There are two types of business owners:
1. Those who view their sales team as an asset.
2. Those who view their sales team as an expense.
Type 2's do not understand the value and contribution of their salespeople. They do not realize that every other function in their company, from accounting to maintenance, is pre-determined by the sales function. If there are no sales, and related profit contribution, there also is little or no operating capital to operate the business. It is a simple model.
In a recession, particularly a long and nasty storm like we are currently experiencing, Type 2's are quick to reduce what they perceive to be a high-overhead item on their balance sheet... cost-of-sales. They want to immediately slash sales commissions, sales expenses and perks for these "non-essential" tasks. This a sure method of losing market position and ultimately experiencing business failure.
"While radical surgery may be financially prudent in the short term it becomes a self-fulfilling prophecy: first sales decline, then performance suffers and finally moral drops, completing the downward cycle" -says Steve Rosen.
What Type 2's fail to realize is that they will ultimately lose all of their experienced and well-trained salespeople and customer service people to new employers. These new business owners are typically Type 1's who will truly value their contribution and reward it accordingly. These owners view their salespeople as valuable assets to their company.
Stop and think. We all know that many businesses are suffering, revenues and profits are declining and companies are struggling. Running off your sales force by making foolish decisions is operational suicide, both in the short and long term. If you selfishly deprive your salespeople of the means to make a living, a living that they determine by their own selling efforts, you are certainly ensuring your own business ruin.
Get aggressive. Buck traditional thinking. Provide additional selling incentives, training and coaching and watch your sales performers do what they do best...sell.
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Daniel Sitter
Author
Stumble It!
My company, Crucible Materials, has been very supportive of the sales group at our research lab, even though the lab is a net loss for them in the first place. We are now in Chapter 11 looking for a buyer, and we're hoping the new management (whoever they are) are "Type 1's" that appreciate that sales provides services that other parts of our operation are not situated to provide. I would hate for them to lose not only the relationships, but also the business-need-to-technical-requirement translation that the sales group provides.
Posted by: Matt Ferry | June 15, 2009 at 02:46 PM
It is very important to understand the benefit of all staff members. These are all support functions that are primary contributors to a successful business. Cutting costs in these times takes skill. Each function needs to be carefully examined. Economic lulls are perfect opportunities to redefine goals and congratulate those members that contribute to the greater good of a firm.
Posted by: Lemonaid_nt | June 17, 2009 at 04:44 PM
Sales team is the revenue generator; teams like IT, R&D, Accounting etc. are cost centers. I fully agree with your entry, in fact the importance of good sale personnel rises even more during the times of recession. Companies who retain their trained sales force gain most when growth mode returns. Nice write-up.
Posted by: saching | June 28, 2009 at 10:13 PM
so so true. I have worked at places where companies had both these opinions. Its nothing better when a company views a sales team as an asset. Sales should be the last function to go in any business. After all no sales = no business! and a lot of people DONT get that!
Posted by: Tim de jardine | July 28, 2009 at 05:08 AM
knowing that some business owners think like the Type 2s. how pathetic they are for they think that he sees his sales team as an expense. that's not good. for that sales team is the reason why his company/establishment is still operating. And for business owners, if they want their company to survive on this crisis that we are all experiencing right now, they should take care first the core of their company, and that is his PEOPLE.
Posted by: swing trading | August 04, 2009 at 12:02 AM
Nothing happens until something is sold. Even non profits need contributions to stay alive.
Posted by: Nick Moreno | August 06, 2009 at 05:57 PM
great article, it never ceases to amaze me how business leaders who have spent time and money investing in their business start to 'consolidate' when the going gets tough. More than ever, now during a recession is the time to invest in you sales teams - remember it's going to be hard for them without management trying to cut back on their commission and perks.
Posted by: sales jobs Ireland | August 17, 2009 at 03:07 PM
so true! every business owner should value what they have in their company..and that is the people!
Posted by: etf trading | August 22, 2009 at 04:50 AM