Great Article From Inc. Magazine on Sales in Difficult Economies

Fighting the Sales Force Blues
How to keep reps motivated when they miss their numbers
By: Susan Greco
Published September 2008
Sales Management
It's been a rough year for QuantumDigital, an Austin-based company that prints direct mail pieces, primarily for real estate agencies. As the housing market has tanked and customers have moved more of their marketing dollars online, QuantumDigital's real estate business has fallen 30 percent.
In response, the $30 million company has added new tools to its website, gone through a rebranding exercise, and struck partnerships with ad agencies in a bid to enter new markets. Even so, the sharp decline, after so many years of success, has taken an emotional toll on the company's 10 sales reps. Where success -- and bonus checks -- once came easily, now reps must fight for every account. "That's really hard," says Eric Cosway, QuantumDigital's chief marketing officer. "For years, they were basically order takers -- all they really had to do was answer the phone."
Similar dramas are being played out at many companies these days. In a bad economy, businesses need the0ir sales reps to be at the top of their game in order to stay on plan or, at the very least, keep lost business to a minimum. But even reps who are inured to rejection can find it hard to persevere. Depending on a company's compensation plan, members of a sales team might be called on to work much harder even as they earn less. It's up to a business owner and top managers to make sure their sales reps are pushed to perform -- but not so hard that they lose heart.
At Quantum, Cosway spent a lot of time talking with CEO Steve Damman and COO Freddie Baird about the sales force's morale. The three of them decided to try to reinvigorate the team by devoting more resources to coaching and mentoring. First, Cosway enrolled the reps in a nine-week sales-training program. Then, Cosway, Damman, and Baird committed to going on many more sales calls themselves. The three executives delegated some of their daily duties to other managers at the company and then jumped into the fray.
"I've been heads-down in sales and pipeline building for the last six months or so," says Cosway. The point, he says, is to make it clear to reps that they are all in the fight together. "When they see Steve and Freddie and me roll up our sleeves and help them, they know they're not alone," he says.
To pump up her five independent sales reps, Michele Mischler recently decided to reduce the amount of administrative work that was required of them. Mischler is the owner and president of MCM Sales Associates, a Cincinnati company that helps manufacturers and industrial customers manage transactions over Internet buying sites like ThomasNet. MCM's revenue was $2.6 million last year. When fears of a recession began to swirl, Mischler concluded that tasks such as market research, reviewing Web-based sales materials, and responding to billing questions could be handed over to other employees; this freed up her reps to work the phones and go out in the field. "They don't have to get bogged down in the little fires," Mischler explains. "I want them thinking creatively and going after new business."
Managing expense accounts is another way that a company can buck up -- or further demoralize -- its sales team. Some sales managers naturally look to trim costs during a downturn. But Judson Kleinman thinks this is a big mistake. Kleinman is the CEO of Corporate Essentials, a Fairfield, New Jersey, company that last year sold $5.3 million of office pantry supplies. Lately, he has had to raise his prices to keep up with the cost of coffee and milk -- at a time when many of his customers are shopping around.
Recently, Kleinman hired a rep named Steven Femenella, who very quickly piled up the miles. Rather than holding him to the agreed-upon spending limit, Kleinman increased Femenella's travel allowance -- "before he had to ask," the CEO says. He also took Femenella along to networking events and promised to hire a telemarketer to generate leads for him. The added investment paid off. In his first six weeks on the job, Femenella landed four new accounts.
Sometimes the best way to boost morale is not through benevolence but by making some tough strategic choices that put the business on sound footing. That is the stance Joe O'Brien has taken at IVO Appliance, a $12 million company in San Mateo, California, that sells computer server systems that allow employees to access corporate software over the Web. Last year, O'Brien began to worry about the welfare of his 17 staff salespeople and eight independent reps. He says that during previous recessions, he saw salespeople spin their wheels for months on end as sales dipped. "You can completely demoralize a salesperson if they're selling in a segment that's doing poorly, no matter what you do," he says. "It's harder to get prospects, and it's a longer sales cycle." Prolonged frustration, he says, leads reps to wallow in self-doubt. Why should I make another cold call? No one's going to pick up the phone, and if someone does, she will say she doesn't have the budget right now, so why bother? This mindset leads reps to make fewer phone calls at a time when they should be making more.
Looking at IVO Appliance's sales, O'Brien saw that the stream of new health care accounts was actually growing despite the sluggish economy, while the sales cycle for media, manufacturing, and finance customers seemed to be getting bogged down. So he decided to tell every member of his sales team to focus exclusively on health care. It was a major change for the reps, who used to have the freedom to pursue any industry in their geographic territory -- and there was an immediate cry for more time to wrap up deals already in the pipeline, which O'Brien quickly granted. But none of the reps staged a coup, and those who had spent a lot of time in the finance sector "were very happy to get the focus on a new industry," O'Brien says, because new accounts in finance had all but evaporated.
O'Brien feels good about the change. Despite signs of declining capital-equipment spending in some of the industries on which the company once relied, IVO Appliance has managed to slightly exceed its midyear projection. Every rep is making quota, and O'Brien says the company's sales cycle has not increased. "When the recession seems to be coming to an end, we'll go back and look at those other industries," he says.
Meanwhile, back at QuantumDigital, the concerted coaching efforts appear to have paid off. The company's sales to real estate agencies are far short of what they were last year, but Cosway hopes overall sales will still wind up flat for the year, thanks to new accounts from other industries.
More important, morale seems stable, and reps are even learning new skills. For example, Tom Baca, who joined the company's sales force in 2001, has begun taping sales calls, with customer permission. The tip came from Cosway. Baca says it gives him a chance to review what the client says and to assess his own performance.
Beyond that, Baca says working so closely with his bosses has made him more comfortable asking for help when he gets stuck on an account. "The coaching comes into play when we run into a hurdle," says Baca. "I can ask these three guys to help me get an account to the next step."