We’ve all read countless cautionary tales about once-mights companies that lost their way. Â 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. Â 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. Â He had five salespeople, and they all made really good money. Â The owner was getting rich, but he wanted to get rich faster. Â “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. Â They know and understand there are no jobs until someone makes a sale. Â They establish a direct, specific, and absolute correlation between the business you bring in and the paycheck you take home. Â 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. Â 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. Â 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. Â Like an all-night party, it usually takes two or three days to get yourself going again after one of these beauties. Â 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. Â Best solution? Quit or transfer. Who wants to work where they don’t want their customers to meet the boss? Â 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. Â 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. Â Some companies load so much extraneous stuff on the sales force, it’s a wonder they ever have time to call on customers. Â 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.