Hire Slow and Wait… Just a Minute Before You Fire Fast

Hire Slow and Wait… Just a Minute Before You Fire Fast

Guest writer Floyd Jerkins walks us through the process of hiring and firing in a way that transcends industries in Hire Slow and Wait… Just a Minute Before You Fire Fast.

If you’re responsible for direct reports, then you’ve heard the hire slow and fire fast statement. Yea, you may have even heard that from me over the years. Before you actually pull the trigger, I’d like to ask you to consider a few things.

Should Management Be Fired First?

I am a huge proponent that you make sure that management has done their jobs right before firing someone. Firing someone who’s had a poor manager or having been managed by a poor set of systems and processes is like knowing your car is nearly out of gas and getting on a turnpike and blaming someone else for not putting gas in the car. It’s a recipe for failure and disappointment. Who’s really responsible?

In assessing an organization, I would interview key employees. One of the questions centered around their understanding of their job description. I was always curious to learn how close the description is to what they really do. It was alarming how many employees didn’t have one or if they did, it didn’t relate to their job functions.

Accurate Job Descriptions and Orientation Steps

One of the very basics is to have a current job description that properly matches what you want the employee to do. This is a guidepost to not only their performance but setting expectations. It is also the baseline of a performance review.

The start of creating a good or even great employee is when they are new. In the interview, you may have said how great your company is and how well everyone gets along. As soon as the new employee is unleashed into your business, the realities are exposed. Old employees will tell new ones the strangest things.

Make sure the new employee receives a proper orientation. They are already dealing with a new job, a new way to drive to work, and a host of other issues. Make it easy for them to assimilate into the business. Show them the lay of the land. Introduce them to all the key players. You might even consider not having them perform in the role until they get settled in.

Every new hire needs to be frequently evaluated. You want to make course corrections early on, so you do not allow bad habits to settle in. Also, be cautious about the volume of pointing out the negatives. You have to find successes and highlight the positive behaviors to help with the new hire’s phycological aspects.

In the orientation, offer a dedicated systemic feedback system. Depending on your cultural issues, this needs to be in a formal and informal style. What you want to create is an open communication process where this employee can ask questions or verify certain systems or procedures.

Was there enough coaching to bring them along? Did we hire them for the wrong position, and could they be better doing something else for us? Should we set them free? All these kinds of questions need to be asked before you fire.

Why Did You Wait to Fire Someone?

Normally, when you decide to let someone go, it’s came after a long time of evaluating and talking, and well, it can become exhausting. If you think you should have fired someone months ago, you are probably right. Why didn’t you? Did you think that there would be some miracle?

Firing fast is all about making the decisions you should have made. But it should always come after you’ve made an honest evaluation of whether or not the management team has done their jobs right. 

Did you enjoy this blog? Read more great blog posts here.
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Relationship Selling: Nine Tips & Strategies on Handling Incoming Sales Calls

Relationship Selling: Nine Tips & Strategies on Handling Incoming Sales Calls

Guest writer Floyd Jerkins closes his series on relationship selling with today’s blog post on nine tips and strategies on handling incoming sales calls.

The radio newspaper was invented in 1939. The idea was that a radio transmission would transfer the newspaper to the device in your home, which would then print it out on a nine-foot role of paper, which could then be cut or folded. Each page would take 15 minutes to transmit, which seems slow in our age of instant news access, but in those days was probably considered revolutionary. It didn’t ever really catch on, but it probably had a bearing on later inventions, such as the fax machine.

The telephone has proven to be one of the greatest inventions ever made but I guess it is a lot like the radio newspaper, if it’s not used right, it is just another device. We are in the “let your fingers do the talking” generation. Customers want to save time and money, so they start making calls seeking information before the make a purchase. Salespeople many times don’t handle these incoming calls as true lead. This misjudgment costs the business thousands of dollars every year. They can be as valuable as a walk-in customer if you handle it right.

Common questions customers ask when calling in:

  1. What do you have?
  2. How much do you want for it?
  3. What is your best price?
  4. How much is mine worth?

A salesperson can quickly gather information as well as give it on the call. Many calls I’ve heard had the salesperson answering every question the customer asks without gathering information to help them understand the customers buying patterns. The salesperson can control the call by just asking qualifying questions.

The goal is to give and get information.

It’s important to be of service to the customer, but also to yourself. Giving out your entire inventory list with pricing doesn’t build value, especially if we are talking about used products because there is no way to compare apples to apples. Find out why they called your business, when are they thinking of buying and other qualifying questions. Asking for the customer’s name and contact number is a fundamental goal. It’s all when and how you ask that makes a difference in the customer’s perception of whether you are helping them buy or if you are trying to sell something.

Nine Tips & Strategies on Handling Incoming Sales Call

1.) Take the Customer Out of the Market and Into Your Business

The overall goal of the call is to schedule an appointment with the customer. You want to take the customer out of the market and into your business. That’s where the money is.

In some instances, the customer may be calling from outside your trade territory. That does not mean they aren’t a buyer. And I get it, there are some sales made over the phone. I am more referring to what happens most of the time.

By planning ahead for your response to each of the common customer requests, you can improve your effectiveness and make more money.

2.) Answer With a Warm Friendly Greeting

Ok, I know that sounds so cliché, but have you called into a business and the person answering the phone just woke up? Or you called, and it sounded like you intruded on someone’s day? The tone and inflections you use create impressions about your business to the customer.

A warm, friendly greeting starts a positive impression of you and your business. When it happens, it is noticeable and can stand out among the prospects other calls where they experienced much less. When it’s positive, it’s the best way to engage a customer on the phone. Think back to the last few places you called. What did it sound like? How did the sound of their voice make you feel about wanting to spend your money with that business? Make no mistake about it; it does make a difference.

3.) Thank Them and Introduce Yourself

In today’s market, customers can buy the same product from five different places or, in some cases, order it and have it delivered to their front doorstep. The key is to make yourself and your business indispensable. Be the resource your customer wants to seek out.

Make a professional introduction of yourself to build rapport. Speak slower than you might in person. Over the phone, there are distractions. Use your full name vs. just your first name.

4.) Get the Customer Excited

Now, this doesn’t mean you pull a Tom Cruise on Opera’s chair. It means that you sound like you interested because you are, right? You want to make more money. You want to create more customer goodwill for your business.

Treat this call just like the customer was in front of you.

Thank them for calling and do that with a positive expression. Listen carefully to what they are saying.

If you are distracted for any reason, don’t take the call. Customers can tell when you are not listening to them. Don’t answer the phone when preoccupied with other thoughts or activities. If you can’t concentrate on giving the customer your full attention, let someone else handle it.

5.) Take the Incoming Call Seriously

Take notes, be a professional, and show the type of consideration you would like to have when you call a place of business searching for a product.

Eliminate distractions and noises so the caller can hear you. If you have loud background noise, recognize that to the customer. You know they can hear it, so recognize it.

6.) Qualify- Take Control by Asking Questions

Don’t let the prospect maintain control with constant questions. I can’t express this enough but learn to ask good questions. I’ve witnessed many salespeople taking these incoming calls only to serve the customer but never win themselves. The goal is to give and get information. If you give out your price list or tell them everything you know, what reason do they have to come to see you in person?

Can you seriously appraise their trade-in without looking at it? I know it’s being done, but I also know it’s a stop-gap measure that can easily spiral into more time and energy to make the deal work when you look at the trade-in real life. I’m talking about high valued trades, not a throwaway product.

Use questions and phrases such as: “What’s that worth?” “Anything wrong with it?” “This equipment will sell for…” “What budget or payment range are you looking to stay in?” Use “availability” rather than “inventory.”

Don’t ask questions like what do you want for it, or what do you need for it? It opens you up for negative questions. Every customer will tell you how great their trade-in is even when it’s not.

7.) Take the Customer Out of the Market and Into Your Business

The goal is to take the customer out of the market and into your business. Schedule an appointment so that you can be of service to them. Imagine if you looked ahead on your calendar for the week, and each day you had 3-5 appointments? Sure, not all of them will show up, but if 80% do, you will have a higher closing ratio of appointments vs. just guessing when they will come in.

8.) Get the Name and Phone Number of Every Prospect

What is the “sales goal” of the call? Is it to give the customer all the information they want and make the customer happy, only to get off the phone and not know who you were talking to?

If you ask, you will get, if you don’t, you won’t. The first rule here is to always ask, but know it is how and when you ask, they determine your success.

You may encounter the customer who won’t give you, their name. Now, think for a minute. If you were the customer under these circumstances, why would you not give them your phone number? I realize there are exceptions to this statement, but more times than not, it is because you didn’t earn the right to get their name.

Can you show enough value, “over the phone” to achieve a higher margin because your business demands it? Yea, some sales are made over the phone but more are not.

Maximize every opportunity! Ask for referrals. I’ll talk about this in a future article.

9.) Use Professional Sales Language and Approaches

Be careful about using industry jargon. What are customary descriptions to you may not be to your customer. You also don’t want to “low-ball” a customer. It’s simply another word for lying just spelled differently. Never lie just to get them in the door, but don’t tell them all the truth to keep them out, either. You won’t win a lot of poker hands when you show people your cards!

You are a professional, so talk and act like one. Prepare questions ahead of time, so you know how to navigate a call like this vs. winging it. Good questions lead to a close.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

Relationship Selling Metrics: Face-to-Face & Write-Ups

Relationship Selling Metrics: Face-to-Face & Write-Ups

Guest writer Floyd Jerkins continues his series on Relationship Selling Metrics by looking at the numbers in face-to-face sales and also in your tracking of your sales with write-ups, and a careful system of staying organized.

Operating a business requires a basic understanding of financial management. Knowing the numbers is important in making good decisions. If your expenses are too high or sales are dropping off you make changes. Do you know how many customers your sales team talks to every week? Many organizations don’t know the answer and are leaving thousands of dollars on the table for a competitor to get.

Ok, let me do a reality check. There are issues with starting to measure a sales team’s effectiveness. Typically, the measurements start with sales volume and other financial metrics. Make no mistake about it; I am a proponent of these. The challenge is to identify where the sales process can be improved before the close of the sale. When you can enhance salespeople’s actions from the start to the end of the sale, the closing ratio goes up significantly.

By now in your business life cycle, you have some sort of a CRM in place. Various tools on the market are either simple or as complex as you want. Getting your sales team to log each sales action properly is yet another challenge and a whole article all to itself. So, with my disclaimers in place, let’s explore.

Measuring a salesperson’s success by the total revenue they generate is only one part of the equation. If a salesperson is selling 5 million a year, but leaving 5 million on the table, really, how good are they?

First, to be successful in sales, you have to talk to a lot of people. You also have to give a price to make a sale. Simple, right? Here is my rationale for a few sales performance metrics to get us started. Each CRM, as well as your organization, may call them something different, so please read between the lines if you will.

  • Face-to-Face Contacts- This category measures how many face-to-face contacts a salesperson encounters on a day, week, and month. This could be a new prospect who has never been to your store or a previous owner who’s bought from you before or even a referral.
  • Sold- Meaning the product is sold and delivered. Paperwork is done, financing is approved, and the checks have cleared.
  • Write Up- Meaning that the salesperson quoted a price and then wrote the order. This doesn’t mean it’s closed, just that a written order was initiated.

Sample Questions About Performance

What percent of Face-to-face to Sold do you think is a good number? 

In the article, Relationship Selling- How to Measure Sales Success, I outline the basics of measuring the types of customers most businesses have. The average closing ratio, many say is 20%. I think that’s a weak number and here’s why.

Long-standing businesses have repeat customers. What if your sales team has 100 Face-to-Face contacts in a month that are repeat customers? Do you think closing 20% is acceptable? I don’t. The salespersons selling process needs to be revised because they cost the business thousands of dollars. Factor in your marketing investment to get an ROI that’s not impressive.

Take each “unit” the salesperson sells and divide that by the total number of face-to-face contacts in a given time period. If you establish a salesperson has a 20% closing ratio, what if they could improve that 5%? A 5% increase would increase the “unit” sales. This is a “natural” increase to make more sales. It doesn’t cost you anything if you help your salesperson improve their effectiveness.

Your business should be closing at least 40% to 60% of your repeat customers. Without measuring, you have wishful thinking. 

What percent of Write-Ups to Face-to-Face contacts is a good number for an experienced salesperson?

Typically, a salesperson will share a price with a customer before they even qualify what the customer wants. This is generally because that’s one of the first questions a customer asks, “How much is it?” Salespeople feel obligated to answer every question vs. learning to control the sale through questions.

The rule of high volume and high margin sales is never price before you establish value. 

A salesperson who verbally prices, especially if they don’t establish value before pricing, will have a lower closing ratio compared to a salesperson who makes written quotes every time they price. Increase the number of professional write-ups, and you will close more sales. 

80% of all pricing should be in writing. 

How effective is an experienced salesperson that sells 30% of their previous customers? 

Let’s say you are measuring the type of customers your sales team is talking with. You know the % of each category. Every time a salesperson prices a customer and a sale is not made right then, the customer leaves the business.

Statistically, I know that most salespeople are not good with follow up. Nearly 7 out of 10 don’t follow up within 24 hours after they price a customer who doesn’t immediately buy. Part of this is because sales managers often focus their team in the wrong direction due to various financial or inventory pressures. The other part is they lack a system as well as the verbal strategies to service the customer. Many salespeople are great at selling the sales manager on why they shouldn’t call back, or they wait on the customer to “get back to them” as they artificially promised.

If this experienced salesperson is only selling 3 out of 10 customers, what is happening to the other 7? If you have a sales team of 10 with a 30% ratio, look how much is being lost due to an inefficient sales process.

Measuring allows you to know the realities of how to improve your sales team’s behaviors and maximize your marketing budget. 

Measuring tells you exactly where to influence the behaviors of your salesperson and sales team. 

Learning to be Effective Starts with Performance Sales Metrics

Talking to a measured number of prospects in a given period of time is just part of being successful in sales. There are only so many selling hours in a day, week, and month. Learning how to be effective with each contact starts the journey of successful time management.

By establishing value and knowing how to communicate that to a prospect, the closing ratio goes up dramatically, but so do the margins. A sales-driven organization takes time, energy, and the correct vision to have a highly competent team.

What are the performance sales metrics for your sales team? 

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

Relationship Selling: Measuring Sales Activities Generates More Sales

Relationship Selling: Measuring Sales Activities Generates More Sales

Guest writer Floyd Jerkins continues his series on Relationship Selling with this week’s blog post: Measuring Sales Activities Generates More Sales.

Whether you have two or 200 salespeople, just talking to more people isn’t the best way to improve closing ratios. Measuring their sales activities generates more sales and allows you to know exactly where they need coaching.

Are You Using a Sales System?

Before we get too deep, let’s make sure you and I are on the same page. I believe you have to be using a sales process and a sales system. The key is to know where you are at in the sales cycle and to know where the customer is at in the buying cycle. Without utilizing these tools, you guess and wonder let alone waste valuable time.

Stop here and check out a couple previous articles of mine on the Steps to the Sale and Relationship Selling: Face to Face & Write Ups, and How to Measure Sales Success. It doesn’t matter that you are using different terms. What is vital is that you are working a sales process with your team and that each salesperson logs into a CRM.

Measuring Effectiveness is the Key to Increasing Sales

Why are salespeople having problems closing sales? Measuring what their sales activities are between the time they first talk with a customer until they price or close the deal will tell you where adjustments can be made.

Will most strategies work with all the customers all the time? Heavens no. Will they work with most of the customers, most of the time? Yes. Sure, the market is tough, prices are high, and the world is turning over and over, so we want to use real-time behavioral analysis to chart a path to more success.

Through analysis for example, you see they are shortchanging the qualifying process. They are getting into the close and realize they don’t know how much down payment the customer has, or that they had a trade-in, or they are not the decision-maker or myriad other things that can derail the close based on your kind of product and business. How are they building value of your product and your business if they don’t know this early on in the sales process?

Building value happens throughout the sales process, not just in the close.

If it all comes down to price, then just post your best price by a kiosk and fire all your salespeople. You improve a salespersons effectiveness not by talking to more customers but by doing a better job with those they work with.

What if you were able to improve your salespeople’s closing ratio from 10% to 15%, how much more money will you make?

Learning to ask better questions isn’t normal for many salespeople. Letting the customer control the tempo of the discussions happens. A good salesperson knows how to navigate the conversation to get out of it what they want, vs. just giving the customer what they want. Asking for the order too prematurely or pricing too quickly delays the buying process for the customer, takes more time to make the sale, and typically makes less margin.

An Exercise to Learn By

If your salespeople are closing deals at anything under 25%, then they are not exempt from a sales manager closely monitoring their sales behaviors. I’d want to see, feel and touch what’s happening in real-time.

Exercise Preparation

My goal here is for you to outline a complete customer profile to use in a roleplay. I’m not saying be an easy customer, but be realistic. Be the kind of customer that your salesperson encounters most of the time.

Include what the customer is looking for and why. List how they plan to pay for it and why they are shopping at your business, if they are married or not, and anything else that describes their buying motivations. List what they like the most and least about what they currently own and how much they paid for it. Did they finance it or pay cash?

Roleplay

Roleplay with your salesperson using the outline as your guide. Start with the introduction between the customer and the salesperson. Have the salesperson show you how they handle the first few steps to the sale. See how “effective” your salesperson is at finding out all that information in a casual, professional and sales focused manner.

Results

If your salesperson doesn’t like roleplaying because it’s not real, ok, you have a problem. If they do the roleplay but then make comments like, well, in a real situation, I wouldn’t say it like that. 

You have a problem.

The start of the sale should make the customer feel at ease. Does the salesperson make a good introduction? The next step in the sales process is discovering or qualifying the customer. This is where they ask several questions and learn how to build value in your products and services that matter to the customer. Do they handle this well or shortchange the process?

A Coach Calls the Plays

In any professional sport team, the coach calls a play. They know the stats how each player performs and under certain conditions make changes. When a sales manager measures sales activities they know the stats of how each player performs. They know what plays to call and it reaps more sales.

Sales teams who are only measured by total units sold or just dollar volume, are leaving thousands of sales and dollars on the table. Measuring their sales activities generates more sales and allows you to know exactly where they need coaching.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

Relationship Selling- A Tool for Improving Your Presentation

Relationship Selling- A Tool for Improving Your Presentation

Guest writer Floyd Jerkins joins us today for another article on relationship selling. This time viewing relationship selling as a tool for improving your presentation.

Since you are following my articles on Relationship Selling, by now you’re starting to get it that I believe in following a system. That doesn’t mean every sale made is templated. It does mean that the more times you can follow a system, your closing ratio goes up.

Practice the Fundamentals Before Engaging Customers

Feedback from master salespeople who do an honest evaluation of their sales strategies often mentions that reviewing the fundamentals before creating an advanced approach just makes sense. Why do professional NBA or NFL or any other professional team work on fundamentals at every practice? They practice on the sidelines, not on customers. They work on the fundamentals.

The Chair Salesperson

Let’s say you are selling chairs. You meet the customer in the aisle after giving them a few minutes to roam the store. You start with an opening line, Welcome to our store; how may I be of service? Of course, the answers could go a few different ways so let’s say they are looking for chairs. 

You are into the Qualifying stage of the sales process. Too many salespeople will start by sharing what chairs are for sale, how many they have, and where they are in the store. A professional furniture salesperson starts by asking questions about why they want a chair, what they have now, what different features they are looking for, etc. You build rapport through questions and showing a sincere interest in the customer. 

Through this stage, you’ve learned that your customer loves their grandchildren, has a bad lower back, likes to rock in a chair, and doesn’t like leather. Ok, great, now you have something to talk about that’s important to the customer.

What is important to the store manager is that inventory turns. What’s important to the salesperson who is on commission is that they sell a chair today. But none of what’s important to the store manager or the salesperson is valuable to the customer. 

In the presentation stage, what do you present about the chair that you’ve selected for the customer? You wouldn’t pick a leather chair that doesn’t rock just because it’s the one on sale or the one your manager told you to sell today, would you? You’d present the chair with the customers’ needs in mind, wouldn’t you? I hope the answer is yes!

Customer Expectations

During the first few steps in the sales process, the customer expects the salesperson to ask questions. It’s a normal process. By using this opportunity to explore, you learn about the buying motives, who the buyer and decision-makers are, how they want to pay for it, how much down payment, and just about anything else you want to know. If you are into the closing stage and asking the customer how much down payment they have, you are well on your way to being an average salesperson and will make an average income and live an average life. 

As you ask questions to learn, make notes. Don’t be afraid that you should remember everything. A good salesperson may talk with several people in person and over the phone every day. Good note-taking is an essential part of time management. I cover those subjects in other articles. 

Working Smart: Tools of the Trade

A professional technician who works on cars has a large toolbox with many drawers. Each drawer contains a tool that’s used for a certain purpose. A good tech won’t use a crescent wrench when they need a 5/8-line wrench. A great salesperson uses selling tools in the same way. There are tools of the trade that help to close more sales in less time. Use them well, and they will make you money and create a lifetime of customers. Don’t use them, and you will struggle with making sales and a significant income. 

In teaching sales and sales managers, I always tried to make it easy to learn new ideas. Now, this isn’t always easy, but using acronyms always helps with retention. 

The SPACED analogy is a tool. Here is how this works. 

Mr. Customer, you’ll notice that the chair rocks but it won’t tip over because of the extra flange on the backside of the platform. That’s a perfect safety feature to prevent you from overturning the chair when you’re rocking your grandchildren you mentioned. Will that feature become valuable to you?

Mr. Customer, you mentioned (while we were in the qualifying stage of the sales process) that you preferred cloth over leather. This particular chair has a cloth velour that is easily cleaned and won’t stain. The appearance of this will last for years and years. Does that type of feature interest you?

Mr. Customer, please notice the adjustable lumbar support in lower part of the seat. That has a wide range of adjustments to custom fit to a person’s backside. You mentioned you’ve had some back problems, does this type of feature sound important to you to improve comfort?

Ok, see how the spaced concept works? When you are in the qualifying stage asking questions, you want to learn what the hot buttons are. By keeping the spaced concept in mind, you pick these up and can use them during the presentation.

When you present your product through what you learned the customers wants or needs are, it’s like magic. You soon learn if you are on the right product. Now, pay attention, we’re not even talking about price here are we? If everything is right for the customer, the price is still important, but not the most important. You are building value.

Note that after every explanation of a feature I ask the customer a question to validate that the feature is what they wanted or that it is important to them. Why do this? What you don’t want to do is make an ineffective presentation by covering too much detail when the customer might not want it. You also want to make sure that you are getting buy in from the customer as you explain key features of your product or service before moving on to the next feature.

In closing…

By systemically asking these questions before moving on to the next feature, you are learning if you are on the right track or if you need to make a course correction with a different product. You are building value.

Did you enjoy this blog? Read more great blog posts here.
For our course lists, please click here.

Relationship Selling Metrics

Relationship Selling Metrics

Guest writer Floyd Jerkins continues to educate readers at Learning Without Scars about Relationship Selling with a look at your business’ metrics in this Friday’s blog post.

Relationship Selling Metrics – Face-to-Face and Write-ups

Operating a business requires a basic understanding of financial management. Knowing the numbers is important in making good decisions. If your expenses are too high or sales are dropping off you make changes. Do you know how many customers your sales team talks to every week? Many organizations don’t know the answer and are leaving thousands of dollars on the table for a competitor to get.

Ok, let me do a reality check. There are issues with starting to measure a sales team’s effectiveness. Typically, the measurements start with sales volume and other financial metrics. Make no mistake about it; I am a proponent of these. The challenge is to identify where the sales process can be improved before the close of the sale. When you can enhance salespeople’s actions from the start to the end of the sale, the closing ratio goes up significantly.

By now in your business life cycle, you have some sort of a CRM in place. Various tools on the market are either simple or as complex as you want. Getting your sales team to log each sales action properly is yet another challenge and a whole article all to itself. So, with my disclaimers in place, let’s explore.

Measuring a salesperson’s success by the total revenue they generate is only one part of the equation. If a salesperson is selling 5 million a year, but leaving 5 million on the table, really, how good are they?

First, to be successful in sales, you have to talk to a lot of people. You also have to give a price to make a sale. Simple, right? Here is my rationale for a few sales performance metrics to get us started. Each CRM, as well as your organization, may call them something different, so please read between the lines if you will.

  • Face-to-Face Contacts- This category measures how many face-to-face contacts a salesperson encounters on a day, week, and month. This could be a new prospect who has never been to your store or a previous owner who’s bought from you before or even a referral.
  • Sold- Meaning the product is sold and delivered. Paperwork is done, financing is approved, and the checks have cleared.
  • Write Up- Meaning that the salesperson quoted a price and then wrote the order. This doesn’t mean it’s closed, just that a written order was initiated.

Sample Questions About Performance

What percent of Face-to-Face to Sold do you think is a good number? 

In the article, Relationship Selling- How to Measure Sales Success, I outline the basics of measuring the types of customers most businesses have. The average closing ratio, many say is 20%. I think that’s a weak number and here’s why.

Long-standing businesses have repeat customers. What if your sales team has 100 Face-to-Face contacts in a month that are repeat customers? Do you think closing 20% is acceptable? I don’t. The salespersons selling process needs to be revised because they cost the business thousands of dollars. Factor in your marketing investment to get an ROI that’s not impressive.

Take each “unit” the salesperson sells and divide that by the total number of face-to-face contacts in a given time period. If you establish a salesperson has a 20% closing ratio, what if they could improve that 5%? A 5% increase would increase the “unit” sales. This is a “natural” increase to make more sales. It doesn’t cost you anything if you help your salesperson improve their effectiveness.

Your business should be closing at least 40% to 60% of your repeat customers. Without measuring, you have wishful thinking. 

What percent of Write-Ups to Face-to-Face contacts is a good number for an experienced salesperson?

Typically, a salesperson will share a price with a customer before they even qualify what the customer wants. This is generally because that’s one of the first questions a customer asks, “How much is it?” Salespeople feel obligated to answer every question vs. learning to control the sale through questions.

The rule of high volume and high margin sales is never price before you establish value. 

A salesperson who verbally prices, especially if they don’t establish value before pricing, will have a lower closing ratio compared to a salesperson who makes written quotes every time they price. Increase the number of professional write-ups, and you will close more sales. 

80% of all pricing should be in writing. 

How effective is an experienced salesperson that sells 30% of their previous customers? 

Let’s say you are measuring the type of customers your sales team is talking with. You know the % of each category. Every time a salesperson prices a customer and a sale is not made right then, the customer leaves the business.

Statistically, I know that most salespeople are not good with follow up. Nearly 7 out of 10 don’t follow up within 24 hours after they price a customer who doesn’t immediately buy. Part of this is because sales managers often focus their team in the wrong direction due to various financial or inventory pressures. The other part is they lack a system as well as the verbal strategies to service the customer. Many salespeople are great at selling the sales manager on why they shouldn’t call back, or they wait on the customer to “get back to them” as they artificially promised.

If this experienced salesperson is only selling 3 out of 10 customers, what is happening to the other 7? If you have a sales team of 10 with a 30% ratio, look how much is being lost due to an inefficient sales process.

Measuring allows you to know the realities of how to improve your sales team’s behaviors and maximize your marketing budget. 

Measuring tells you exactly where to influence the behaviors of your salesperson and sales team. 

Learning to be Effective Starts with Performance Sales Metrics

Talking to a measured number of prospects in a given period of time is just part of being successful in sales. There are only so many selling hours in a day, week, and month. Learning how to be effective with each contact starts the journey of successful time management.

By establishing value and knowing how to communicate that to a prospect, the closing ratio goes up dramatically, but so do the margins. A sales-driven organization takes time, energy, and the correct vision to have a highly competent team.

What is your sales team performance sales metrics? 

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Holistic Management

Holistic Management

Guest writer Floyd Jerkins writes this week about the ins and outs of Holistic Management, and all the ways it sets a company apart from others.

Holistic Management: Who Are the Real Kings of the Business?

We’ve all gone into a business to buy something and experienced the sales staff that was energetic and full of promises, only to find what happens after the sale isn’t quite the same. One department blames the other, and there’s confusion about exactly what to do. We’ve all been there. The question I have is, who are the real kings of the business?

Holistic management practices set a company apart from those who are not managing this way. Fundamentally, how do you get all the departments to work in unison for a common goal? How can we align these departments and divisions to create peak financial and operating performance while also generating high levels of customer satisfaction and repeat and referral business?

What’s So Unique About You?

Organizational development takes on many shapes based on the business model or industry. Each industry has unique characteristics with how they sell their products to generate revenue. There are thousands of family-owned multi-generational businesses driving our economy. Many times, industries’ overlap and have common organizational traits despite the notion that they are unique. They share so many of these traits that it creates a pathway of learning.

Startups and small, closely-held companies create policies, procedures, and methods of operations differently from companies with fifty or more employees. Typically, in smaller companies, the owner or founder is actively involved. Their knowledge and experience are put to the test every day as they attempt to scale their business. If they come from a sales background, the business takes on a sales mindset, although other structural components are needed for the whole company to thrive.

Nothing Happens Until Something Sells

If you don’t sell something, no one has a job, right? I’m sure you’ve heard that before. I contend that salespeople who are allowed unique privileges to make a sale can easily cause havoc in other departments. I’ve been in hundreds of businesses over my years. Too often, an owner supported a salesperson telling the customer something to make the sale even though they have no clue how they will honor that commitment and keep everyone in the chain happy. There are hundreds of examples, but let me get back to my points.

Many “chronic” organizational illnesses are associated with a front-end business regardless of what market segment you’re in. Each business model has specific characteristics that help it grow or die.

With owners or executives coming from sales, other departments often suffer by not getting the proper attention to invest in people and resources. Too many times, sales meetings don’t include leaders from other departments. Policies are made without consideration of the impact through the entire company.

Executives who create a holistic culture know that everything in the day-to-day flow of operations is hinged together. Instead of fixing one problem and making five others, they think and plan with an overall company’s view.

Are the sins of the sales department masking the ability of other departments to be successful?

Are Salespeople Really the Kings of the Business?

You would think with so many sales-driven leaders that the sales departments would perform perfectly. Leaders who come from the sales side of the business many times will struggle to influence other departments. If you ask many, they will say they have a great sales department, just look at my volume and margins. However, as I address in other articles, these are not the only predictors of success and often are put in front of a conversation to mask a sales department’s real sins.

Holistic Thinking

Executives and leaders have to be bought-in to improve overall operations. If they aren’t, then the fish can rot at the head first because you can’t get to peak profits by a pen stroke.

For an organization to achieve high levels of customer satisfaction, they require knowledge-based workers. Through these people, you earn the right to have a repeat and referral business that sustains your organization through a cyclical market’s ups and downs.

You can easily win a customer through the sales department, but where you keep and then retain the customer is through all the other touches and servicing points your business offers.

If a business owner tells me they are selling a boatload of their product but are losing money in another department, it is a sure sign they are probably not leading with a holistic mindset. They are headed towards the business of the past.

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Relationship Selling – How to Measure Sales Success

Relationship Selling – How to Measure Sales Success

Sales are a cornerstone in business. Guest writer Floyd Jerkins talks tonight about relationship selling, and how you can measure your sales success.

Would you run your business without looking at a financial statement? Crazy right? Do you know how many customers your sales team talks to every week? For many organizations, they don’t know the answer and are leaving thousands of dollars on the table for a competitor to get. This article outlines the process to create a measuring system.

A sales driven organization takes time, energy and the correct vision to have a highly competent team. Becoming effective in sales and marketing of your business requires an understanding of your customer base so you can focus the team on what matters the most.

In many business environments, there are typically four categories of customers that can be measured:

New Customer

This customer is one who has never been to or called or emailed your business before. They may call, email or come into your business from marketing and advertising efforts. This customer forms an impression of your business through every interaction they have. Every interaction. Not just the one where they drive up on your parking lot, but when they call into your business, what they see on Facebook or hear at the local restaurant from a group of customers. Every interaction creates an impression of your business.

Repeat Customer

This is a customer who has bought from you before. To a salesperson, this means that customer bought from them before. To the business, it means that customer purchased from the company previously. Many companies have “orphan owners.” These are customers who bought from a salesperson at your business but who is no longer there. These are typically a gold mine for new salespeople in companies with turnover in the sales department.

Referral Customer

This is a customer who was referred by another customer to your business or the salesperson. I apply the same sales “rules” to this category as I do for repeat customers. This is often an area that is highly underutilized by salespeople to generate revenue. When you have happy customers, they tell others about their experiences. When they tell someone else, and that customer calls or comes into the business, it is essential to train the customer to ask for the right salesperson.

New Business

This customer is one that you meet while at the gas station or a social event. A brief conversation in most any social situation generates new leads. One of the most natural ways to prospect for new business is to just talk to people you meet. It works like magic when done correctly.

For each of these categories, it’s important to know the sales mix in your business. Measure them monthly to determine how many sales were made in each of these categories and by each salesperson.

Relationship Selling Metrics

Let me start this segment by asking you three questions:

  1. Who do you make more money on, a repeat customer or a customer who has never done business with you or your company before?
  2. Who do you have the most fun working with, a repeat customer or someone who has never done with business with you before?
  3. Who do you sell in less time, someone who you don’t know or a customer who’s bought from you before?

Ok, I could ask ten more but let me just give you the answers. Repeat and referral business is where you make money and in less time. Time is money in sales, and by now in your career, someone’s told you that. So, learn how to develop this book of business to be a pro at sales.

Closing Ratios and Measuring Variables

There are many variables to discussing closing ratios for a salesperson and a sales team such as the type of product or service being sold, the customers buying cycles and personality type to name a few. If you only have twenty customers vs. a hundred or a thousand that makes a difference. So, even though there are variables, there are common points that every salesperson and team should be measured to increase their success and have some fun while doing it.

Do you have a CRM or other Sales Tracking System? Without a sales activity measurement system in place that consists of more than gross margin and sales volume, the ability to make improvements can many times escape even the best intentions. Integrating these systems into your sales and marketing teams are also challenging but required. If you don’t have one, get one.

How many people you talk to vs. how many you close is a crucial measurement in selling a product or service. Just like learning to shoot a free throw or how to stand in the batter’s box, it’s the basics of the profession. Time is an asset, and it must be used efficiently. Future articles will cover more metrics in detail.

What Does This Tell You?

  • If a salesperson talks to 6 people a day x 5 days a week, that’s 30 contacts. How many of those do they sell?
  • With a 20% closing ratio, they close 6. What happened to the other 24 contacts?

To effect change, you have to look deeper into what the salesperson’s activities and behaviors are between the time they first met the customer until the sales order is signed. To only look at the end of the sales cycle is like jumping in a lake before checking to see if there is enough water in it.

Read my article titled, “Relationship Selling – Steps to the Sale” because how the sale is processed can make a difference in how many deals are closed.

Sold Ratio to Face-to-Face Contacts

The average closing ratio of 20% should be the very minimum standard of sales performance. There should be a focused effort to increase this number regardless of your sales environment.

In a business that has 50% or more repeat customers a 20% closing rate is terrible and should be carefully examined because you are losing customers. With measurement, you learn how “effective” the salesperson or the sales team is and in what areas.

What if you measured 10 sales people and came up with the following scenario:

  • 10 salespeople x 6 customers per day x 5 days per week = 300 customers
  • At a 20% closing ratio would be 60 sold units.

Let’s say your Average Gross Profit (AGP) per unit is $500.00. Your goal is to increase the closing ratio by 5%. That would be an increase of 15 Units.

15 Units x $500.00 (AGP) equals $7,500.00 of additional profit.

What if?

What if you improved the closing ratio to 30%?• What if you improved AGP by 2%?• What if you improved the closing ratio by 5% and the AGP by 2%?

With just a little focus in the right areas, you can make more money and have more fun doing it. There are no shortcuts to sales success.

Process Improvement: Steps to Gaining More Efficiency in Closing Deals

To improve salespeople’s closing ratio involves coaching and counseling. Many times, the ratio’s can be improved by helping them become aware of their selling habits. Just like every person does, after we do things for a while, they become a habit. It doesn’t mean it’s good for us. I also know that many salespeople don’t have a dedicated sales manager whose job it is to help them improve. Professional salespeople take it upon themselves to measure and improve.

For a Salesperson, you could ask yourself the following types of questions:

  1. Am I walking the customer through the sales process and fully engaging them in each step?
  2. Am I prematurely asking for the order or have I properly built value then asked for the order?
  3. In the past 5 customer experiences, how many of them was I successful in taking them through the entire steps to the sale and closing the deal? For those that I was not successful, why, what happened, what could I have done differently?

For a Sales Manager, you could be asking your salespeople the following types of questions:

  1. What step in the sales cycle are you in? They should be able to describe clearly where they are and why. If they can’t, they need some coaching.
  2. Since you’ve priced the customer, what are the top three reasons they want to buy that product and buy it from us? If they can’t tell you it’s because they have not asked during step #2 of the sales process.
  3. If the customer walked after you gave them a price, what were the customer’s reasons for leaving? Make sure you get what the customer said, not what the salesperson heard.

5 More Tips & Suggestions:

  1. An old-time rule of sales is that you have to talk to a lot of people to make money in sales. The new rule to add to that is you want to be super productive with each interaction. Time is money. You don’t want to waste your time or your customers. Learn the sales process and use it as many times as you can so you can make more money in less time.
  2. Make sure to measure your key behaviors accurately. Measure it the same way for a while to accurately assess before deciding on an improvement plan.
  3. Businesses that log these customer contacts for every interaction outperform those that do not. You wouldn’t run your business without a financial statement, so don’t run it without knowing the sales teams key performance indicators. Tracking the key selling behaviors is a performance statement for the salesperson or sales team that allows you to create improvement plans.
  4. Knowing the “steps to the sale” allows a salesperson to gauge where they are at in the sales process. By using the process, you build the value of your product and your business by knowing when to insert key value added solutions that your business or product offers.
  5. It is very common for a customer to ask the first question when they meet a salesperson. That question can be “how much is it?” When you first meet the customer make sure you qualify their wants and needs before pricing your product.

Moving a customer through the sales process naturally creates closes. Improving your closing ratio doesn’t add cost to the sale. It can be as easy as learning how to communicate better. In future articles, I’ll address other key metrics to measure and how to improve your effectiveness.

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The Evolution of Business Owners

The Evolution of Business Owners

Change is just one inevitability in life. Guest writer Floyd Jerkins walks us through just one change in his piece on the evolution of business owners.

It is quite rare for a dealership to be able to adequately plan succession in the ranks of their mid-management staff. So often, a manager must be replaced in quick order. In that instance, should you look for a replacement within your ranks, or should you go outside to find a suitable replacement? What are the critical skill sets that predict success? What kind of training will the new manager need to have a reasonable chance for longevity in the position and the potential for career growth?  

The problem is that these decisions are often made in haste. A good parts salesperson certainly will be a good parts manager, right? It only makes sense that an outstanding technician who knows your products and your customers will be a natural as the next service manager. However, making this most obvious choice in many instances has led to an unfortunate professional and personal lack of fit that has hurt the dealership and an outstanding employee.

If these issues arise at the mid-level management, what is the big picture view of the dealership owner? Where is the career path of a dealer principal? Can an owner be quickly replaced? How does the owner become better educated and identify the right resources for their personal learning pathway? What are the skill sets that predict success?

The Evolution of Owners’ Skill Sets

With one store doing $10M in sales, the competencies for an owner typically require them to be able to change a tire, handle bookkeeping, sell a piece of equipment and maybe even stock the soda machine. They probably do all the hiring and firing. They have to wear several hats. 

Many owners of single-store operations come from a sales background. Where do they learn to sell? In my experience, these owners hardly ever take a professional selling course or become constant readers of sales-related material. They learn on the job and through trial and error. The issues this causes in the day-to-day operations is a whole other topic of discussion. 

Developing a business that has $1M sales per employee with revenue from $50M to over a $1Billon requires different skill sets. The knowledge, skills, and attitude must improve to be adequately prepared for what is yet to come. As an owner expands their operation, the plan of getting personal education should grow as well. 

Owners Learning Pathway During the Stages of Consolidation 

We know that with consolidation in any market, the organizations continue to grow larger. Will all of them follow this model? The answer to that is no. Every market has movers and shakers while still supporting the smaller operations. But make no mistake, consolidation reshapes local and regional markets. I call it Shark or Bait. When owners are not proactive; they are often forced to make hard decisions before they might be ready. 

Once the organization achieves a certain size and scale, the business becomes less about what industry you’re in and more about adapting to the best practices highlighted by successful companies. This requires the owner to have a new vision and different skill sets. 

There still seems to be a lengthy discussion going on about whether or not hard skills are more or less important than soft skills. I’ve said for years that what has been commonly called soft skills are now hard skills. You can’t ignore them because they are a fundamental part of leading a company and for your teams of champions to achieve peak performance. 

The key to enduring success lies within the people who deliver the day-to-day operations. They must be in harmony with the policies, procedures, and methods of operations to reach peak performance. The owner or owner group is still setting the pace and controlling many of the businesses’ outcomes with their decisions every day. With an operation of 30, you can meet with everyone and change a policy in almost a day. With over 300 employees, policy changes must be carefully thought out and creating an implementation plan is critical or it could take months and months to become reality. 

Business Owners Are People, Too

Each business owner is unique with strengths and weaknesses, just like everyone else. Just because they own the company doesn’t automatically give them all the necessary skills to be an effective leader. Instead of trial by fire, business owners can develop a method to go through a learning pathway that will provide the foundation for success. Assessing their own competencies isn’t something that comes naturally. Commonly outside influencers are needed to affect real change. 

  • Learning from your peers is an excellent method. These working sessions are normally financial discussions that can reveal many operational issues and hopefully the best practices to learn from. Taking these ideas back and implementing them is another story in itself. Often, an owner may be uncomfortable bringing out certain subjects or need in-depth or more customized information. That’s where one-on-one coaching becomes extremely valuable. 
  • A challenge many businesses owners experience is that sometimes the ego gets in the way or needs to get out of the way. Leading by ego is a sure way to disassemble a great organization and push people away. Success often fuels the ego, and it becomes the master. I’ve helped many leaders learn how to tame this trait and use their natural talents. Ego is a tool to use, but not to have it become our master. 
  • Personal education requires a pathway so you invest time learning what you need to learn. Time is precious. If you don’t have this plan, then you are “wondering” and “wandering” with your time and energy. You should know how you learn best, is it visual, auditory or kinesthetic? Knowing yourself allows for the most impact to be made and having some fun while you do it. 
  • There are numerous trade publications that are required reading, but you shouldn’t limit yourself to this one area. Industry-specific material should be accompanied with broader-based business material, listening to podcasts, online webinars, and attending in person events. 
  • There is so much material available and through various mediums that you must be careful about what information you allow into your brain. Too much of the wrong information will easily steer you away from what matters the most. Verify the sources of the material and vet the author. There is a lot of junk out there today with people making sound bites sound like in-depth knowledge. 
  • You can get so involved in running the business that it just doesn’t seem like you can take time away to learn. Sure, time management and effective delegation strategies are part of the solution, but there is more to the whole equation. The reality is that you can’t afford not to take the time to get formal and informal education. Knowledge is power and is the stimulus to building an enduring organization. 

What is your learning pathway? Once this is prescribed, then you have focused learning that brings about the most substantive changes. 

Self-Evaluation Can Lead to Happiness and a Dynamic Lifestyle

Be honest with yourself about what you’re good at. Listen to others about who you are vs. who you think you are. There are numerous “outside-in” assessments and methods to evaluate your knowledge, skills, and attitudes. “Find what you are good at and hire the rest.” There are just some skill sets that you can’t master and knowing this is powerful. Set the ego aside so once you hire them, don’t micromanage. Get out of their way and let them do what you hired them to do. 

Finally, be sure to put yourself into a position to have some fun. If what you do in the company isn’t generating that fun factor, change your role. One of the privileges of owning a business is that you can change your role to something that is a better fit for where you are in age, business acumen, and above all, the desire to live a dynamic life. Remember, there is a life after owning a business. 

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Coaching Questions to Reach High Performance

Coaching Questions to Reach High Performance

Tonight’s blog post about coaching questions to reach high performance comes from our guest writer, Floyd Jerkins. 

A coach can only be effective if someone wants to be coached. Frankly, that’s not entirely true. Some coaches live with the myth that someone always listens when they speak. Well, that’s also not quite true.

A coach constantly gauges how much input to give versus listening or asking questions to develop high performance. Professional sports players listen best when they are committed to producing an outcome beyond what they know how to do. It is the very same in the business world.

Can You Benefit by Using an Executive Coach?

When someone approaches me with interest in my coaching services, there are questions about what makes me a qualified coach. I’ve been doing this work for many years quite successfully, so it doesn’t take long to answer their questions.

After some casual exchange, my natural curiosity wants to know who you are, but more prescribed questioning is needed. I am not there to judge, analyze, or otherwise render an opinion. All this dialog focuses on designing a learning pathway. 

Edward DeBono said it well in his book, Parallel Thinking, “Digging for gold is not the same as designing and building a house. Analysis and judgment are not enough when there is a need to design a way forward.”

Getting Started Is Easy

We establish a coaching contract because we must have this written to clearly describe the expected performance and the frequency and duration of the sessions. This is an important step to take because it spells out expectations and the timing milestones.

The first step is to figure out where you are and why. Then we look at where you want to be and what you want to accomplish. There is typically a “gap” between these two that allows insight into the behaviors that got you where you are.

To say that by looking into your past we can predict your future, is partially correct. If you don’t change how you make decisions, your future will be similar to your past. A good coach is a stimulus to make behavioral and attitude changes. My type of coaching approach alters your future.

Humans are a creature of habits that ultimately make up how we think, eat, talk, and above all, how we make conscious and unconscious decisions. Creating new habits isn’t always easy. I’ve seen people make functional changes almost instantly in their lives. Being told you have cancer can become life altering immediately. I’m more so talking about experiencing positive realizations that propel you forward in your life—essentially taking control of your life.

Pointed Questions to Discover Direction

What desired outcomes must be achieved between now and our next session to move you towards your objectives? This is an important question and one that can sometimes be tough to answer, especially if I keep asking it until the answers are specific. More often than not, just asking the question opens up ideas and possibilities.

What specific activities will you need to perform to accomplish your objectives? I’ve noticed that people often create a list of things to do. Too many times, these actions are tasks more than specific activities.

Why do you think these actions will achieve the outcome you’ve stated? How and when will it be accomplished, and who else must be included in this plan? These questions and, more importantly, the answers are super important in measuring success.

Wishful Thinking or True Change? 

During the next call, we explore what happened between calls. At this stage, helping us both know the rationale behind the words becomes important to understand. I’ve often had clients say they do things or take actions but don’t know why; it’s just what I do they say. Other times their rationale doesn’t match up to the objectives. Getting behind the “why” you do what you do helps to make better decisions in the future. I firmly believe you can design your future.

Tom Landry, coach of the Dallas Cowboys, said, “A coach is someone who tells you what you don’t want to hear and has you see what you don’t want to see, so you can be who you have always known you could be.”

During these calls, the realities start to reveal themselves. The time milestones between the coaching contacts allow the individual to perform based on what they say they will do. We are beginning to uncover fact or fiction at this point. I like to say that the entire situation is now “unfolding,” and together, we design the next steps in your pathway.

Internally I am asking myself, what other resources do they need? Is my coaching what they really need?  Is the original plan designed to move forward on track, or does it need adjusting? Can they take hearing the truth, or do they just want to hear false kindness?

I think Coach Landry said it really well. Sometimes, a coach’s role isn’t to be the friend who only tells you how great you are. Holding up the mirror of truth and then listening closely normally reveals if the coach needs to ask more questions or is it time to give input. Once the light goes on, and the ears are open, that’s when sweeping changes occur. I love the journey and exploration.

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