All Work & No Play

Developing Process

At the root of what entrepreneurs and sales pundits are talking about is the need to approach sales as a process. Rather than calling prospects and expecting to close a deal upon first contact, salespeople are expected to systematically learn a market, develop leads, prepare solutions and present them effectively.

"A lot of salespeople tried to hit holes-in-one," says Stephan Schiffman, CEO of sales consulting firm DEI Management in New York City. "There was a time when you could do that. But now you have to go back to the process and be good at it," adds Schiffman, the author of many sales books, including one he considers particularly appropriate to today's selling environment, Make It Happen Before Lunch: 50 Cut-to-the-Chase Strategies for Getting the Business Results You Want (McGraw-Hill).

Salespeople can't expect golf outings and other forms of entertainment to yield rapid results-or that time-pressed clients will even accept such offerings. "Entertainment is on the wane," says Schiffman. "Unless there's already a relationship, taking someone to lunch doesn't serve a purpose."

Developing and executing a sales process can takes a while. Eighteen months ago, an opportunity that did not pan out after four to six weeks would have been labeled a low priority. "A sales cycle of three to four months is now mainstream," Schiffman says.

It may take twice as many contacts to close a sale today, says McClennan. And surprisingly, both entrepreneurs and experts agree sellers can't always shortcut the process by just dropping the price.

"The old method of selling by price is falling by the wayside," explains Dennis Kyle, a sales consultant with Positive Results in Avon Lake, Ohio. "Organizations are willing to pay more if the product's value is evident. They won't pay a dollar for anything if they don't see the value."

Performance Anxiety

The good news about paying salespeople today is that you can peg a higher percentage of compensation to performance. The bad news is, old measures of performance may not be good enough.

Entrepreneurs today are having less trouble keeping good people and hiring new ones at lower base salaries than in years past. But they are also finding less justification for paying straight commissions for new orders. Instead, they're basing compensation on more exotic, harder-to-figure measures such as profit margin per order and customer satisfaction. The revised approaches do more than save money, although total sales pay may actually be shrinking from previously inflated levels.

Most important, they make sure salespeople aren't making the wrong sales. Paying based on profit margin keeps sellers from cutting prices just to get an order. And basing pay on customer satisfaction means salespeople won't promise features and delivery dates the company can't provide.

 

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This article was originally published in the August 2002 print edition of Entrepreneur with the headline: All Work & No Play.

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