Archive for category: Floyd Jerkins

Coaches Corner v.04.06.2023

In Coaches Corner v.04.06.2023, guest writer and Coach Floyd Jerkins writes this week on the topic of Behavioral Sales Metrics for Coaching Equipment Industry Sales Teams.

Every dealership organization is at a different place in time with the diagnosis of their sales teams and processes. The size of complex and level of operational sophistication are factors. Many times, it’s a location issue more than overall company-wide so that requires custom solutions. So, maybe this article is timely and you’re ready to look deeper into how to make real progress in the sales department. 

Professional Sales Management and Salespeople

Great salespeople are great salespeople, and in the equipment industry it’s no different than other industries. There are particular aspects unique to every industry due to a product’s life cycle, style of customers and personalities, buying patterns, and market conditions. And the best salespeople know they have to understand these industry specific characteristics to succeed, but there is more. When you learn to sell, you can sell anything. Yea, I know, I know, but it’s true.

Being a professional sales manager or salesperson in the equipment industry isn’t for everyone. There are real superstars doing this work every day and many of them make it look easy. They have a natural and personal approach that gets the job done. Others have tried and failed. Many linger on with average performance. Yet, owners who sell often do not follow the system they expect their salespeople to follow or they have a perceived top producer that no one can touch. 

There are typically high and low performers when you have a large sales team. Improving the performance metrics of sales managers and salespeople can be challenging to establish what particular actions need to be taken.

Building a sales team of all superstars is a great plan, but not always realistic or practical. In my experience, sales management and sales teams usually have a mixture of age and talent with varying skill sets and competency levels.

A Sales Managers Rally Cry – To Sell More, Talk to More People

To sell more, talking to more people always seems to be at the top of the list of things to do. Still, if a salesperson talks to a lot of people and prices a lot of people but doesn’t have a good measured closing ratio, it makes me wonder how effective they are and whether they should be allowed to keep talking to your customers. When a sales manager influences the sales team with a whip and chain or talks more about the problems than the solutions, is that the most effective leadership style to use in today’s business climate? I don’t think so.

The traditional metrics for sales success include new and used margins, sales volume, new and used turns, and a mixture of others. To be an excellent asset manager, you must know these metrics and how to positively influence their outcomes.

Performance Metrics Created Before & After the Sale

Like many traditional metrics, margins, turns, and other sales department indicators are created after a unit is sold. The efficiency of your booking and accounting practices determines when the sale appears in a statement. That could be anywhere from one week to sixty days past when the actual sale was made. Once the numbers are current, you can assess what’s going on. If you’ve followed my articles about this, you know where I am headed.

Let me ask a few questions:

1. Who do you make more money on, a repeat customer or a customer who has never done business with you or your company before?
2. Who do you have the most fun working with, a repeat customer or someone who has never done business with you before?
3. Who do you sell in less time, someone you don’t know or a customer who’s bought from you before?

Perhaps you took a few seconds and thought about your answers. I appreciate the effort. Now, consider your answers and what you know and don’t know.

“The goal is to coach performance in the areas that help salespeople become more effective with real-time data. Becoming more effective in sales and marketing your business requires a deep understanding of your customer base so you can focus the sales and marketing team on what matters the most.”

Behavioral Customer Segmentation

The old saying is you can’t improve something unless you measure it. One of the first principles of process improvement is as a process evolves make sure you are measuring the right things. 

You probably already know the customer by machine or product sold, sales volume, and parts and service sales, so tracking this kind of customer segmentation can reveal even more real time data. Even a basic CRM system can track these customer categories.

Total Customers

Customer Categories

• New Customer- This customer has never been to, called, or emailed your business before.
• Repeat Customer- This is a customer who has bought from you before. Many companies have “orphan owners.”
• Referral Customer- This is a customer who another customer referred to your business or the salesperson.
• New Business- This customer is someone you meet at the gas station or a social event. A brief conversation in almost any social situation generates new leads.

The sale is the end result of all the activities performed by a salesperson. By coaching performance on these sales activities that happen before and during the sales process, we can naturally increase a salespersons effectiveness. 

When you measure these you learn a lot about how your sales mix is made up, how effective sales and front-line people are in each category, and even how well your marketing is doing. It also speeds up the learning curves. If you don’t know these, you are at the end of the sales cycle making decisions. When you are looking at unit sales, you are best guessing how effective your sales and marketing efforts are. 

A Behavioral Sales Mix- BSM

Each salesperson should log every Customer Contact interaction each day. To get buy-in, a sales manager communicates with the sales team to create the “rules of logging” they’ll follow. For example, if the salesperson is at the parts counter talking with Joe Customer and he asks how much that used machine is, that should be logged. Each person inputting into the system should understand what the code means when they log it. GIGO- garbage in, garbage out. 

Salespeople shouldn’t be allowed to post at their discretion, and that’s part of the rules created in the early stages of implementation. You don’t allow your accounting staff to post credits however they like, nor do you allow technicians not to record their time. Salespeople should be required to a certain standard of recording their day-to-day activities. Its good business. 

It’s essential to know how many Closes to Face-to-Face Contacts there are in the same time period. This establishes one of the fundamental Closing Ratios for performance improvement. 

By tracking these customer categories and how many face-to-face contacts by salesperson and how many closes by salesperson, you are ready to create a new view of your sales mix. Stay tuned, next month’s article will be on the analysis of these metrics. 

Floyd can be reached at floydj@me.com or www.floydjerkinsexecutivecoaching.com.

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Coaches Corner v.03.02.2023

In Coaches Corner v.03.02.2023, Coach Floyd Jerkins discusses sales mix and closing ratio analysis of behavior metrics.

In my last article, Behavioral Sales Metrics for Coaching Equipment Industry Sales Teams, I laid out some framework for measuring sales activities. This article is the second in the series to analyze the behavioral metrics sales mix and closing ratios.

CRM systems are full of good information that sets in a hard drive or the cloud waiting to be accessed. The data quality is only as good as what gets input into the system. Just like a financial statement, the numbers tell a story and provide a pathway to improvement. When you follow a sales system, some patterns emerge in the sales manager’s and sales team’s behaviors. 

 

Let’s look at an example:

10 salespeople x 20 days x 5 customers per day = 1000 customer experiences

% Per Category # of Customers

25% New Customers 250

35% Repeat Customers 350

20% Referrals 200

20% New Business 200

If this is your operation, it shows you a view of the customers engaging with your business. The mix of customers in this example is all face-to-face. Also, measuring whether the contact was an incoming call to the dealership is equally essential. These incoming calls can be more profitable with handling the call correctly. I address part of this in another article called “9 Tips for Handling Incoming Calls“. 

Sales Mix Based on Your Products and Market

In this example, 35% of your sales opportunities come from repeat customers. Based on the business model, that could be a super great number or not. 

With the Ag market, more corporate farms aren’t a fad, and the volume of customers is declining. Competition is fierce, and the notion that customers only buy locally isn’t the same today. Buying cycles can be long and require various strategies to make a sale, so sales teams must stay close to the customer and make the proper interpretation of why the customer isn’t buying today. 

New customers and customer segments are emerging every year in the rural lifestyle market. Many customers buy on their first visit, so the sales process must support that environment. Adding F&I sales is also growing, finally, as a means of adding additional revenue. Additional sales support may be needed to handle the volume of customers. 

Construction and heavy equipment related markets are booming. Brands that once could hang their shingle out and command sales and margins are being challenged. The sales cycle for these products can be long, with customer demands unheard of in recent years.  

Inventory 

In all segment’s, getting inventory is a current issue and who really knows when relief will occur. And to think of the market as having preordered only products may be closer and closer to reality. That requires new thinking to manage a salesforce. Your inventory value isn’t like fine wine. The “turn and earn” practices replace the “buy it and hold it” inventory practices.

Analysis & More

The sales mix analysis shows you a path and insights that you must look at your business model and market to reveal your findings. However, there is more to the story because we must sell stuff to make money. 

Closing Ratios That Cause Pain & Pleasure

If you’re following the rationale so far, then you start to get that there must be a sales flow followed. I call them the Steps to the Sale. A sales team can call them whatever you like or whatever your CRM system supports, but the key is to have a known system that you and your team follow. 

Following a sales system lets you know where you are in helping a customer buy. When a sales team works under the same guidelines, a sales manager can more easily identify how many qualified leads are in the pipeline. But wait, it shows you so much more because it’s like music to your ears, not excessive noise in the background. 

 

What if the Closing Ratio of each of these were:

Sales Mix Total   Closing Ratio            Sold Unsold

25% New Customers 250         10%              25 225

35% Repeat Customers 350         15%           53 297

20% Referrals 200         18%           36 164

20% New Business 200         20%           40 160

1000 154 846

 

Face-to-Face Contacts

Sold Units

Closing 10% of your New Business isn’t a great number at all. To improve, you must start by addressing the interpersonal and selling skills of the sales team. The average closing ratio of 20% should be the very minimum standard of sales performance. A focused effort is required to increase this number regardless of your sales environment. At 10%, you are walking around one-hundred-dollar bills to pick up nickels. 

In a dealership where sales teams are seeing 35% Repeat Customers, a 15% closing rate is alarming. Repeat Customers close at a high ratio because they already know about your products and services. Carefully examine the sales team and sales manager’s behaviors because you are losing and churning through customers’ experiences. And don’t be naive here; to increase the repeat business ratio, a key ingredient is looking at the personality style between a salesperson and their customer. Just because a customer is in a salesperson’s territory doesn’t mean they have matching personalities. Trade territory management in many operations has too many old-school attributes.   

The 225 “New Customers” that were priced and not sold require immediate and calculated strategies to close deals and create a customer for life. Each of them should have an NDOC (next date of contact) assigned with a prescribed plan based on where they are in the steps to the sale. Often, prescribed follow up doesn’t happen because the salesperson is told to go out and get the next sale vs following the customer for life. 

For a customer to refer to the dealership is different from being referred to a particular salesperson. For a commissioned salesperson, they want that referral. They also have to “train” the customer to receive these referrals. In this example, 20% of customers were referrals. If this was your operation, then a big tip of the cap to you. That means your marketing and parts and service are doing a good job. 

Referral-based selling and servicing offer a huge upside to creating more sales and margins. They will naturally come forward because of your dealership’s presence in the market, marketing efforts, and various relationships with team members. The goal is to make asking for referrals an intentional practice vs. something that happens occasionally. 

In closing…

Ok, we’ve made it this far, and you are still reading. That’s a good sign because we’ll continue exploring these new sales metrics in more detail in the next article.

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Coaches Corner v.02.16.2023

Guest writer Floyd Jerkins returns with Coaches Corner v.02.16.2023.

HELP WANTED: Leaders Who Can Influence Multiple Generations in the Workforce

A freight train is coming around the corner for business owners and managers. And it is closer than you might think. Modern times call for new leadership styles. Businesses will not survive without having leaders who can influence multiple generations in the workforce. 

When you read my rants or hear me talk about leadership, you’ve heard me say it more than once. Your people are your business’s greatest asset. And to take that to another level, they are your most significant source of frustration. 

Establishing and maintaining a positive business culture takes a lot of work for many people.

Leaders of all kinds shape the culture daily by how they walk, talk, and communicate. Knowing that people’s issues can create a stranglehold in day-to-day operations, it makes sense to address how you and your leaders affect others in the organization.

How can we fast-track an ordinary manager into an effective leader? What are the essential skills? How can we get the entire team on board to follow our lead? How can we encourage managers to become influential leaders? Are leaders born, or are they made? 

Command and Control Leadership Style is Demotivating  

The command-and-control model of communications is under attack today. This starts the real internal push in an organization to address all the leaders’ influencing styles and finding a new pathway to correcting many chronic issues. 

Although workplaces and management styles have come a long way in the last decade, the command and control style of management behavior continues. This management approach behaves in ways that suggest employees need to be told precisely what to do, when to do it, and even how it should be done. The manager is in charge, has all the answers, and fixes all the problems.

Managers are taught to find the things that are going wrong and fix them. When the leader’s style of questions is always negative based on assumptions, this permeates the organization as the proper method to resolve issues. When they are always looking for what’s wrong, employees will learn to hide their mistakes. You really want them to bring mistakes forward, share them with the teams and learn. The positive questioning style and supporting behaviors of this new leadership style don’t always develop naturally. Leaders have to learn to lead the process.

One of the challenges in driving organizational change is how to keep changes positive. Leaders can easily spend more time addressing perceptions than factual events. For many, change is uncomfortable and can create suspicion. Too often, employees hold back, fearing how the changes will affect their job or department, leading to struggles with implementation and process improvement. 

Participative Leadership and Coaching is Empowering

A leader’s personal success will only happen when you help enough other people succeed. Caustic leader behavior is when they speak and behave in a way that highlights their success is more important than their employees.  

I have heard many leaders say that employees must accept me for who I am and do what I ask them to do. That leadership attribute is such a limiting, potentially caustic communication style that shows a genuine disconnect from the ingredients necessary to unleash creativity from individuals and teams.  

Employees demand a voice at the table of change. 

Today leaders, young and old, know their strengths and weaknesses. They don’t let their shortcomings weaken their strengths. A leader doesn’t hide their flaws anymore; they never really could because employees knew these weaknesses and would talk behind the leader’s back. So, in turn, this further creates a disjointed culture that cannot reach operational excellence. By learning and sharing together, the leader gets stronger, not weaker.

Does the perception I have of myself matter more than the perception that others have of me?

A leader who genuinely wants to be more effective realizes that their people’s perception of them can be more important than what they think of themselves—learning to “hear” these perceptions requires strength of character and healthy self-esteem. 

The new leadership style aims to provide employees with all the necessary information to make sound business decisions. One-way communication styles are part of the old leadership style. Keeping people in the dark and feeding them only what you think they can handle is a surprisingly easy process to keep an organization from reaching its full potential. 

 In the Absence of Leadership, People Will Follow the Strangest Things

It’s naïve to think it’s just the younger generation on their phones or is self-absorbed all the time.

Everyone is so amassed with information today from thousands of uninformed sources that it’s scary to realize how all these inputs create beliefs and influence our behaviors. We can easily see on the internet and in the news where leaders in prominent positions fail the basic tests of integrity. How does all this nonsense influence young and old leaders?

When you are a leader in an organization, it stands to reason that having impeccable integrity goes with the job. They must represent themselves as someone who others like to follow. In the absence of leadership, people will follow the strangest things. Leaders today practice being a person whom others are comfortable telling them anything. They adjust their style out of genuine care and concern, not for manipulation.

Without Leaders, a Business Will Fail

Leaders who are often insulated from employees are seen as the top of the hierarchy, yet a leader can be many different people in a company. Even leaders without sales or management titles influence positive outcomes for a business every day.

You drive more revenue, manage expenses better and increase profits when everyone is leaning forward in the best way they know how. Everyone should be answering questions like: Is it good for the customer? Is it good for business? Is it good for the team? Is it good for me?

When leaders model the change, they wish others to make, it sets the tone in an organization. This leadership style leads the way when they want employees to change and improve performance. When leaders gather input from all their employees and work alongside them in developing the changes, implementation is faster and more sustainable. It’s like magic when the leaders exemplify the changes, they want others to make.

 Creating policies, procedures, and methods of operations are necessary for any organization. In today’s business climate and employee empowerment, companies that adopt a participative leadership style outperform those that don’t.

 Your Company University

When learning and teaching is an intentional organizational practice, accomplishing the business goals becomes more predictable. Leaders today understand that cultivating their most important assets presents an opportunity to improve everyone’s quality of life. With purpose and a plan, they create an internal educational model to grow their existing and future talent pool. 

The volume of knowledge held in a business by the employees is immeasurable. Either you are investing in your people, or you are not.

 There is a connection between great leaders. Not just those who talk about it but those who behave the way people will follow. You can have fun working on the business and having a dynamic lifestyle when you unleash the natural creativity in all of us.

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