When a Salesman isn’t a Salesman

A business owner decides to beef up his company’s sales talent. He forks out a hefty salary for a “proven performer” from another industry; then…nothing.

empty suitThe salesman (or woman) is glib, professional and hard working. The owner devotes more resources to marketing and lead generation in an attempt to make good on his investment. Still no results.

Frequently, the owner assumes the blame for the shortfall. After all, the employee earned huge commissions in his previous job. He sold to CEOs, or to high net worth individuals, or products that were ten times the price of yours. Why can’t he sell your stuff?

Sales is a relative term, and sales compensation is a relative measure. I knew a former tennis pro who had made a huge salary “selling” medical devices to surgeons. When he transitioned to selling OEM hard drives, he failed miserably. He had qualified leads, and heavy marketing to support brand identity. His skill, however, was in demonstrating to the doctors how they could work faster and more profitably if they insisted the hospital pay for his devices. Faced with cost-conscious purchasing managers who perceived his product as a commodity, he was lost.

The owner of a technology company shared this with me last week. He is looking for reps to sell managed services to large corporations. There are plenty of highly compensated salespeople in the technology world. What he has found, however, is that selling networking equipment, software or telecommunications gear has little in common with “invisible” services located in the cloud.

Both examples are similar. In the first, the salesperson moved from selling to an end user who was focused on technical issues to a financial buyer. In the second the shift is from selling a known solution for a known problem to selling change that is disruptive to an entrenched infrastructure. Other than calling both jobs “selling,” they have very little in common.

The technical aspects of presenting a solution to customers are basic to all sales, but that doesn’t mean that all sales skills are transferrable. Someone who was provided with qualified leads likely lacks the training for effective cold calling. One who represented a well-known brand may not be prepared to educate buyers on a need they haven’t yet identified. Selling to large corporations is nothing like selling to small businesses.

Choosing an effective salesperson has little to do with how much he made in a previous position. Translating his or her success to your business depends on who he sold, how he sold, and what he sold. If those three factors match your sales profile, then prior successes are worth considering.

My latest book, Hunting in a Farmer’s World: Celebrating the Mind of an  Entrepreneur, is now available in paperback, hardcover and Kindle. It is an ownership book, not a management book. Please click on the link above to see what business owners think of it.

Posted in Management, Marketing and Sales | Tagged , , , , | 2 Comments

2 Responses to When a Salesman isn’t a Salesman

  1. Ray says:

    Excellent article and very true.

  2. David Basri says:

    The days of the order-taking IBM salesperson of the 1980’s are long gone. While sales people can and should be well compensated, the majority of it should never be because of a hefty salary. Sales compensation may need to take into account a spin-up period, but most of the compensation should be commission or profit sharing, not salary. Order taking can be done by computers or employees in Accounting.

    David Basri
    http://www.pointent.com

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Four Generations’ Embrace of Technology

Technology is pervasive in the workplace. That isn’t a news flash; it’s just reality. When we have an IT or Internet malfunction, my employees are probably less than 20% as effective without their computers. They will catch up on some filing, make a few copies, and then talk about whether they should just go home.

With four generations in the workplace today, how you deploy technology to employees, and how it is utilized, becomes a substantial part of planning for productivity. Each generation has a different approach, and understanding it is critical if you want them to work together as a team.

office geneerationsBefore I go further, any generational discussion is by nature broad. I know advanced-aged seniors who live on Facebook, and GenXers who can barely find an on-off switch. They are just not typical.

The Silent Generation (1925-1942) were generally too young to fight in WWII. They are also called the Traditionalists. Although in their 70’s now, many are still active in the workplace. They are technology avoiders. It isn’t intuitive to them, and they are often afraid of breaking something. In the workplace, they may argue that the old ways are the best ways. Pens and paper are their friends. Many got through that entire VCR “fad” without learning how to record, and they hope other technologies are just as transient.

The Baby Boomers (1945-1964) are technology acceptors. Many are frustrated that they barely learn how to deal with the latest release of a gadget before they have to start learning another. They can handle computers and smart phones, but typically absorb just enough to make them functional. They will cautiously take on a new technology. but only after they are sure it’s going to stay around for a while.

Generation X (1965-1980) are technology adopters. They are likely to take pride in owning new gadgets; having the latest gizmo is a status symbol. Technology has always played a central role in their offices and communications. It is a tool, and one they can’t function very well without.

Millennials (1981-2000) are technology anticipators. It  is so entwined in their daily life that they are surprised when it can’t do something. If their device lacks a capability, they hit the Internet to search for the program, app or widget that will make it possible.

Four people, one from each generation, agree to meet at a festival. The Silent Generationer insists on a setting time and place for the rendezvous. The Boomer, running a bit late, calls one of the others on her cellphone, and asks that everyone be informed about her delay. The GenXer texts the entire group every few minutes with updates on his estimated time of arrival.

The Millennial doesn’t show up at the meeting place. When he catches up with the group an hour later, he is puzzled at their irritation. After all, he tweeted his change of plans, posted a picture of what he was doing instead on Instagram, and was easily locatable via GPS. What was the problem?

Implementing a tech upgrade used to be a matter of handing out the directions. Today, managing the users has become more of a challenge than the installation. Accept that their learning curves will differ, and that for some, nothing will ever be new enough.

My latest book, Hunting in a Farmer’s World: Celebrating the Mind of an  Entrepreneur, is now available in paperback, hardcover and Kindle. It is an ownership book, not a management book. Please click on the link above to see what business owners think of it.

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Measurement Isn’t Necessarily Management

“You manage what you measure” is axiomatic in business ownership. “Employees respect what you inspect.” Understanding performance and productivity by comparing it against past performance, industry norms or internal benchmarks is useful, but measuring something doesn’t mean that you are managing it.

As a basketball fan, I’ve been fascinated by the rise of metadata analysis in the NBA. last year a few teams subjected all their game film to computerized dissection. This year all teams are doing it. Measurements of a player’s performance have grown far beyond points, rebounds and assists.

Game films are now broken down  to calculate the speed with which a player brings the ball up the court, how many times he made a pass that led to a pass counted as an assist, how often an opponent penetrated inside and decided not to take a shot because of the defender in front of him, the number of defensive assignments missed, and scores of other indicators that were traditionally characterized as intangibles.

satisfactory performanceDoes converting intangible factors into statistics make them actionable? I guess there are some coaching opportunities, as with the missed defensive assignments, but other seem to be data collection for its own sake. Passed up interior shots, for instance. How many factors did the offensive player consider in his split second of decision making? Did he see an open man? Was a better play developing? Did the defensive player have help? Was the shooter typically comfortable with that spot on the floor?

You can’t coach an employee based on numbers that may or may not indicate a performance issue. Statisticians are fond of saying that congruence doesn’t indicate causality. Just because event B happens after action A does not necessarily mean that the action created the event.

In business, the danger of over-measuring is the temptation to act on specious information. Regional magazines are fond of publishing “best doctor” lists; but measuring outcomes isn’t necessarily an accurate approach. As one cardio-thoracic surgeon in New York pointed out, his practice was focused on taking patients referred by other surgeons who felt a specific surgery was too difficult to handle themselves. Not surprisingly, they all scored well above him in the number of successful outcomes, and he was far down the list of “best” in his field.

Measuring the percentage of leads closed by a salesperson is clearly a worthwhile exercise. Trying to refine that by weighing the initial quality of leads, tenure in the position, or lag time for submitting sales reports doesn’t product actionable data. It just builds potential excuses for not closing sales.

In my most recent book, Hunting in a Farmer’s World (link below), I argue against entrepreneurs trying to run their businesses strictly by the numbers. A few Key Performance Indicators or Flash Reports are usually sufficient to make major decisions. The numbers you review regularly should tell you if something isn’t going well. They are not supposed to tell you exactly what the fix is. Too much reliance on a boatload of data will cause you to discount your instincts. With Hunters, instincts are more important than statistics.

My new book, Hunting in a Farmer’s World: Celebrating the Mind of an  Entrepreneur, is now available in paperback, hardcover and Kindle. It is an ownership book, not a management book. Please click on the link above to see what business owners think of it.

Posted in Entrepreneurship | Tagged , , , | 4 Comments

4 Responses to Measurement Isn’t Necessarily Management

  1. David Basri says:

    I would agree that putting too much credence into deep numbers analysis is counter-productive. Mark Twain’s quote that, “There are three kinds of lies. Lies, damned lies and statistics.”, comes to mind.

    However, over time analytics can indicate trends in employees. One who consistently performs below other employees in whatever KPIs are being measured, needs remedial action. Trends can indicate employees who have a propensity for too much, or too little, risk. And so on. . . .

    While it is no substitute for management, experience or intuition, there is a role for analytics.

    David Basri
    http://www.pointent.com

  2. Todd says:

    You assertion that “you manage what you measure” maybe accurate in the extreme of over measuring and producing an avalanche of data that hide the reality of a situation but “you can’t manage what you don’t measure” seems to be a bigger problem with small businesses.

  3. Joel Fay says:

    Yes. The quantitative stuff that’s easy to measure is often not the important qualitative stuff to measure.

    When you measure something in your business…you’ll probably get the behavior you expect, and then some…

    • Is the measurement of “sales time with customer” getting higher sales? Lower sales? Or, more sales of easier-to-sell stuff?
    • Is the measurement of “customer service time,” driving faster service, or more errors and irritated customers?
    • Is the measurement of ancillary sales creating an erosion of the core brand?
    • Is the measurement of errors, increasing the inspection costs of a process?
    • Is the measurement of an already low “bad debt” cost driving policies hurting customer relations?

    Measurement of stuff in your business can be good. Just be careful about what you measure, and how it’s implemented. Be sure to ask…

    • What’s the goal?
    • How much will it cost to measure it?
    • How will it help the customer and the sale?
    • And, what will be the unintended consequences?

    • John F. Dini says:

      Excellent response, Joel. Measuring the impact of measuring is a sensible first step. Too often we put in “controls” without sufficient thought to whether we will be controlling the right thing.

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Employee “Rights” in the Workplace

The 14th Amendment to the Constitution of the United States, the “Due Process” amendment, is one of the most-litigated sections of that document. It is also the only one that specifically abrogates rights, broadly removing the right to vote or hold national office to those guilty of “participation in rebellion, or other crime.”

The due process language is better known for conveying rights to citizens. The key language in Section 1 is “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property…”

That language has been the basis of landmark Supreme Court decisions from Brown vs. Board of Education (1954 – the right for students of any race to have equal access to any public school), to Roe vs. Wade (1973 – legalizing abortion as part of a woman’s right to privacy), to Bush vs. Gore (2000 – requiring standardized vote counting between districts).

Roe vs. Wade was a landmark in constitutional law not only because of the decision on abortion, but also because the decision specifically enumerated  the “right to privacy.” I am not taking a position on the wisdom of the decision, that is too volatile for my concept of a business column. The modern approach to enshrining new rights, however, begins there.

Justice Byron R. White wrote a dissenting opinion on the decision. He said: “I find nothing in the language or history of the Constitution to support the Court’s judgment. The Court simply fashions and announces a new constitutional right…”

Since 1973, the concept of “rights” not specifically enumerated in the Constitution has become commonly accepted. The right to equal access for the handicapped is one example. The passage of the Affordable Care Act, while not specifically justified by constitutional argument, is based on the presumed right of people to access decent health care. Individuals routinely claim the right to be respected, even from strangers who have no basis for deciding.

Employee rights wordsEmployees have assumed a number of rights in the workplace over the last forty years. They have become so commonplace that few employers would dream of challenging them. How many typical employment policies from just a few years ago have become laughable today?

Rules against the use of company telephones for personal calls have been eradicated with BYOD (Bring Your Own Device). Except for secure worksites I doubt anyone can imagine a business that successfully prohibits employees from personal communications during working hours.

A mandatory physician note to justify any routine absence seems pretty heavy-handed today. We accept the employee’s right to personally determine whether he or she feels well enough to work.

Workers have the right to a safe workplace. That seems logical, and few would argue it, but it didn’t exist forty years ago. I tell younger owners stories of the jobs I did (before OSHA) that they think should have landed my ex-employers in jail for the obvious physical dangers involved.

Employees’ have the right to a workplace free of harassment or discrimination. Watching a few episodes of Mad Men illustrates the pre-EEOC environment fairly well.

There are many others. The right to do work that is meaningful and enjoyable. The right to use company technology to maintain personal networks. (Yes, still being argued in many businesses, but they are losing.) The right to recognition for doing a job well. The right to clear warnings and remedial plans before being terminated.

Small business owners justifiably complain about the increasing costs of compliance with employee rights in the workplace, but most of what we accept as a requirement of being a good employer today isn’t mandated by government rules. It’s driven by competition. What kind of employees would you have if your business was unsafe, uncaring and unreasonable?

My new book, Hunting in a Farmer’s World: Celebrating the Mind of an  Entrepreneur, is now available in paperback, hardcover and Kindle. It is an ownership book, not a management book. Please click on the link above to see what business owners think of it.

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The Tyranny of The Bad Customer

“The customer is always right,” or at least that’s what most business owners profess to their employees. We post it for all to see. “Customer satisfaction is job one.” “Our boss is the customer.” The most important person in our business is…you!”

But we all know it isn’t true. Sometimes a customer is unreasonable, dishonest, or simply just wrong. A small manufacturer we work with recently had one of his top five customers call with a request. “I’ve collected a bunch of your stuff over the last two years that we broke, or our customer broke and returned, or that we ordered but just didn’t sell. I’m going to pack it all up badly and send it back. You can make a claim to UPS for shipping damages, and give me replacement product for free.”

That customer was just plain dishonest. (The manufacturer declined the opportunity, although it took some agonizing before he made the decision.)

In another recent case, the customer was simply unreasonable. He called to express his dissatisfaction. The business owner first offered to remake his product, then to replace it with another, then to refund all the customer’s money. The customer refused any solution, but promised to take to the online rating sites to tell everyone how unhappy he was.

Common wisdom says that a satisfied customer will tell five people about his experience, while an unhappy customer will tell twenty. The numbers vary, but the point is people with a gripe are much more motivated to let others know about it. In the Internet, the number of people who may see that complaint is infinite.

What if the gripe isn’t valid? A recent court decision said that Yelp! should reveal the identities of anonymous detractors, since the owner of one business being slammed by 7 people (all using pseudonyms) couldn’t even tell if they were really his customers. Yelp! is appealing the decision, based upon a First Amendment protection of free and anonymous speech.

cyberbullyOne survey showed that businesses could expect a 4-star Yelp! rating to result in 9% less new business compared to 5-star competitors. This and other studies showing the importance of online presence cause may retailers I know to live in fear. They check Yelp!, UrbanSpoon, AngiesList, TripAdvisor, or other rating sites constantly, terrified that one unhappy buyer (whom they might not know about and can’t identify), will torpedo their cherished score.

My book on selling small companies, 11 Things You Absolutely Need to Know About Selling Your Business, has generally good ratings on Amazon. Seventy-five percent of the reviewers give it five stars, the rest giving four with one exception. He gave it two stars almost three years ago, and said he was being charitable (yeah…thanks). What makes me nuts is that his review always seems to come up first, and some people check it as helpful. I have no defense or ability to respond.

Anecdotally, competitors are using consumer feedback sites to damage reputations, customers are threatening to go to the web if their demands aren’t met, and some businesses are posting raves about their own company to inflate ratings. Yet, “I know it’s true because I read it on the Internet” still seems to be the standard for many consumers’ verification.

Have you been subjected to a rating site bully? Please share your story.

My new book, Hunting in a Farmer’s World: Celebrating the Mind of an  Entrepreneur, is now available on Amazon in paperback, hardcover and Kindle. It is an ownership book, not a management book. Illustrated with the stories of real entrepreneurs who faced challenges that apply to us all, it recognizes why small business owners are different from those who work for them.

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One Response to The Tyranny of The Bad Customer

  1. This is a great article and absolutely accurate! I represent a number of small to medium business owners and have owned businesses for many years and I find the credibility associated with online ratings to be quite shocking. As the owner of a law firm I continually stress about having a client get angry about a result in court one day and write a nasty online review the next, especially on a site that doesn’t allow users to delete reviews.

    I have one client in particular that has had to reinvent and re-brand his business a few times because of online reviews and another client that was the victim of a consumer complaint site and is spending thousands of dollars trying to resolve the claims, most of which are wholly unfounded. Yet another client had the ex-husband of a girl he went on a few dates with post that he was a pedophile and claim that his business utilized fraudulent practices and was being investigated. Sadly, those posts will probably never come down because no one wants to spend thousands of dollars suing someone who will fight a silly fight and declare bankruptcy at the end of it all. Unfortunately for one of my client’s ex-employees, he is willing to spend any amount of money to get her to remove comments she made online after he fired her.

    I would be surprised if employees or employers have analyzed the potential liability associated with posts and responses, or really any content they put online about another person. It is my opinion that most businesses should have new-employee trainings about this topic so as to avoid future problems.

    Business owners certainly do not often consider the impact online reviews can have on the sale of their businesses. Buyers can decrease the purchase price substantially if they have to fight bad reviews because getting enough good reviews to offset one bad review is time consuming and costly. Whether or not the review actually impacts the business is irrelevant in negotiations because a seller can’t really prove otherwise.

    Something new that is happening in the law is the use of reps and warranties associated with goodwill and how future reviews impact present covenants. We will be seeing a lot of litigation in the future over poorly written or understood reps and warranties in purchase agreements.

    Great article John!

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