Sales: What Works Now

Special Report

For years the sales just came. Now it's the questions that won't stop coming. Here's how smart companies are tackling today's toughest selling challenges.

Last year Doyle Miller's worst nightmare came true. Sales, once plentiful, had all but evaporated at Optomec, the Albuquerque company where Miller is chief executive. Demand for the company's laser equipment was down, way down. "For the first time," says Miller, "there was nothing on the horizon to help cash flow." Meanwhile, Optomec's two salespeople were still collecting salaries. Out of desperation, the CEO hatched a drastic plan: put the salespeople on straight commission and take away their secure base salary. He knew that carrying out such a draconian decision would probably result in one salesperson's immediate departure. Miller didn't want that. But what, he wondered then, were his options?

Rich McElaney, the CEO of $3-million Micromarketing, in Chantilly, Va., also reached a do-or-die moment. After years of double-digit growth, Micromarketing's sales slid so badly in 2001 that McElaney grew concerned about the company's viability. He too made a plan. The CEO quickly helped his two salespeople focus on new market opportunities among their retail customers and then went about hiring more salespeople. McElaney's plan, though very different from Miller's, was also risky. What if the new sales opportunities didn't pan out fast enough to pay for the newly expanded sales force?

At no other time in the past decade have CEOs and company owners faced such a flurry of sales issues flying at them all at once. Is there something wrong with my selling approach? My sales force? Is my product mix still right? And the biggie: When will things turn around for my industry? Many entrepreneurs, accustomed to good times, have few models or memories to fall back on during this downturn. Some, like Tom Salonek, were just getting started in business 10 years ago. "It was me and the dog, and we didn't know any better," says Salonek, the owner of Go-e-biz.com, an Inc 500 company in St. Paul, Minn. As the years went by and his E-business consulting company prospered, Salonek turned over the role of selling to hired hands. But today he's back in the saddle, riding with his reps on sales calls again. "Now I'm involved with key accounts, and that matters to our customers. I used to think, 'Big deal if I'm there."

Big deal indeed. Salespeople clearly need all the help they can get. Many sales recruits in their twenties have no recollection at all of the last downturn. With a straight face, a young salesman at one company asked the owner, "Gee, what was it like in the recession of '91?"

The short answer: nothing like this recession. "I've been in this game for a long time, and I've been talking to a lot of sales VPs," says sales consultant Robert Miller, author of the classic tome Strategic Selling. "Everybody says exactly the same thing -- their biggest challenge is managing pervasive uncertainty." But it's more than that. Tom Hopkins, popular sales trainer and best-selling author of How to Master the Art of Selling, sees salespeople gripped with fear. "A lot of salespeople have been on the gravy train for the last 8 to 10 years. A lot of sales were handed to people. They are immobilized now."

Before, the sales just came. Now it is the questions that won't stop coming.

Q: Should I be hiring salespeople right now?

The answer is a resounding yes. "Always be closing," a character says in Glengarry Glen Ross. Always be hiring, says Steve Schmidt, CEO of $20-million Abraham Technical Services, in Maple Grove, Minn. "A lot of top-notch folks are currently available, and I would pour all available monies into latching onto some winners," says Schmidt. Others agree that now is the time to snag superstar talent. "Anyone who joins has to be stellar," says Andy Zoltners, a sales consultant, professor of sales management at the J.L. Kellogg Graduate School of Management, and co-author of The Complete Guide to Accelerating Sales Force Performance. His advice: (1) change your hiring process so you're interviewing higher-caliber candidates, and (2) pay more to get the best. "My attitude on compensation is, the sales force is self-funding."

McElaney of Micromarketing did his math carefully before he recruited a top-performing salesperson from one of his competitors. "The person has 18 years of experience in my industry. I knew I'd be forced to pay top dollar to do this. But I've done a lot of payoff models," he says. In his experience, new hires are doing well if they make enough sales to cover their salary and other fixed costs in less than 12 months while they're learning the ropes. His new supersalesperson, he estimates, will be paying his way on a month-to-month basis within 7 to 8 months. "A few years ago I would have dismissed this kind of deal as too expensive, but I did the analysis and was pleased to find it will only take a few midsize deals to pay back the investment," McElaney says.

Q: I can afford to hire only one salesperson. How do I pick a winner?

A recession-proof way to boost revenues is to hire away from a competitor that top-level salesperson who has a ready book of business. Barring that, you're probably going to have to kiss a lot of frogs to find your prince or princess. Lots of salespeople are leaving or being laid off from big companies and failed dot-coms. But are any of those folks right for you?

"Good salespeople are usually 'expressive drivers' like me. And that's who I hire."

Meet Tony Natella, the master of sales recruiting. "Good salespeople are usually 'expressive drivers' like me," the onetime Inc 500 CEO says without a trace of modesty. "And that's who I hire." As you might gather from the psychobabble, Natella is a big fan of personality testing. But that's just part one of his rigorous screening system, which weeds out 29 of every 30 people who interview for sales positions at Diversified Communications Group, a $6-million recruiting firm in Bedford, Mass.