An Interview with sales
specialist Jim Pancero conducted by Stacy Ward, Managing
Editor, FEDA News & Views, the voice of the Foodservice
Equipment Distributors Association
 Sit
next to sales consultant Jim Pancero on a plane and be
prepared to rethink everything you thought you knew about
sales, particularly if you’re in management or have umpteen
years invested in the profession. Veterans are a favorite
target and since the majority of frequent fliers are in
sales, reeling one in takes minimal effort and two
questions: “How long have you been selling?” and “How much
sales training have you had in the last 12 months?”
“What’s amazing,” says Pancero, “is no one ever says I
haven’t had any training, which is oftentimes the case.
Instead, they say ‘I’ve been selling for 15 years,” implying
that experience somehow trumps training or altogether
negates the need for it.
That’s a problem for a great number of sales organizations,
according to Pancero, who’s been involved in selling in one
form or another for more than 40 years, earlier in his
career as a top salesperson for IBM before opening his own
training and consulting firm in 1982. Since then, he’s
worked with more than 500 companies across industry lines
and believes that one of the biggest challenges many sales
teams face is overcoming the assumption that “experienced
equals trained,” a sales management philosophy he says often
dictates how sales managers lead their teams and ultimately
determines their effectiveness in helping their companies
become more profitable.
“With experienced equals trained, the assumption is if I
have an experienced sales team, I don’t need a strong sales
manager, and my people don’t need coaching” says Pancero, a
recent speaker at the 2012 FEDA Convention. And by “strong,”
he means “proactive or process-selling” managers, not
“reactive transactional” sales managers—the two categories
he uses to divvy up the skill sets and management styles of
sales managers. Reactive transactional managers spend most
of their time on maintenance and sales support, says Pancero,
while the focus of proactive managers is the development of
their sales reps and selling processes through leadership
and coaching. One guess as to where he thinks most sales
managers fall?
“Sales management is one of the weakest areas in the sales
channel because the way the position is structured,” says
the sales consultant. “That’s why I believe it’s also the
competitive edge for most companies because there is so
little proactive management across industry lines.”
Recently, News & Views sat down with Pancero to discuss the
role of sales management in distribution and the sales
philosophies he believes is sabotaging the efforts of most
sales managers. Also included below are practical steps to
help move your sales organization toward a more proactive
approach to sales management.
Q: Jim, let’s start with the “Sales Managers Survey”
FEDA emailed to its members at the beginning of the summer.
What general observations did you take away from it?
A: Like most sales managers, the overwhelming majority of
those surveyed spend their time on paperwork and problem
solving. You’ll note that when you look at the list of
responsibilities for a sales manager—budgeting, paperwork,
customer service calls, personal selling and even hiring and
firing—most tend to be reactive responsibilities and demand
a great deal of time. The only proactive thing on that list
is future-focused coaching and it has to be initiated. Less
than 10 percent of those surveyed engage in future-focused
coaching, and one of the reasons has to do with the number
of salespeople they carry. Thirty five percent of survey
participants carry 10 or more salespeople. Most sales
managers have so many other things demanding their time they
do not have time to be proactive.Story
continues below ↓
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Q:
Before we get into specifics about key terms like
future-focused coaching, I’d like to talk about the role of
sales management and how it’s perceived. What does that list
of responsibilities say about how most sales organizations
view the role of a sales manager? Secondly, what outside
forces, thoughts, assumptions, etc., have helped to shape
those perceptions over the years?
A: We
have to step back and take a look at how sales and sales
management evolved. Over the last 20 years, there has not
been a lot of structure in selling, or what I call a
predefined or multistep approach to sales. Instead, the
focus has been on building relationships. Every salesperson
has a unique sales approach and that approach even varies
from customer to customer. It’s that painter vs. printer
philosophy. Painters believe every customer is unique, every
selling opportunity requires a different approach and what
worked to win one customer will most likely not help them to
win the next. Printers follow a consistent multistep selling
process, developed by lessons learned from previous sales.
Painters view selling as intuitive art, not needing nor
requiring any consistent selling structures. So because most
sales organizations are filled with painters, they do not
see the value in having an involved sales manager, or having
a great deal of structure in the selling process to move the
needle forward.
Secondly, the assumption of “experienced equals trained”
also has greatly influenced how the role of a sales manager
is perceived within a company. Companies with experienced
salespeople assume those salespeople do not need training,
so the assumption is there’s nothing the manager can do
except handle reactive responsibilities—special pricing,
problem-solving, etc. Therefore, they do not see sales
managers in a leadership, directional role; they see them in
a maintenance and management role.
Another important point is that companies also assume their
sales managers do not need any sales management training
because they’ve been a successful salesperson. But the
reality is that the job of a sales manager is one of the
toughest in any company. Most businesses take their best
salesperson, an expert doer, and promote them into sales
management. Then, without any kind of training, that new
sales manager has to figure out how to shift from personally
doing everything to being a manager whose primary role
should be to guide, coach and lead others to do what needs
to be done.
Because of this thinking, a couple of things have evolved.
No. 1, sales managers are required to carry territories.
When I ask owners why they have their salespeople carry
territories, they say that’s the only way they can justify
their salaries, which means they do not put any value into a
manager’s role as a coach.
Q: What’s the problem with carrying territories? Are
there ever instances in which it makes sense?
A: As a
rule of thumb, if there are three or less sales reps
reporting to a manager, a manager will probably carry
territory because unless the reps are new or it’s a unique
situation, managing three reps is not a full-time job.
Q: You also noted that most sales managers have too
many reps. What’s an appropriate ratio?
A: Ten
to one for experienced sales pros is most likely a max per
sales manager. However, if you’re adding new salespeople
(new to selling, not just your company), then more than six
outside reps reporting to a sales manager will push that
sales manager back into the reactive transactional sales
management role. Having said that, it’s not a finite number
as much as it’s a variable scale, and the two ends are
reactive and proactive. The more time that is taken up by
other efforts—whether those efforts be a sales manager
carrying their own accounts or other responsibilities—the
more overwhelmed and less proactive that manager becomes.
I’ve seen sales managers in charge of purchasing or
something else that has nothing to do with sales.
Questions Your Sales Manager Should be Asking
Q: Can you give me an example that illustrates the
difference between transactional and proactive management?
A: When
a salesperson comes into a sales manager’s office, the
transactional manager only asks two kinds of questions—what
and who questions. “What do you have that you’re going to
close?” and “Who’s it going to be working with next?” Both
deal with issues in range and final efforts after the
proposal has been initiated.
A proactive or selling-process manager moves up stream and
gets involved earlier in the process by asking
selling-process questions, or how and why questions. How are
you going to sell that account? Why are you doing it that
way? Their goal is to impact the sale earlier in the
process, so they can improve the results at the end of the
process.
If you don’t do a good job communicating all of your value
and uniqueness fairly early in the selling process, and the
sales manager only gets involved after the proposal has been
issued, the only issue left to deal with is price. At that
point, it’s too late to talk about value differentials. It’s
the first 20 percent of the selling process that really
determines your competitive differential and the value
perceptions of your customer compared to the competition.
That’s why it’s important for the sales manager to get
involved before the proposal is issued.
A sales manager who says my door is always open, is a
reactive manager because the assumption is the salesperson
has enough vision to know when he or she is in trouble. The
problem is most sales reps don’t know they’re in trouble
until they’ve lost the sale, so I often suggest to sales
managers to ask their reps to be prepared to discuss
specific accounts during weekly meetings. And the kind of
things they should be talking about is future plans. What
multiple moves are they thinking about implementing down the
line? What are they trying to accomplish? Are they calling
on the right people? How are they getting higher, wider and
deeper? Higher says you’re getting to the person that’s the
decision maker. Wider says are you getting to the
influencers that might be outside of the department, and
deeper says are you talking to a customer’s frontline. What
are the challenges they’re facing and how can your product
or service help them? There are a lot of salespeople working
very hard on the wrong things.
Q: There’s another great example you often give
regarding the difference between how a proactive manager and
a transactional manager handle a crisis. You use it to talk
about the terms future-focused and history-focused.
A: Yes.
If a salesperson walks into your office and says there’s a
problem with the Johnson account, your first question will
be what happened. That’s a history-focused question. Your
next question will be a today-focused question: “How are you
going to solve the problem?” It’s a third future-focused
question that most managers do not ask: “How do we prevent
this from happening again?” or “How many other accounts do
you have exposed like this?” or “Why did this surprise you?”
or “What kind of different information controls do we need
to put in place?”
Q: And again, these questions are often not pursued
because of time challenges or reactive overload?
A: In some instances, there’s just a lack of awareness. I
would guess over 98 percent of the sales managers I have
seen have never been through sales management training
because when they’re promoted, the assumption is experienced
equals trained.
The One Hour Sales Training Meeting
Q: If you’re an owner, how do you measure your sales
manager’s performance in terms of proactive vs.
transactional?
A: It’s
a tipping point that tends to consistently move the needle
toward more revenues or profitability. Your sales manager
should be spending at least one hour a week with every sales
rep (one-on-one). It can either be on the telephone or face
to face.
Q: One hour seems like a lot of time. Can you give me
an example of what that call would entail?
A:
Whenever I cover this with a sales management team, that’s
always the first question I get. I’ll give it to you in six
10-minute segments.
The First 10 Minutes: Start with an open-ended overview
question. What’s going on in your territory?
Second 10
Minutes: What crisis or fires are you dealing with right
now? These first two topics are the ones that every sales
rep is going to want to talk about, so get them out of the
way.
Third, Fourth
and Fifth 10 Minutes: Have your sales rep pick three
different accounts and spend 10 minutes talking about what
their plans are and where they’re going with each account.
The Final 10
Minutes: Summarize what’s been talked about and review the
action plans that everybody has agreed to.
If you do this the right way, it will be very difficult to
get this done under an hour. By the way, this does not only
apply to the sales manager and the sales rep. The manager of
the sales manager should be spending at least two hours a
month reviewing all of the notes that the sales manager
gathered during his coaching sessions. Sit down and discuss
where they’re going with the reps and offer help as to what
the sales manager can do to better assist their reps. This
not only encourages accountability, it also ensures the
owner has a clear understanding of what their sales reps are
doing.
Q: I’d like to try something different for the next
round of questions. I noticed that during your presentation
and in many of your “You Can Always Sell More” articles, you
have a few key phrases you often use to explain the
nuisances of proactive sales management. One of them is
“working on results instead of the sales process” and
another is “stop letting your salesperson off the hook.” How
do they fit into your overall philosophy that any
salesperson can sell more by being proactive?
Working on Results Instead of the Sales Process
A: If you only focus your attention on the results
discussion, you’ll lose a lot of sales at the beginning of
the process that are not savable unless you dramatically cut
your price, which significantly reduces your profitability.
This goes back to my earlier comments about communicating
value. Proactive sales management really relates to higher
profitability because the more value that’s communicated or
set up in the beginning of the sales process, and the more
people that understand what your value proposition is and
how it differs from the competition’s, the more willing the
customer is to look beyond price. Even though they know
you’re higher, they see your value and the lower total cost.
This is what
all of the coaching and the sales efforts are about—that one
moment when the customer questions your price. You may have
to give a little bit of a concession, but you don’t have to
match your competitor’s price. The major challenge of
selling is that customers tend to assume that multiple
vendors from the same industry have equivalent features, so
the job a sales rep really becomes to educate the buyer on
what the differences are and how one is more relevant or
applicable over another.
Stop Letting Your Salespeople Off the Hook
A: Price is not the primary determinant in your
industry; the difference in value is the primary
determinant. In other words, if the customer does not see
value, they will buy the cheapest price. So if the sales rep
comes in and says, “we lost the Johnson account because our
price is too high,” what they’re saying is they didn’t do
their job as a sales rep.
I teach sales
managers to never again accept “we lost because our price is
too high.” It’s not the reason you lost, it’s a symptom. You
lost because the customer didn’t see enough value and the
symptom is that’s why they beat you up on price.
By agreeing that price was the reason for the loss, the
sales rep doesn’t have to change anything or consider what
else they could have done. Why didn’t they see more value or
why didn’t the salesperson walk away sooner once they
realized they were dealing with a price buyer? If you don’t
hold them accountable for the sale, you’re missing out on a
proactive opportunity to coach: “What could you have done
differently?” and “What can we do differently the next
time?”
Becoming More Proactive: Steps to Get You Started
Q: Ultimately, though, if change is going to occur,
it seems to me that it not only has to be systematic but
companywide. What steps can a company take as a whole to
help their sales managers become more proactive?
A:
Let’s break this down into three parts: action steps for the
owner, the sales manager and the rep:
For the Owner: Evaluate where your sales manager spends
their time. How much and how frequently are sales reps
receiving coaching help? Another question is how much
coaching help is the sales manager getting—other than just
transactional discussions? It’s also important that the
owner speak makes the sales manager accountable. Speak with
him or her and make sure they understand the important role
of coaching, but don’t just stop there. Consider how you can
help the sales manager free up more time for future-focused
coaching. Look at getting a junior person involved in some
of the major accounts to handle some of the paperwork and
the smaller details.
For the Sales Rep: It’s about proactively going to your
sales manager and asking for help. Ask him or her to walk
you through your most important accounts and look for ways
to improve. About 80 percent of what a reactive and
proactive salesperson will do and say will be identical.
It’s that additional question or the extra moves to set up
the next discussion that sets them apart. Being proactive is
like playing pool, where you don’t just shoot the ball
that’s easiest to put in the hole. You have to think about
running the whole table and all of the moves it will take to
clear it.
For the Sales Manager: Add a proactive coaching function to
every phone call with a sales rep. For example, end your
calls with one final question: “What are you doing with this
account?” or “What’s the next opportunity do you have coming
up?” It doesn’t have to be separate meetings; it can be five
minutes at the end of a transactional conversation that can
add more future-focused opportunities.
As far as time, I’ve worked with a lot of sales managers who
use their drive to work as a coaching opportunity. Or, you
may need to schedule coaching time first thing in the
morning and you can meet with a different rep each day. If
you wait and try to fit it in with your schedule, it won’t
happen.
Q: What is your response to those who are content
with business as usual and seem to be doing fine without
restructuring the sales process?
A: A
sales organization will still achieve a certain level of
sales if they only have order takers or their reps choose to
deal with existing customers and not prospect, or do not
bring new ideas to the customer. Even with that level of
effort they can still generate some sales. The only question
becomes is that satisfactory to you as an owner. Is that
enough sales to keep you satisfied? The answer
overwhelmingly is always no.
The Anatomy of a Sale
When a customer buys, there are four steps. First, they have
to identify a problem and decide it’s worthwhile fixing.
Secondly, they must identify the specific solutions,
products or services they feel will generate the most
effective or loss-risk solution. Next, the select a vendor
they want to use or trust to help them fix the problem. The
final step, of course, is the purchase or commitment.
Reactive selling waits for the customer to do the first
three steps on their own and is trusting the relationship is
so strong that they will be the first choice when the
customer is ready to take action. A proactive salesperson,
on the other hand, doesn’t trust in the odds and begins
moving up stream in the steps, much earlier in the process,
to see if he/she can create an interest in the customer by
identifying problems, providing alternative solutions or by
showing why they’re the best vendor to meet the customer’s
needs.
It’s the sales
manager’s job to find out where the rep is in this process.
Is the salesperson moving up stream or focusing on Step 4?
The further up those four steps you move, the less
competitive pressure you’re going to have when it’s time for
the customer to make the final decision.
About Jim
Pancero
Sales advisor Jim Pancero has the most advanced,
leading-edge “business-to-business” sales and sales
management training available today. Everything he does
is extensively researched and has one bottom line focus…to
increase an organization’s strategic competitive
advantage and market uniqueness.
For more
information visit
https://www.pancero.com/
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