Brad Leggett - Developing a High Performance Sales Team (C0718)

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And now here's your host, the exit coach Bill Black. Welcome. Thanks so much for joining us. Uh, I want to remind you that we have the audio library available at exitoachradio.com. Over 500 interviews. Uh, all categorized into 40 different topic file folders, things like business succession planning and leaving a legacy and planning for your family business, life after exit, a wide variety of topics. Go there, you'll listen to advisors, authors, and thought leaders, and hopefully you'll gain insights and information that'll help you become well planned. My next guest is Brad Leggett from the Leggitt Group here in Laguna Niguel, California, locally here, and Brad is a member of Pro. and Visage, and he's a speaker for Visage International Groups. He's always well received. He talks about building and leading high performance sales teams, and those are teams that meet or beat their target every year. Brad's been a guest on the show before, and I always look forward to having him back. Brad, welcome to the show and thanks for joining us today. Thanks for having me back on the show. I appreciate it. Oh, it's my pleasure, Brad. You know, we see each other regularly and out and about in different groups and Uh, everybody always has great things to say about how you clearly communicate and help sales teams to build and grow, and you know, a lot of people think, well, how often do sales teams not meet their goals? What's your experience been? My experience, Bill, is that less than 50% of sales teams meet their sales goal every year, and there are a number of factors for that. A key one is the leadership and who they pick to be on the sales team. In addition to that, another key factor for them not meeting goals is not having clear goals the sales team has bought into. We look at goal setting with the sales team, to me that should be a collaborative process. If we just hand the number off to the sales team, then it's my goal, and I can have them become potentially accountable for it, but it's still my goal. If I get them involved in the goal setting process, they begin to own that goal with me and they're much more motivated and directed towards making it. And I'm not saying the sales team should set its own sales goals, but that we should have a process where we've got an idea where the company needs to be revenue wise, sit down with the sales team and conduct a review territory by territory so we can see where the growth is, where the challenges are, and lay out a good sales goal for the year. Lay out the plans to get there. And another key component to making sales goals is that we have clear activity levels associated with the goal. Number of sales calls that need to be made on a daily or weekly basis. How many proposals should be out the door, the dollar value of those proposals, and how those proposals are moving through our sales process, so we have clear visibility of what's going on. When that begins to come together, we have a high performance sales team that's got a very good shot at making its goal for the year. So listeners, you can, you can already hear the clarity and the logic of some things that are just done sometimes just by the seat of their pants pants, and they're not taking, they're taken too lightly and importantly, and there's a process that goes behind these things that make these things come true. Uh, Brad, let me ask you a question about something that I've heard recently, and that is what happens when a sales person leaves? I'm always concerned that they're gonna take their accounts with them. What can I do to retain control over accounts when a sales person leaves? Bill, that process should really start long before the salesperson ever leaves. Part of it is good sales management, and if I want to retain control of those accounts when a salesperson leaves, and let's figure that most will leave at some point in their career. Number one, as a manager, I need to be out making periodic sales calls with my salespeople, and I should be targeting some of those calls on key accounts and to meet the buyer or key managers at those accounts. So if and when that salesperson leaves. I, as a manager, already have a relationship there. I can pick up the phone and call and say, really disappointed that Jill's left, but she's decided to other career options. The good news in this I'll be working with you during the interim or whoever I assign to that. Here's how we're going to work with you. And so there's a continuing relationship there, and I can continue to have the account feel close to me being they'll leave then. Also, when I say it should start long before the salesperson leaves. If I'm a good sales manager, I'm having regular review meetings with my sales team where we do account reviews, particularly on my key account, and we delve into what's going on at the account, who's changed out of the account, how we're keeping up with them. So I know the accounts as well as the salesperson. Also, if we'll implement a CRM system, customer relationship management, say a sugar-based salesforce, there are a number of them out there, all of them very good. But if I implement a CRM system and have the sales team keep its notes and contacts in there and keep them up to date, when the salesperson leaves, I'll have a good account history. And if I've got the relationship with the account, much less likelihood that account's going to leave with the salesperson. Now you talked about the day the salesperson leaves. What will we do? We need to sit down as a team, sales manager, maybe some of the other salespeople, customer service, and develop a communication plan with each account. And clearly communicate to them that Jan has left. Sorry about that. Here's who'll be in contact with you. Here's who to call for these items until we get a new person in the territory, or maybe we've assigned a temporary person in the territory. So the customer has somebody to call right away and they're not going to be wondering what to do because it's really uncomfortable for the customer to call up and ask for Jan. And they say, Oh, Jan's left. Who do I talk to? Oh, I'm not sure, and that's not a good way to keep the customer relationship going. So start the process as part of good sales management long before, contact with the accounts by sales management, review them, keep the notes in the system that we all know what's going on with the account. And then when the person leaves, have a clear plan and execute it to talk to every account out there, either email or in person or by voice. That's, that's a great strategy. It makes a lot of sense and it's something that anybody can start doing right away, building those relationships and keeping the information current and And knowing where the records are going to be and then uh having having that plan B if things do change and of course like you said, things will change. Brad, a lot of people are saying, you know, my sales were growing for years and years and years, and now they've started to go flat. What can I do? What should I do? Bill, somebody comes to me with that challenge, and I hear it quite often. The first thing we do is we look at why have sales turned flat. And to me there are 3 major buckets that falls into one, I'm in an industry or market that's turned flat. Secondly, we need to look, have my products or services become stale? Are they outdated? Are they new and cutting edge things ahead of me? And third, and this is the one I encounter most often with entrepreneurial companies, the team that got me to where I am today is not the team to take me to where I need to go. Case in point, a company I've worked with, they have grown from about 2 to 15 million a year in sales in about a 5 year period of time. I think any of us would feel very good about that growth, but once they got the 15 million, they pretty well flattened out, and the CEO brought me in to help him analyze the why behind this. It's the services business. When I got in there, what I began to find out is that the VP of sales of this company had been the engine behind that growth. This person was still 70% of the revenue base of the company. About another 15% was house accounts, 15% was the sales team. There were another 4 sales people working at the company, and they were bringing in very little revenue. As I begin to peel back the onion, what I found out is that the salespeople were really be players in this industry. They needed to be calling on major accounts and pulling business from them. The salespeople they had in place weren't paid that well, and they didn't have the training and really the skill set or knowledge to go in and work these major accounts. So they were taking business from the B accounts and pulling in very little business, and it was actually a less profitable business. What we did over about a year and a half period of time was build a whole new sales team, including the sales manager. A team that could take them from 50 to eventually $50 million a year in revenue. We hired a new sales manager that came from industry that was very aggressive in a very positive sense of the word. We redid the sales compensation plan, so they paid much better, and that allowed us to hire a much higher caliber salesperson. In addition to that, we worked with operations to tightly integrate. It's a service business and operations and sales needed to tightly work together and they hadn't been. So with the new talent in place, a new model internally, and an aggressive to the market, they've grown anywhere from 50% to 500% in specific territories in the past year and a half. So and that was the case, and like I said, it's the one I encounter most often with entrepreneurial companies, that the talent that gets you to a certain level is the talent to take you to the next level. And so there's a choice the CEO needs to make. Do I stay with the talent and accept limits to growth, or do I look for new talent with better skill sets that can take me to the next level? Those are great points, and I think that in in a lot of cases, people might be well suited to to have someone like yourself come in and analyze those because I wouldn't have thought of all all those different things, you know, you think, well, you blame it on industry, you bla blame it on our products are outdated, but that whole is the team that got you there, the one that's gonna get you to the next level, that's That can be the most critical factor, the people situation, and and that's where you come in. So that's great, great information. I was just going to touch on the other one that at times it is a product or service issue. A number of years ago I was working with a furniture manufacturer, and they were still growing. They've been an Inc 500 winner 3 years in a row, so they had very good growth, and my work there was helping them set up an overall sales and marketing plan for the company. Part of the analysis I did there, I found out that their profit margins were shrinking, and it was hitting somewhat because total gross margin dollars are going up every year because of great growth, but the percentage of gross margins were shrinking and net margins corresponding were shrinking year after year, and it wasn't a case of cost of goods going up or GNA expense, you know, overhead expense going up. I got into it and found out that it was the product prices were being pushed down, and they were in a very specific market and we drove into that market and got a size on it and then to look at competition and I said, OK guys, here's the competition. What are they doing that's forcing down your prices because you're telling me you're having to take a little lower price. Well, it was a case where every year that product line was out, new competitors would come knock it off because it's very common in the furniture business. And so they were having to take 2 or 3% off their product price every year to stay competitive against these smaller upstart companies. What this drove them to was to develop two new product lines and bring them out, and that began to turn that around and it actually drove up margins and drove up net profits in the corresponding years after they brought them out. So at times it is a product or service issue as well. And so we need to look at both our team and our offer to the market we're looking at why we're having flat sales. Interesting, very interesting stuff, but now, uh, you know, a lot of people are saying, and as a matter of fact, some of my guests today were talking about inbound marketing with the internet and that people are more information savvy and sales people maybe not as important because everything's online these days, but I don't think that's true. Do you think that's true? It's true in some cases and not true in others. There's no one uniform answer here. The internet has certainly brought tremendous knowledge to all our fingertips. And that's very true of us as customers as well, whether we're a commercial customer, individual customer, whomever, and I've heard the statement. Well, sales is a dying thing that the internet's going to take all that on. I'd say we need to step back and look at it with a little more specificity and look industry by industry to see how that sales role has changed. Early I had a reference the services company I'd worked with. They're in the healthcare industry providing services to patients, but they get their referrals from hospitals, so they're selling to a fairly technical audience. I've also worked a good bit in commercial construction in the past few years. Those are two industries where the sales role has really not been impacted by the internet. The information the customer's looking for, they are the people in the hospitals or major construction companies or somebody looking for a whole GC to come in, general contractor come in and build a building for them. They're going to get a little bit of information off the internet, but how they're going to make their buying decisions really developed on interviews and relationships with the people out selling to them. So in those industries, it hasn't changed a lot, and I think that's true for most complex or higher risk services, you know, to outline there where it's really begun to change is more in technology sales or manufactured goods, and the customer no longer needs a sales rep for the same thing they needed a sales rep say 20 years ago. 20 years ago or more. The sales rep was in charge of almost all of the knowledge, knowledge about the product, the market, the competitors. So now when a salesperson engages with the buyer, the buyer knows most of that. That doesn't say the salesperson's irrelevant. It says that the salesperson's role has changed and where they enter the buying cycle is different. Often they're going to enter the buying or decision making cycle later on and need to recognize that. Also, they need to come armed with a lot more knowledge about their own product and more specifically, where does their product or service really fit for a customer like the one you're talking to today. That's often information that can't be gained from the internet and is valued by the customer. Another role salespeople fill, particularly if you're working major accounts, is often you'll know things going on in the account that individual person won't, and that knowledge can help you become a value or become a resource to the buyer. So you need to look at your role differently, appreciate you're to enter the buying cycle later, and have much better knowledge about your product, your competitors, and your customer than you did 1520 years ago to still be effective in the market today. So for those that still think it's all about, just about technical knowledge, Brad, how important is it to have very good people skills to, to be questioning the customer more about their. Uh, non-technical needs for products, for instance. You're asking is are relationships still important in the world today? Are they more important than ever, yeah. Yes, they are, because that's one of the key things the salesperson, I'm glad you brought this up, Bill. It's one of the key things a salesperson can bring to the table is the relationship skills, and good relationship skills start with understanding your customer. A good salesperson should be listening 70 to 80% of the time. You know, it used to be the model of salesperson's supposed to talk all the time. That's not what gets you where you need to go in sales. It's asking good relevant questions, listening to what the customer says, and then based on that stirring the conversation. And being genuinely interested in understanding the customers not only for your product or service, but what all is going on in their job or their company, so you understand where you fit into things and have an empathy for what they're dealing with and going through. When you develop that depth of relationship with a customer, it makes a tremendous difference. People still buy from people they like, and if it's not a simple product that I can easily buy over the internet and people get involved, they want to deal with people they like. I deal with a building products company. And the sales team there is very relationship focused. They see it as a key driver of why landscape architects specify their products as the depth of relationship. They take many of them to lunch, spend time taking them to ball games, and other venues where they can develop an out of work relationship. So there's a real Personal bond there between them. Those are great tips. I mean, it's, it's really beyond that technical sales skills to building that relationship is still important. And you know, one thing I'm hearing from from some of my clients out there, Brad, is that they're getting up there maybe in their 60s or so and they're saying, you know, my, my peers that I used to entertain at companies that, that, you know, that we work with are retiring. And the younger people that are coming up, I need help because they, I don't know how to build relationships. They have different interests, so the millennials or the, the Generation X or Y's, they, they have a different interests so that relationship building still becomes important, but in some cases it's shifting a lot uh for for some of our uh baby boomer owners out there. You bring up a very good point there, Bill, that how you establish the relationship, you know, for baby boomers, we still come from a background. You establish relationships in person, preferably for many of the millennials, they're really establishing a relationship, texting one another back and forth, Facebook posts, things like that. So it's not just the face to face skills, and I'm glad you brought it up, it's what are you doing? With social media as a way to engage with others, LinkedIn is a great tool for the business conversations, Facebook for personal and bringing some of your personal life out there so people get a sense of who you are, because it all boils down to we like to do people with we like to do business with people like us. And we want to buy from somebody we like. Great point. Now Brad, uh, turn the corner on, uh, one last question with you and relevant for our business owners who are thinking about their exit strategies, investing in strengthening their sales team fit into their overall exit strategy. That's one that depends on the time horizon they're operating in. If you're looking to sell a business in the next year or less, then going out and investing and strengthening your sales team is probably not going to make a material difference in in the value of your business when you sell it. Because it just takes time to build a team. I do this for a number of companies, and we're 90 days plus getting a decent salesperson hired another 90 days plus getting them effective. So that's a year in, excuse me, half a year into it. On the other hand, if you're 2 years or more out, it can be a real help in driving greater value when you go to sell your business and some things to look at. Should I invest in a sales team or sales, maybe just 1 or 2 more salespeople? Some places that might really add value if you've got a company that's largely dependent on 12, or 3 customers, then there's a really good chance the buyer on the other side of the table is going to discount your business from industry norms because of too much dependency on a customer, 1 or 2 customers that pull the plug and really take the value out of the business. Another one that I've seen quite a bit is the entrepreneur founder, and that almost every entrepreneur I've run into is intrinsically a good salesperson or you never gotten the company off the ground. Sometimes that translates into 30 years later they're still the number one rainmaker for the company, and if that's the case again you've got an issue where you're probably going to get your business discounted by the buyer because it's too much on you as the owner and they figure, well, even though you may stick around a while, you're not going to stick around a long period of time and there's a risk in that. So in those cases where I'm dependent on a very few customers or I'm the principal rainmaker for the company. Investing in one or two key sales people that can open new key accounts for you can make a material difference in the value of your business when you get to sell it. The other one is just looking at your revenue, and then when it flows down to earnings because most businesses are bought on a multiple of earnings. If I increase my revenue, I'm going to increase the base off of which my business is valued. And interestingly, I was in this conversation with an investment banker yesterday, and his perception was a strong sales team that's bringing in a balanced base of business. can add from a quarter to 0.5 point to the multiple the business is sold on. And what I'm speaking there is, say for instance, a manufacturing business. Some recent data I saw was they sell for 3 to 4 times EEDO earnings before taxes, depreciation, amortization. So if I'm selling for 3 to 4 and I raise it from a quarter to a half point, and I take it from say 3 to 3.5 based on the strength of having a sales team that's bringing in balance revenue and balance out of accounts, that's a very nice kicker to the value I receive from my business. Great point, great point. So there's multiple ways, you know, I guess, uh, the easiest way that I can think of it is to working on your sales structure which includes all the things that Brad's talked about your. Your sales team diversifying your efforts, your client base, having having your managers have good relationships so you retain clients, staying current with your clients, having a great CRM so you can identify future sales and and good business information and um and a and a communication plan. Brad, great information, a great uh. Interview as usual, um, you've given us a lot to think about. How do our listeners get in touch with you? One of two ways. One is my phone number is 949-388-6910949-3886910, or they can reach me on the web at www.leggettSales.com. That's L E G G E T T sales plural S A L E S.com. And Brad, I believe you're offering our listeners a complimentary 30 minute phone consultation. Just to give you a call and mention the show, and you'll help them with an assessment tool also for key success factors for a high performance sales team. That's an incredibly generous offer. So I hope everyone will take advantage of that and I appreciate you again coming on and sharing your your wisdom and ideas with our listeners. Bill, thank you and thanks for having me back on the show. Thanks again. We're gonna take a short break. We'll be right back after this. Please stay with us. Hi everybody, this is Spike Riel with the Exit coach. Business owners, can you name the eight key value drivers that you and your manager should be focusing on to increase the value of your business? Introducing the Sellability score index. Visit our website and answer 25 questions about your business, and you will instantly receive your sellability score, showing you how well you stack up in the 8 value driver areas. It's a great management tool. It's absolutely free for our listeners. Just visit exitcoachradio.com and click Get My Sellability score. Just thinking about what will happen to your business if you're gone keep you awake at night, will you get the price you need from your business to carry you through retirement? The BEI Network of Exit Planning Professions is the world's leading advisor network with the power to help business owners transition out of business on their own timeline and terms. Ask your most trusted advisor to create a BEI plan for you, or visit us at exitplanning.com. That's exitplanning.com. Thank you for listening to Exit Coach Radio. Uh, spam calls, sound familiar? Introducing line 2, get a second phone number right on your existing phone. Imagine, discounts, appointments, online forms. Handle it all without giving out your personal number. It's like having a secret weapon against spam, and when those Unwanted calls sneak through, boom, blocked. No more interruptions, no more stress. Stay connected, stay protected. 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