WHERE HAVE YOU BEEN?

I am constantly amazed at sales people who, when they lose business, either through an RFP or some other means, won't re-engage with the client, until the next RFP or the like.

During the debrief of why they lost the business, they inevitably ask "How long is the contract for?" When told 1, 3 or 5 years, they check out and no one sees or hears from the company until near to the time that they may have an opportunity to re-engage.

So, as Dr. Phil would say "How's that working for you?"

I've seen too many sales people go off, licking their wounds and figure next time. But if the next time I see you is only when the business is up for tender, then you'll probably lose.

If you were the incumbent and lost or even if it was a potential new client and you lost, don't wait to re-engage, because quite honestly at that point it is too late. And by the way, if you were the incumbent and you lost, well, your competition was certainly cultivating the relationships over the years that you had the business. They understood the client, the client's direction and knew what was needed to win.

I know, you are probably saying, "well, you know those ______ (fill in the blank) procurement people won't make time for me." How often have you tried? And at what level? Yeh, maybe the VP or Director won't have time but others in the chain will, and you can glean valuable insights from them.

And yes, right after losing is probably not a great time to begin the next sales cycle, but even during the debrief, you can say "Well, we thank you for the opportunity. Obviously we are disappointed that we lost. We look forward to keeping connected, so who would it be best to reach out to in 8 months or so?"

And even if they say, "we'll call you," just reach out in 8 months anyway. And see how things are going with the chosen supplier. Have a coffee chat or something like that. Nothing formal, informal is best. Keep your potential client up on whatever new things your business is doing. Say "we've had real success in approaching issues with another company by doing this...."; "We've really moved forward on our sustainability platform...."; "We won an award for......" Plant the seeds. The old adage, you reap as you have sown is a truism.

Start doing your homework and keep up the contact. You don't want to show up in three years and all the players have changed, the strategy has changed and you don't have a clue what's going on.

I mentioned incumbents earlier, but let me tell you that keeping abreast of what's going on goes double for you. If you lose the business on price, then you didn't effectively put forward your value proposition when you had the chance. Furthermore, you missed the business drivers that were pushing in this direction. You missed the opportunity to develop some innovative approach to the business, which could have had the organization meet their metrics, while you maintain the business.

Don't walk away at anytime from a client or potential client. Keep up the relationship. Keep them close.

Because "Call Me Maybe" is not a strategy.

IT'S ABOUT MORE THAN SALES

Organizations are always quick to put sales on a pedestal. Sales is the lifeblood of the organization they will shout from the rooftops. Much effort and money is put towards annual sales conference, sales training, "President's Club" trips, etc. etc. etc.

A stellar sales force is extremely important to a company, because obviously without revenue generation there would be no business. But focusing most efforts on sales is like saying you only need a frontal lobe in the brain, there is no need for the rest of the organ to think and make the body function.

So what about Supply Chain, Procurement, Finance, HR, Marketing, IT. Research etc.? Could sales actually put together proposals, sell to the client and deliver excellent service to that same client without these so-called support organizations? Of course not. Yet because these are what are typically referred to as "back-room" functions (or even worse - cost centers) they are taken for granted.

Some organizations get it and celebrate the contributions of stellar individuals or teams outside of sales. But most do not. They will slash other budgets while putting more into sales, not recognizing that the other aspects of the organization are in fact the "client retention" part of the business.

I will address Supply Chain and Procurement specifically here because that is what I have the most experience with, but that is not to diminish the rest of the "support" functions...they are equally important.

When dealing with  product distribution, Supply Chain defines the client experience. From having the inventory available, to delivering the right product, to the right place, at the promised time, in one piece. If you think about whether you would want continue to deal with an organization that never had the product you wanted available, and never delivered to promise, well, you would take your business elsewhere, pretty quickly. 

Supply Chain and Procurement often work hand-in-hand with the sales force in structuring deals, whether in services or product sales. They may even be asked to go on client visits to give some credibility to the "team" approach of their company. I have also seen deals sold, where it was almost impossible to deliver to the promises made within the profitability matrix provided. That's when all the non-sales functions role up their sleeves and become creative on how to make this work. But at the end of the day it will be the sales rep who will get the shiny statue and maybe a trip to boot.

I could give more examples, but I think you have the basic idea. I am not dissing sales, far from it. I actually like sales people. They have a tough job, I mean they have to truly go through a labyrinth, with unknown obstacles hiding away, before they make a sale. So I think it is appropriate to recognize them and train them to do better.

Yet don't forget the rest of the folk back at the shop. They don't expect much, they are used to being overlooked. But if you really want a high-functioning organization, make a point of recognizing all the contributors to the achievements of the organization, and promoting that success is the net result of everyone in the team -- not just sales.

THE PERSONAL TOUCH

In this world of there being an "app" for everything, when it comes to business there is no substitute for the personal touch. When you remove the personal touch, then your business becomes a commodity, which means you have made it easier for your customer to switch to another provider.

We seem to have lost sight of the fact that humans still need to "touch and feel" (figuratively not literally) the people that they will do business with. That's right, the people. Because we still do business with people not corporations. I know in the past when a sales rep whom I knew provided stellar service, was trustworthy and I knew the product I was getting was at a good price (you don't always have to RFP, you can do a market review), I began considering other companies, because that bond had been broken.

Some companies believe because they have a unique product/service, they don't need to worry as much about the personal touch. The problem with that philosophy is that other companies will likely catch up, eventually, and if you haven't treated your client well, then guess what? You will be sitting on the street corner lamenting as to why you didn't see this coming.

The world is "flat" and as such a lot of communication must be done by phone or Skype or text...name your poison. But even in those instances you can develop a long and lasting relationship which can withstand competitive pressures. An example of this is that I have had the same insurance broker for over 25 years. I've never met him, but when we chat it is like good friends catching up. The reason I stay even though there may be other insurance "deals" out there? Because when I've had claims, he has been there as my advocate, I know he knows the market and what I need. I trust him. It is theis personal bond we've created over the years that ensures I remain a loyal client (and a referring client...I've sent a fair amount of friends his way).

So don't forget the personal touch. It will bode well for increasing your business and it should make your work a lot more pleasant!

RETHINKING SACRED COWS IN SALES COMPENSATION

In the July/August edition of Harvard Business Review, there are several articles about how to motivate and get the most out of your sales force. One article that I found of particular interest was entitled "A Radical Prescription for Sales", wherein the premise is basically that offering commissions to the sales people may not be the way to get the best performance. 

As there is a shift from product selling to solution selling this makes absolute sense. The "if-then" reward system perhaps worked (and may still work) with simplistic sale, but when you get into high-value selling where you may need to take a lot more time in getting to the end-state with a client (and service the client post-sale) the commission structure could result in shoddy workmanship, if you will, because the sales person needs to already be focused on the next sale to make sure his/her income keeps rolling in. 

The cost to the corporation is high for the selling of a service which inherently is operationally difficult to implement, because there is distinct dissatisfaction for both the client and the internal folk of an enterprise who are tasked with ensuring the project/solution is implemented and the profitability promised by the sales person remains intact...not a prescription for success. 

This article in HBR refers to a company Microchip Technology which in the late 90's took their salespeople from a 60% base salary, 40% commission structure to a high base salary, which represented 90% of earnings for sales, and 10% was linked to the corporate (rather than the individual) measures. Not only was this the comp model for sales, but for the rest of the corporation too!

The result was sales increased and the cost of sales remained the same. This seems somewhat counterintuitive, but if you think of the sales force of today, vs. those of yesterday -- today you have highly educated self-motivated individuals whom you want to have working for the benefit of the whole vs. just their own pocket book. Several companies are embracing this "radical" approach with great results -- even GlaxoSmithCline. 

When I was on the buying side of the equation, I was much more inclined to give business to those firms where I didn't feel like they were looking at their watches and hurrying to the next appointment so they could keep up their mortgage payments. Furthermore, it isn't just about getting new clients, it is about no losing those that you have. With a revised comp system you may be able to do this.

As a consumer I prefer to go into Best Buy, as opposed to The Future Shop. Both are owned by the same mothership, but I don't feel pressured at Best Buy and I feel that I'm getting the best advice, vs. where the sales rep will get the most commission.

So perhaps it is time to revamp the thinking on sales compensation. And if you really think about it, you could probably eliminate a whole bunch of accounting people too that have to keep track of the complicated matrix of sales compensation that most companies have!