Scott Rosen fired his entire sales force in an effort to save his company. Was it a smart move?
Firing your whole sales team to help save your company sounds like a drastic measure, but business owner Scott Rosen saw it as the only way he could grow his business. In " A Sales Force of One," Inc senior writer Susan Greco recounts his experience and the lessons he learned from his strategy. Here Inc 500 CEOs and sales experts share their thoughts. Read what the experts have to say and then weigh in with your own thoughts by taking our on-line poll.
John D. Hawkins is president of Employer Services Corporation, a professional employer organization based in Buffalo, NY, and a two-time Inc 500 winner (#72 in 2001 and #211 in 2002).
"The first thing that jumped out at me is that Scott spent a significant amount of time trying different strategies to fix the problem before understanding why things went in the wrong direction in the first place.
"Sales can decrease for a number of reasons. He seemed to assume it was his salespeople. But there are a lot of reasons sales can go bad. He may have had the wrong salespeople. He may have had the right people but incented them wrong -- maybe they didn't have skin in the game. It could have been his sales process changed over time. It could have been the product he was selling, the type of recruiting that he was performing, was no longer in demand, so their sales pitch was falling on deaf ears. It may have been a combination of all of the above. If I were Scott, the first thing I would have done would have been to analyze exactly what had happened and why -- then applied the applicable solution.
"It also occurred to me that he may have, to a certain extent, abandoned his CEO job in search of a sales solution. I say, from experience, that that would be a mistake. In the past, my partner and I would get dragged into the day-to-day operations and forget about our core focus and strategic direction. We've been doing the majority of sales since inception. We have tried two part-time salespeople in the past, which did not work out. Today we use a "sales report" card that measures pipeline activity, target account size, closes, etc. and gives weightings to different areas of the sales process. Frankly it gives salespeople an overall grade based on what I believe they need to be successful."
J. McCurry is CEO of AquickDelivery, a courier-delivery service based in Atlanta, Ga. His company was #314 on the 2002 Inc 500 list.
"After reading your story, I commiserate with Scott Rosen. In fact, I think that Scott's course of action was correct. I have a good friend in the same industry, and he has experienced similar declines in demand for his service. You cannot support your sales people if a change in the economy switches the whole paradigm that your business model was build upon, and it becomes impossible for you to generate sales profitably."
Pamela E. Munn is CEO of All Star Consulting, Inc., based in San Francisco, Calif. Her company was #429 Inc 500 2002.
"What he did, I believe, was good for the wrong reasons. He niche business was hot and then died. Perhaps he could have kept his sales force and broadened the types of people he represented. As president it is his job to be looking at a more global picture, and I believe he let everyone down. "
Verne Harnish, founder and CEO of a Gazelles, Inc., a co-op corporate university providing organizational and business development tools to fast-growth companies based in Ashburn, Va.
"In essence, two things are going on as a result of the economy -- and his situation is typical of what I'm seeing all over the place:
- "For roughly a decade, no one really had to sell anything, just take orders. Thus, many of the traditional sales techniques have been lost, which is why you're seeing (and we're seeing) a real up-tick in Sales Technique and Sales Management books and seminars. Now that the economy is back to normal, companies really have to know how to sell.
- "For roughly a decade, the main value proposition has been 'we're here!' You could just hang out a shingle and if you had any entrepreneurial and sales skills, like Scott clearly has, you could build a company (I know I'm overstating it, but I'm not far off). However, now a firm really has to have a value proposition that makes sense. Most firms have woken up to the fact that they don't really have a strategy -- which means a viable value proposition supported by an underlying advantage over the competition. Many entrepreneurs, including myself, had to take 4 to 6 months to rethink our product and service offerings, so it's also not surprising that Scott is starting to get some ideas for 'new' firms (really just new value propositions) that are viable given what he's learned slugging it out over the last several months -- he's been learning whether he consciously knows it or not!"
Anthony Parinello is author of Selling to VITO, the Very Important Top Officer. His latest book is Secrets of VITO, Think and Sell like a CEO.
"Some leaders choose to delegate their sales activity - - and in so doing run the risk of cheating their organizations out of a great deal of selling 'impact.' Scott, you decided to project your 'best practices' into your sales process personally and by doing so, you gave up the power, control and authority that comes with your position! There really is a middle ground whereby leaders of organizations can be in the sales process without becoming the sales process. Here are a few secrets I'd like to share:
" Secret #1: CEOs who know how to sell know who their ideal prospects are. CEOs who effectively manage their sales process hate wasting time, so they make sure that their sales team targets the people and groups most likely to quickly buy from them. Wasted time in the sales process adds to the cost of sales and extends the critical time-to-revenue benchmark. Scott, your 'Field of Dreams' tactics didn't work! Instead you could have asked a hand picked, short list of your best existing customers to help you re-invent your product, service and solution to match the current needs and initiatives of your marketplace. Whenever the majority of your customers stop (or slowdown) buying from you, it's time to look at the conditions that exist beyond any economic woes. The shortest time to revenue is to rebuild your offering through your best customer's eyes (this way you've got a built in demand). Without changing what you're selling to match what your market is currently buying you proved the fact that making more cold-calls will only backfire and bring greater rejection to the doorstep of your sales team not greater sales revenue.
