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Sell the salesman

Article Summary: Flagrant errors in managing a sales force are easy to discern. What may be harder to spot are the subtle mistakes or oversights that can be just as counter-productive to profit-making and sales force motivation.

Flagrant errors in managing a sales force are easy to discern. What may be harder to spot are the subtle mistakes or oversights that can be just as counter-productive to profit-making and sales force motivation.

The profit and motivational value in treating salesmen as though they were your best customers is illustrated in a recent experience I had when my firm provided sales and marketing management consultation services for a new manufacturer of high-priced radial tires.

The tires are exceptionally good, and the manufacturer knew that the large United States and European firms were squeezing the profit margins of the independent tire dealers. So, the tire producer came up with an obvious solution. It offered independent tire dealers the best profit margin in the industry and a completely protected territory. In order to give the dealers this break, the firm explained that as a new tire manufacturer it couldn't afford a gigantic advertising and promotion budget. The tire firm had to rely on the retail salesman at the point of sale, and the independent tire dealer, to make the tire a success.

Sounds good? Well, it was good. The tire dealers, battered from their continuing profit erosion battle with the large tire producers, were wildly enthusiastic. They ordered the tires and waited for the expected consumer demand.

But that demand never came. The manufacturer and I had made a crucial mistake we failed to realize that we must sell the salesman before we can get him to sell the customer. Fortunately, we discovered our mistake in time. We saw that we could not expect customers to buy tires unless our dealers' salesmen were sold on them first unless those salesmen were fully aware of the product's benefits. In other words, we found we must sell the salesman as if he were our customer, our best customer.

We had no difficulty selling the dealer. He knew he was being profit squeezed and needed a way out. But he assumed that because he made an excellent decision to buy our tires his salesmen would jump on the band wagon, too. That was a fallacy. Napoleon was once asked who ruled France. "Ten thousand file clerks," he replied. The same with selling. The bosses at the dealerships ruled in their domains, and were 100% for us. But until their store managers and salesmen were educated and enthusiastic. We had sold the boss, but the real test was whether our client could get reorders, and that depends on the dealers' salesmen.

So, here's what we did. First, we went back to the dealers and explained to their salesmen what was happening in the tire industry regarding the profit squeeze. Their bosses never wanted Co bother them with that information. We explained Chat their salary, their year-end bonus, and their livelihood depended on the margin that their sales generated. Because the big tire manufacturers reach the consumer directly via huge television advertising budgets, they can force a cut in the dealers' profit margin. That's great for those tire producers but terrible for the independent tire dealers.


Copyright (c) 2008 Thotsaporn Khumwaree

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About the Author:
Thotsaporn Khumwaree
Thotsaporn is the owner of http://www.linefinance.org where he provides finance information and resources.