Saturday, June 9, 2012

Do you or one of your salespeople need a Check-up from the Neck-up



Call Reluctance: When Salespeople Need a Checkup from the Neck Up
Part Three

Call-Reluctance Case Study #2: Suzy

Note: The following case study is a fictional account of a salesperson loosely based on an actual salesperson the author has known or has been associated with.

Suzy has been selling for Superior Security for over three years and has enjoyed moderate success. She knows her product and is passionate about the need for professionally installed Security Systems. However, Suzy lags behind most of the other salespeople in her company. Even salespeople, that started well after her, not as knowledgeable as she is, regularly outperform her.

During a sales meeting, Suzy’s sales manager asks one of the newer salespeople, Melissa, how she managed to get going so quickly. Melissa’s sales were even with Susie’s after only working six months for the company. Melissa’s reply was that, shortly after getting the job, she did as the sales trainer suggested. She mailed a short announcement note to everyone she knew informing them of her employment with Superior Security Systems. Once again, as instructed, she followed up each letter with a personal phone call asking for their assistance. The notes and calls paid off. She began getting leads from friends and relatives.

As Suzy listens to Melissa’s story, she says to herself, “No way! No way will I involve my family and friends. I haven’t up to now, and I won’t in the future.”

Why does Suzy feel as she does? What is so hard or distasteful about calling on friends or relatives? Suzy apparently feels there is a problem with it. Do you?

Suzy suffers from two contact style problems. First, Suzy is hesitant to call on friends, which is a symptom of “Separationist Call Reluctance.” She is emotionally resistant to mixing business interests with friendships. Salespeople with this malady find it difficult to prospect for sales among personal friends or even to ask them for referrals. She avoids even telling friends about what she does for fear of the perception that she is attempting to sell them.

Second, she is hesitant to call on family members, “Un-emancipated Call Reluctance.” She is resistant to mixing business and family. Salespeople with this problem find it extremely difficult, if not impossible; to prospect for new business among family members or even ask them for referrals. Suzy feels this way despite her firm belief in her company.

How did Suzy acquire these career-limiting psychological maladies? Was she born with them? Were they developed through her training? Did management in her company subliminally suggest them? Had she suffered an earlier traumatic sales experience that caused her to feel as she does?

People aren’t born with the fear of calling on or selling to friends or family. That feeling is acquired, taught by people whose opinion they respect.

Well-intentioned sales trainers can plant the seed through their suggestions regarding how their trainees should develop new sales opportunities. Management can pass along their bias. And certainly negative sales experiences, perhaps with a friend or relative attempting to sell to her, or a former company whose entire focus was having salespeople sell to friends and relatives, could have deeply influenced her call reluctance.

George W. Dudley and Shannon L. Goodson
– The Psychology of Sales Call Reluctance: Earning What You’re Worth in Sales.

When you gaze into your psychological mirror do you recognize this person? Is it you? Is it someone you know, or that works for you? 

If you suspect you or someone you know has this problem there is a test you can administer that will help ferret out the problem. Contact me by email and I will direct to a professional you can get help from.

To Learn more about Lou Sepulveda C.P.P. go to Lou's web site -  www.lousepulveda.com

985-778-1571

Book Title by Lou
The Formula for selling Alarm Systems
Surviving in the Security Alarm Business
Managing to Sell
Gerencia de Ventas Efectiva

Order Lou’s New CD – Handling Objections & Closing the Sale

Note: If you would like to read previous Blogs go to http://lousepulveda.blogspot.com


Tuesday, April 3, 2012

Call Reluctance Part Two

Call Reluctance: When Salespeople Need a Checkup from the Neck Up
Part Two

Call-Reluctance Case Study #1: Bill

Note: The following case study is a fictional account of a salesperson loosely based on an actual salesperson the author has known or has been associated with.


Bill enters the office, rushing past the sales manager’s office on the way to his desk. As he passes, Bill breathes a sigh of relief. John, the sales manager, is on the phone and hasn’t noticed him.

At his desk now, Bill scans the all-too-few phone messages in his in-basket. Nothing looks promising—a couple of callbacks from existing customers but no leads, no sales.

Bill knows what he must do, but just can’t get himself to do it. He needs to get off of his seat and get out on the street. He needs to make some cold calls. With less than 50 percent of quota reached and only four days left in the month, Bill feels like a failure and is sure his manager would agree. But next month will be better, Bill assures himself. Next month the leads will improve and some of the proposals he has out would close.

Just then John enters the sales room. “How’s it going, Bill?”

“The month is almost over,” John says. “Do you think you’ll get the sales in by month’s end?”

“It looks real good,” Bill says as he glances at his watch. “Got to run, I don’t want to be late for my appointment. I’m scheduled to call on Acme construction. They build over one hundred homes a year, and I’ve got a shot at their security business.”

Bill lied. He doesn’t have an appointment with Acme Builders. The fact is Bill made one call on Acme. And when the receptionist said no one was available to speak with him, Bill gave her his card and asked her to call if they were ever in need of a security supplier. He never called back.

Twenty minutes later, as Bill sips coffee at the local Denny’s he wonders if he could get a job at the shipyard. They might have an opening in marketing for an experienced salesperson. “The security business is not for me. How can I compete with the big guys here in town?” he thinks. “I’m just in the wrong business.”

Bill, an experienced, once-successful salesperson, has a problem. Nothing is wrong with the industry he is in. Nothing is wrong with the company or product Bill represents. The problem resides in Bill’s mind. Bill may suffer from one or more forms of contact hesitation or call reluctance. Deep down inside, Bill knows he has a problem. However, he doesn’t know how to fix it and he is too embarrassed to ask for help. He certainly won’t ask for help from his sales manager. He feels sure he’ll get fired if he admits his problem.

Bill is hesitant to make the sales calls he needs to make, even though he knows his future in sales depends on it. When he attempts to make cold calls, he becomes nervous and uncomfortable. He feels as if he is imposing on people who have expressed no desire to see him. He knows he should make cold calls; however, at the same time, he feels that making such calls is unprofessional. He prefers to work with clients who have expressed a need for the product, prospects with whom he can develop a relationship over a period of time, winning the right to do business. Cold calls conflict with his vision of professional selling.

What form of call reluctance does he suffer? Without testing, it is hard to say. He could be suffering from yielder call reluctance. The yielder salesperson needs the appreciation and approval of everyone, which often results in indecisiveness and conflict avoidance. Yielders do not prospect well. They may become immobilized by a fear of rejection or disapproval. They may develop an acute sensitivity to interrupting people. Yielders enjoy servicing existing accounts more than aggressively developing new business.

To Learn more about Lou Sepulveda C.P.P. and what he has to offer to help Security Professionals succeed go to Lou's web site -  www.lousepulveda.com

Lou Sepulveda Consulting & Training
985-778-1571

Book Title by Lou
Selling Security Systems Like A Pro
How To Manage  Security Sales Organization
The Formula for selling Alarm Systems
Surviving in the Security Alarm Business
Managing to Sell
Gerencia de Ventas Efectiva

Order Lou’s new CD – Handling Objections & Closing the Sale


Note: If you would like to read previous Blogs go to http://lousepulveda.blogspot.com



Saturday, March 3, 2012

Call Reluctance - A potential career ending disease

Did you know that you or your salespeople could have a career ending or career limiting Psychological disorder?

Call Reluctance: When Salespeople Need a Checkup from the Neck Up
Throughout my years as a salesperson, trainer, and manager, I have witnessed the “death of a salesman” played out all too often in real life. I have seen successful salespeople wither and die on the vine, careers washed up on a psychological reef, never again to close the sales they were once capable of.

Like other sales managers and trainers, I attempted to find the ailment. Most often, however, the patient was too busy wallowing in a quicksand-like denial to seek or accept help. When I extended a branch, offering to pull the salesperson out of the quagmire that engulfed him, he denied needing help. “Nothing is wrong. What’s the fuss? I’m doing okay,” he exclaimed. All the while the problem grew worse, finally ending what had been a promising career.

The problem, the malady, the disease that scuttles so many sales careers often has its roots in the fear of self-promotion. Also know as contact hesitation and call reluctance, the fear of self-promotion prevents salespeople from doing the very things they know are necessary to succeed.

Sales Call Reluctance is a career-threatening condition that limits the number of calls a salesperson makes. Some have trouble using the phone to prospect, while others find it difficult to call on friends, or relatives, or important people. Until just a few years ago, most sales managers and trainers thought of contact hesitation as the simple fear of rejection. “Your problem is you’re just afraid of the word no! Don’t you know the prospect can’t hurt you?” the old-time sales manager would exclaim.

The age-old fear of rejection materializes around puberty, preventing many young people from talking to someone they find attractive. While this can contribute to call reluctance, behavioral psychologists digging into the affliction have uncovered more than the simple fear of rejection, the fear of being told no.

Depending on who you ask, there are anywhere between six and twelve distinct types of call reluctance—six to twelve very different psychological afflictions that, if allowed to, will ruin the most promising sales career.

Furthermore, studies have revealed that contact hesitation does not only affect new entrants into the sales field. “While it is true that up to 80 percent of all salespeople fail within the first year due to insufficient prospecting activity, 40 percent of experienced, successful salespeople will experience one or more bouts of call reluctance, hampering their prospecting activity seriously enough to threaten their continuation in sales. If they learn to cope with and overcome these bouts, their careers will suffer no permanent damage. If not, their names will be added to the ever-growing list of once-successful salespeople.” George W. Dudley and Shannon L. Goodson – Earning What You’re Worth.

Over the next few blog entries we will explore a few of the more common varieties of call reluctance and attempt to clearly identify each. We’ll study examples, attempting to paint a picture we all can recognize as we gaze into our own life’s mirror. We’ll attempt to understand the debilitating nature of each kind of call reluctance.

Your job is to study each of these with an open mind. Lock yourself in a room as you read and then ask yourself honestly, “Could this be me? Could this be someone working for me?” Ask yourself if you could use a checkup from the neck up.

Remember, there is nothing shameful in needing help. There is nothing shameful or career-busting about suffering from contact hesitation. The only way contact hesitation in any form can harm your career is if you shroud it in denial, allowed it to grow and fester unchecked.

In Earning What You’re Worth?: The Psychology of Sales Call Reluctance by George W. Dudley and Shannon L. Goodson[SW1] , the authors identify twelve forms of call reluctance or contact hesitation. The following outlines some of what they found[SW2] .

Type of Call Reluctance
Behavioral Markers
Doomsayer
Worries, will not take social risks
Over-preparation
Overanalyzes, under-acts
Hyper-pro
Obsessed with image
Stage fright
Fears group presentations
Role rejection
Ashamed of sales career
Yielder
Fear of intruding on others
Socially self-conscious
Intimidated by up-market prospects
Separationist
Fears loss of friends
Emotionally un-emancipated
Fears loss of family approval
Referral aversion
Fears disturbing existing business or client relationships
Telephobia
Fears using the telephone for self-promotional purposes
Oppositional reflex
Rebuffs attempts to be coached

Your job is to study each of these with an open mind. Lock yourself in a room as you read and then ask yourself honestly, “Could this be me? Could this be someone working for me?” Ask yourself if you could use a checkup from the neck up.

Remember, there is nothing shameful in needing help. There is nothing shameful or career-busting about suffering from contact hesitation. The only way contact hesitation in any form can harm your career is if you shroud it in denial, allowed it to grow and fester unchecked.

To Learn more about Lou Sepulveda C.P.P. and what he has to offer to help Security Professionals succeed go to Lou's web site -  www.lousepulveda.com

Lou Sepulveda Consulting & Training
985-778-1571

Book Titles by Lou
Selling Security Systems Like A Pro – (Paperback & EBook)
How to Manage a Security Sales Organization – (Paperback & EBook)
Managing to Sell
Gerencia de Ventas Efectiva – (Paperback & EBook)
The Formula for Selling Alarm Systems
Surviving in the Security Alarm Business

Order Lou’s CD – Handling Objections & Closing the Sale

Note: If you would like to read previous Blogs go to http://lousepulveda.blogspot.com


  [SW2]

Thursday, February 2, 2012

Answering the Objection – Step 6

Answering the Objection – Step 6



In November, if you have been following my posts, you learned how to accomplish the fifth step of the eight step closing pattern, “isolating the objection.” You have successfully navigated the first five steps of the eight step closing pattern. You Listened carefully (step 1) and completely to the prospect’s objection. Then you Paused, (step 2) giving the prospect time to restate the objection, change it, or in some cases decide the objection didn’t even make sense to them.

Once sure they didn’t have more to say, you Empathized (step 3) by saying you could understand how they might feel as they do.

Next you “Repeated the Objection changing” it ever so slightly which is (step 4).

And then you made sure there weren’t any other objections they had prior to answering the objection, which is to Isolate, step 5.

So then now you are at the step you’ve been building up to. You are now ready to “Answer The Objection” the prospect raised. 

Answering objections requires you learn answers to, at the very least, the top 3 to 5 common objections salespeople hear when selling alarm systems. To determine what those objections are simply get together with other salespeople in your company and ask them to list the objections they routinely hear. When you do that exercise you will no doubt learn that the common objections are just that, common.

The objections salespeople all over the US tell me they hear are as follows:

1.     We need to think about it. (Or any iteration of that same statement)
2.     We plan to shop around.
3.     Your price is too high.
4.     We’ve never had a problem. (Safe neighborhood etc.)
5.     We have a good watch dog.

The above objections are likely the ones you hear regularly, but of course there are others you hear infrequently. However, I can assure you, if you learn to answer the above five objections professionally, you will make more money and protect more homes, families and businesses in the bargain.

I believe answers to objections come in three forms.

1.     A Verbal Answer – This is an answer to an objection you have memorized.
2.     A Written Answer – This answer style is accomplished by writing or referencing a written document which supports your argument.
3.     A Third Party Answer – Often the strongest tool, because this answer comes from a satisfied customer, or a customer that wished they had purchased a system before they were burglarized.

Not to make this article too long, we’ll deal with one objection in this article utilizing one type answer. I will cover them all, including all styles in future posts.

The number one objection heard in any form of belly-to-belly sales is the first listed above. “The Think About It” objection.

Sales professionals all over the world will attest that the “Think About It” objection is often a smoke screen at best, meaning the objection isn’t they want to think about it, the real objection is hidden. They have another reason for not saying yes, they just don’t want to tell you what it is. However, on occasions the prospect does truly want to think about your offer, which then begs the question, for how long?
In my humble opinion the best way to deal with the “think about it” objection is for you to assume they do want to think about it, talk it over. Assume they need only a few minutes without you staring at them to ask each other, so what do you think? To handle the objection with the above assumption in mind I would use the five minute close. The five minute close assumes they only needed a few minutes to mull over the decision. So here is what I would say.

1.     I would “Listen” completely and intently to the words they are saying to me when they say they want to think about it.
2.     When they finish talking I would “Pause”, looking directly at them, saying nothing for a few seconds. If they don’t start talking again………
3.     I would “Empathize” with them. You know Mr. & Mrs. Jones, I certainly understand how you feel. After all, a decision as important as protecting your family is surely worth thinking about.
4.     Next I would “Repeat but Change the Objection.” So what you are saying is you like the system and would have me install it just as soon as possible, but you feel you need some time to mull it over, to talk it over between you two, is that right?
5.     When they agree to the repeat step, I would “Isolate the Objection” by saying: Other than thinking it over, is there anything else that would prevent you from saying let’s protect my family right away, anything else?
6.     Hearing no other objections I would “Answer the Objection” by saying; I have another appointment after this one, and I’m not completely sure how to get there, so if you don’t mind I’ll just step into the next room and make a call to my office to get directions. That will give you two time and privacy to talk it over.

If they don’t stop me, they only needed a few moments to decide. When you return to the room, don’t ask if they have decided to buy. Ask a minor point, alternate choice question, assuming they are going to buy. The question could be as follows: So would a morning or afternoon installation work best for you?

Do this and you will find a high percentage of the think about objections vanish, replaced by their signature on your sales agreement. 

Lou Sepulveda C.P.P. is a 35+ year veteran in sales and sales management. He has managed very large and small sales teams selling in 30 countries around the world. Lou is a published author. His most recent books are “Selling Security Systems Like A Pro”, “How To Manage A Security Sales Organization,” and “Gerencia de Ventas Efectiva,”all of which are available as an E-Book or in paperback. His previous books are “The Formula for Selling Alarm Systems,” “Surviving in the Security Alarm Business,” and “Managing To Sell”. Lou’s company, Lou Sepulveda Consulting, provides consulting services, sales and sales management training, and motivation seminars designed to help companies grow. Lou’s web page is www.lousepulveda.com. Or email him at lou@lousepulveda.com.

Sales Management Part Six

Sales Management Part Six
Answering Objections & Closing the Sale
Using the 8 step Closing Pattern
(Continuing from last post)
Step 4: Repeat the Objection, Changing It Slightly
Salesperson: “Just so I’m clear, what you are saying is that while you agree that you like the system and you would give my company the go-ahead to start work as soon as possible, you feel you need a bit of time to talk it over between you two, without me staring at you. Does that about cover it?”
Prospect: “Yes.”
What the salesperson changed was the first part of the original statement. He repeated the objection, but added that the prospects agreed that they liked the system and would buy it as soon as possible once having a “bit” of time to talk it over without the salesperson being present. That statement also assumed that the prospects only needed a few minutes versus hours, days, or weeks, to think it over.
When you hear prospects say they want time—the classic “think it over” objection—how much time do you assume they want? I’ve asked that question all over the country at seminars I’ve conducted, and the answers I get are mixed. Mostly I get the impression that in general; salespeople haven’t thought to ask themselves that question.
Years ago my wife met with a man who said he would help us find government grant money for our son’s college education. I suspected the man was selling something but my wife was convinced he wasn’t selling only helping us with a government grant. But given he insisted we both be present I was convinced he was in fact selling something; probably insurance. I wasn’t happy to see what I knew was a salesperson, probably selling insurance. I felt I had more than enough insurance and didn’t need more. However, my wife had made the appointment, and I was bound to suffer through it.
When he arrived for the scheduled appointment he did a great job warming us up. He spotted our sailing pictures, and from those photos and some well-asked questions, he learned of our love for sailing. After that crucial step I liked him and was more open to hearing what he had to say. When he launched into his presentation, and it became clear that indeed he was selling insurance, I wasn’t concerned. My wife, however, now realized that I had been right—he was selling insurance—and she thought she knew my feelings about that since we had discussed it earlier that day.
From that point forward my wife assumed I wanted no part of what this guy had to sell, so she dutifully listened to his presentation. She knew that at the end, she would simply tell the man we wanted to think it over, he would leave, and that would be the end of it. However, as I listened to what he said, I was sold. While it was true that a large component of his plan was to sell me more insurance, the whole package kind of made sense for our youngest son’s college education, which all of this was aimed at.
So picture the situation. My wife was half listening, knowing I had made it clear before he arrived that I was against buying more insurance. In fact, we made a pact before the salesperson arrived: if it turned out I was right, that he was selling insurance, we would get rid of the salesperson by saying we wanted to think it over. So while my mind was changing, my wife didn’t know that, and she had resigned herself to telling the salesperson the lie we agreed to.
However, as the presentation came to an end, the salesperson asked the most unbelievable closing question I’ve ever heard. In fact, because it was so unbelievable, I was stunned into silence. The closing question was, “Do you folks want to take a couple of weeks to think about all of this?”
He said a couple of weeks? Being married to someone who is an author of sales books, a sales management executive, and a sales trainer, my wife knows all the sales steps and all the closes. She’s heard me talk about them in seminars, and since she had helped me with my audio closing CD, she heard me talk about what to say so many times she could recite it in her sleep. So when the salesperson said what he did, she was also shocked. And she knew me well enough to understand that even if he was selling gold bars for the price of chewing gum, I wouldn’t buy anything from him after he committed such an incredible sales crime.
Obviously, this salesperson had come to the conclusion that everyone needed time to think about a decision, and in fact, needed at least two weeks. The fact is, had he asked the most basic closing question like, “So what do you think?” My wife would have jumped in, and said we needed time to think about it. And if the salesperson had been smart enough to perhaps assume we needed only a few minutes, and suggested as much, I would have told my wife I had changed my mind, and we would have bought the insurance policy. But he didn’t and we didn’t either. The sale never happened.
Take my advice, and first assume your prospect only needs a few minutes.
This then leads you to the next step which we will cover in the next months posting.

Would you like to hear Lou Answer the common salespeople in the security industry face every day in a role playing environment?

Here is how you can.

Order Lou’s New CD – Handling Objections & Closing the Sale
Also a Great tool for Salespeople is Lou’s new E-Book entitled:

Selling Security Systems Like a Pro
In this NEW E-Book Lou teaches salespeople how to prospect, present themselves, your company, the problem, the survey, the investment, and how to answer commonly heard objections. Lou share’s 12 Powerful Closes sure to help salespeople close more sales. The E-Book is available NOW! And the best part is the investment; only $29.99. Wow! How can you beat that? To order go to www.lousepulveda.com.

Lou Sepulveda Consulting & Training
985-778-1571

Book Titles by Lou
·        How to Manage a Security Sales Organization – NEW (E-book only)
·        Selling Security Systems Like a Pro NEW (E-book only)
·       Gerencia de Ventas Efectiva  - NEW (E-book only)
·       The Formula for Selling Alarm Systems
·       Surviving in the Security Alarm Business
·       Managing to Sell
·       Gerencia de Ventas Efectia

Note: If you would like to read previous Blogs go to http://lousepulveda.blogspot.com


Wednesday, February 1, 2012

Income Caps - Why? Do they make sense?

A Ceiling on Income – Income Cap
Does it make sense?
In the late 1960’s, after completing my college education and after working my way through college selling door-to-door, it was time to begin looking for a career. My goal was to work for a National company that provided benefits, a career path and, of course, given the sales experience I had gained while in college, I hoped to earn good money.
My first interview was with the Burroughs Corporation. I was given a test to complete which was followed up by an interview with the Sales Manager. At the conclusion of the interview I was offered a position in sales. The position paid a salary, benefits, a potential annual bonus based on achieving corporate sales goals, a car and business expenses. At the time, I considered this offer an attractive offer. However, since I had already scheduled other interviews I told the Sales Manager I’d get back to him with an answer.
My next interview was with IBM. At the time IBM wasn’t nearly as big as it is today, but IBM had already earned quite a nice reputation and was an appealing company to work for. The interview with IBM went much as did the Burroughs interview. IBM explained the offer which included salary, benefits, a potential annual bonus, a car and expenses. The salary was about the same as the salary offered by Burroughs.
My next interview was with Xerox. That interview concluded about the same as the previous two. So after a couple of days of interviewing I had a pretty good picture of what my potential earnings could be.
My last interview was with NCR, National Cash Register. At the time, NCR was the run-away market leader in cash register sales. No one was close. NCR was also competing with IBM in the then new computer business. Before discussing the pay plan I ranked NCR right with the three previous interviews with the exception that the explanation of the training program NCR offered its salespeople added extra appeal to me. NCR’s training in my judgment appeared to be second to none.
The final portion of the interview was, like the others, a discussion of income. When I asked how much the salary was, the NCR manager informed me that they didn’t pay a salary. I was told NCR salespeople were paid commission and in the beginning were given a very small draw. I then asked if they provided a car. The reply was not only no, but worse, all NCR salespeople were required to purchase a station wagon to work out of. It was necessary, I was informed, so salespeople could carry cash registers to demonstrate to potential buyers. Wow, I thought, I am so not going to take this job.
Anticipating that I wasn’t exactly thrilled with what I heard, the Sales Manager asked me to take a walk through the building with him. I agreed purely out of courtesy. The manager led me into a Sales Room and once there pointed to one of the fifteen or so salespeople busy working at their desk. “Lou,” he said, “you see that man right there in front?” He pointed at a man apparently in his late forties. “Where do you think he is going once the sales meeting is over?” The man he pointed to was in casual, going to play golf today, clothes. “Based on how he is dressed,” I said, “I think he’s going to play golf.” The manager smiled and said “you’re probably correct.” “And you know what” he asked? “I don’t care. He is one of our top salespeople and he is on the very same compensation plan I’ve offered to you. And Lou, with that plan he will earn five times or so more than the other companies have offered you including the potential bonus. You see with us,” he explained, “we don’t limit income by paying salespeople a salary and bonus. Because that is exactly what a plan like that does; the strong pay for the weak. We also don’t set a cap on income. We give strong salespeople an opportunity to earn as much as their sales skills allow them to make.”
I accepted the NCR offer and position and quickly became one of the top producers. My first year, and every year after I earned far more than the salary the other companies offered. I earned every dollar, and I was proud of what I accomplished.
Three years after joining NCR the President retired and a new President was brought in. Soon after he announced he was changing the compensation plan. He announced that the new plan would include a salary and bonus plan. He didn’t say as much, but reading the plan and how it paid, an automatic cap on income would be in place. The commission plan as I knew it was out. I did the calculation. Based on the new plan, assuming I achieved what I achieved the year before, plus a predictable increase, I would earn approximately one third of what I earned the previous year. Within a few months I resigned and so did many of the top performers. Not surprising, the weak salespeople stayed.
Today, most people reading this article have never heard of National Cash Register, NCR. I believe changing the compensation plan contributed greatly to the company losing market share.
Next I am led to ask, why limit a salesperson’s income? Am I the only one that knows and believes that it is human nature to slow down or even stop once realizing additional sales and effort no longer contributes to income? Think about it. Your salesperson is enjoying a great year. He has worked hard, made lots of calls, worked long hours, often well into personal time, and is literally kicking sales butt. However, as he approaches month eight of the sales year he realizes that he is already at or very close to the “capped income” the company set. He can’t earn any more money. Will he continue to work hard? Will he continue to forego personal time to close more sales? Or will he begin to coast, play a lot of golf or whatever activities he has been putting off in favor of work?
Not long ago I worked for a fortune fifty national company that understood that problem. So they announced to all employees that there was absolutely no limit on income. They instituted a tiered (they called Plateaus) commission structure designed to reward production, to cause salespeople and the managers that managed them to work hard up to the very last day of the year. They made a big deal out of their “NO Caps on Income” policy. The “No Caps Plateau” plan produced phenomenal, record breaking results.
How did the “plateau” commission plan work, you ask? Let’s look at an example. Let’s assume a territory salesperson sold $3 million dollars of product this past year. (The amount doesn’t matter as much as how you arrive at the Plateau plan.) Let’s further assume that the projected production achieved quota or plan. Corporate would budget for next year’s sales prior to the past year end. Looking at “run-rate” we could determine quite accurately what the next twelve months production should be for the company and each salesperson. So let’s assume the goal is to grow 10% over run-rate.
The salesperson that produced $3 million in sales last year would be expected to produce 10% more in the New Year, $3.3 million in sales. That goal would be Plateau One production. Plateau two production may be set at 20% growth and Plateau three may be 40% growth. Commission/bonus calculations changed by plateau. Every dollar of production over Plateau one earned a percentage increase in income, thereby motivating the employee to continue to push even after achieving Plateau One. Even more important was the fact that once achieving Plateau Two, the employee received a higher, per dollar, income bump. The same applied to Plateau Three. The goal is to drive the salesperson/manager to continuously push to the last day of the company year.
Managers were charged with the responsibility of staying on top of every salesperson’s year-to-date production. If we saw that a salesperson was on track to achieve the highest commission plateau (Plateau 3) a month or more before the end of the year, the manager would meet with the achieving salesperson to give him yet a higher Plateau commission plan, Plateau Four or even Plateau Five. We hoped the salesperson would make record breaking income by producing record breaking sales. If he did, the word spread throughout the company causing other salespeople to work hard in an effort to earn top dollars. One year, at a corporate management meeting, our CEO, Dennis Kozlowski, spoke about the great results we achieved as a company the previous year. He attributed a lot of the success to the no-caps Plateau compensation plan. We had empirical evidence that the plan worked. He challenged us all to look for ways to motivate every employee in the company with a similar plan. He suggested everyone would contribute more, work harder, and produce greater results if they were rewarded when they did.
Now the bad news; The CEO of the fortune 50 company resigned and the newly appointed CEO decided the existing compensation plan was too rich. He decided a Cap on income was appropriate. As the new policy was instituted I couldn’t help but think about NCR and what happened to them after they did the same. Are the company salespeople and managers working as hard, producing as much as they did under the No Caps plan? Will they continue to push for more sales after reaching the company “Cap” in income? I would bet they will not. Only time will tell.
Limiting income leads to limited effort.
I often compare the sales profession to professional sports. In both cases professionals are involved. Suppose the PGA announced that a ceiling will be placed on income and so no golfer will be allowed to earn more than one million dollars. Would the top golfers continue to play tournament after tournament once reaching the income cap? Suppose a similar cap was placed on football, basketball and baseball. Do you think a policy like that would result in players working as hard? No? Then why would anyone expect a salesperson or a manager to continue to work hard when he knows, because of the company No Cap plan, additional effort won’t result in commensurate pay.
If you want to drive your employees to produce, keep dangling a carrot of additional income in front of them and you will see production grow, I promise.

Am I wrong? Do you have an opinion? Email me if you want to weigh in.

Lou Sepulveda C.P.P. is a 35+ year veteran in sales and sales management. He has managed very large and small sales teams selling in 30 countries around the world. Lou is a published author. His most recent books are “Selling Security Systems Like A Pro”, “How To Manage A Security Sales Organization,” and “Gerencia de Ventas Efectiva,”all of which are available as an E-Book or in paperback. His previous books are “The Formula for Selling Alarm Systems,” “Surviving in the Security Alarm Business,” and “Managing To Sell”. Lou’s company, Lou Sepulveda Consulting, provides consulting services, sales and sales management training, and motivation seminars designed to help companies grow. Lou’s web page is www.lousepulveda.com. Or email him at lou@lousepulveda.com.



Sunday, September 4, 2011

Answering Objections Like A Sales Pro


Step 4: Repeat the Objection, Changing It Slightly

Salesperson: “Just so I’m clear, what you are saying is that while you agree that you like the system and you would give my company the go-ahead to start work as soon as possible, but you feel you need a bit of time to talk it over between you two, without me staring at you. Does that about cover it?”

Prospect: “Yes.”

What the salesperson changed was the first part of the original statement. He repeated the objection, but added that the prospects agreed that they liked the system and would buy it as soon as possible once having a “bit” of time to talk it over without the salesperson being present. That statement also assumed that the prospects only needed a few minutes versus hours, days, or weeks, to think it over.

The repeat but change step is powerful because it allows the prospect to hear his objection repeated but with a carefully worded twist. The twist says he likes the system and would have it installed as soon as possible but ….. (the actual objection repeated).  I have used that step for years and have never had a prospect tell me he didn’t say he liked the system and would have it installed. The prospect always agreed. The change plants the subliminal thought I needed.

Once completing step 4 you are ready to move on to step 5, Isolate the objection. We will discuss that step next time.

Would you like to hear Lou Handle the common Objections in a role playing environment?

Here is how you can.
Order Lou’s New CD – Handling Objections & Closing the Sale
Also a Great tool for Salespeople is Lou’s new E-Book entitled:
Selling Security Systems Like a Pro

In this NEW E-Book Lou teaches salespeople how to prospect, present themselves, your company, the problem, the survey, the investment, and how to answer commonly heard objections. Lou share’s 12 Powerful Closes sure to help salespeople close more sales. The E-Book is available NOW! And the best part is the investment; only$29.99. Wow! How can you beat that? To order go to www.lousepulveda.com.
Lou Sepulveda Consulting & Training
985-778-1571
Lou@lousepulveda.com
Book Titles by Lou
How to Manage a Security Sales OrganizationNEW (E-book only)
Selling Security Systems Like a Pro– NEW (E-book only)
The Formula for selling Alarm Systems
Surviving in the Security Alarm Business
Managing to Sell
Gerencia de Ventas Efectiva
Note: If you would like to read previous Blogs go to http://lousepulveda.blogspot.com