well in his prior sales position.

The strategy was simple. End one day by setting appointments for the next day. Since the contacts occurred over the phone, the goal was one appointment per hour, resulting in eight appointments each day. This provided eight opportunities to close a sale every workday. Then, after the final appointment of the day, begin setting appointments for the next.

Since he didn’t ask my opinion, I didn’t give him one—even though I really wanted to.

As I understand it, his sales team wasn’t impressed when he presented his grand idea. They gave him a half-hearted assent and made some effort to set appointments, but no one came close to the goal of eight per day.

After a month of him trying to hold them accountable, he abandoned his strategy. Notably, there was no overall measurable sales increase for the month, one person even sold less, and none of them were happy.

Not All Strategies Transfer

At Frank’s prior job he sold manufactured products to an identifiable niche market. Each existing customer in his territory would make ongoing purchases throughout the year. And each prospect in his territory needed what he sold. The question was whether they would buy from him or his competitors. Most ended up choosing him.

To meet with his customer base, he would visit them in their offices. Because of travel time, he could only set two or three appointments a day. It was easy for him to do because these meetings were with people who wanted to talk with him. In many cases they already knew what they would order when he showed up.

His goal was to build a rapport with each customer, supply the information they wanted, and offer strategic advice as needed. Then he would take their orders. Frank was professional, personable, and reliable. This allowed him to achieve success and earn a nice income.

Frank’s new company, however, didn’t sell a product. They sold a service. And each sale was a one-off; there were no chances to make repeat sales. Though there were occasional opportunities for later upsells, the more likely scenario was a customer scaling back to save money.

Setting appointments in this industry was also a challenge. Prospects were entrepreneurs or small business owners. They were busy, often out of the office, and hard to reach by phone. They’d call when it worked best for their schedule. That meant sales staff functioned primarily in a reactive mode. Prospects would call, and the salespeople would react. If they weren’t available when the call came, they might not get a second chance. For them, availability was the key to success.

Frank soon realized his sales training, experience, and success didn’t transfer to his new employer’s industry. He needed to revamp his strategy to better align with what his company sold and how its prospects functioned.

Key Differences to Consider

Product versus Service: Selling a product is different than selling a service. A product is tangible; a service is not.

A customer can look at a picture of a product or hold it in their hands. With their senses they can assess its functionality. A prospect can’t look at a picture of a service or touch it. They can only imagine how it might function and if it’ll produce the desired outcomes.

It’s much easier to sell a product than a service. Success in the first area does not guarantee success in the other.

Repeat Sales versus One-Time Purchases: Making a new sale to an existing customer is much easier than making a first-time close. Repeat customers understand the product’s utility and know your company. They’ve already made the buying decision once, so making a later purchase is an easy decision.

Successful salespeople are often effective because they can make recurring sales to existing customers. It’s much harder to find success when each sale is to a new prospect.

High-Ticket Items versus Low-Cost Purchases: The price of the product or service has two ramifications.

The first is the amount of commission. Ten percent of a hundred-thousand-dollar sale is much more significant than ten percent of a ten-dollar sale.

The second is the amount of work needed to make the sale. High-cost items may need several people at the prospect’s organization to sign off on the purchase or multiple rounds of approval. It may mean adding the cost to next year’s budget, which will delay the purchase for a year or more. Inexpensive items or services are open to spontaneous purchase and easier to sell.

Differentiated versus Commodity: If your product or service is different from what your competition offers, even unique, prospects who need it will eventually buy from you. All that’s needed is patience—which is a good reminder to never write off a prospect who doesn’t buy right away.

A commodity product or service, however, is available from multiple providers. This includes you and your competition—all of them. Prospects can buy from you, or they can buy from somebody else. It may come down to price, availability, or how well you connect with the prospect.

Sales Management Success Tip Recognize that sales skills that worked well in one job or industry may not readily transfer to another. Therefore, build on what you know to create an approach that fits each situation.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer Service, Sticky Sales and Marketing, and Sticky Leadership and Management featuring his compelling story-driven insights and tips.

Peter Lyle DeHaan is an entrepreneur and businessman who has managed, owned, and started multiple businesses over his career. Common themes at every turn have included customer service, sales and marketing, and leadership and management.

He shares his lifetime of business experience and personal insights through his books to encourage, inspire, and occasionally entertain.

Sales Compensation Requires Careful Consideration

By Peter Lyle DeHaan

Our company had multiple offices. Those in larger cities called for having full-time salespeople. At one of those offices, one with a larger geographic workforce to draw from, my ads always received a response. Yet not all respondents were good fits.

For one applicant, Jennifer, our in-person interview was going quite well. She currently worked in retail sales and wanted to move her sales skills into the business-to-business environment. Professionally attired, she conducted herself well, having an engaging personality and a suitable level of enthusiasm—coming across as neither desperate nor aloof.

The 24-Hour Rule

As our interview wound down, I wanted to hire her. Though I had never offered an applicant a job at the end of the first interview, I expected I would eventually do so. As a rule, I always make myself wait at least twenty-four hours to process my interaction with the applicant more fully to make sure I hadn’t overlooked something.

One time, however, I came close to breaking that rule, but fortunately I did not. Because the applicant came from out of town for her interview, I asked my operations manager to take part in the interview process. The applicant enthralled me but not my operations manager. Her apprehension over the candidate gave me a needed pause.

Fortunately, I resisted the urge to offer the woman a position on the spot. Instead, I told her I’d be in touch. In the hours after the interview, I considered her conduct. I realized I’d focused on her many good points and brushed aside the multiple red flags that went with them.

The next day it was clear she wasn’t a good match for our company. Hiring her was bound to produce conflict throughout her employment. She would be a high-maintenance salesperson. And, despite her confidence to the contrary, I doubted she could produce the sales results she promised.

I wisely decided to pass. This experience confirmed the importance of waiting at least a day before offering a salesperson a job.

How Much Do You Want to Make?

I had one last question to ask Jennifer before we wrapped up our interview. I asked, “How much do you want to make in this position?”

She had her answer ready and flashed a confident smile. Her response, however, shocked me.

Even though I had told her this was a salaried position with commission, she gave her answer in terms of an hourly rate. This revealed a disconnect between the entry-level job mentality of where she was at and the professional sales opportunity she applied for. Her perspective of hourly pay was misaligned with my salaried compensation paradigms.

More telling, however, was the low number she gave me. It was about twice minimum wage. Though I hadn’t given our salary range, what I planned to offer far exceeded that amount.

I knew she would be completely satisfied to earn our base pay. As a result, she’d have little incentive to work hard to close sales and earn a commission. This is because she’d already be making more than she wanted to.

Though I could’ve offered her a much lower salary—one slightly less than the amount she wanted to make—and thereby motivated her to sell, it wouldn’t be fair. And I wouldn’t feel right about it.

I wrapped up the interview and thanked her for her time.

Too Much

Though Jennifer disqualified herself by having low expectations, I’ve more often experienced the opposite extreme. These people cruised through their interviews but then ruled themselves out with their lofty compensation goals.

By design, I expected a successful salesperson to earn commissions equal to 35 to 50 percent of their base pay. In doing so, they could earn a good living.

Though they could surpass that amount and earn higher commissions, it seldom occurred—and never on a regular basis. No one ever earned a sales bonus that approached their base pay. It was the nature of what we sold, the amount of a typical sale, and the number of hours in a workweek.

One cocky applicant insisted upon a nice six-figure base pay. He claimed he was worth it. Regardless of if he was, I knew from experience that he’d never come close to making enough sales to justify such a lofty salary. It simply wasn’t achievable. Even if he accepted my offer of a much lower base, he wouldn’t stick around and would leave as soon as a better opportunity came along.

For him, I smiled and segued into my 100-percent-commission ploy. He backpedaled quickly. His overconfident demeanor disappeared, yet he held fast to his need for a high base salary.

Another slick-talking interviewee waved off my offer of commission. “I don’t need an incentive to motivate me. I’ll be more successful than anyone you’ve ever hired.” Of course, he wanted an astronomical salary as well. Our ensuing discussion about why I wasn’t open to his request became quite terse. The interview didn’t last much longer.

These are examples of why I always guard against sales candidates who try to convince me to do something I don’t normally do or doesn’t feel realistic.

Just as Jennifer set her sights too low and didn’t get the job, these two applicants—along with others like them—missed out because their expectations were unrealistically high for our industry.

Sales Management Success Tip

Never offer a sales applicant a job on their first interview. Always give yourself time to fully process how well they align with your company and goals. And never allow an applicant to sell you on the need to offer them a compensation plan that’s unrealistic for your organization.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer Service, Sticky Sales and Marketing, and Sticky Leadership and Management featuring his compelling story-driven insights and tips.

Peter Lyle DeHaan is an entrepreneur and businessman who has managed, owned, and started multiple businesses over his career. Common themes at every turn have included customer service, sales and marketing, and leadership and management.

He shares his lifetime of business experience and personal insights through his books to encourage, inspire, and occasionally entertain.

Desperate Times Call for Desperate Measures

By Peter Lyle DeHaan

Her words surprised me.

“I can’t run this ad!”

The rep’s response caught me off guard, but it wasn’t completely unexpected either. “I agree that it’s a bit unorthodox.”

“I might get fired if I publish this.” She fumbled for words. “Or we might get sued.”

“It’s just a classified help wanted ad,” I said. “What are your concerns?”

“Well . . . to start with, I doubt it complies with EOE requirements. And then there’s truth in advertising too.”

“I worked hard to write an ad that is both legal and ethical. I feel I’ve done that and see no reason the ad can’t run.”

She paused and let out a deep sigh. “Let me check with legal.”

I doubted their small operation had a legal department or even legal counsel, but it sounded better than her saying she was going to check with her boss. Though I’m sure that’s just what she did.

She agreed to call me back with the decision.

I waited.

As I did, I contemplated what plan B would be. Yet this was plan B, and there was no plan C. I only resorted to my unconventional ad because I was desperate to hire someone to handle our sales.

The office in question was in a resort town. We served area businesses and needed a salesperson if we were to grow and realize the market’s potential.

Currently, the operations manager was handling sales in addition to her other duties, but she already had too much to do. Responding to a sales inquiry was one more distraction from her primary role. And if she closed the sale that meant even more work for her and her team.

She had no incentive to handle sales inquiries and even less interest in closing a sale.

That’s why I needed to hire someone for sales. I’d been trying the usual approaches for months and had come up empty. That’s when I stumbled onto plan B.

Waitstaff and Salespeople

My idea was to target restaurant waiters. Here’s why a waiter would make a good salesperson.

First, a successful waiter knows how to interact with a wide range of people with different temperaments and expectations. They know who they can banter with, who wants to establish a rapport, and who wishes to keep a professional distance. The same skills are critical for sales.

Second, a successful waiter knows how to read people. Waiters not only listen to what the customers say, but they also tune into the tone of voice and are careful observers of body language. They’ve honed all three aspects of effective communication: words, tone, and nonverbal. They excel in each area. Sales staff must do the same.

Third, successful waiters receive generous tips. The expectation of a financial payoff from each patron motivates them to do whatever they can to maximize their tip. The same principle applies to sales. Commissioned salespeople want to maximize their commissions. Though waitstaff receive tips and salespeople receive commissions, both have a financial incentive to do their job with excellence.

But why would a successful waiter want to exit the restaurant industry to work for a 9-to-5 business? There are several good reasons.

The Benefits

The first reason is better hours. Restaurants schedule staff to work when people want to eat. This seldom fits working eight-hour shifts. It requires short shifts, long shifts, split shifts, and even double shifts.

The second benefit is a more consistent schedule. The work schedule for most restaurant employees varies from one week to the next. There’s a constant juggling of shifts and trading hours. This is ideal for a person who likes variety and is okay with their plans being flexible. Some people can build their life around an ever-changing work schedule, but few people can do so for the long-term.

Third is full-time employment. The nature of restaurants, with most of their activity happening around mealtimes, not only makes an eight hour shift unlikely, but it also requires a lot of part-time staff. But most people want full-time work—because they want full-time pay.

Fourth is protecting evenings and weekends. Though it’s not absolute, many restaurants—especially the upscale ones—do most of their work in the evenings and on weekends. Again, this is ideal for some people but not for most—and not for the long-term.

Working in business sales is a full-time, daytime, weekday job. It smartly addresses the downsides of working at a restaurant.

The Ad

A few days later, my ad contact called me back. “I can’t believe it,” she said, “but they approved your ad!”

It ran that weekend and for the next seven days. I waited for the calls to roll in. Five people answered the ad. Though I’d hoped for more, five responses were more than the none I had been getting.

Of the five, three were interested, two scheduled interviews, and one showed up.

Brandon, however, was not who I envisioned. He fell short of expectations. Yet he responded to my ad for exactly the reasons I theorized. He was tired of the restaurant schedule and wanted full-time, business-hours work.

He was the best candidate I interviewed, but he was also the worst. I hired him anyway. This wasn’t because he was a great match for the position but because I was desperate to hire someone.

The Results

We went through a few days of training, and I turned Brandon loose to work on his own. Brandon, I soon learned, needed on-site supervision, but I was seldom on site. For a while I checked in with him daily by phone, and he told me what I wanted to hear (his waiter skills coming through). But I doubted his veracity.

His results disappointed me as well, with his sales numbers only slightly surpassing the results of the office manager.

Because I was desperate, I worked with him to improve his sales, but the outcome didn’t change. He quit before I could fire him.

The Mismatch

I think my logic in targeting waiters was sound. The failure was that it didn’t apply to our company’s situation. We needed an employee who was self-motivated and needed minimal daily accountability. Had I been running a retail operation, with on-site management and day-to-day oversight, I suspect Brandon would have excelled.

Sales Management Success Tip

Never hire someone because you’re desperate. Better to be short-staffed than stuck with the wrong salesperson.

[In case you’re wondering what the ad said, I’m sorry to say that I don’t remember. But I can assure you it was a wonderful one.]

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer Service, Sticky Sales and Marketing, and Sticky Leadership and Management featuring his compelling story-driven insights and tips.

Peter Lyle DeHaan is an entrepreneur and businessman who has managed, owned, and started multiple businesses over his career. Common themes at every turn have included customer service, sales and marketing, and leadership and management.

He shares his lifetime of business experience and personal insights through his books to encourage, inspire, and occasionally entertain.

Ill-Conceived Incentive Programs Can Actually Hurt Sales

By Peter Lyle DeHaan

John was a salesperson who periodically visited our business. His company supplied specialized equipment to our industry, and we regularly bought from him.

He cultivated relationships with many people in the company, including me, even though at the time I was scarcely an influencer—let alone a decision-maker. Yet John paid attention to me, and I looked forward to his visits and the cordial friendship we shared.

John once told me that his company provided a decent base pay along with a commission. The base pay was enough to live on, but to go beyond that the commission was essential. When my company made a significant purchase from John, I assumed he would be ecstatic.

He was not. He was quite nonchalant about his significant sale.

“Won’t you get a nice commission?” I asked him in private.

He shook his head.

I gave him a quizzical look.

“I only get a commission if my sales exceed last year’s. And last year was a banner year for me, three times what I’ve ever sold in one year. I was the top salesman of the company and ranked high on the all-time list.

“I won’t be able to match that this year, not even close. That means no commissions.”

I considered what John said. “Does that mean you need to try to alternate between good years and bad years so you can at least earn a commission every other year?”

John again shook his head. “Last year’s sales number is my target going forward to earn any commission. And since my base pay is fixed, if I want to earn more, I’ll need to change jobs.”

John continued his affable interaction with our business, but he seemed to have lost his enthusiasm. His company’s commission plan had disincentivized their top salesman, serving to push him away.

Much later in my career, the company owner presented me with an intriguing incentive plan of my own. Though it wasn’t sales related, he intended it to motivate me to produce even greater results.

As he explained the criteria to calculate my bonus—which could double my already nice base pay—I planned what I’d do to maximize my bonus.

My eagerness didn’t last long, however, when he got to the last provision of the plan, a caveat. It said that the payout was contingent on company profits. That meant I could meet every objective and receive no bonus if the company had a bad year.

He never asked me what I thought about the plan.

If he had, I’d have told him that to work all year for a bonus but then not receive it would be the biggest demotivating factor I could face. As far as my long-term employment with the company was concerned, it would be in my best interest to not pursue the bonus, even though that’s how I was wired.

I ignored the goals of the incentive plan and continued to do what I thought was in the best interest of the business. Even so, by year end I did earn a couple thousand dollars bonus. But I didn’t care. I didn’t get my hopes up because I knew that each year was contingent on the company’s profitability.

My indifference toward the bonus surely perplexed my boss, but he never asked why the plan failed to motivate me.

My employer no doubt put that last provision in place because of a negative experience that another company owner had encountered. She had put her operations manager on an incentive plan that rewarded her for growth, effectively for sales and customer retention. The manager responded with diligence to the incentive and the company grew under her direction. She earned nice annual bonuses.

A few years in, the owner realized the operations manager would make more than she would—much more. The owner paid the agreed upon amount and dropped the plan. The operations manager soon left.

Sales Management Success Tip

The purpose of a commission or bonus is to motivate salespeople. Evaluate your plan from their perspective to ensure that it does, in fact, incentivize them. Make sure there are no provisions that would cause them to not do their best or that might provoke them to leave.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer Service, Sticky Sales and Marketing, and Sticky Leadership and Management featuring his compelling story-driven insights and tips.

Peter Lyle DeHaan is an entrepreneur and businessman who has managed, owned, and started multiple businesses over his career. Common themes at every turn have included customer service, sales and marketing, and leadership and management.

He shares his lifetime of business experience and personal insights through his books to encourage, inspire, and occasionally entertain.