150,000 Reasons Why You Need an On-boarding ProgramResearch by industry consultant Brent Grover indicates the typical distributor invests more than $150,000 before a salesperson starts generating profit for the company. Think about this: that new guy out there struggling to figure things out is burning through dollars like a forest fire. Did this get your attention? 

If not, here is another tidbit that will bring tears to your eyes. A couple of months ago, I hosted a meeting of new distributor salespeople. Their common link? They all had less than 18 months of experience in the outside role. We asked which of them had any training when they hit the road. Unfortunately for most, their introduction to their new job was the same as their bosses’. “Here’s the key to the company car, there’s your territory, go forth and sell,” is still the motto. In spite of high costs and mounting financial pressures, most distributors start new salespeople off without a well-thought-out onboarding process.

One of the critical points of bringing on any new salesperson comes in setting process expectations. They start their career with you without truly understanding some of the fundamentals of how you expect to do business in the future. I believe that process is critical to efficient organization. This need not be a fancy setup, however; every good distributor has at least a few process points. Let’s explore what some of these might be.

Establish Expectations

First, lay out some financial guidelines. What does a successful salesperson look like in your organization? When a salesperson starts off with an expansion territory, they need to know that growing their business is job one. But how much growth equates to success? If a successful salesperson should be handling $2 million and their new territory generates $500,000, make them realize that doubling the territory in three years is a good thing but not necessarily a win for the company.

Lay out growth plans for the territory including the types of accounts, the products you believe are ripe for growth and how future increases will impact their income. Be absolutely certain to explain your expectation for rapid growth within the new salesperson’s territory. Stress the fact that expansion territories are strategic investments that do not immediately add to the company’s bottom line.

While I don’t believe in micromanagement, set expectations on working hours, number of calls made, appointments and timeliness of communication. As strange as this may seem, I continually hear stories of sales managers discovering that their new salesperson has the habit of not starting the day until 9:00 because they like to drop their spouse off at work each morning. Why not nip the issue in the bud by laying out expectations the first day?

Joint calls represent not only an important selling tool, but an opportunity for the new salesperson to gain valuable job experience and product sales training. Yet many distributors allow new salespeople to go untrained in how to use this resource. I believe in establishing expectations around when to use outside resources for sales improvement. Metrics and instructions can easily be defined for joint calls with specialists, key supply partner reps and distributor management. Lay out how many calls are expected per month, who is responsible for setting up the call, what follow-up might look like and how the call will be tracked and measured.

Today there are so many ways to communicate with customers and vendors. I believe in spelling out expectations around the timely return of communications. A template might look similar to the one below:

  • Phone calls from customers – returned within four hours.
  • Emails from customers – answered in one business day.
  • Phone calls from inside support staff – returned within two hours.
  • Phone calls from key supply partners – returned within four hours.
  • Phone calls from other vendors – returned within one business day.
  • Email requests from management – returned on the requested day or an explanation provided immediately.

How do you capture customer data? If you are a distributor that uses a customer relationship management (CRM) program, the new guy should understand the information required to operate it and the timeframe for entering it into this system. This includes new customer contacts with accurate names and titles, product interests, calls and so on. To illustrate, you might list expectations this way. You should enter new contacts from all customers to the CRM record within two working days of the meeting. Failure to set measurable guidelines creates sloppy habits that are difficult to change later.

Sales managers and their new charges often find attempts to monitor their ongoing progress frustrating. When laying out an opportunity tracking system, coaching and mentoring occurs with greater efficiency and regularity. Lay out rules for opportunity tracking. This includes the size and type of uncovered potential and how it is to be recorded. An example might look like this: We record into the CRM system anyone who uses more than $5,000 of our equipment along with competitive information, technical issues and the decision maker. As before, this information should carry an expected time of entry.

Quotations are another stumbling block for many distributor organizations. A savvy sales manager takes the time to define how quotations are created. Set rules for quotation generation outlining precisely when the new salesperson handles the task and the times inside sales and specialists are involved in the process. Further, setting expectations as to how you follow up on quotations within your company is important. Our experience indicates that failure to follow up on large quotations often results in missed opportunities. Set a time and responsibility for these quotations.

Establish the Right Behaviors

It’s amazing how many salespeople go into calls without defining a purpose. Early in the customer/salesperson relationship, the purpose is sometimes hard to define, but still the call should be more than simply shaking hands.

When salespeople know what questions they should ask before the sales
call, they gather more information, listen better and accelerate the relationship. Insist that the new salesperson establish a list of customer questions. These might range from the market the customer serves to the companies the customer sees as competition to product preferences to the type of training they need for employees. You need to record and store the answers to these questions away somewhere besides the salesperson’s ironclad memory. You want instant recall without depending on memorization.

The need to remember the answers to ground-breaking questions takes us to our next point. Salespeople need to take notes during customer visits. For years, I recommended the use of a composition book with pages that are not easily detached. This meant the salesperson always stored customer data in the same place. Today, you can take notes electronically via a tablet computer. If they do this, insist on a well-defined method for categorizing, storing and maintaining the notes.

When new salespeople hit the street, there is often a tendency to use price as a door opener. While the strategy may produce temporary gains, I believe they create long-term pains. Margin erosion has become an epidemic issue with wholesalers across the country. Give every new salesperson pricing direction. Regardless of whether they have industry experience or not, your business model probably requires a different type of gross margin strategy.

Spell out minimum gross margin deviation before the salesperson shakes the hand of their first customer. If you have a pricing process like David Bauders’ Strategic Pricing Associates, spend time briefing the new salesperson on how and why the process works. Furthermore, measure the salesperson’s adherence to that pricing strategy from day one.

When Special Pricing Agreements are required, new salespeople should understand your company’s position on their proper use to capture and lock in important customer opportunities. And if (for some reason) you do not have a plan for how these agreements are registered within your own organization, this should be established immediately, for the entire sales team’s benefit.

The Right Tools

OK, we’ve walked our way through setting expectations, establishing work habits, and this brings us to equipping new team members with the right tools. Most of us have given thought to the right phone, laptop, Internet connection and company car. But the tool box needs to hold more than just the physical tools. Let’s go a bit further and talk about ERP system tools.

Every new salesperson needs to understand the purchases currently made by their accounts. Ideally, this should include more than just a top-line sales number and gross margin percentage. I suggest reports outlining product purchases broken down by customer. If the product can be segmented by technology groups, it’s all the better. Sales managers must invest the time to instruct salespeople in the reports available and how to interpret them. Ideally, this should become part of a monthly coaching session to ensure the data is correct and there are no issues with
account groupings.

The salesperson should know where and how to get this data in the future. Bouncing back to our first message,
set expectations as to how often you anticipate this type of information for review at the salesperson level. Strangely, even experienced salespeople from other companies within the industry have no realization as to the importance of understanding where their sales come from.

Before we sign off…

This article barely scratches the surface in launching a new member of your team. I am working on a workbook to assist distributors in effectively launching new territories. My notes have already spilled into their fourth folder of information. Along the way, I have discovered the best resource for information is the salesperson that started their journey two years ago. They still remember the pain.

With this final word, I challenge you to sit down with your newest successful salesperson, the one who is showing real promise, and ask what they wish they knew two years ago. Maybe they could whittle your investment down to $100 grand.

Frank Hurtte provides Strategic Insight for New Times. He speaks and consults on the new reality facing distribution in a post-recession world. Contact Frank at River Heights Consulting, 563/514-1104 or frank@riverheightsconsulting.com.