So instead of worrying about the frequency and format of meetings, we decided to focus on the information being covered in them. The first step was to assemble a four-person committee to oversee the training process. I serve on that committee, along with the regional managers, to convey the importance we attach to sales training.
The committee began by looking at the kind of information necessary for successful sales meetings. That obviously included information about products, about customers, and about the technical aspects of real estate finance. But how do you teach salespeople in a small company to develop profitable relationships with customers, to sell the company's strengths, and to convey a sense of their professionalism and fair dealing? We've learned that consultants, motivational gimmicks, and time-management seminars are of nominal value. Instead, we encourage our people to train each other using the case-study method of teaching made popular at Harvard Business School, a method I first encountered five years ago while attending Harvard's Smaller Company Management Program (now the Owners/Presidents Management Program).
Our version of the method relies on cases written by branch managers, based on real experiences they or their subordinates have had, that run anywhere from 3 to 20 pages. To teach overcoming sales objections, for example, one manager wrote about an especially difficult real estate broker who, despite many reservations, was eventually persuaded to recommend our services. To teach about ethics, I wrote up a case of a loan that had suspicious documentation.
The training sessions are built around the cases. Salespeople will read a case and then meet informally for an hour, without the instructor, to talk about it. We have found that these premeetings encourage participation and sharing of ideas during the formal discussion that follows. That session is led by the manager who wrote the case and generally lasts about 90 minutes.
Of course, some cases work better than others. As a rule, the more complex and subtle cases make for livelier discussions and do a better job of teaching than those showing extreme situations. In my view, that's because they more accurately reflect the real world of selling. In any event, we have had great success with the case-study approach to training. It has done more than provide effective instruction; it has also proved to be fun. In fact, it has generated so much enthusiasm that both managers and salespeople now ask to write the cases.
* Don't try to compete on price.
As a smaller company, we are often at a pricing disadvantage. It is not uncommon for a large competitor to invade one of our markets with substantially lower interest rates than we can offer. To counteract this, salespeople have a tendency to tout "better service," but this rarely works. The truth is that most of our competitors have service comparable to ours.
So how can the sales staff of a small company cope effectively with such apparently ruinous competition? We have found no easy solution. My conclusion is that waiting is the best strategy. Sooner or later, the competitor always returns to making loans at market rates.
Of course, we temporarily lose some business with this approach. We recognize that customers will usually go elsewhere to get a better price. Our response is to remain involved, to be reliable and fair dealing. We hope that when the below-market-rate lender reverses its pricing strategy, it will appear to have slammed the door in the customer's face, and we will have an opportunity to recover the business.
I've seen it happen time and again. We'll be handling the loans for a builder putting up 50 houses. A competitor comes in offering lower rates. Our salespeople plead with me to match the lower rates. I refuse. I tell them to keep in touch with the builder, because the competitor could foul up the loan processing or suddenly change its rates. When it does, we'll get the customer back.
At The Hammond Co., it's no crime to lose business because we can't compete on price. It is a crime not to get the business back eventually. Smaller companies cannot control a large market share, but we can maintain a customer base with a strategy of patience and reliability.
* Keep your people informed.
I have always told our sales staff that our company has no secrets. As a small company, we have the luxury of being able to debate every success or problem that arises. Personnel changes, compensation arrangements, and pricing decisions are all open for discussion.
Some salespeople become frustrated with the endless discussions of issues, including ones that don't appear to affect them. "Doesn't anything ever get resolved around here?" they ask. But, over the long term, this open, participatory style serves an important purpose. Our experienced salespeople come to accept the process as normal and get used to the idea that many tough issues have no clear solutions -- just a range of alternatives. Their attitude is, "Let's make the best choice we can and get on with business."
The real payoff comes during a crisis. In our 11 years in business, we have had three major events that could have been catastrophic for our company. In each case, we kept our sales staff completely informed about the crisis and our strategy to survive. To my amazement, not a single salesperson jumped ship during those perilous periods.
