Count the ways:
What, exactly, constitutes selling? “A good salesman should have a sale every second or third day,” says Vaughn McCourt, a CPA and management consultant who has managed several large home improvement companies. Software, such as MarketSharp and Improveit 360, makes it easy to track. But a whiteboard posted in the salesroom takes it public. “Every square, every day,” McCourt says.
2) Net sales per leads issued. It’s key to know how much actual revenue is produced by a salesperson for every lead you hand him, and it will vary by product. “You have to work out what that metric is for your company,” says Frank Manzare, co-owner of Statewide Remodeling, in Texas. You can manage within the acceptable range. So if a rep’s average sale is low but his close rate on leads issued is high, “what do I care?” Manzare says. “He’s good for me. But I’ll work with him to see if he can get the average sale up and make more money.”
3) Demo rate. That is, the actual percentage of those issued leads where a contract is presented. “[It’s] the first thing a sales manager should look at,” Manzare says. “If [the rep is] demo’ing 50% and closing 45%, he’s qualifying them.” That is, deciding which to run. “A pattern quickly develops,” Manzare says, “that shows you who’s in line and who’s out of line.” Ronan expects reps to present product and to attempt to get a signature on a contract at least 75% of the time. If they can’t sell windows or siding, “diversify to a smaller-ticket item,” he advises. “Try to sell [the prospect] something” — anything from storm doors to gutter protection.”
4) Retention rate. You have a salesperson who sells as many jobs as anyone else but with twice as many cancellations and credit rejects. For instance, if his cancellation rate is high, he may be “rescission closing.” That is, he persuades homeowners to finally sign by assuring them that they can cancel in three days. Or he might be selling those who are easy to sell — and who just as easily cancel — avoiding the sophisticated buyers who have the money but where it takes a complex, well-thought through and convincing presentation to actually close business. You can find out what the problem is by riding with him.
5) Non-metrics. These are the intangible but key factors — attitude, as indicated by dress, demeanor, and style of communication. Is the rep driven to succeed or not? Pay attention to the attention they pay. Find out with a phone call to unsold homeowners. “You come up with four or five derogatory results on one guy,” Manzare says, “and that’s telling.” The rep’s report says he was one time, but the prospect says he was half an hour late. Bring it up at sales meetings without mentioning anyone’s name. “I guarantee you he knows you’re talking about him,” Manzare says. “And now they all know you’re watching.”
—Jim Cory is editor of REPLACEMENT CONTRACTOR.