Wednesday, December 3, 2014

A Fresh Look at the Sales Manager Position

Modular home factories enjoyed a wonderful sales experience prior to 2008 but then the bottom dropped out and over the next few years many of them floundered and some actually sank. The sales managers and sales reps also shared in this plight. The industry lost a lot of them. The ones that were able to weather the downturn are now enjoying a little of what was once the expected income before 2008.

Sales managers fared much worse than their sales reps. Factory owners, trying to find any way they could to stay open and productive, started up the Sales Manager Merry Go Round. If this one didn’t work out, promote the next poor schmuck sales rep and see if they could do any better. I know some factories that went through a Sales Manager a year.

But hopefully that era is over and modular factories are beginning to get back into gear. The question that needs answered is whether the factory owners and GM’s learned anything about what drives sales from the whole Up -Very Down - Up Again cycle. Some have and some haven’t.

In a recent survey of 1,200 companies, owners and GM’s were asked what metrics they used to measure their Sales Manager’s performance. The sales quota is still the most common and probably should be. Here are the results:

  • 67% said Meeting Team Sales Quotas
  • 41% Winning New Accounts
  • 30% Maintaining Margins and Avoiding Discounts
  • 18% Minimizing customer churn
  • 14% Accurate Forecasts
  • 13% Training and creating a positive sales environment

Now let’s dig a little deeper into each of these areas and really see what is happening as it pertains to the modular housing industry.

Meeting Team Sales Quotas
Having worked for several modular factories, both large and small, the ways that the sales reps’ quotas are determined run the entire gambit from the sublime to the ridiculous.

One Sales Manager I had sat down with each sales rep and went over each builder one by one and looked at historical data to work out the next year’s sales quota, taking into account how the housing market forecast would influence sales. Loved this guy.

At another all the sales reps sat in the conference room and discussed each of their builders and how much more they were going to buy next year. The sales reps would write down each others sales target for each builder knowing that before the year was up at least half the sales reps would either be fired or quit for not hitting their sales projections. New sales reps that were hired after the quotas were done for the year never realized that they were given the worst builders in the worst areas because the other reps and the Sales Manager divided up the exiting reps’ builders.

The worst factory I worked for simply looked at my sales were for last year and added 20%. Ridiculous.

Winning New Accounts
What can I say about this that I haven’t already beaten to death in previous articles? Sales reps are ill-prepared to target, seek out and bring in successful new home builders into the factory. Sales Managers don’t have the time or knowledge to train sales reps for this important task. Owners and GM’s don’t want to spend much, if any, money on sales staff training let alone training new builders.

Most builders stumble across a modular home factory by looking at factory websites and calling them to have a sales rep stop by. The Sales Manager usually hands the lead to a sales rep, gives them a thermos of coffee, some brochures and says “Sic ‘em.”

When 6 months have gone by without an order from the new builder, the sales rep and the Sales Manager lose interest in him. What a shame. If the ‘new to modular’ builder actually does place an order with the factory, so many things that were not discussed pop up during the process that the builder says “Screw this” and goes back to site building.

This metric is the one that should be highlighted by every factory owner, GM and Sales Manager and programs put into place to train both the sales rep and the new home builder. Invest now and reap the benefits or don’t invest and watch those little shoots die from lack of attention.

Maintaining Margins and Avoiding Discounts
This is one area that I think belongs to the GM and/or Owner. Asking a Sales Manager to do this can have a devastating effect on the Inventory Control, Accounting, Estimating, Shipping and Service Departments.

I can remember huge discounts of 5, 10 and even 15% being given by my Sales Managers just to get the sale. What happened next was the builder expected it on every house. Price wars kill everyone.

Minimizing customer churn
After a really bad day of listening to builders bitch and complain about the problems in the homes they bought, one of my Sales Managers turned to me and said he “would trade jobs with me for a nickel.” And I seriously think he meant it.

The only thing that is needed to keep a builder happy and continuing to buy homes from your factory is for everyone to do their job right the first time and on time. What more could be asked for from anyone in the sales game. Add prompt communications and it would be great.

Can you even imagine a Sales Manager’s attitude if he got very few complaints about the quality of the homes shipped, the turnaround times, the service department and of course the price? He wouldn’t trade his job for mine for a million dollars.

Accurate Forecasts
If the Sales Manager had a solidly trained sales staff, happy builders and didn’t have to worry about people doing their jobs properly, he/she would be able to focus on forecasting sales trends, working with the sales staff to improve sales and be able to go on the road visiting happy builders.

My God, this sounds like Heaven on Earth for Sales Managers. It could be but I’m thinking it will take some factory Owner or GM deciding that the Sales Manager is the key to sales and giving them the tools they need to achieve this little slice of Heaven.

Training and creating a positive sales environment
We all know that sales training for sales reps is low on every Sales Manager’s list. Not because they don’t want to help train the sales staff but rather because they don’t have the time or the resources.

That brings us to creating a positive sales environment. It is not solely the Sales Manager’s responsibility to create this. It is developed through the interactions of everyone the sales rep meets and talks to at the factory. Give a sales rep a slug for an estimator and that kills it. Have a Service Manager that continually blames the rep’s builder for every problem and that kills it. Have a receptionist that’s a gossip and talks about other reps to you knowing that she/he probably talks to them about you and that kills it. A CAD operator that drags their feet kills the positive attitude on most sales reps.

It is the Sales Manager’s job to protect the sales staff from these kinds of people and not throw either party under the bus. This is one aspect of the job that takes a special type of person.

The Sales Managers of yesterday are history. Today’s Sales Managers need to make history. That means all hands on deck when it comes to training sales reps and builders. It also means looking into each area and deciding what needs to be accomplished in each for the betterment of the factory and builder.

It’s time that the Sales Manager’s position become the professional one it is meant to be.

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