Who is Managing Sales?

Sales Byte®

Who is Managing Sales?

Few residential HVAC or plumbing contractors have someone responsible for managing sales. Many owners do the selling, perhaps along with a selling technician or two, and get good-enough results. Companies with a technician-selling strategy usually have the service manager responsible for replacement sales and the added revenue makes the average service call revenue KPI bells ring. Those with just one or two full-time comfort advisors have the owner watching over them…when they can. Any of these strategies can produce good results, but could they be even better?

What about companies that have 3 or more full-time comfort advisors? For the most part their sales leads are randomly distributed but the results can be hundreds of thousands of dollars different from the bottom to the top producer. What are the better producers doing to create that difference? Could a sales manager coach the others to do the same?

Having a sales manager is a costly proposition. Typically the sales manager was a highly productive sales person and that takes a proven revenue producer and turns him or her into an overhead expense. For the company to at least breakeven on this, the company has to first replace the sales that he had produced in the past, and then the sales manager must create incremental profits of an amount greater than his/her cost. As many of us have learned the hard way, managing others has it’s own challenges and there is no guarantee that the great sales person will be a great manager. Too many sales managers become sales administrators and little or no coaching is ever done.

So, if you don’t have someone managing sales, what is the cost of not managing, and if you do have someone managing sales, what is he doing to create sales and profit growth of an amount greater that his cost?

A starting point is to determine if investing in a sales manager, or investing the time in sales management, makes financial sense. Here’s a straightforward way to see if change is warranted. The difference between what you are now producing and what you could be producing is called “opportunity cost”. For example, if you sold a basic replacement system for $6,000 and, with some sales coaching, you would have included an enhancement such as Aeroseal, the customer could have bought it at $8,000. The opportunity cost for not proposing Aeroseal was $2,000 on this one sale. There is a much greater opportunity cost when you consider a whole year’s worth lost business.

Let’s say that you, as owner, or your sales manager did the things sales managers do:

• Hire the right people
• Set sales goals
• Determine and document your in-home sales process
• Train
• Measure results
• Recognize and reward good performance
• Continuously coach for improved performance

With these types of management activities it could be fair to assume more sales would be produced at higher selling prices and at higher margins. Try this quick calculation:

Before Managing Sales
The number of leads =_____
X current close rate = _____%
X current average job selling price = $______
= Total Current Sales $_______________
X current gross profit margin _____%
= Current Gross Profit $______________

After Managing Sales
The number of leads = (same number as above_____)
X new close rate = _____%
X new average job selling price = $______
= Total New Sales $_______________
X new gross profit margin _____%
= New Gross Profit $______________

Total New Gross Profit $________________
- Total Current Gross Profit $_____________

Opportunity Profit Cost
of Not Managing Sales $_______________

If the opportunity cost of not managing sales people is not significant then do nothing. If what you are leaving on the table can justify the investment you would need to make in having someone manage your sales process and sales persons, then perhaps it’s time to do something about it.

Want an unsettling thought? Imagine what the opportunity cost has been for the last 2 years…5 years…10 years by not managing sales. Every incremental gross profit dollar not produced has been all lost net profit.

Good Selling.

- Tom

P.S. Want to learn more about Selling with TRUST® in-home selling strategies and tools? View a short summary of my NEW Selling with TRUST® In-Home Sales Call Platinum Edition DVD.

Watch Video Now

JUMP START! NEW Comfort Advisor Training Program

The next session begins on September 28!

Start Selling Like a PRO in Just 4 Weeks!

How painful is it to hire the wrong comfort advisor…not just in direct cost, but also in lost opportunity cost?

What if you had a way to get a new comfort advisor up and running in just four weeks?

Our experts will provide the fundamental HVAC product and application training that the new comfort advisor needs and add to it the most effective in-home sales training in the industry. You will be able to send your new comfort advisor on a lead and have confidence that they will sell the job and create a very satisfied customer.

To register contact Tom at 425-985-4534
or tom@sellingtrust.com.

Click for more information.

Do you have someone who could become a terrific sales person but lacks any HVAC experience?

Are you an owner who has always done the selling and are reluctant to turn that over to anyone else?

Are you a sales person who easily connects with customers but struggles with product application and design details?

Are your installers continuously frustrated with inadequate or incorrect takeoff information from your sales person?

Let’s face it. Selling replacement HVAC systems takes some basic skills and tools to do it correctly and efficiently. And the cost of training someone on-the-job is enormous when you consider jobs that are lost or have to be corrected due to simple mistakes. This costs your company a lot of money.

There is a better way. Industry expert Mark Sims will conduct two weeks of daily online product and application training sessions that will take the HVAC novice through the fundamentals of basic HVAC systems.

That will be followed by a week-long workshop in Seattle where the product pros at the HVAC Business and Technical Institute (HBTI) in Kent, WA will conduct two days of hands-on lab training. This will insure your new comfort advisor will be able to identify what they find on their own sales calls and propose a correct replacement system.

The week is rounded off with my three day Selling with TRUST® for In-Home Sales Professionals training program.

Online accountability coaching continues the next week and beyond to insure that the new or inexperienced individual will have the support they need to sell $1M or more in their first year.

Get More Information

To register contact Tom at 425-985-4534
or tom@sellingtrust.com.

Special 2-for-1 Offer!

Thank you for reading the entire Sales Bytes! As a reward for your interest and commitment to self-improvement, I'd like to make you a 2 for 1 Special Offer.

Order any of my TRUST DVD's...any one...and receive the second for FREE.

Here's how this works. Just order your first one and send me an email at tom@sellingtrust.com, telling me which additional DVD you want. It's that easy!

I look forward to hearing from you.

Good Selling

Sales Byte®