This is part 11 of our Marketing Series, for the related article please see our Marketing Articles section.
No doubt many of the story lines of our later day teenage Vampire movies have been derived from the real life dramas of sales reps. Certainly as a species they are viewed with contempt by customers and a necessary evil by business owners. When I first came to London I worked in admin support for a well-known Real Estates company (No prizes for guessing who) and I had the privilege, or misfortune, of sitting in on the weekly sales meeting. Seeing a room full of people being celebrated or chastised for that week’s results reminded me more of coliseums of ancient Rome, than the behaviour of a modern company. Certainly the public humiliation of underperforming staff was hard to stomach as each was encouraged to climb over the corpse of their fellow workmates to reach the prize.
Each organisation needs a department that generates new income and focuses on getting money in, otherwise any business would go under. Yet it is more the bonus fuelled culture, which encourages short cuts, which sometimes undermines the very business they are working for. It can be argued that the commission incentives did not serve the community or protect the banks in the latest financial crisis. Focusing on targets didn’t assist Stamford Hospital improve their standards of patient care? Certainly having a sales rep hassle a business owner so he can meet that month’s bonus target is NOT WHAT THE CUSTOMER WANTS. A business owner can tell from the desperation in a sales reps voice, whether they are interested in fulfilling their needs, or those of their monthly target.
I work in a technical area of sales and that has the advantage of a client base that just wants the relevant information in order to make a decision. They appreciate a demonstration of the product and expect you to highlight the benefits, but if you mislead the client, the chances are you will be found out. If sales reps see themselves more as facilitators in the negotiation process, to assist the customer to come to the right choice, then that enhances the brand and assists the integrity of the business. It is up to the business to create the best product on the market that the consumer want.
I’m not saying that people shouldn’t be rewarded for their performance, as there is no incentive if staff are paid the same, regardless of result. But maybe the reward should reflect more the benefit for the consumer than that of the organisation. When you have monthly sales targets based only on money coming in, then that just encourages a culture of greed. Sales reps generally are not loyal to a company and neither is the company going to keep staff who don’t meet their budgets. There is mutual distrust between both parties that sometimes hinders actually making a sale.
I have experienced losing a number of potential leads when other sales reps “put pressure” on the customer in order to obtain a signature. If you put an abstract figure on hitting monthly targets then that endangers a process that may take months to mature, and since monthly targets have more to do with satisfy accounting periods than the realities of customer expectations, then this scenarios seems even more absurd. This relates to our previous article in regard to pacing contact intervals so that it gives the client time to consider the proposal properly (Contact Management Systems: How they can go wrong). Certainly anyone who feels forced into a sale will end up resenting the process and switch to an alternative as soon as one becomes available. If the idea is to develop a long term relationship with a client, which generates more money in the long run (Marketing Series: An Introduction to Marketing), then the current sales practices are not conducive to this outcome.
As we covered in previous sessions, (Marketing Series: Customer Orientated Marketing) if the entire organisation is focused on fulfilling customer expectations, from accounting to logistics, then that should include the sales team. So maybe bonuses should be measured over longer periods and balance sales income with client satisfaction? If a sales rep had their bonuses paid over the period of a year, instead of a month then that would ease the pressure for a quick sale. Add to that a longer gestation period to allow a response from the client, that could directly affect someone’s remuneration, then you’ll have a customer focused sales team. Sound radical? By removing the pressure to rush a sale it allows the process to mature naturally AT THE CUSTOMERS CONVENIENCE NOT THE OWNERS. On top of that, can you imagine how quickly the good word would spread by clients who comment that bonuses are only paid when customers are satisfied? Word of mouth is still the best advertising any business could hope for.
In a few sales meetings, I have actually told clients directly that our product is not for them and recommended other alternatives. Madness in the world of sales. Or is it? You would quickly gain a reputation for honesty and having specialist knowledge of not only your own products, but those of your competitors or other substitutes. What does that make you? An expert in your field, which cares more about the result than money in your pocket. That is advertising you cannot buy. Obviously you need to be in a strong cash flow position, to not need the money now, and ride the financial waves.
There is no stronger negotiating position than being able to walk away from a sale. How many sales reps would do that, let alone be rewarded for doing so?
Obviously measures need to be put into place so that customers don’t take advantage, as the deal needs to be fair for all parties. This can only be successful if a business takes a long term view and wants to see a return on invest over a number of years, not months. But if you want to develop a customer base that will continue to buy from you, and recommend you to their contacts, that is what you need to do.
Make sure you have the capital to take the highs and lows but if you are in there year in year out, survivability is also its own form of advertising. This means a substantial change in culture as it means business and the sales community taking a long term view to make even larger returns.
Next in the series: Getting your goods to market.
Malcolm Ford has worked for over 5 years selling enterprise software solutions to SME business’s and advises sales teams on using CRM systems.