In my last post, I listed 5 reasons why sales rep fail in small business. But here is the #1 reason why most sales reps fail in small businesses: small businesses cannot afford the salaries and comp plans necessary to hire the “great” reps so they are stuck with the “C” players. It is simple math – in the good ol’ days, six figure sales reps would not work for a company that could not afford six figure comp plans that included high salaries. So the business was/is forced to hire mediocre sales reps, then they put them into an environment with no real sales management or process and expected them to succeed. In the good ol’ days, this sometimes worked because of the economy. Not now - in today’s economy this strategy can put a company out of business. How?
- Lost sales: Every deal is important because the number of leads is down and the competition is fiercer than ever. Still competing with a minor league team?
- The cost of the sales rep’s salary and benefits and its impact on cashflow: Small businesses can no longer afford the ramp up time required to get the rep producing.
- Poor customer relations: Mediocre sales reps usually do a poor job of setting customer expectations during the sales cycle. They over promise and under deliver because they are desperate to get the sale. Once this it occurs, it is difficult to reset the expectation without the customer becoming angry and disenchanted.
- Wasted time and energy: How much time, energy, and money have you wasted listening to the excuses and lies of underperforming sales reps? “I swear! It is closing this month!”, “I don’t know what happened! They said they were going to buy!”, “How was I to know they could not afford it!” Tired of the excuse yet?
Whether it is the owner of a small business who does the selling or a team of sales reps, the success, or failure of the company will depend on the sales team. So what is the solution? I am about to announce a sales outsorcing program for small businesses.
The rules have changed – have you?
