You’re the Boss Blog: An Owner Gets a Lesson In Managing Sales Reps

She Owns It

Portraits of women entrepreneurs.

Earl Wilson/The New York Times Susan Parker: Keeping the reps honest.

At the last meeting of the She Owns It business group, Beth Shaw, founder of YogaFit, wondered why her recently hired sales representative was not meeting expectations. As that conversation continued, Ms. Shaw came to see the importance of a good customer-relations management system. She also considered putting role-playing exercises in place for her sales representatives and setting clear goals for them — from Day 1.

During the same meeting, Susan Parker, who owns the dress maker Bari Jay, talked about her company’s approach to sales. She uses independent contractors who are paid on commission. They represent other brands as well, and travel from store to store. Additionally, Bari Jay has one salaried sales manager on the staff to oversee them.

Ms. Shaw asked Ms. Parker if she offered any sales incentives to her customer-service people.

No, Ms. Parker said, although she does give year-end bonuses when the company does well, and she also offers profit-sharing. “When you offer them a carrot, then they try to sabotage your road men to get those accounts themselves,” she said. For example, someone in customer service might report that a certain bridal shop had called, complaining about its sales representative. Seeing an opportunity, that person might then offer to handle the account.

“The other thing they do is, then they stop paying attention to some accounts because they don’t see a big commission opportunity,” said Deirdre Lord, who owns the Megawatt Hour.

Ms. Shaw asked Ms. Parker how she knew her shared sales representatives were out there actually trying to sell Bari Jay.

That is where her “phenomenal” sales manager comes in, Ms. Parker said. He was previously Bari Jay’s sales representative for the Northeast region. He retired from that role — he is in his 70s and sold Bari Jay for some 40 years — and Ms. Parker created the sales manager position for him in September.

“Good idea,” Ms. Lord said.

Initially, Ms. Parker said she wondered whether she needed him. She now says hiring him was “the best thing we’ve ever done.” He keeps the sales reps honest, she said, because they can’t argue with him.

For example, Ms. Parker thought one particular rep had a great year because his sales were up 15 percent. Her sales manager helped her put things into perspective. “He’s like, ‘Susan, he has like 100-and-something stores; he physically set foot in 30-something of them,’” she said. Those few stores were already Bari Jay customers. The others represent a huge missed opportunity. “It’s been a big learning curve for me,” she said.

Ms. Parker said her sales manager knew every angle. When he saw frequent orders for eight dresses, he began asking the reps why they were not pushing for larger orders. Stores that sell Bari Jay dresses get volume discounts. “If you buy 12, you get 40 percent; 18, you get 45 percent,” she said. “You buy the whole line, you get 50 percent off.” And the more dresses the sales reps put in a store, the more money they make. Still, they were not rising to the occasion. The manager wound up calling the stores himself. He learned from the thankful owners that they had not even been told about the discounts.

“So, he’s kind of doing their job for them,” Ms. Shaw said.

Ms. Parker acknowledged that Bari Jay needed to do some housecleaning. She let one sales rep go, but her sales manager does not recommend getting rid of everyone at once. “We kind of have to focus on one territory at a time,” she said.

You can follow Adriana Gardella on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/02/04/an-owner-gets-a-lesson-in-managing-sales-representatives/?partner=rss&emc=rss