Hard Sell: Sales Training
In what is still a rocky economic environment, the majority of jan/san distributors are not in the 'grow my business' mode. Instead, they're stuck in a 'let's hold on and see if we can get through this year and the next' mode. And as a result, distributors are cutting every discretionary cost they can, including the first thing to go when the economy went sour: sales training.
"Because of the recession a lot of distributors just don't want to invest in their business," says Andy Brahms, president of Armchem International Corp., Fort Lauderdale, Fla. "They think sales training costs them too much and they're not going to get a return."
In fact, Dave Kahle, sales coach and president of DaCo Corp., in Comstock Park, Mich., says over the last two years the world of distributor sales training has been non-existent, shrinking by a staggering 90 percent.
"The percent of distributors who are actually training is very small," says Kahle. "One out of 20 distributors are providing actual skill training: how to make an appointment, how to ask a question, how to understand a need, how to present effectively, how to close."
Because the recession has crippled distributors' margins, they are looking for quick and inexpensive ways to prevent their businesses from collapsing during this "recovery" period. Unfortunately, distributors aren't doing themselves any favors by pulling sales training in such a critical time.
"Distributors are like everyone else and they are looking to keep their bottom lines healthy. The avenue they've chosen is cost-cutting," says Ed Stasiak, vice president of KSS Enterprises, Kalamazoo, Mich. "From a short-term perspective, cost cutting is one approach, but long-term it's not the right approach. Selling your way out of the recession is the only answer. Increase your sales, don't decrease your costs."
Cost cutting will only hurt distributors more in tumultuous times. Adopting a business model based on skilled selling will better set distributors up for the long haul because it prepares them to go out and acquire new business.
Contrary to what economists say about the recession being over, distributors don't see any telling signs of the recession coming to a close by the end of 2010. Thus, on the cusp of 2011, distributors can't just sit back and wait for the economy to recover as a means to improve their businesses. They have to sell their way out of the poor economy.
Selling Your Way Out
Distributors who have invested in their sales staff during the recession have been able to grow their business. They've adopted the mindset that they are "selling their way out of the recession."
Just like the majority of his industry peers, Brahms' business has been affected by the recession. With customers going out of business, downsizing and slashing their budgets as a direct result of the economic conditions, business was slowly deteriorating. But instead of accepting the situation, Brahms decided to take action by hiring and training a number of new sales reps to go after new business.
Starting in January 2009, Brahms and his sales executives started training reps on how to cold call. Through a series of in-house month-long training classes, they taught the reps how to reach the qualified buyer in the organization, how to do a demonstration in front of the qualified buyer, and how to close the qualified buyer, all in the same meeting. Armchem also taught the reps organizational skills with time management being of the utmost importance.
"If you're not speaking to somebody, you're wasting your time," says Brahms. "We teach them not to speak to people for more than 30 minutes who can't make a decision to sign an order."
Since bringing on the new reps, Armchem has opened up more than 8,000 new customer accounts. As a result, the company's profits are up 8 percent in 2010. For Brahms, investing in his sales staff and molding them into sales professionals helped his company get back into profitable territory.
"Training was key in growing our business," says Brahms. "That's what kept us going. It's either you come out doing something to try and grow your business or you're going to curl up in a fetal position and find yourself behind the eight-ball in being acquired or go out of business."
Ensuring his company's efforts on training its sales staff does not get wasted, Brahms says he will continue to invest in his reps throughout the economic "recovery" period. In fact, he says by continuing to train and mold salespeople on a monthly basis it will put his business in the position to outperform his competition and stay healthy. It also sets his company up to thrive when business gets back to normal.
Unfortunately, too many distributors are currently caught in the trap of being too focused on short-term cost saving measures, rather than looking at the bigger picture and investing in their business in today's tough economy. So, most distributors are not putting their sales staff through a disciplined and strategically focused training regimen.
"If you're not training your salespeople, you're going to die a slow death," says Brahms. "Those salespeople will get frustrated because they won't know how to deal with the change in economy. And they have to know exactly what to do to be the utmost professional so they know how to offer the best products, solutions and services that you may offer to the changing customers and the changing economy."
Overall, distributors are choosing not to train because it costs money and the return takes months to years to notice, says Steve Deist, partner with Indian River Consulting Group, Melbourne, Fla. Thus, for the majority of jan/san distributors, they are only offering their reps free product training by manufacturers. Product knowledge is a must for any sales rep to effectively sell, but in recessionary times, true selling skills should take precedence, says Kahle.
"There is an overwhelming focus on product and not nearly enough time and attention being focused on process," says Kahle. "Attention should be directed at the sales process and the fundamental skills of asking questions, uncovering a customer's needs and resolving concerns."
Getting A ROI From Training
There's a lot that goes into selling than just going out and making calls. If distributors are going to sell their way out of recessionary times, they need to know how to do it right.
Sales training should be more detailed than just a salesperson's initial training when hired, which may or may not include a few weeks of learning basic selling skills. It needs to be a process that is performed on a monthly basis. Whether it's internal or external training, distributor salespeople should be learning basic selling skills such as how to make an appointment, how to cold call, and how to close a sale. Unfortunately, this thinking has gone by the wayside for most distributors over the last couple of years.
Today's distributors instead are either not interested in training whatsoever, or are too focused on low, or no-cost methods such as free seminars, free online training tools and sales books. They're also looking for things homegrown where they have a training course that's offered internally by practitioners rather than by training professionals. Expecting sales reps to be skilled salespeople based on free or minimal fee-based training, however, is improbable.
"A seminar by itself is not sufficient," says Kahle. "You have to continue the conversation and the expectation after the seminar. Where a lot of distributors make the mistake is they all send people to a seminar or they'll do a free Webinar and then they'll expect that everybody will change. Some will, maybe 5 percent, but for the most part they need coaching and encouragement and accountability and mentoring after the fact."
Sales training, by itself, however, is not enough. It needs to go even further. Coaching and mentoring after training by distributor sales managers can increase learning retention rates among salespeople, according to Deist, who says the retention rate of attending a lecture style training course is only approximately 5 percent.
"If you actually do exercises and get involved, then you're getting up to 25 to 30 percent retention," Deist says. "If you have to train yourself that same material, you jump up to 60 to 70 percent retention."
If a salesperson actually ends up using a high portion of what they learned on a day-to-day basis, then their retention rate can go even higher.
"For sales training to be effective, it needs to be consistent," says Dan Josephs, general manager of Spruce Industries, Rahway, N.J. "I guess the best way to describe it is to compare sales to a muscle. If you just exercise once you get some benefit but in the end you will just be sore. Being sore can relate to a sales crash course. But if you exercise consistently you will see drastic improvements with less soreness. If you are trained on a regular basis you will retain more and it will become easier to implement."
At Spring Lake, Mich.-based Nichols, the sales training the company's reps receive from either outside consultants and in-house sales leaders are continually being tested, says Glen Huizenga, the company's sales manager.
Monthly, the company's sales leaders meet with individual reps and test them on their sales presentation skills. The sales reps are also required to role-play selling scenarios in front of their peers where they get critiqued. This, Huizenga says, ensures that the reps are meeting the company's selling criteria.
In order for sales training to stick in a downtrodden economy, it has to be continuously interjected into a distributor's organization. In fact, most veteran distributor salespeople who haven't adopted this philosophy have been caught off-guard by the effects of the recession.
"What has happened is a lot of the veteran salespeople have gotten gun shy because they haven't been cold calling new business or adding new products and they're not sure what to do," says Brahms. "And their skills sets have diminished because they haven't been practicing them on a day in and day out basis. They didn't know how to open up new business, they didn't know how to get add-ons to help them make up for lost business. It's because they haven't been trained properly."
A distributor's sales staff is their most valuable possession. Without equipping them with the tools to sell, and sell effectively, in what has been new territory for the jan/san industry, it will only set distributors up for disaster.
"If you're unwilling to invest in your salespeople you're going out of business and you don't even know it," says Stasiak.
Hiring New Sales Reps
When looking to add or replace a sales position within their company, most jan/san distributors prefer to hire sales professionals from the jan/san industry because of their industry knowledge. Sometimes these reps come with some baggage.
"The typical jan/san distributor hires somebody who sells jan/san for somebody else," says Dave Kahle, sales coach and president of DaCo Corp., Comstock Park, Mich. "And the reason [distributors] do that is because they think [the reps] know how to sell. When in fact, they've never been trained, they just worked for somebody else and they feel they don't have to train them."
Another reason distributors like to hire from within the jan/san industry is the costs associated with bringing new hires up to speed. Distributors say that the costs associated with training and the time it takes to get someone up to speed often is just too much of a hassle in the daily grind.
"It is faster to hire from inside the industry," says Dan Josephs, general manager of Spruce Industries Inc., Rahway, N.J. "But, we do find that they come with some bad habits."
So, instead of getting a sales rep who a distributor thought was already trained and well-versed on the industry, the distributor oftentimes has to spend the time getting the reps to break their old ways.
Getting burned in these regards has made some distributors look to hiring reps from outside the industry first. Distributors who have done so say they prefer reps from other industries because of their fresh perspective and their willingness to learn.
"You want to train somebody from scratch so they don't have any dirty laundry they're bringing with them, no preconceived ideas, and you can teach them the way you do things," says Andy Brahms, president of Armchem International Corp., Fort Lauderdale, Fla. "If you can do that effectively, you can get a successful person. They don't have to know anything about what we do, but they do have to have some kind of knowledge in sales."
Instead of distributors pigeonholing themselves into hiring salespeople from inside the industry or outside the industry, choose the rep that is the most talented.
"Look for somebody who is hard working, who is competitive, who is professional," says Ed Stasiak, vice president of KSS Enterprises, Kalamazoo, Mich. "Look for somebody who wants to learn, wants to be No. 1 and has that internal drive to bring that whole package to the table."
If distributors are looking for fresh faces, some colleges and universities offer sales as a major. These students have gone through role playing, practiced presentations and know what it means to effectively sell by the time they graduate.
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