Jumpstarting Sales

Get the spark back by developing a pervasive focus across the organization

By Evan Pattak

Following several years of cost-cutting forced by the slump throughout manufacturing, ASKO, Inc., was determined to jumpstart its business and infuse its organization with a fresh sales mentality. To achieve that, the Pittsburgh provider of products, services and technical support for the metal-producing, metal-processing and recycling industries took what some might regard as a radical step — it opened its books to all employees at all locations, in effect making staff partners in sales and customer satisfaction. ASKO paired its open-book approach with a Performance Management Roadmap that grounds employees in the company’s vision and competitive advantages.

The strategy was not without risk; if business sagged, employees would swallow a daily dose of bad news. While it’s still a work in progress, ASKO President and CEO Bill Rackoff considers the innovations instrumental in the company’s recent upturn.

“Without them, I think we would have had a demoralized bunch,” Rackoff says. “But having everyone aware of what we’re trying to do in the market has given us a motivated group of people, despite the austerity we’ve had to impose. They not only can see where we’re headed, but they also see something in it for them personally when we get there.”

Developing a pervasive sales focus always has been an objective for manufacturers, but never has it been more timely. As manufacturers shake off the malaise of the past few years, they may discover that their employees have grown tentative; instead of putting their best foot forward, they’re waiting for shoes to drop. The good news for manufacturers is that re-establishing a sales focus throughout the organization typically does not require massive re-education.

“Do you have to take everybody — from sales to production — and put them all through a sales training class? Probably not,” says Michelangelo Celli, Co-Founder and CEO of The Cornucopia Group, a western Pennsylvania consulting firm.
Sometimes, a modest tweaking of your commission structure will be all it takes to rekindle the enthusiasm for growth. Says Steve Lippock, Founder and President of the western Pennsylvania consulting group HarvestGold, LP: “If you introduce a new product, and your company’s goal is to achieve 10 percent market share the first year with that product, it won’t help if your sales organization is driven solely by a pure commission-based compensation plan. They will just continue going after the low-hanging fruit with no real focus.

“If the company’s goals change, you have to redefine success for the sales people, in this case focusing them on new-customer acquisition. You must ask yourself: ‘What activities or results within their areas of responsibility will drive the company’s strategic goal of attaining 10 percent market share?’ That’s where they should be rewarded. This applies to employees in other areas of the company as well — right down to the shop floor.”

But more often than not, creating a sales focus is a matter of delivering the right message to employees — and rewarding their performance. “Value, not price, drives sales today,” notes Dennis Caruso, Founder of Smart Systems Technology, Inc., Industrial Research Services Corp. and Caruso & Associates. “So to have a sales mentality throughout the organization, companies must operate from a customer satisfaction mentality. They must ask: What is it that I can do to represent great value to my customers in how I conduct business with them, how I service them, how I communicate with them, how I help them with their problems.”

In short, creating a company-wide sales culture is part communication, part remuneration, and part inspiration. Here are some ways — traditional and out-of-the-box — to get there.

Get senior management involved and committed.
Your leadership team can play a pivotal role in growing a fertile sales environment. Often, though, they may not be aware of this hat they wear, since it’s one among many.

“The number-one sales person in the company probably is the owner or someone who came up through the ranks with no sales background,” says Caruso. “They’re not sales people — never were, never will be — yet the prime responsibility falls on their shoulders because they can’t compete with larger organizations who employ the best sales professionals.
“When a prospect comes to them, they do pretty well because they know the business thoroughly. But when it comes to probing desires and needs, they get tip-of-the-iceberg answers; the real information lies below the water. They need to be educated on developing a customer-centric focus.”

And that education shouldn’t stop there. "Senior managers and executives also must be trained,” Lippock says. “They don’t need to know all the details of managing opportunities or sales cycles, but they need to know that a process exists, and be familiar with the tools sales managers have (and should be using) to manage it. Then you have accountability up and down the organization, a common language and a well-defined role for everyone. When all that happens, you have built a sales culture.”
Even your sales and marketing people may need training, not so much in product knowledge as in the important fundamentals of your business.

“As the company develops its business plan and the marketing department develops a marketing strategy, you want to ensure that the strategies and business objectives extend down into the field to sales people,” Lippock suggests. “Therefore, the territory-level sales goals and the behavior of your sales people all must be in alignment with the company’s strategic objectives to give you the best opportunity for success.

“Everybody sells. Everybody has to be aware of the company’s goals, its position in the marketplace and its overriding mission. It’s as much about good communication as it is about training. If you ask, ‘What’s our competitive advantage? How are we better?’ everybody in the company should know the answers.”
This can be a particular challenge in manufacturing, where sales often are handled through reps or distributors carrying the lines of other companies as well. ASKO overcame this communication obstacle by producing special print materials for its outside sales reps.

“You can’t expect them to know as much about your company as you do,” Bill Rackoff says, “so you need to put tools in their hands that reflect your strategies and positioning.”

ASKO considered this aspect of its mission so vital that it hired two regional sales coordinators whose principal job is to interface with outside reps.
“It’s not enough to create printed words, a Web site or advertising,” Rackoff says. “People need that human contact.”

Revitalize and expand your bonus program.
Everybody appreciates a cash bonus around the holidays, but think how much better your company’s performance might be if all employees earn monthly bonuses that, by percentage, equal those of management. That’s what Precision Medical, Inc., had in mind when it restructured its bonus mechanism about four years ago.

A Northampton County manufacturer of medical products for hospitals and the home healthcare market, Precision Medical implemented a two-tier bonus program. When monthly goals are achieved, each of the company’s 150 employees receives a one percent bonus styled as a company contribution to their profit-sharing plans. Informal celebrations, such as pizza parties, also provide recognition for monthly goal achievement.

Then, if the company achieves its annual targets, employees collect cash bonuses ranging from $500 to $3,000.
Adroit, timely communication is what makes this program go. Precision Medical displays its daily performance on giant thermometers posted throughout the plant. And since managers must pass through the shop floor to reach their offices, daily dialogue about goal achievement is the norm.

“We know what we need every single day,” says Tim Clark, Executive Director of Global Sales and Marketing for Precision Medical. “Sales and Marketing hear about it if the numbers aren’t there. In the same way, everybody knows when there’s a back order.”

The program has been a key contributor to the company’s impressive growth — revenue jumped 30 percent in 2003 alone — in a competitive market. One reason for its success, Clark says, is that management solicited input from all departments in shaping the initiative. “It has to be a coordinated plan,” Clark says. “Everybody has to buy into it and see it as a benefit.”
Cost also can be an issue, but if your bonus plan inspires employees to new levels of collaboration and productivity, the program will more than pay for itself.

“Can you afford to do this? You can, if you relate it to the increase in sales that you think will occur from working as a team,” Clark says.

Open the books to all employees.
Traditionally, staff learns how their company is doing only at the fateful year-end meeting, when senior management doles out Christmas bonuses or pink slips. That makes it hard for employees not directly involved with sales to develop a sales mentality — they have no way to gauge their performance against expectations. In ASKO’s open-book management system, every employee knows exactly what’s expected, exactly what’s been achieved and exactly what they stand to gain, since an incentive for goal achievement is built into the program. ASKO calls its innovation the “Great Game of Business (GGOB)” and peppers it with familiar sports terminology. The management team, for instance, “huddles” once each week to review performance; department and group huddles quickly follow.

“Within 48 hours of the management huddle,” Rackoff says, “everyone in the company has the same information. All employees can see how their areas are doing. Our system is aimed at motivating through information; the incentive really is a by-product. Everyone comes to understand not only the corporate position and strategy but also their roles and how they can affect outcomes. There’s a line of sight between them and the larger corporate message.”

Rackoff notes that successful roll-out of open-book management requires a time commitment. While staff-level huddles take about 30 minutes, the average prep time for managers runs about two hours per week. “We haven’t found time to be a major problem,” Rackoff reports. “The biggest issue is keeping the same day of the week available. Maintaining that discipline probably is the biggest challenge.”

Some basic training for employees in financial reporting and analysis also has been vital to the program’s success. “We ran a series of seminars on financial literacy for everyone in the company,” Rackoff says. “After awhile we found that everybody was interested and able to understand the information.”

Finally, if you decide to open your books to employees, make sure you provide them with relevant information, even if it means introducing new metrics. “If you’re not measuring,” says Michelangelo Celli. “you’re not really managing. You can go to great expense to make people aware of profitability and revenue, but these are trailing indicators. They don’t give you a lot of information about what you need to be doing today. “For instance, how many inquiries does it take to produce how many orders? That’s often where things break down. Companies get leads, but they don’t have any way of measuring or controlling how they nurtured those relationships or where they spent the money. You can break down the entire sales process into its value-added steps, and each one can be measured.”

Reassign some traditional sales responsibilities.
What sales reps do best is sell. Often, though, they’re asked to handle a whole host of tasks that appear to be related yet may involve different skill sets. Explains Celli: “The question manufacturers should ask is: What changes should we engender to allow our sales people to spend as much of their time as possible negotiating sales with people prequalified and predisposed to buy? That requires an increased organizational commitment to off-load from the sales force such tasks as prospecting, preparing proposals and quotes and logistics.”

Relieved of these ancillary tasks, your sales force will operate from a pure focus. In fact, says Steve Lippock, they even can fashion customized annual plans because their objectives no longer are cluttered. “Ask your territory-level sales people to develop business plans driven by their own income objectives,” Lippock advises. “This personalizes the corporate strategy and enables sales people to develop plans that are subsets of the overall corporate plan. When setting productivity goals, if you ask them what they think they will be able to sell next year, they’ll probably low-ball it. But if you say, ‘How much do you want to make next year?’, they’ll give you a very different answer. With an income-based approach to goal-setting, they typically target an income level which results in a level of productivity that surpasses what the company would assign as a quota. It’s a whole different approach than managing by mandate.

“You can position the sales planning process as an investment by management in sales people: ‘We’ll provide you with historical sales information, tools and templates to assist you in developing your plan, and then we’ll manage and support you based on your ability to execute a plan that we will help you build for yourself.’ It’s a message that’s typically received very well.”

Plus, there’s an added benefit. Once you redistribute such duties as prospecting and proposal development, you bring more staff into the loop — and take a giant step to creating an effective sales culture.