Not a single owner, executive, or manager of a brokerage or agency is likely to confess committing sales and marketing sabotage — and they usually aren’t guilty (at least not intentionally). However, in this game, ignorance is not bliss; it’s a sure recipe for failure.
Do you have a sales prevention department in your company?
This question was posed by Nadji Tehrani, the publisher of Telemarketing. It reminded me of my many mistakes over the years — excuse me, I mean “my many learning experiences.”
Why base an article on the things not to do? Because sometimes we’re so bombarded with articles about what we should be doing that we end up missing the point. This article is intended not to give you answers but to stimulate thought about your sales and marketing process. It reviews a number of typical mistakes that might be hindering your operations. Many of them fall into the category of omission (things you aren’t doing), as opposed to commission (things you are doing). If you can identify any of these mistakes as your own, you have the opportunity to improve.
KEEP THEIR NOSES TO THE GRINDSTONE
Many sales managers think they should constantly push their producers to do more or do better. In fact, “breathe down their necks” seems to be part of these managers’ job description. As a result, many producers are managed with too heavy a hand. Although it’s true that sometimes producers need a nudge, too hard a push might propel them right out the door.
I categorize producers three ways: As Shooting Star, Steady Eddy (or Steady Edie), and Super Pro. The Shooting Star is a cyclone of activity that, like a giant storm, leaves a lot of wreckage behind. Most shooting stars resign within a year or two unless they’re used strictly to open new business. Steady Eddy, on the other hand, will never lead the pack in sales, but you can always count on them to write a specific amount of business month in and month out. The Super Pro combines the ability of Shooting Star with the consistency of Steady Eddy.
Regardless of the categories your producers fall into, each one of them needs to feel valued as an individual, not just a producer. Rather than haranguing Shooting Stars to become good at account servicing, acknowledge their strength in opening new clients and nurture it with praise and other benefits. Be sure also to recognize their weakness, and turn the servicing and development over to an account executive. Although a Shooting Star might last a short while at the agency, you can make it shorter by demanding what can’t be delivered. Properly managed, a Shooting Star can create a lot of revenue for the agency or brokerage.
Similarly, don’t keep picking on Steady Eddy to deliver more sales. After a while, this will depress Eddy’s level of confidence, and the regular stream of production will decrease. Accept the fact that Eddy will deliver only a set number of policies per month, but that you can count on this business. Give them the latitude to spend time with existing accounts, even if you think it’s too much, because Eddy’s retention rate is usually quite high. Designing a sales contest that incorporates retention and account-rounding will give Eddy a chance to claim the honors occasionally.
Super Pro’s problem is usually a bit different. You seldom push this producer because everything is usually right on target. Consequently, Super Pro often feels neglected. At least once or twice per month, have a non-sales-oriented conversation with Super Pro. Ask their opinions on community issues, product development, and agency operations. Find out if there are any projects in which Super Pro would like to be involved. Nurture this producer on a well-rounded basis, because the time will come when Super Pro will want to turn toward management.
NEVER CROSS-EDUCATE
Does this sound familiar? “Producers should only go to sales, product, and motivational seminars. CSRs should only be sent to service-oriented sessions. Specialize.”
Accept the fact that many of your best employees hope to climb the ladder to new positions. For many, work is a challenge that eventually turns to comfort and then to boredom and frustration at its repetitive nature. Many Super Pros experience a mid-career crisis after racking up seven to 10 years of success.
Integrating the educational experience can alleviate feelings of entrapment. Send your producers to management classes, send your CSRs to sales seminars, send your telephone operator to a CSR class — and send them all to classes on motivation and sales techniques. For those who want to progress to new areas, you’re providing some of the basic training they’ll eventually need. Others will come away from these experiences with a refreshed appreciation for their current job. Everyone will feel more a part of the whole, and that always translates to better client relations across the board.
WHAT WE DO IS WHAT YOU GET
Today’s world is more dynamic than ever. To maintain the status quo is to go backward. Certain markets might have done well for you in the past, but that doesn’t guarantee their continued success as sources of revenue. Keep on top of client needs and new markets to stay on the cutting edge of the competition. Every agency should always have at least one or two new products under development and testing.
YOU GET IT WHEN WE GOT IT
Do you work around your clients’ schedule or your own? Suppliers to the auto manufacturers who couldn’t meet the requirements of just-in-time-delivery to help cut the manufacturer’s inventory costs discovered that they couldn’t remain competitive. It’s a go-go world out there, and if you can’t keep up with clients’ needs, you’ll soon be gone-gone.
PROMISE THEM ANYTHING
Overpromising and underdelivering are two of the most common causes of client failure. When was the last time you held a total staff meeting to discuss client expectations and agency capabilities? If you know what they want and what you can do, you can make a binding promise.
MY JOB IS MANAGING
Too many sales managers no longer understand the market in which their producers are doing business. Recently I saw a resume letter of a successful producer who was vying for a sales management position. His first sentence describing how he would manage was “to set producer goals and manage their achievement.” When I asked him how he would accomplish this, he began a litany of call reports, sales meetings, and so forth.
If I were to rewrite that resume, the first sentence might say, “As a sales manager, I would spend a minimum of one day a month in joint sales calls with each producer.” Sales management requires up-to-the-minute knowledge of markets and clients. You can’t get this from sitting behind a desk and reading reports.
Although nearly everyone agrees that a desk jockey isn’t the most effective manager, too many managers are loath to go out into the field. Thus their advice is often years out of date. A good economy and accumulated “order taking” can disguise their ineffectiveness, but in a tough market that requires persistent salesmanship, the camouflage usually fails. Unfortunately for the agency or brokerage, the damage has already been done and repairs can take years.
THE INFAMOUS 'SURVEY OF ONE’
Have you ever been excited about a new marketing concept? I mean really excited, with visions of a financially secure retirement dancing in your head? Upon implementation, did it crash to the ground, bursting those visions like bubbles? If you’re anything like me, a lot of money probably went down the drain, in addition to the loss of the anticipated revenue.
Statistics prove that “new” is likely to fail. Just look at new business start-ups: Nearly 90% end in closure or bankruptcy. True, some of these failures have to do with mismanagement, but I think that most fail because thorough market research was lacking.
One of my best mentors owned a national manufacturing company. As the manager of eastern sales operations, I frequently approached him with ideas for new products that, I was convinced, would create quantum leaps in our sales. The first time I approached him (flushed with zeal for my idea), he asked me how our customers would react to it. Having talked with a couple of my top customers about it, I quickly replied that they all loved the idea and couldn’t wait for it. He said, “If you’re sure it’s a winner, go ahead.”
Several months later, we discussed the reasons behind this foolproof idea’s failure. He told me that I had learned the “Survey of One” lesson. Running a new idea up the flagpole with a few friends or clients does not constitute effective, thorough research. A good rule of thumb is to seek a reaction from at least the top 10% of your clients, the bottom 10% of your clients, and each of the employees who would be involved. Whenever possible, arrange that their replies be written and anonymous. This dramatically increases the odds of getting honest, objective feedback. Too often, we seek the opinions of friends and associates who don’t want to hurt our feelings with the truth.
I would love to say that my “Survey of One” lesson was learned well and I never repeated that mistake, but I can’t. More times than I like to remember, excitement has overpowered judgment and I’ve plunged into failure on the basis of one opinion.
THE MORE THE MERRIER
Is revenue down a little this year? No problem! Hire another producer — or two or three. Retail businesses refer to this as “flooding the floor.” I won’t print my term for it.
Management gurus such as John Jaques have talked till they’re hoarse about the importance of managing revenue per employee, and particularly revenue per producer. Before hiring a new producer, examine your current revenue per producer; it’s probably too low. Hiring another producer, who will probably produce less than the desired revenue, will serve only to increase the overhead.
The solution is to search out the causes for the low production and quash them. Many owners lack the objectivity and brutal honesty required to find and fix the problems, and they might consider having an outside consultant perform an evaluation and recommend solutions. But before a manager throws away good money after bad, he or she should make a commitment to follow through on the changes the consultant will bring to the table.
TURNING TO THE POSITIVE
Many of the mistakes outlined in this article are caused simply by human nature. Success in sales requires nothing more than common sense. At least twice a year, take time to evaluate the basics of your sales and marketing efforts. Brainstorm new ideas and review the old ones. Seek constructive criticism from your clients and don’t be afraid of their comments; a good dose of reality from a client can put you back on the track to success.
We all know that most successful retail and wholesale businesses rely on their annual inventory. It’s a time to see what sold and what didn’t, what spoiled and what remained fresh. The results enable owners to make the tough decisions of dropping a line or reducing stock levels. The owners can also improve profits by adding new items, increasing stock levels of fast-selling items, and reducing carrying costs.
The concept of inventory might seem a little strange when applied to a service business-but your sales and marketing evaluations are your inventories. Build on what works, discard what doesn’t, and test out the new. It’s the best way to transform a “sales prevention department” to a Department of Sales Invention and Retention!