Dealing With The Producer Who's Leveled Off

DEALING WITH THE PRODUCER WHO'S LEVELED OFF

by Dave Kahle

If a producer’s performance is lagging, here’s how to turn the situation around.

Every manager has, or will, confront this troublesome issue: When your salespeople level off and their performance stagnates, what do you do? Here’s a simple, effective strategy. First, verify that a problem exists. Then, place the responsibility for solving the problem where it belongs.

VERIFY THE PROBLEM

It might not be a problem at all. On the surface, there’s nothing wrong with a salesperson becoming comfortable at a certain level of performance. Aren’t salespeople allowed to become comfortable in their jobs? What about your CSRs, or your CFO? Don’t you expect them to perform in a predictable manner? Are salespeople any different?

For a lot of people, the answer is, “Yes, salespeople are different.” We have different expectations for our salespeople than for other job titles. Salespeople are supposed to sell, and sell more each year.

We need a way to sort this out. On the one hand, it might be perfectly acceptable to have a salesperson who has leveled off. On the other, it might be a problem. Before you rush to judgment on any particular person, you need to ask — and answer — two important questions about their performance. First, “Is the salesperson appropriately profitable?” Second, “Is the salesperson appropriately ‘directable’?”

Is this salesperson appropriately profitable? Don’t be fooled by looking at net sales or even total gross profit. Profitability is the difference between costs and revenues. To answer this question objectively and accurately, compare the total direct cost of the salesperson with the total absolute dollars of gross margin the salesperson has generated.

Once you arrive at either a percentage (relationship of cost to revenue) or an absolute dollar amount (total margin contribution) that describes the salesperson’s profitability, compare it with the rest of the sales force.

For example, your salesperson in question might have a productivity number of 19%. In other words, they cost the company about 19% of the gross profit that they bring in. The actual numbers might look like this:

• Gross profit produced in the last 12 months: $394,737
• Total direct costs of the salesperson: $75,000
• Productivity measurement: 19%
• Total margin contribution: $319,737

Now you can answer the question, “Is this salesperson appropriately profitable?” Compare the numbers with the rest of the sales force. Let’s say the median productivity number is 20%. That means that half of the sales force costs the company more, as a percentage of margin, than this salesperson does.

If they rate in the upper half of your sales force, as in our example, they’re not a problem. If, however, they’re in the lower third of the sales force, you clearly have a problem. Anything in between is a judgment call.

You’ve dealt with the issue of profitability. Now, how about the second question, “Is this salesperson appropriately directable?” Directable means that you can count on the salesperson to do what you ask.

Here’s an example: Your marketing department has put together a hot new program. You assemble the sales force at your monthly meeting and lay out the program. You tell them to present it to each of their top 20 accounts during the next 30 days. What’s the likelihood that they’ll actually do this?

That’s a measure of directability. If the salesperson in question nods in agreement at the meeting and then does just what they want to do without considering your expectations, you have a problem. If, however, they follow through on your directions, and can be counted on to do so consistently, then there’s no directability problem.

Let’s recap. If you have a salesperson who has leveled off, the first issue is to determine whether this is a problem. If the salesperson is appropriately profitable, and appropriately directable, it’s not a problem. Leave them alone; you have more pressing issues. However, if either question reveals a deficiency, you have a problem that requires your intervention.

ASSIGN RESPONSIBILITY

Place the responsibility for solving the problem where it belongs: With the salesperson. Don’t bother staying up all night, tossing and turning over this issue. Don’t be crabby to your spouse and short with your kids as you mull over what you should do. It’s not your problem — it’s the salesperson’s! You just need to let the person know this.

There might be a thousand reasons why this particular salesperson has leveled off. They might be:

• Comfortable with their income
• Having personal relationship problems
• In a behavioral rut
• Disinterested
• Working on a personal business on the side
• Depressed

It doesn’t matter. It’s not up to you to ferret out the underlying cause and correct it. Your job is to put the problem squarely on the salesperson, to explain clearly your expectations, and to provide specific and clear direction.

Here’s how to accomplish this:

1. Prepare your case. Define the problem exactly. Profitability? Directability? Be detailed and specific. Prepare the numbers and outline your perceptions.
2. Meet with the salesperson face to face. No written memo, no phone call, no e-mail. This person deserves your best effort. Set aside a special time, have your secretary hold your calls, and meet eyeball to eyeball.
3. Communicate specifically, clearly, and non-emotionally. Explain the problem. Communicate your expectations for improvement in specific areas. Provide a time frame. Make sure your salesperson understands. Ask them to summarize the conversation and restate your mutual goals.
4. Let the salesperson know that you’re on their side. You want them to be successful. You’re here to help. Toward the end the meeting, ask “How can I help?” There might be some things that you can do or changes you can make that will help them achieve at higher levels. If your conversation uncovers relevant issues, make sure you follow through and do what you say you’re going to do.
5. Schedule another meeting to follow up and review progress. This establishes the seriousness of the situation and interjects some urgency.
6. After the meeting, document it. Capture your notes while they’re fresh in your mind. Summarize the meeting in a memo to the salesperson, to add to the seriousness of the event.

The responsibility rests squarely on the salesperson to improve their performance. You can sleep at night and get on with other issues. At some point, probably in the next meeting, you’ll have some decisions to make about the salesperson’s future. Until then, it’s not your problem.

Dave Kahle is a consultant and trainer who helps clients increase sales and improve sales productivity. He’s the author of more than 200 articles and three books. The Six-Hat Salesperson was recently released by AMACOM. Contact him at The DaCo Corporation, 15 Ionia SW, Suite 220, Grand Rapids, MI 49503, phone (800) 331-1287, fax (616) 451-9412, e-mail [email protected], or Web site www.davekahle.com.