February 2010 – Ed Warner-Enterprise Software Sales

Stop the Churn

I never thought I would ever write a public service announcement, but that is exactly what this post is going to become. STOP the CHURN! I aim this message at companies that are sacrificing long-term talent for short-term gain. Whether you are a newcomer to my web site or follow me with regularity, you know I mostly aim for the sales side of the audience; but not this time. I point my finger in absolute disgust at companies that are using talented workers as throw-away pawns in an effort to forge some semblance of profitability.

My routine is to regularly “stalk” websites, postings, and even job listings in order to stay abreast of changes in sales and the competition. I am seeing something I find unsettling. A trend among companies to hire hastily and hope for the best. Are they expecting exceptional talent at low-ball prices? What is the reasoning? The fiduciary responsibility of any company’s executive leadership is to the stakeholders, whether those stakeholders own part of the company or not. This responsibility is being ignored. I often use the phrase, “Churn-n-burn” when I talk of a salesperson’s desire to sell and get out quick. Well, it is apropos when it applies to those that are sacrificing bottom-line dollars to make themselves look good.

I will give you two examples I have personally observed without revealing the names of the innocent.
FIRST: I have followed this particular company over the past 18 months and have seen advertised an opening for a account manager/sales representative listed 6 times for the same area! You do not have to have higher math skills to understand the people have only lasted three months! More likely 45-60 days since there will be some time period necessary to fill the position.

SECOND: Another company decided they would branch out from their inside-based verticalized sales model for a sales model based on territory. This is a model I embrace, so it is one I fully understand and believe in when a company’s strategy is to go to the next level of revenue. They brought in sales management to execute this strategy, which they in turn brought in territory-based sales people. For those not familiar, this type of change takes time–a long time to see end results. So what was the outcome? Within 4 months the senior VP was let go and within 5 months the personnel he brought in was gone; some sales people with as short tenure as 45 days. Seeing a pattern here?? The second example is pretty extreme, but none the less true.

This is costing companies thousands of $$, let alone the cost in terms of brand damage. Think I’m wrong? Ask any reputable company what a revolving door of personnel does for company reputation. I wrote an article, “Hiring the Right Salesperson” where I mentioned the cost associated with hiring the wrong person. Think about how costly it is to the company in both tangible and intangible elements. Hire for the long-term. Hire and treat employees as you do your product. Use “Life Cycle Management” theory and apply it to the employees. If, as a company, you continue to go through not only sales people, but any employee you must understand your variable costs are going to be skewed. Is that the overall intent, screw with the variable costs at the right time to make the contribution margins look better? Let it be understood that this will catch-up on the backside–BIG TIME!

Show this to your company’s executives. See their reaction. Was it snuffed? I’ll let you decide.

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Happy Selling!

Ed Warner

Social Media and Sales

I wrote an article a few months back, “Selling Under the Social Media Umbrella”, in which I described more or less, the evolution that took place that brought us to where we are today. So, fast forward six months and look how much it seems to have changed.

People are coming out of the woodwork to claim instant superiority as social media gurus. It seems most are saying they can increase exposure, double sales, and increase your bottom line. Here’s a suggestion, ask for proof! I did from one such claim only to be told it was confidential information. What!? This is not to say they cannot be of some help, they can, it just some precautions. The problem with social media today is it is too raw an avenue to have “experts”. You can have some experience, but only to a point, but certainly not experts. Those proclaiming themselves as experts are grabbing from their legacy marketing experience and throwing the social media cover over your eyes. “Buyer Tread with Caution”.

Social Media takes time and a lot of commitment with the understanding that it is a continuous process; one that you just do not jump into. Social media is not for every business or industry. The smaller the organization, the least benefit it reaps. The reason is fairly simple. The amount of time involved is prohibitive. Smaller businesses simply do not have the resources. This is about the time they begin to look for help. The problem is, they are not sure what type of help they really need, they simply believe it is a quick way to help their business. Unfortunately, they turn to and rely on the self-proclaimed “experts“.

I believe social media should be called “Commercial Media”. This avenue is best exploited by bigger industries that have a much larger ROI. Bigger industries have the stamina for the long-term. Let me stop here and explain something. Social media is not the same as social networking; either for business or pleasure. Social media is an evolving source of communication. I am not saying there is any benefit to smaller companies, rather smaller companies simply cannot expect the plethora of return an organization with a huge marketing budget can expect.

Social media is an offshoot of marketing. Like any other marketing campaign, a social media campaign’s success is in the execution. If done correctly, the impact can be huge. Done poorly, social media will be deemed a failure as a medium of information dissemination.

For the foreseeable future, social media will be a passive path for sales. It will eventually evolve into an active path, but not for some time. Social networking will be the next path for commercial business despite the muddling around of those that now view it has a fad.

Happy Selling!

Ed Warner