The salesperson as Lone Ranger is becoming something of an anachronism. The new salesperson has to have the smarts -- and the humility -- to know when to call on resources back at headquarters. But for most salespeople that is not an easy role to take on. As John Sample of Business Interiors explains it: "Salespeople, especially successful ones, are entrepreneurs. And they are used to doing things on their own and having control of what they do, and they like to look at a job from start to finish. And all of a sudden we're saying, Look, your job is to bring the business in, and this person's job is to make sure it's specified properly, and this person's job is to make sure it gets entered and acknowledged correctly, and this person makes sure it gets installed."
For companies that have treated their sales reps as sole providers, it's a major shift in thinking, the corporate equivalent of becoming a two-wage-earner household. "The salesperson doesn't have all the answers," says Manco's Tom Corbo, "and is foolish to pretend to. Now the partnership is with the whole company. You're judged by the brainpower you bring." In Manco's case, since superstores are competing with it in efficiency and logistics, the company includes people from information systems and operations in its sales presentations. The talents of 20 people might go into any one presentation.
With rare exceptions, companies switching to value-added sales are improvising on ways to promote team selling. Some have set up loosely defined teams, made up of salespeople and a limited number of key players outside sales who have generally agreed to make themselves available for important presentations. At the other extreme, some companies have assigned just about every employee to a sales or sales-support team. Business Interiors, the office-furniture dealer, has six sales teams and four support teams. Included on the sales teams are employees from different parts of the company, such as project managers and order-services people.
CEOs are trying out a variety of ways to bring salespeople closer to the rest of the company, and the rest of the company closer to customers. Manco brought its far-flung sales force permanently back to headquarters. The 11 salespeople now drive or fly out to meet clients. An extreme measure? Perhaps. But Corbo found that when reps were out of the loop of what Manco was trying to teach back at headquarters, some made bad decisions, such as loading retail customers with too much inventory. Plus, he says, "there was rapid change going on, new products, new customers, and a lot of learning. Having reps out in territories didn't work."
At Robinson Brick Co., a $14-million family-held manufacturer of residential brick, in Denver, salespeople must take one employee a month into the field. Robinson broke out of the commodity business by offering such unexpected extras as 68 colors, state-of-the-art delivery technology that makes same-day delivery possible, and responsive field service. ("A lot of competitors still think they're selling just bricks," says CEO George Robinson. "We hope they keep thinking that way.") As the company increased its customer base from 15 brick distributors in 1987 to 115 in 1992, Robinson started a distributor training school that employees also can attend. Since 1987 about 100 of 170 workers have been through the school.
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Compensation Questions
Compensation is an issue that no CEO has been able to ignore as roles shift within a company. And, so far as we've been able to tell, no CEO (or consultant) has the answer to compensation, because of all the variables -- the industry, the company culture, the type of salesperson, the customer mix, the role of service and support people, and so on.
There's an almost staggering range of options in thinking about how to compensate salespeople. Do you tie incentives to individual product margins? The gross margin of the sale? The size of a long-term contract? The mix of products? Number of new accounts? Number of presentations? Number of customers retained? Customer-survey results? Team goals? Regional goals? Companywide goals? Many companies are mixing and matching to suit their individual needs.
Some companies have switched to all commissions for salespeople and have set up a customer-service point system to determine commission rates and bonuses. Others have dropped individual commissions and quotas altogether, preferring to pay straight salaries and a bonus on the profits. Still others use a combination of commissions based on gross margins, and a series of bonuses tied to individual and corporate goals.
Once teams begin selling and employees who never leave the premises commit themselves to customers, the issue of fair compensation gets very murky. How a company compensates the people who service and support key accounts is an area that's ripe for overhaul. Many CEOs admit they underpay in this area simply because service people in general across many industries are paid less than salespeople. Still, owners who believe everyone in the company helps that company's sales are finding ways (monetary and otherwise) to reward everyone when customer-related goals are achieved.
Those companies recognize a variety of employees for their part in adding value for customers. Fletcher Music selects two employees of the month for customer service -- one from sales, one from support (including administration, service, and delivery). Winners get $250 and their name on a company plaque. Recognizing "all levels of customer-service achievement," says John Riley, helps foster goodwill between sales and support. It also rewards salespeople "in front of their peers for something other than selling."
