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Thursday, June 21, 2007

I am reading consultant Michael Stone's new book, geared primarily for the residential contractor. It certainly is one of the most thorough books I've seen and will provide some worthwhile guidance for the renovation contractor, small company selling siding, and smaller new home builder.

I'm not so sure how scalable the bulk of his ideas are to the ICI market, or, for that matter, to the point where you are ready to move from a "do it yourself" business model to one where you hire third-party salespeople; and ultimately a sales manager. The reason: Stone advocates 100 per cent commission sales and, after some years of experience with this, my perspective on the commission vs salary approach have changed.

Beneath the material is a tone (though he denies it) of the old high pressure style of pushing people for decisions. Of course Stone is right about ethics -- it is always wise to get it right with the client before starting the job -- and he is especially correct in insisting that you know your numbers, and ensure you are making a proper 'markup' and return on your work. Finally, you will find his closing ratios/lead tracking guidelines useful, especially if you are trying to see how well you are doing.

But I wouldn't follow his model on recruiting, hiring and compensating salespeople, with a paradoxical twist -- the quality of salespeople we should aim to high should be just as good as he advocates.

I've detailed earlier my system for finding sales reps. It works in Canada but may not apply so well in the U.S. We start off with a decent but not overwhelming salary offer, and then screen heavily using a systematized process minimizing the need for direct contact with bozos or people 'just looking for a job." At the very end of the process, after using third-party sales aptitude/orientation tests and a phone interview, we give our new sales representatives between a day and a week's paid work to see how they do in real life. They need to pass all the tests -- and a reference check -- before we hire them.

While sales are on a salary base, we pay commissions if they go beyond their salary; and the representatives know that consistently falling below their 'salary' is not a good thing. (I am learning a sustainable employee review/evaluation system and will introduce this once I've proven it in practice.)

Finally, since Stone is writing a sales book, he focuses on the sales process with lesser emphasis on the main issue -- developing and maintaining current client relationships. This of course, in my opinion is where most future sales originate, and should be the centrepiece of your selling and marketing strategy.

Would I buy Stone's book? Absolutely, certainly, if are a residential contractor with sales to the general public; we might not agree on everything, but you'll still find many useful ideas in its pages.

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