A highly successful entrepreneur details the difference between a good and bad sale and how to avoid the latter.
Norm Brodsky is a veteran entrepreneur.
Selling is easy. What's important is knowing the difference between a good and a bad sale
Everybody sells. I don't care what position a person holds in your company. All the people who work for you are directly involved in selling your product or service, and they had better know how, or you're asking for trouble.
It's especially important for your key managers to understand sales. I encourage all of mine to put in a couple of days making sales calls every month. Sometimes I get resistance from new managers. A few years ago I hired an administrator for my delivery company. He knew my philosophy. He said, "I can't sell." I said, "Sure you can. Sales is the easiest thing in the world. Look, I'll prove it to you. Tomorrow we'll go out and make a sale."
The next morning we headed off into midtown Manhattan and chose a building at random. I told him to pick a company from the directory. He said, "What are you going to do?" I said, "I'm going to go up and sell this account." He said, "How can you be so sure?" I said, "Louis, I'm telling you, selling is easy. You can do this, too."
We went upstairs to a small advertising agency. I told the receptionist I was selling messenger service. She didn't seem overjoyed. There were probably 340 messenger companies in New York City at the time. I asked to see the person who purchased the service. It turned out she did.
I said, "Great. This is my first day on the job, and because you're my first customer, I'm going to make you an offer you can't refuse. How many messenger calls do you do a day?" She said, "Three or four." I said, "OK, I'm going to do all your messenger calls for a dollar a call for the next four months." Back then, the going rate was about $6.50 a call. She gave me a suspicious look and asked about the quality of the service. I said, "The service is unbelievable. In fact, it's so good, I have no doubt you'll want to keep it after the four months -- at our regular prices, of course, which are very reasonable." She laughed and said, "OK. If you'll put that in writing, I'll give you my messenger calls."
We got into the elevator, and Louis was shaking his head disapprovingly. I said, "See, I told you selling was easy. Would you agree we just made a sale?" He agreed. I said, "OK, I guess that's your definition of a sale." He said, "What's your definition of a sale?" I said, "My definition of a sale involves making money on it. That's why we have salespeople. Anybody can do what I just did. When we hire salespeople, we're paying them to go out and make sales at a profit."
We made 10 more sales calls that day and managed to pick up another customer -- this time without giving our profits away. I wanted to demystify selling for Louis, to show him the difference between a good and a bad sale. When managers don't sell, they get funny ideas about selling. They think it's complicated, mysterious. A kind of sales mystique develops in the company. Then a salesperson comes back and says that he or she can't sell your product at full price, that the market is demanding a steep discount, or a special deal, or whatever. The managers don't know how to respond. They don't trust themselves. The salesperson could be right or wrong, but the people who have to decide don't have a clue.
I want my managers to be able to make those decisions. I also want them to know who our customers are. I want them to learn how to listen to customers, because customers will define your market for you. They'll tell you whether you are different from your competitors and, if so, in what ways. They may not tell you directly. Often you learn more from listening to the questions they ask. You find out what you need to sell, what your product is, how best to approach the market, and what changes would let you charge a premium.
Managers need to understand all that if they're going to play a significant role in setting company policy, but they won't learn it unless someone takes the trouble to teach them. That, of course, is where you come in. I believe teaching sales is the job of the president or CEO, at least in a small or midsize business. In fact, it may be the most important job you have.
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Norm Brodsky is a veteran entrepreneur whose six businesses include a former Inc. 100 company, a three-time Inc. 500 company, and a start-up that he hopes will qualify for the list in 1996. His column, Street Smarts, appears every other month. Readers are encouraged to send him questions care of Inc. This column was coauthored by Bo Burlingham.