150,000 Reasons Why You Need an On-boarding Program
A couple of months ago, I hosted a meeting of new distributor salespeople. Their common link; they all had fewer than 18 months experience in the outside role. We asked which of them had any training when they hit the road. Unfortunately, most were introduced to their new job the same way as their bosses: “Here’s the key to the company car, there’s your territory, go forth and sell.” Despite high costs and financial mounting financial pressures, most distributors start new salespeople off without a well thought out onboarding process.
One of the critical points of bringing on any new salesperson comes in setting process expectations. They start their career without truly understanding some of the fundamentals of how you expect to do business in the future. I believe that process is critical to efficient organization. Nothing elaborate, however; every good distributor does need at least a few process points. Let’s explore.
Establish Expectations
First, lay out some financial guidelines. What makes a salesperson successful in your organization? When a salesperson starts off with an expansion territory, they need to know growing their business is job one. But, how much growth equates to success? If a successful salesperson should be handling $2 Million and their new territory generates $500,000, doubling the territory in three years is good, but not necessarily a win for the company.
Lay out growth plans for the territory including the types of accounts, the products you believe are ripe for growing and how the growth will impact their income. Make certain they understand growth greater than the organization is expected and doesn’t necessarily translate into massive profits for the company.
While I don’t believe in micromanagement, expectations should be set on working hours, number of calls made, appointments and timeliness of communication. As strange as this may seem, I continually hear stories of sales managers discovering that their new salesperson has the habit of not starting the day until 9:00 because they like to drop their spouse off at work each morning or sit in line for fancy coffee. Why not nip the issue in the bud by laying out expectations the first day? Joint calls are an important selling tool as well as an opportunity for the new salesperson to gain valuable on the job product sales training. Many distributors allow new salespeople to go untrained in how to use this resource. I believe expectations should be established around when to use outside resources. Metrics and instructions can easily be defined for joint calls with specialists, key supply partner reps and distributor management.
For example:
• How many calls are expected per month?
• Who is responsible for setting up the call?
• What follow-up might look like?
• How will the calls will be tracked and measured?
We have a multitude of communications options available. Expectations should be set based on the mode of communication used with customers and vendors. Response times could resemble the following:
• Customer Phone Calls – 4 hours
• Customer Emails – 1 business day
• Inside Support Staff Calls – 2 hours
• Key Supply Partner Calls – 4 hours
• Vendor Calls – 1 business day
• Management Emails – returned on the requested day or an explanation provided immediately
How do you capture customer data? If you are a distributor using a customer relationship management (CRM) program, the new guy should understand the information required and the timeframe for data entry. This includes new customer contacts with accurate names and titles, product interests, calls, etc. For example, contacts from all customers will be added to the CRM record within 2 working days of the meeting. Failure to set measurable guidelines creates sloppy habits which are difficult to change.
Sales managers and their new charges are often frustrated by attempts to monitor their ongoing progress. When an opportunity tracking system is laid out, coaching and mentoring occurs with greater efficiently and regularity. Lay out rules for opportunity tracking. This includes the size and type of uncovered potential and how it is to be recorded. An case might be look like this: anyone who uses over $5,000 of our equipment is recorded into the CRM system along with competitive information, technical issues and the decision maker’s name. This information should also carry an expected time of entry.
Quotations are another stumbling block of many distributor organizations. A savvy sales manager takes the time to define which quotations are handled by the new salesperson, which are handled by inside sales, and which are developed by specialists. Further, setting follow up expectations within your company is important. Our experience indicates that failure to follow up on large quotations often results in missed opportunities. Set a time and responsibility for these quotations.
Establish the Right Behaviors
It’s amazing how many salespeople go into calls without defining a purpose. Early in the customer/salesperson relationship the purpose is sometimes hard to define, but still the call should be more than simply shaking hands.
When salespeople know what questions they should ask before the sales call, they gather more information, listen better and accelerate the relationship. Insist the new salesperson establish a list of customer questions. These might range from the market the customer serves to the companies the customer sees as competition to product preferences to the type of training they need for employees. The answers to these questions need to be recorded and stored away somewhere besides the sales salesperson’s ironclad memory.
Our next point involves the need to remember the answers to ground breaking questions. Salespeople need to take notes during customer visits. For years, I recommended the use of a composition book with pages which are not easily detached. This meant the salesperson always stored customer data in the same place. Today, notes might be taken electronically via phone, tablet, laptop, etc. Insist on a well-defined method for categorizing, storing and maintaining the notes.
When new salespeople hit the street, there is often a tendency to use price as a door opener. While the strategy may produce temporary gains, I believe these gains create long term pains. Margin erosion has become an epidemic issue with wholesalers across the country. Any new salesperson should be given pricing direction. Regardless of whether they have industry experience or not, your business model probably requires a different type of gross margin strategy.
Minimum gross margin deviation ought to be spelled out before the salesperson shakes the hand of their first customer. If you have a pricing process like David Bauders’ Strategic Pricing Associates, spend time briefing the new salesperson on how and why the process works. Furthermore, measure the salesperson’s adherence to that pricing strategy from day one.
When Special Pricing Agreements (SPAs) are required, new salespeople should understand your company’s position on the proper use of an SPA to capture and lock in important customer opportunities. And, if (for some reason) you do not have a plan for how these agreements are registered within your own organization, this should be established immediately; for the whole sales team’s benefit.
The Right Tools
Ok, we’ve walked our way through setting expectations, establishing work habits and this brings us to equipping new team member with the right tools. Most of us have given thought to the right phone, laptop, tablet and company car. But the tool box needs to hold more than just the physical tools. Let’s go a bit further and talk about ERP system tools.
Every new salesperson needs to understand the purchases made by their accounts. Ideally, this should include more than just a top line sales number and gross margin percentage. I suggest reports outlining products purchases broken down by customer. If the product can be segmented by technology groups, it’s all the better. Sales managers must invest the time to instruct salespeople in the reports available and how to interpret the reports. This should be part of a monthly coaching session to ensure the data is correct and there are no issues with account groupings.
The salesperson should know where and how to get this data in the future. Bouncing back to our first message, set expectations as to how often you anticipate this type of information to be reviewed at the salesperson level. Strangely, even experienced salespeople from other companies within the industry have no realization as to the importance of understanding where their sales come from.
With this final word, I challenge you to sit down with your newest successful salesperson, the one who is showing real promise, and ask what they wish they knew two years ago. Maybe they could whittle your investment down to $100 grand.
Published in Industrial Supply Magazine several years ago, but still pertinent today.
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