She Owns It

Portraits of women entrepreneurs.

Earl Wilson/The New York Times Deirdre Lord

During a previous She Owns It business group meeting, Beth Shaw, who owns YogaFit, said she realized she had to ramp up her sales efforts. Toward that end, she brought on a sales manager with a 60-day contract that is up in February. So far, results have been lackluster, leaving Ms. Shaw to wonder whether her expectations are realistic and whether she is offering the contractor the proper incentives to sell sponsorships of YogaFit’s conferences and its branded merchandise. She asked the group how quickly they expected new sales representatives to sell and what type of learning curve they expected.

“I used to create sales quotas, and then assume people were going to hit them immediately, which is totally unreasonable,” said Deirdre Lord, who owns the Megawatt Hour, a start-up in the energy industry. Now, she said, when forecasting — especially when working with new sales representatives — she builds in a three- to six-month period for them to get up to speed.

“Do you pay them a small base plus a large commission?” Ms. Shaw asked.

Ms. Lord replied that her two sales reps were paid only on commission. She added that it was important to set targets because salespeople are competitive and want to know what they must do to succeed. She said that should drive how you manage them.

Ms. Shaw asked Ms. Lord if she had trouble finding good sales people willing to work for commission only.

It’s a challenge, Ms. Lord replied. She said the sales reps she considered typically require $100,000 to $125,000 in total annual compensation. “You have to map that out for them — if you do X, Y and Z, that’s how you get to those numbers,” she said.

Depending on how successful her outside sales reps are, Ms. Lord said she would switch things up — ultimately giving them smaller commissions and larger base salaries.

This surprised Susan Parker, who owns Bari Jay, which manufactures bridesmaid and prom dresses. “When they’re more successful, you give them lower commission and a higher base?”

“Yes,” said Ms. Lord, who is also engaged in selling for her company, “because they like to have the security.”

Ms. Parker said, “But I feel like a good salesperson always wants commission because —”

“Of the unlimited upside,” Ms. Lord jumped in. But, she explained, “We’re competing for salespeople so we need to be able to offer them greater stability.”

Ms. Shaw said, “Throughout the years, I’ve had salespeople on and off, some more successful than others, some as employees, and some as independent contractors,” But the current arrangement, a 60-day contract with expectations, doesn’t seem to be working. She said that, in a month and a week on the job, her new sales manager hadn’t done much selling.

She said she gave the sales manager clear goals. “One is to sell, two is to do sales training with my staff, and three is to handle some inventory management,” Ms. Shaw said. “Inventory management hasn’t been handled, sales training started for a while and then stopped, and she hasn’t pulled any numbers.”

Ms. Shaw wondered whether it was time to admit defeat. After all, the sales manager has sold no YogaFit conference sponsorships, which range from $5,000 to $15,000 and offer her a 10 to 15 percent commission. “I’ve given her a tremendous amount of leads,” Ms. Shaw said. These include pro shops located in health and fitness clubs that offer YogaFit trainings. Maybe, she suggested, she should just have the sales manager finish out her contract by handling incoming customer service calls, with the hope that she might manage to sell something extra to the callers.

“What was her background?” asked Jessica Johnson, who owns Johnson Security Bureau.

“She supposedly sold cars,” said Ms. Shaw. And supposedly, YogaFit’s former chief operating officer checked references.

“I guess one question would be, How important is experience in your industry when you are looking at a sales professional?” Ms. Johnson said.

“I think you’re either a salesperson or you’re not,” Ms. Shaw said.

Ms. Parker agreed.

Ms. Johnson, who worked in pharmaceutical sales before taking control of her family business, described herself as a “recovering salesperson.” “I can sell anything,” she said.

Ms. Shaw agreed: “Me, too. My background is advertising sales.”

Still, Ms. Johnson said she knew of sales reps who thrived in one context but not in another. “Some people are more relationship-driven, some are more technical,” she said.

But what’s a reasonable amount of time to give a salesperson to get up to speed? Ms. Shaw asked.

“I think it takes a while, particularly in our industry, to establish relationships,” Ms. Lord said. Unless someone comes with a book of business, it takes time to generate leads. Still, she added, she would not expect zero progress after one month, and asked: “Is there any way you can track who she’s calling?”

“I still don’t have an adequate C.R.M.” — customer relations management system — “in place,” Ms. Shaw said.

“Do you give her checkpoints to meet, like ‘For this month I want you to have 100 new touches?’” Ms. Johnson asked.

“Not in terms of daily calls, I would hope she could figure that on her own,” Ms. Shaw said. She noted that the sales manager was receiving a “pretty generous base.” With hindsight, she thinks she probably should have paid her half of that and increased her commission.

What do you think?

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Article source: http://boss.blogs.nytimes.com/2013/01/25/getting-sales-representatives-to-sell/?partner=rss&emc=rss