Though only in my 30s, I've cultivated a cynical outlook of the business world worthy of a dyspeptic old man--think Andy Rooney with lots of hair and a great handbag collection. This basic distrust of human motives makes me well-suited to work on my own and, according to my high school aptitude tests, be a lawyer.
A little business cynicism may serve you well when you face the defection of a top producer. Because you hired a high achiever who knows his or her way around a client meeting, a pro who's fearless and impervious to rejection, you may have trained your future competition. When you hear the good news-that your employee is starting his or her own shop and the shingle's set to debut any day-what should you do? It's time to beat feet: Secure outstanding client lists, assign a new salesperson to the employee's accounts, and get on the horn to let clients know who'll be their new sales representative.
It's rough enough to lose a good employee, so when your top salesperson bids you adieu, keep these points in mind to prevent a client exodus as well:
- Protect your company's assets from the get-go with a noncompete agreement. Nicholas C. York, an attorney and partner at Arter & Hadden LLP in Cleveland works with entrepreneurs and emerging-growth companies. York is blunt about the need for a noncompete agreement right upfront: "If you wait until your top sales producer decides he's leaving to take a position with a competitor, or if the entrepreneurial bug bites him, it's probably too late."
Talk with a lawyer about crafting the right noncompete agreement for your business. A standard agreement aims to protect you from an employee poaching your accounts for a certain amount of time after employment ends. York says such agreements are "generally enforceable to protect 'legitimate business interests,' [though] the enforceability and/or scope of the protection varies from state to state."
Andrea Nierenberg is principal of The Nierenberg Group Inc., a consulting firm in New York City that specializes in sales, customer service, presentation skills and management training. Nierenberg encourages entrepreneurs to create a document that spells out what happens when the employee-employer relationship ends, specifying provisions about the salesperson steering clear of his or her former company's clients for a certain amount of time.
- Don't let the door hit you on the way out. Cathy Kato, a business coach in Beaverton, Oregon, agrees that noncompetes are worthwhile, but she also believes that they're "very hard to enforce and are not generally enforced as long as the ex-employee doesn't try to take a large portion of his business with him." Kato, also coaches business clients on the steps to take to avoid account pilferage. When an employee gives notice, Kato recommends entrepreneurs pay the salesperson the final two weeks' salary, then conduct an exit interview and escort the employee out of the building.
- Never lose touch with your clients. If the salesperson is the only contact a customer has with your company, you may be left wondering what the hell happened to all your clients. Get out in the field on regular sales calls and check in with clients at least quarterly. Of course you're swamped, but lose touch with the people who put you in the black at your peril.
Kimberly L. McCall is president of McCall Media & Marketing (www.marketingangel.com), a business communications company in Freeport, Maine.
- Arter & Hadden LLP
(216) 696-5572, http://www.arterhadden.com
- Cathy Kato
(888) 805-5513, http://www.cathykato.com;
- The Nierenberg Group Inc.
(212) 980-0930, firstname.lastname@example.org