Sales Blog with Sales Tips

This is part two of a two part series containing sales tips on how to educate your customer on two important issues. For those of you who missed my last sales blog post, I discussed training your customers in relation to discounts.

You won’t normally see these kinds of sales tips in other sales articles or in another sales blog because I’m challenging you to take control of customer behavior. As sales professionals, we too often allow ourselves to be dominated by the customer. We have more influence than we think in defining our relationship with them. This sales blog post and my last are but two examples.

“Teach them the right way when they’re young and impressionable and you’ll avoid future problems.”

Fred’s Sales Tips
As is true of my last sales blog post, Fred, my German Shepherd, assisted me with this sales blog post. He made me realize he had been training me for years instead of my training him. All dog owners understand this principle. Unfortunately, we allow our customers to train us in ways that can hurt our sales effectiveness.

Customer Training Sales Tips #2 of 2
One of the many ways we unconsciously train our customers is in the area of accounts payable. Most companies require that a customer’s bill be paid in order for the salesperson to be paid their commission or to keep their commission. For this reason, most sales professionals are interested in selling to customers who pay their bills in a timely manner.

With new customers we frequently let them “slip” a bit on paying their bills. We don’t want to stir up the waters. They might pay their first invoice in 40 days, their second invoice in 60 days and before you know it they’re paying in 90 days if we’re lucky. By not intervening with their accounts payable department and even shutting off delivery of products and services, we are subtly educating our new customers that we are one of those suppliers that isn’t a stickler on payment. We jeopardize our commissions. Personally, I hate working for free.

You have to let your customers know from their very first order that you are not one of those companies that takes a “whatever-whenever” attitude on being paid. The bean-counters at your customers know which suppliers will let them “slide” and which ones won’t. The earlier you train your new customers that you aren’t one of the “sliders,” the sooner they will learn to put your invoices in the “pay now” pile.

Sales Blog Epilogue
As with sales tips #1 of 2, customers are like children. Teach them the right way when they’re young and impressionable and you’ll avoid future problems. You and your company have a right to be paid promptly for the products and services you provide. Remember, teaching your customers these “rules” for doing business will improve your relationship with them in the long run and make you more effective and profitable.

Further reading:

• Bad Accounts are Like Weeds
• One of My Most Startling Sales Tips
• Fire a Customer for Fun and Profit

To receive this sales tips blog by email <click here> to receive by RSS <click here>. © 2008 Scott R. Sheaffer

If you read my last post you know that I am a big proponent of calculating how much money you want/need to make on an annual basis as a primary goal for sales professionals. This principle should also be used by sales managers to motivate their people. It’s simple, determine what your income goal is and then see what you need to do in order to achieve that goal. This sounds easy to calculate, and is, by using the following formula. Reality check: Calculating the goal is easy, getting there is where the real work comes in. As we all know, if you don’t have a target…

Your Total Pay = Your Base Salary + Your Annual Commission

Let’s break it down one more step.

Your Total Pay = Your Base Salary + 12(Monthly Average Order Total X Commission Percentage)

Using the assumptions above you can calculate how much you need to sell each month to reach your annual income goal by using the following formula.

Monthly Average Order Total = (Your Total Pay – Your Base Salary) / (12 X Commission Percentage)

Here’s an example.

Debbie wants to make $83,000 per year, her base pay is $45,000 and her company pays her 15% commission on each order. How much does she need to sell each month to reach her goal? (And you thought you’d never use those word problems from junior high algebra.)

Monthly Average Order Total = ($83,000 – $45,000) / (12 X .15)
Monthly Average Order Total = $21,111

Debbie needs to sell $21,111 per month to make her annual income goals. How she is going to do it is where the real work comes in.

Welcome to my brand new sales tips blog. I will be updating this on a regular, if not daily, basis. I’ve been in sales, sales management and sales training for over 20 years and one thing that I know is that busy sales professionals don’t have a lot of time to read sales books, view sales CDs or even read long sales blogs. I’m going to keep these posts “short and sweet”…and meaningful to you.

Keeping Score. Your boss is always talking about “sales goals.” These goals are normally broken down by revenue amount, new business attainment, product category, SIC code, etc. This is true whether you’re brand new to sales or the VP of Sales for a Fortune 500 company. Coming up with these goals usually takes about 30 seconds, which is a testament to how valuable they are. The most important goal, however, for the sales professional and sales manager to focus on is the one that actually means something to the person tasked with the goal: compensation. If a company has a sales compensation program that is not broken (many are), then sales personnel will be rewarded for the selling behaviors that the company desires. If the sales employees are making the compensation they need to make, then the company should be reaching its goals as well. Again, this is based on a compensation program that is actually rewarding sales staff for selling the revenue amounts, products and types of customers that the company desires. So…why not work it backwards? How much money do you want/need to make? Set your compensation goal and see what has to be done to reach that goal. If you’re a sales manager, then do it for your entire group. This way you will be working toward a goal you care about.

Hint to sales management: your sales staff does not care about any goals other than this one despite what they may say in order to be politically correct. It’s time to get real with them.

Oh, and by the way, if you work it backwards and you find that Superman could not possibly sell enough to reach your goal then I don’t need to tell you that it’s time to do some soul searching.

To be continued tomorrow.