My wife Jackie and I recently had dinner with friends in Florida, where we both winter. We met Ray and Donna several years ago during “happy hour” at an RV dealership called “Lazy Days.
Jackie and I have been motor-homing for about 10 years now. We have met lots of couples that share our passion for the open road and the camaraderie that goes along with the journey. Traveling on the road obviously takes much more time than flying to your destination. In addition, the cost to purchase a motor coach, maintain it, and fuel it is not trivial. It must be a passion for both the husband and wife to make it work. Also, and of great importance to my wife and me, is the fact that most of the folks we meet on the road are of strong character, very humble, and always willing to go out of their way to assist you in times of need. In short, we have met numerous couples that we have become very close to in a relatively short period of time. In addition, couples that motor-home typically do not have 9-to-5 jobs. They are either retired, semi-retired, or own their own business.
I knew Ray was a roofing contractor in Massachusetts. But basically that was all I knew. I was curious to know how he got started in the business and what, in his opinion, made his business successful. As I have mentioned in past articles I truly enjoy learning from other successful business executives. It helps me be a more effective small business advisor with SCORE, as well as provide food for thought for my sales newsletters.
Ray told me that he did not start his career in the roofing industry. He began his career as a sales rep. Specifically, he was a manufacturer’s rep in the electronics industry. Ray is very personable, has a strong work ethic and consequently became quite successful at a young age as a manufacturer’s rep. Things were progressing well and it looked like he would have a long career in the industry.
One day the manufacturer of the product that Ray’s company represented called a meeting. The reason for the meeting was to announce that the manufacturer had decided to sell direct. So, in effect, the company that Ray worked for did not have a product to sell. The bottom line was Ray was out of a job.
In addition, there wasn’t an opportunity to stay in the same industry, so he had to somewhat reinvent himself and think “out of the box.”
He met Ron, who owned a roofing contractor business. Ron needed cash as well as a salesperson to replace his recently deceased partner, who previously held this responsibility. So the partnership began with a mutual agreement of a 50-50 split of compensation. Ray handled all sales responsibilities and Ron handled everything else. Before long Ray had sold numerous commercial jobs that generated significant income and profit. In fact, during a five-year period, Ray grew the business from $500,000 to $1.5 million. His partner Ron was not customer-facing at all. He was the back-office businessperson responsible for everything but selling.
One day Ron informed Ray that he had met with an attorney and turned the company into an S corporation, with him as sole principal. The compensation was to remain the same, but Ray was no longer to share in any manner of ownership. Since Ray had no formal agreement in writing, and Ron owned the company, he could do whatever he wanted. Under the new plan, Ray had no choice but to leave the company.
So Ray left and started his own commercial roofing company. He called on the same clients he sold to in the past, but this time he represented his own company. And since Ray was the face of the previous company and not Ron, the clients naturally continued to do business with him. In fact, many of the major clients did not know the owner of Ray’s previous company. Ray might as well have been the owner. To make a long story short, Ron obsessed about Ray’s success, which eventually led to the demise of Ron’s company. In contrast, Ray’s new company has grown every year to become one of the top 100 roofing contractors in the country.
So Ron, the owner of the company, was totally in charge of his business, yet he didn’t have a connection to the most important aspect of his business – his customers! Sounds pretty fundamental, but it happens all the time in small business as well as in B2B corporate sales.
In my 30-year career in IT sales, this is more common than you might think. While it is certainly understandable that there are times when territories need to be adjusted to open up opportunities for other salespeople or to accommodate promotions to management, we must always be mindful of the potential downside of making these changes. Too many times executives in small business as well as large corporations are cavalier in their thought that sales execs can be shuffled around without any impact on sales volume. They underestimate the value of the product or service they are offering and underestimate the value of the customer-facing sales executive. Professional sales execs have, in many cases, spent years earning trust, respect, and extreme loyalty with their clients.
Before severing these relationships I would ask one simple question: Does the company or executive leadership own the relationship with the client, or does the individual sales executive? Or said another way, is the value the company offers so impactful that the sales exec doesn’t matter?
In addition, as in Ray’s case, a sales exec who you don’t compensate properly might end up being your fiercest competitor.
A word to the wise is hopefully sufficient.
Universal Sales Truth # 4
WORK YOUR LAND
Proverbs 20:4
A farmer too lazy to plant in the spring
has nothing to harvest in the fall