Gary Kearns has a dartboard on the wall. It's hand-drawn on poster paper. There are circles, squares, all kinds of configurations, with something written on each. "Oil change," for instance, or "hat." Bring Kearns a signed roofing contract and you get to toss a dart at the board. Depending on where that dart lands, you might receive any of the things mentioned, or a gift certificate to McDonald's, a T-shirt, or a mock turtleneck, courtesy of Kearns Brothers, the suburban Detroit roofing, siding, and window company.
The dartboard is one of many ways that Kearns, who manages both sales and marketing at Kearns Brothers, uses to motivate those who sell for the company. In September, the employee who came in with the most roofing contracts for the business was crowned "Roof King," literally.
The key to keeping salespeople on track and on target, Kearns says, is "constant communication" and remaining positive at all costs.
New Frugality and More
Any number of factors today can dampen the all-important enthusiasm of home improvement salespeople. At many companies, average tickets are smaller, and credit rejects have gone up, with companies losing 20% or more of their deals to a tight financing market.
And then there's something more vague, but present nonetheless, something that reps run up against all the time in the living room. That something is what the media call the "new frugality," or consumers' reluctance to spend. All these factors, company owners and managers say, can undermine the confidence of salespeople daily. And salespeople must have confidence in themselves and in their product to sell it.
"You've got to send somebody out there who believes," says Vaughn McCourt, director of operations at Penguin Windows, in Mukilteo, Wash., one of the largest home improvement companies in the U.S. Though closing rates, average sale, and company sales are all up this year at Penguin, the company, like most, watched everything slow to a standstill last fall and into the winter. At summer's end, sales were back on track, but the glory days of 2005-2006 are definitely over, McCourt notes. And reps who are used to closing in good times and to credit galore for buyers may not be able to make that adjustment. At Penguin Windows, at least, some reps have not. "A guy who was an 'A' in 2006 may be a 'D' in 2009," McCourt says, "if the discipline disappears and they're not willing to change." At Schmidt Siding & Window Co., in Mankato, Minn., closing rates are down primarily because "there's a tremendous amount of competition out there," says owner Dale Brenke. "The pie isn't as large as it used to be, and everyone's fighting for everything they can."
Sales meetings at Schmidt Siding & Window, with a salesforce of five, often center on how to put the 60-year-old company's "trust factor" front and center against price-cutting competitors. To bolster leads, Schmidt sponsored a series of quarterly open-house events at its showroom this year, inviting prospects with open quotes ? "even sold customers" ? via postcard. The August event drew 600 people, and the company ran out of food.
The Marketing Challenge
Schmidt Siding & Window Co. has managed to sustain its lead flow using innovative tactics that aren't costly. It has also, Brenke says ? with the help of the American Recovery and Reinvestment Act tax credits ? rebuilt sales levels after they tanked last fall and into winter.
But many companies that depended on warm-call leads generated by media advertising or direct mail have found such leads scarce, so they've turned to canvassing and events, which make for a different kind of lead. But a bigger problem is that, for many companies, there are simply fewer leads to go around. "Our lead bank is not what it would've been in better times," says John Aurgemma, vice president of Rhode Island Home Improvement, in Warwick. "So we work harder." But at RIHI, Aurgemma adds, fewer leads have produced at least one positive result: a stronger overall close rate. Why? "[Reps] pay more attention to [the lead] and do what we tell them to do and adhere to all the principles."
Among other things, the new frugality of consumers has made prospects "tough negotiators," says Paul Despenas, director of marketing at Midwest Construction, in Mason City, Iowa. This is the first year in the company's 50-year history that it hasn't seen an uptick in its average sale. So Midwest Construction did some negotiating of its own, with its suppliers, and put together a volume discount with factories and a coupon program offering discounts on the products it carries. "We worked with them to put something real in the hands of salespeople," Despenas says. That gave reps a story to tell.
Having a story to tell was, for companies such as Euro-Tech, in the Chicago suburbs, the best part of the stimulus legislation that passed in February. Euro-Tech, says president Fred Finn, watched as leads and sales took a plunge in the fall of 2008 and into the winter of 2009. But on March 1, he says, the company declared the recession over. "We had a meeting and I said: 'I don't want to hear about the recession as an excuse. We are going to go back to kicking butt.' What [the stimulus] did was give us something to go out and tell people about why they should buy windows." Euro-Tech, where the salesforce had shrunk from 17 to nine, began hiring salespeople again, and month by month, the company's sales began to climb.
In the Numbers
Still, no owner or manager would deny that motivating a sales staff in lean times is difficult to do. For many sales representatives, credit turndowns can be particularly demoralizing. Reps did the work, only to have their reward snatched away by credit scores. Industry veterans say that reps need to be reminded that it's all in the numbers. "If two deals are rejected for credit, that means the next eight will be accepted," Aurgemma says, and he points this out to those who sell for RIHI. Not to explain that, he adds, means risking that reps will take demoralization into their next appointment.
RIHI will also work to find other financing for homeowners whose credit has been denied, will finesse the sale with partials or other products, or will help the customer in some other way to find the means to afford the project.
"I have to look at it as a numbers game, but I also have to respect the reps and their feelings," McCourt says. What he has noticed is that the ratio of two-in-10 credit rejects can be a self-fulfilling prophecy, and that the best reps seek out cash-paying customers. Cash deals at Penguin Windows, where 75% to 80% of transactions have been financed, are up 20% this year. "You know how you get cash deals?" McCourt says. "You ask for them."
Kearns points out that in the current economic environment, where there are many competitors trying to undercut on price, it's critical to explain why the company must hold the line on margin to stay profitable and in business. But the most important thing is to pay constant attention to what's going on in the field and to provide continuing direction and feedback to reps. "You have to be a 'one-minute manager,' now more than ever," he says. "A leader who is not leading is standing still. You have to celebrate the victories every day, no matter how big or small."
?Jim Cory, editor REPLACEMENT CONTRACTOR.