A successful manager gives tips on creating a winning sales team.
For Tom Golisano, the secret is control
Even before they're hired, B. Thomas Golisano demands full-suited splendor from everyone hoping to sell for him. "If they don't present themselves well in an interview," he worries, "How would they present themselves on the job?" It may have been while on the road himself that ex-salesman Golisano discovered the power of proper dress, but it's from the president's office of Paychex Inc., the payroll-processing company he founded in 1970, that he now dictates sartorial and other policy. And Paychex just piled up a record $101 million in revenues for fiscal 1989 -- its ninth straight year of 20% to 25% sales growth. With a pattern of dependability like that, its public stockholders wouldn't complain if the chief executive draped all 310 reps in rags.
Golisano's formula for sustained growth is simple enough: to expand your sales by X%, expand your sales force by the same X%. Under less rigorous management, the hiring, training, and rewarding of said force would seem similarly uninspired. But the 47-year-old Golisano is nothing if not rigorous (see "How to Build an Inc. 500 Company," December 1988, [Article link]). And the product of rigor, he would say, is that you finally get it right. Here's a sampling of Golisano's sales-management tactics. If some seem extreme, remember: success is its own best salesperson.
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Paychex's turnover rate in sales employment is 20% to 25% -- too low, theoretically (conventional wisdom deems turnover of 30% to be healthier). But where the traditional sales-force upgrading procedure is to wash out lesser performers by showering them with pink slips, Golisano focuses on hiring high achievers in the first place and keeping them.
Initial screening is entrusted to middle sales managers, who have complete hiring authority. To find applicants outside their networks, Golisano encourages using newspapers, "even though going through all the replies demands so much time," and employment agencies, "who at least whittle them down, though you pay large fees."
The Perfect Recruit In general, Golisano wants what every manager wants: energy and motivation. But specifically, a Paychex salesperson must:
1. Have had a "successful selling experience" -- which means they were consistent quota achievers at another company. Documented success spares interviewers guesswork and lends maturity to the sales corps, whose average age is 30.
2. Demonstrate in the very first interview that they possess superior communications and presentation skills. No second chances; they wouldn't get any with prospects, either.
3. Pass the 16-minute quiz that Golisano has used since his first hire in 1971 to quantify comprehension of math and logic. Lacking an appreciation of number relationships, "they won't do very well in the technical side of our business."
TRAINING
Back to School
Since 1984, when Golisano devised a universal sales-skills course, full-time faculty has been teaching payroll service to Paychex recruits. The two-month education is so intense -- and successful -- that most graduates are up and selling at 75% of quota or better within four months, Golisano claims. The speedy ramp-up is critical because the company's most painful expense -- more than the $18,000 or so in salary, travel, and accommodations that it lays out per student -- is the time a territory remains vacant.
Compared with the less formal days when Paychex left training wholly to middle sales managers, new salespeople start producing revenue from 30% to 40% faster and at higher levels. Not only can the return on the $18,000 be thus quantified, says Golisano, but the centralized training "sends a message to the general public of consistency and gets all our people off on the right foot. It's a question of focus -- one of my favorite words." (He acknowledges liking "discipline" and "standardization" just as well.)
Paychex U., The Curriculum Here's Golisano's version of How to Create a Salesperson in Eight (Not So) Easy Weeks:
Weeks 1 and 2. So as not to culture-shock them, the trainees' first two weeks are spent orienting themselves to the atmosphere and routine in their home offices. "One of the things we love to have them do is stay at night and watch the computer work," beams Golisano.
Weeks 3 through 5. The recruits gather at the training center at corporate headquarters in Rochester, N.Y., where they're put up for three weeks and taught the technical intricacies of payroll accounting and reporting. If it were purely up to him, they'd keep at it even longer, but taskmaster Golisano has been willing to strike a compromise between holding them away from hearth and home and "cramming as much as we can into them." The session concludes with a comprehensive test.
Weeks 6 and 7. The survivors (about one in 15 fails the technical test) return to their branches for sales presentation coaching by their managers.
Week 8. Back to Rochester for another seven rigorous days, these to sharpen sales skills such as reading body language and dealing with clients' personality types. Videotaping is used extensively.
THE SALES MANAGER
Eight Is Enough
First, structure: eight-to-one is Paychex's magic management ratio, for no other reason than it works. Zone managers each supervise eight middle sales managers; each middle sales manager in turn manages eight working salespeople. When a district exceeds eight salespeople, it's time to add another middle sales manager; when there are more than eight middle sales managers under a zone manager, the next zone manager is added and territories are redistributed. Golisano doesn't always find his managers by promoting from within the sales ranks. ("Though we prefer to promote, we don't hold out vertical movement as a promise," he admits.) He'll hire both middle sales and zone managers from outside.
And what do Paychex sales managers do? "Ninety-five percent of the job," says Golisano hyperbolically, "is making sure he has the right eight people in his territories. If he hires the right eight, they'll take care of themselves." Despite the company's trickle in turnover, sales managers are expected to make recruiting a full-time job, "whether you have openings or not," Golisano says. "If you're a sales manager and not constantly recruiting, one day you'll find yourself with a resignation or termination and an empty territory for three months. A good sales manager networks, building a cadre so that when there's a turnover, there's a person waiting in the wings."
Apart from keeping the recruiting process in constant motion, Paychex sales managers are expected to spend a large part of every month on the road with their sales-people, observing how they make calls. When you come right down to it, Golisano concedes, their "primary responsibility is to achieve quotas, and one of the best ways to do that is to work with reps who need help."
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CONTESTS AND MOTIVATION
The Well-Chosen Few
Compared with many a sales operation, Paychex's paychecks may be a tad on the thin side. Even with achievement bonuses that account for two-thirds of the total, six figures a year is rare. But, Golisano reminds us, "salespeople are not motivated solely by compensation. Reps want to know how they're doing relative to their peers; the competitive element is part of a happy environment." Paychex spreads the cheer in three ways:
