We’ve all read countless cautionary tales about once-mights companies that lost their way. The horror stories usually blame products that haven’t kept up, dumb acquisitions, weak marketing strategies, byzantine decision-making procedures, or overloaded debt structures.
There’s another major reason companies hit the skids, and I have yet to see the first word written about it: mismanaging the sales force. Well, here is that first word and a few more besides.
1. Add more salespeople. – A car dealer in a midsize city has a very prosperous dealership. He had five salespeople, and they all made really good money. The owner was getting rich, but he wanted to get rich faster. “If I can make this much money with five salespeople, I can make twice as much with 10.” Good arithmetic, bad idea.
2. Cap their earnings. – Smart companies take pride in their sales forces and believe strongly in the rainmaker concept. They know and understand there are no jobs until someone makes a sale. They establish a direct, specific, and absolute correlation between the business you bring in and the paycheck you take home. The CEOs of these companies don’t get their noses out of joint if one or more of their salespeople ends up the year making more money than the boss. If fact, they’re proud of it.
3. Boring sales meetings. – There must be a course taught somewhere titled “Show Them Who’s Boss: How Corporal Punishment Inspires Superior Performance.” This line of reasoning may work for motivating marine recruits when they have to crawl across the ground under a hail of machine-gun bullets or slog through a 40-mile forced march. It does not work for experienced salespeople who are required to attend weekly three-hour sales meetings. Naturally, an appointment with a customer is no excuse for missing the fun. Like an all-night party, it usually takes two or three days to get yourself going again after one of these beauties. Good performers hat meetings, and the wimps that like them usually can’t sell anything anyway.
4. Promoting boneheads. – Many a good peddler thinks their boss is an imbecile. Best solution? Quit or transfer. Who wants to work where they don’t want their customers to meet the boss? They’re afraid the customer will think, “My sales rep can’t be as sharp as I though if he’s reporting to someone like this.” Answer: Don’t try to hide your brother -in-law in the sales manager’s job. It could cost you your best salespeople.
5. Smother them in detail. – Show me a salesperson who loves paperwork and I’ll show you a bookkeeper, or a salesperson in the bottom half of the class. Some companies load so much extraneous stuff on the sales force, it’s a wonder they ever have time to call on customers. Here’s the acid test of that last wonderful project: How many others did it bring in?
Mackay’s Moral: Most companies today have similar products. That leaves one sure way to beat the competition–the best sales force.