Are salespeople necessary? According to Peter Drucker: “People are simply too expensive to be used for selling. We cannot, by and large, sell anymore—we must market, i.e., we must create the desire to buy which we then can satisfy without a great deal of selling.”
Companies don’t always need their own sales forces. About 50 percent of companies use contract sales forces: manufacturers’ reps, sales agents, and so on. Many companies hire outside salespeople to handle more marginal geographical areas and market segments.
In hiring salespeople, you should hire only those who are sold on the company and its products. This is hard to fake. And you might prefer people who have failed, rather than those who never tried. And don’t hire any salesperson whom you wouldn’t want to invite to your home for dinner.
In deciding on how much to pay salespeople, remember that low-paid salespeople are expensive, and high-paid salespeople are cheap. Top salespeople in a company often sell five times as much as the average salesperson but don’t get paid five times as much.
Salespeople need to be motivated, much like football players huddled in a locker room. The real talent is to be able to motivate the average salesperson, not just the star performers.
Watch out for the salesperson who thinks any sale is good no matter what its profitability. Tie compensation to the profit on the sale, not to the revenue. Each salesperson should see himself or herself as managing a profit center, not a sales center, and be rewarded accordingly.
Here are other measures to look at in judging a salesperson’s performance: average number of sales calls per day, average sales-call time per contact, average cost and revenue per sales call, percentage of orders per hundred sales calls, and number of new and lost customers per sales period. Then compare this salesperson’s performance to the average salesperson’s performance to detect poor or exceptionally good performance.
Poor performance is often excused by saying the market is mature. But calling a market “mature” is evidence of incompetence. It is probably easier to make money in a mature industry than in a high-tech industry, to take an extreme case.
The hardest job facing a salesperson is to tell a customer that a competitor has the better product. IBM expects its sales reps to recommend the best equipment for an application, even if this means recommending a competitor’s hardware. But the sales rep will win the customer’s respect and eventually his or her business.
Marketing’s role is to support the sales force in the following ways:
- Marketing places ads and buys lists to identify new prospects.
- Marketing prepares a proﬁle of the best prospects so that salespeople know who to call on and who not to call on.
- Marketing describes the buying influences and rationales used by key customer decision makers.
- Marketing highlights competitors’ strengths and weaknesses and how the company’s products rate against competitors’ offerings.
- Marketing documents and distributes sales success stories and uses them in training programs.
- Marketing prepares and distributes communications (advertising, brochures, etc.) to customers to stimulate interest in the company’s products and make salespeople more welcome.
- Marketing uses advertising and telemarketing to ﬁnd and qualify leads that can be turned over to the sales force.
Smart companies are equipping their salespeople with sales automation equipment (computers, cell phones, fax and copy machines) and software. Salespeople can research the customer before the visit, answer questions during the visit, and record important facts after the visit.
Salespeople can retrieve product information such as tech bulletins, pricing information, customer buying history, preferred payment terms, and other data to facilitate their work.
When the salesperson finally makes the sale, “The salesmen’s anxiety ends and the customer’s anxiety begins.” (Theodore Levitt)