The longest journey begins with the first step, and your entry into a successful commercial business in 2011 is no exception. Start the year out right by executing your plans for sales promotion, tracking your business with a management focus on personnel performance as measured by established goals.
With current business conditions, I expect you’ve put a lot of thought about how you’re going to get profitable business in 2011. The biggest single mistake is not to have a plan, and the second biggest mistake is not to work your plan. So, in January, start off by reviewing goals for 2011 with your personnel. Many focus only on sales, but that is a mistake that will cost you dearly.
Look at each part of your business to remind you of what has made you successful: Sales, administration, operations, and installation. Each area should have clearly defined, easily understood goals for the year. Each team member should be able to state their goals and that of their entire team.
Vague or fuzzy ideas like “I want to do more business than last year,” or “we want to perform better” are doomed to fail because the goals are not clearly defined, and therefore, not measureable. Each manager should have defined the goals in late 2010; no one knows better where improvements can and should be made than the manager (with help from his personnel). For the purposes of this column, I will focus on the sales area.
First, meet with your managers and review the sales goal for the group. Have there been any changes in business outlook or personnel since the 2011 targets were approved? If so, fine-tune. The team members will expect you to have done your homework. After meeting with all managers, set the individual group meetings. The purpose of this first meeting is to focus everyone’s attention on their individual performance as it relates to the group goal. Without this focus, there is the tendency to think, “Maybe if I don’t make my numbers they won’t notice.”
Give group personnel some notice about the meeting and the agenda. This way they can prepare and not feel ambushed or embarrassed when they are asked to respond. Perhaps you can give them three (or more) questions you will be asking each person in the meeting. “Ken, please list your five top clients and the amount of business you expect to receive from each this year. Which prospective clients have the most potential for you in 2011? What steps have you taken to promote business with these clients?”
One-on-one meetings are fine for the manager and his personnel, but a group meeting with all personnel will underscore the importance of each individual’s performance; this will foster more of a team atmosphere. This is also a good time to announce any special promotions, spiffs, product emphasis, or scheduled training. The more time you spend on planning such meetings, the bigger the payoff.
Next, schedule a general meeting for all sales groups or the entire company. This rah-rah-rah type meeting should be well orchestrated and provide an overview of what the company expects to achieve during the year. Make sure to clearly outline company goals for the year; this should include sales volume targets, personnel recruitment, training agendas, and other accomplishments (such as company rank within the market area or peer group). Be as specific as possible without disclosing sensitive data.
This is the time to announce a theme that can be carried out for the year: A concrete sales goal such as, “11 million in 2011” (better for an all sales groups meeting rather than a company meeting) or new tag line like, “Win with Flynn” (Flynn Commercial). One can also tie in specific company promotions for bonuses, awards, or other prizes. You can announce the general nature of the promotion, but be sure and publish an easy-to-follow, clear set of rules. No one likes fine print that may cost them an award or prize.
More than one management guru has said that if you just track sales performance and hold people accountable for their individual goals, you will increase sales by 10% if you do nothing else. The effort of tracking, by itself, will pay dividends. Your next step should be monthly performance checks in each business segment by individual sales target goals.
If they made their target sales volume, how was their profitability target? If they missed it, can they make it up next month? Will they commit to being on target by the end of the quarter? What help do you need to give them to succeed; have you asked? What about their new account close rate or are they living on established client business? What is the progress on their target clients? Overall, how is business looking within each segment: On target, below target, or above target? Do adjustments need to be made or will missed sales volume in one area be offset by sales in other areas?
It is extremely important to listen and ask the right questions when you are reviewing sales performance. It should not be a session where you berate, rather, a quest for information. What has caused this person to underperform on a target you both agreed was within reach? I have found that health issues, a disastrous personal relationship, financial hardships, or personal conflict within a team contribute to low production. Sometimes the manager can help, sometimes not. Emphasize that each person’s contribution affects the whole team.
Frequently, making small changes can pay big dividends. In one case, a salesperson was uncomfortable in following up with prospective clients until we developed a simple script of what to say and set a new contacts schedule for Tuesday and Thursday mornings. This way, the salesperson had a specific track to follow, the client list was contacted, and he exceeded his sales volume because of new account production.
The time for really zeroing in on your plan for the year is on a quarterly basis. You’ve been reviewing each month, but now you have a three-month period to evaluate. This timeline will cut out the anomalies that are found in monthly figures. Ask the same questions and make needed adjustments as this is the time for a close look at individual personnel performance.
Look back at your planning; how much business can you realistically expect one person to produce with the available support? If you are running too lean, perhaps you should make an investment in another qualified team member. Consider how long it will take a new person to make any contribution to the sales goals. Or how much in sales volume and profit will it take to support that new person while they learn. Terminate non-performers within the first 90 days to lessen the drag on the overall group.
To reach your goals this year, put additional effort into getting started out the right way. Measure performance consistently, and fine-tune along the way.
See you at Surfaces
If you’ve got questions about Commercial Business, attend Dave Stafford’s Surfaces seminar, “Everything You’ve Always Wanted to Know About the Commercial Flooring Business” MO175, Monday, January 24, 2011. Along with me, this 90-minute seminar features Alan Beswick, coo of JW Floor Covering, Jeanne Matson, ceo of Starnet Worldwide, and panel moderator Sim Crisler of LGM & Associates. This will be packed with valuable information for those who’ve decided to make their commercial business successful.