In the classic play and movie, Glengarry Glen Ross, Blake, the somewhat strident troubleshooter from downtown, informs us that “Sales is a tough racket.”
Selling is not only tough on the sales rep, it is also tough on the company. For that matter, it can be tough on the buying party and buying company, as well.
Before we go further, I want to say that I have the highest respect for good salespeople. They have a tough job, and we all depend on them to do their jobs well. But, not all salespeople are created equal. For every few Zig Ziglars, there is an Orville Haney. For each Og Mandino, you will also find a Herb Tarlek.
Consider the average transaction. Two large organizations represented by two individuals negotiate a deal. Money and product are exchanged. All of this happens largely behind closed doors, out of sight and with little or no oversight. Granted, larger deals may involve more folks on both sides of the desk, but these still require a considerable amount of trust.
Companies frequently find themselves prey to unscrupulous or incompetent sales reps or simply bad business practices. As a VP or director of sales, you’re ultimately responsible for the actions of your sales team. While you (hopefully) trust your team, anyone who’s been in the game long enough knows that the landscape of a sales organization is prone to sudden and dramatic shifts based on unforeseen actions of sales reps.
It really doesn’t need to be this way. There are easy ways to ensure that the selling process is transparent and easy to manage and follow so you and the company don’t get burnt.
Let’s take a look at a few of the more common scenarios and how they can be mitigated. Let’s meet the Sales Reps from Hell.
The Disappearing Sales Rep
If you have been around sales folks for any length of time, you’ve most likely run into this fellow. He’s likeable, he seems to stay very busy and he closes some business now and then. He has been around for quite a while, but he seems to always be a month away from closing the big deal.
He’s kind of a cowboy in that he doesn’t share a lot of detail about what he’s doing. But, since he does earn a bit for the company, no one complains, and they let him kind of run his own show.
Then, one day quite unexpectedly, he leaves the company. He’s gone and no one really knows why. He does not go alone. His contact list, his deals, his customer files, his price list, his product information and his calendar all go out the door with him. They go out the door and down the street … to your primary competitor.
Today, companies don’t have to accept this. CRM systems provide a place for contact, customer and activity reporting. Sales reps that don’t use CRM need to understand that this is not acceptable any more. More companies are adopting a policy that if something isn’t in CRM, it isn’t real. No commissions are paid; no exceptions.
Sales managers have every right in the world to be informed of everything going on in their territories. If a sales manager sees a month of no CRM activity posted by a sales rep, they need to place that individual on an improvement program or show them the door.
Parting ways with partners and employees is not an easy process. Situations will vary. The key is to understand what your rights and responsibilities are in this area.
In the Midnight Hour
This guy is always too busy to come in and talk. He is never in the office, and he’s always late with reports or other work. He may close some business, but not very much. He may miss sales meetings or other gatherings, always with a last-minute excuse.
He works out of his home, and many times he doesn’t answer the phone, instead allowing it to roll over to voice mail. He is perpetually vague about who he is talking to and what the status of this or that deal is. It is only by accident that you learn the truth—your man in Topeka is also someone else’s man in Topeka.
He’s a moonlighter. It may be Amway, or it may be your primary competitor. Either way, he is stealing time from you and defrauding you.
Perhaps you are paying him a salary plus commission, or perhaps you call it a draw. Regardless, it is money wasted.
Once again, a requirement to use a CRM system is the best insurance against this. Daily discussions with prospects and customers are recorded. This has the added benefit of improving your ability to forecast business based on real data instead of polling reps every month or quarter.
Undoubtedly, there are the few that will interpret this as spying on them. They will complain about a lack of trust.
Too bad. Too much is at stake. The Air Force and Navy both require two keys to be turned simultaneously to launch a missile. Generally accepted accounting practices require multi-party authorizations on maintaining the financial records and activities for the corporation. It is not a matter of trust, it is a matter of corporate credibility.
Sales reps, by their very nature, love to have the answer. They hate having to say, “I don’t know.” So, when the customer is listening early on, the pitch asks, “How much?”
These guys feel compelled to toss out an answer—usually calling it a ballpark quote. But is it? Is it a quote or is it an estimate?
The problem with ballpark quotes is they become etched in the mind of the customer and three months later, when the final presentation is given, they are shocked to find that the price has tripled.
Of course, during those three months, all manner of additional functionality is revealed as required for the delivered product.
A CPQ system allows the rep to generate as many quotes as required. Each will reflect the exact functionality built into the system being quoted. It’s not a ballpark; it’s a firm quote for a firm product. Documenting the quotation in the CRM system will also add to the validity of the quotation. If you must produce it down the road, it will clearly spell out what was included.
This is helpful when the customer suggests that promised functionality is not included in the deliverable. People remember things inaccurately. CRM and CPQ systems remember things exactly the way they were entered.
The Flim-Flam Man
It’s the last day of the fiscal year and one of your reps who is down a few points off quota walks in with a last-minute order that puts them over the top! Hooray! All of the incentives kick in, bonus checks are written and the hero is headed off to Tahiti for the 100 percent club meeting. The sales manager gets a kiss, and the VP of sales is honored, as well.
Three months later, all of the money has been spent, the club trip is a memory and all eyes are focused on the new year. A return for credit is quietly processed for the customer who placed the over-the-top order. It seems that they are not going to need the product due to some unforeseen situation.
In reality, it was always a bogus deal. The customer may or may not have actually placed the order. It really doesn’t matter because the whole thing was bogus to begin with.
Yes, there are sales folks out there who are capable of doing this. I personally know of a case involving a computer salesperson who did this on multiple occasions. The customer loved this rep so much they would do anything to help him out. Machines were ordered then they stayed on the pallet on the receiving dock. After a few months, plans would magically change and the box was returned for credit.
Once again, steady use of CRM to document ongoing sales cycles is an effective way to avert this kind of fraud. Last-minute deals, especially ones involving incentive kick-ins or similar perks, should be easy to track in CRM. If they aren’t there, by policy, the deals should be handled on a tentative basis. This isn’t a slap in the face; it’s smart business.
Technology does more than speed things up or help us eliminate mistakes. Technology keeps honest people honest. Selling is so critical to any company, and so much rides on the integrity of the transaction and the people consummating the deal.
A handshake may have been good enough for folks of years past, but today we require more. CRM and CPQ are just two tools that not only reinforce the integrity of the selling process, they help the sales rep close business. It is, after all, the business that owns the data and is incurring the liability for storing that data.