The country is locked down, millions are out of work, travel is restricted, people are working from home, sales have ground nearly to a halt, panic is in the air and short-term visibility for your business is about zero.

It’s like we are driving along at full-speed on a busy highway and suddenly we enter dense fog, all visibility is gone and cars are hurtling by in both directions.

How are we going to get through this foggy stretch without hitting another car, hitting an animal, ending up in the ditch”, or being killed?

New information is becoming available daily:

• Sunday, March 29 the President announced the continuation of “social distancing” and “15 Days to Slow the Spread” guidelines for another month through at least April 30.
• Tuesday, March 31 the White House will brief on results of the last 15 days and the next action steps for both the government and the public.
• Friday, March 27 Congress passed and the President signed the $2 Trillion CARES (Coronavirus Aid, Relief, and Economic Security Act) Act.
• The CARES Act includes massive aid for small business, likely an opportunity for your company to get access to capital through the SBA.

What does it mean for your Alarm business?

We at Larrabee Ventures, Inc. (“LVI”) are as concerned as you are to learn the ramifications of all these changes in our way of life and our economy.

As business owners, we are asking survival questions: “How long can I make payroll? Who should be laid off? Which bills can I delay paying? How can I keep the team together to get it all started again? Is there short-term financing available? How can I access the new government aid for my company?”

We are also asking opportunity questions: “How can I take advantage of this time and emerge as a stronger company than before?”

At LVI we are doing our best to find the answers and we will share them with you as quickly as possible.

In addition, we are available to help clear the fog, answer questions, provide you with the best information and assist you to better understand the ramifications for your business.

During this crisis period, certainly through at least May 1, we will NOT be charging for our services unless you and we agree on a specific project or engagement. That means you can call or email, request help, ask questions, talk about whatever you want and we will freely share our information and perspective.

Larrabee Ventures, Inc. (LVI)

LVI is staffed by highly experienced alarm professionals.

William Larrabee (“Bill”) has started three alarm companies from scratch, been president of five different alarm companies, and worked through crisis situations in numerous companies, either as an on-site executive or paid financial advisor. Bill knows the alarm business.

Michael Carter (“Mike”) has been a sales manager and vice president of sales and marketing for five of the largest alarm companies in the US. He also has ten years of experience driving sales and marketing programs as a consultant and coach. Michael knows sales, marketing, and sales management for alarm companies. For more information about LVI please visit our website: Larrabee Ventures.com.

Together we will answer your questions and help you get your business out of the fog and back on the open road.

More than 30 years ago, when I was a young alarm company owner busy growing our business with new sales, I might have said; “Well we lose one monitored account, but the loss is partially offset by a reduction in our monitoring and billing costs and we might save a little in service as not all our service turns out to be billable. The loss of a $40 RMR customer is about $33 per month – that’s it, no big deal.” At that time, I thought there was an endless supply of new customers and I didn’t understand the value of recurring revenue.

Now, we say; “That’s all wrong, the company is growing and when it loses a customer the very next customer created (sold) has to fill up the RMR hole caused by the lost customer. The company is pretty efficient creating new customers so the out-of-pocket incremental costs, net of money received from the new customer, add up to only 20 times the RMR created. Then we add half of the unallocated G&A to the Creation Investment because the rent, utilities, telephone and management are all necessary to create new accounts.”

The company’s Creation Multiple is 30 or 32 times RMR (20 times for the variable costs plus an allocation of 50% of the G&A) and so the cost of losing the $40 RMR customer is $1,200 – $1,280 ($40 multiplied by 30 or 32). A lot of money, 2 and 1/2 years of revenue, 3 – 3 1/2 years of profit.

This whole discussion reminds me of one you might have if you had a fender bender and didn’t have insurance. How much does the fender-bender cost? The answer is; the fender bender itself costs nothing if you don’t fix it. It’s the cost of restoring the car back to its original pre-accident state that is costly. In the alarm company case, it’s the cost of restoring the company to its prior level of recurring revenue and profit that is relevant.

So What is the Replacement Cost of Recurring Revenue?

The loss of a $40 RMR customer costs out-of-pocket $1,200 -$1,280, or more.

For a real current example, in our recent ebook, Monitronics Under The Microscope, MONI’s management lists their recent Creation Multiples as trending between 34.6 and 36+, see chart below:

The Point is, losing customers costs you dearly.

I keep being reminded; the value of a portfolio of customers is like the total amount of water stored in the pail. See our prior blog post; “Is Saving Customers Important?.”

When holes develop in the pail, water leaks out and there is less water left in the pail. When your sales department pours in a glass full of new customers, their hard work and Creation Investment is wasted to the extent the attrition leaks in the pail continue to drain the existing customers away.

If, on the other hand, you are going to keep the company indefinitely, the leaks in your pail are stunting your growth and stealing from your retirement and your estate.

What is it Worth to Save $40 in Recurring Monthly Revenue?

Let’s say the customer will renew his agreement and stay on if the company will upgrade his system at an out-of-pocket cost to the company of $800. Is that a good deal?

We would say yes because the alternative of replacing with a new customer is even more expensive.

Some of you will respond, “That’s extortion. We already paid for the customer once when we first sold it, why do we have to pay again?”

Well you don’t have to give in to extortion, but why would you want to give up the old customer? Isn’t it better to have both your existing customer and your new one?

Wouldn’t the best solution be to build a customer retention culture into every aspect of the company’s relationship with its customers? We’ll show you how in another blog post soon.

If attrition and customer retention aren’t in the front of your mind daily, your company is almost certainly losing a tremendous amount, perhaps even jeopardizing your company’s future health.

Larrabee Ventures, Inc. (LVI)

LVI is staffed by highly experienced alarm professionals.

William Larrabee (“Bill”) has started three alarm companies from scratch, been president of five different alarm companies, and worked through crisis situations in numerous companies, either as an on-site executive or paid financial advisor. Bill knows the alarm business.

Michael Carter (“Mike”) has been a sales manager and vice president of sales and marketing for five of the largest alarm companies in the US. He also has ten years of experience driving sales and marketing programs as a consultant and coach. Michael knows sales, marketing, and sales management for alarm companies. For more information about LVI please visit our website: Larrabee Ventures.com.

Together we will answer your questions and help you get your business out of the fog and back on the open road.

We have just published a new ebook that is free for our subscribers to download.

“Monitronics Under The Microscope –Everything You Need to Know to Better Understand your Business”

This blog post will give you a summary of the ebook and discuss why you want to learn more about Monitronics (“MONI”). Future blog posts will feature extensive excerpts of the ebook, but if you wish to subscribe now to our blogs, you can download the entire ebook immediately.

CLICK HERE TO SUBSCRIBE AND RECEIVE YOUR FREE ebook.

Studying MONI is a great way to better understand what is going on in your business because, as a public company, MONI releases lots of information to its public shareholders regarding MONI’s strategy, how it does its business, key metrics and financial results. You’ll get a great detailed look at the performance of another company with lots of similarities to yours.

We know that many of you have already formed opinions of MONI, its dealers or its prior business practices. It has been a major player in the industry since 1994.

We urge you to set aside preconceptions you may have and review MONI, not as a company to do business with nor one to copy, but rather as an example of an alarm industry player, with all its warts and blemishes, that is struggling, just like we all are, to reinvent itself in light of the circumstances of today.

While MONI is one of the largest companies in our industry, MONI’s strategy is, in many ways, a simple concept and a pure play in the alarm monitoring business. It’s only business has been to acquire and monitor customers with security alarm (and more recently home automation) systems.

In many ways MONI is not different from most other alarm companies. Here are some similarities:

• MONI acquires new accounts as they are created and, in recent years, it has begun to internally create about 40% of its new accounts.
• MONI provides monitoring through a large UL listed central station and it bills and arranges for physical service for its customers as needed.
• MONI struggles with customer attrition and new account creation rates.
• MONI has been impacted by changes felt by every company in the industry, including:
  • Providing home automation and mobile interactive features for new systems that increase RMR, but reduce the Gross Margin percentage
  • Responding to Federal restrictions on telephone soliciting which inhibit new account creation
  • Dealing with increases in the attrition rate
  • Competing with new direct-to-consumer channels such as DIY systems, Nest and others
  • Increasing knowledge and awareness of consumers regarding home security and home automation alternatives, pricing and Internet shopping for alternatives

We have read, digested and organized substantially all of MONI’s publicly released information over the last 7 years to prepare “Monitronics Under the Microscope” which will give you many insights into how MONI works and, hopefully, some better understanding of how your own alarm business works.

Here’s the Executive Summary

Monitronics (MONI) is the number three company on the SDM 100 ranking of U.S. security alarm companies. MONI is an important player in our industry. As of March 31, 2018, MONI had around 958,000 active customers, more than $42.9 million of recurring monthly revenue (“RMR”) and was adding more than 7,000 new customers a month. MONI is owned by Ascent Capital, Inc. (“Ascent”), a public company traded on the NASDAQ with the symbol ASCMA. MONI is important to everybody in the security alarm industry because:

• In recent years, MONI has failed to create or acquire enough accounts to produce net growth and, as a result, enormous shareholder value has been destroyed.
• MONI has made many changes and is beginning to have some success in transforming its customer creation strategy from acquiring all its new accounts from traditional alarm dealers to internally creating a large portion of its new accounts from three direct-to-consumer channels.
• MONI has now rebranded as BRINKS Home Security (“BHS”), a bold move which may put MONI on a path to repair some of the damage done in recent years and support a critical near-term refinancing of its debt.
• The satisfactory (or unsatisfactory) resolution of its 2019 refinancing may well impact all of us as players in the alarm and home automation industries.

“Monitronics Under the Microscope” details MONI’s evolution over the last 7 years and provides perspective on how things are changing in the security alarm industry. It should also provide you with a better understanding of how your company can cope with similar challenges facing all alarm companies.

Highlights

In summary, here is a snapshot of what “Monitronics Under the Microscope” will show you in detail. MONI experienced some severe performance issues beginning in 2015 and continuing through Q1 2018. Highlights over the 3 ¼ year period include:

• The number of accounts dropped 9.5%.
• The number of active dealers dropped 43% and new account creation by dealers dropped more than 66%.
• Internal account creation through direct-to-consumer channels increased from nothing to 40% of new account creation, an annualized rate of 34,500 units in Q1 2018.
• Account attrition has been disastrous;
  • Unit attrition has increased from 12.9% in 2014, to a current rate of 16.0%.
  • RMR attrition has also increased from 12.6% to 13.9%.
• RMR per account has increased to $44.76 in Q1 2018.
• The Creation Multiple has improved from 36.4 to 34.6.

To turnaround this downtrend in operating performance, Ascent and MONI have taken many strong steps. There are some indications that the turnaround may be beginning to happen, but as of Q1 2018, results still have not improved materially.

Management has now embarked on a second rebranding by exclusively licensing the BRINKS Home Security name and changing all of its marketing to focus on the BRINKS Home Security brand for all its customer creation channels, both through its dealers and its direct-to-consumer channels.

MONI’s biggest challenge: It must refinance $585 million of a total $1.8 billion in debt by October 3, 2019 or risk the acceleration of more than $1.1 billion of other debt. If such debt acceleration were to occur, it could easily lead to the sale of the Company on unfavorable terms, or worse.

LVI’s Conclusions

Refinancing:
The refinancing looks to be exceedingly difficult based on the turnaround results achieved to date and the highly-leveraged status of the MONI Balance Sheet.

If, over the next 4 quarters, MONI were able to grow new account creation to the point it is at least replacing its RMR attrition or, better yet, replacing its unit account attrition, a refinancing will become more feasible.

Replacing Attrition:
For MONI to grow to the point that it is replacing its current RMR or unit attrition, it will have to increase its quarterly account creation from 21,547 in Q1 2018 to about 35,000 to 40,000 new accounts per quarter, an increase of 65% to 85% from the Q1 2018 creation levels.

MONI will need to show phenomenal growth in new RMR creation, roughly 20% quarter-over-quarter growth, over the next four quarters. If it does, it will have demonstrated results to show to new lenders before the commitment date. This is a tall order but perhaps achievable.

This blog post is a summary of the ebook; “Monitronics Under the Microscope”. If you wish to receive the full ebook now, CLICK HERE TO SUBSCRIBE AND RECEIVE YOUR FREE ebook.

Larrabee Ventures, Inc. (LVI)

LVI is staffed by highly experienced alarm professionals.

William Larrabee (“Bill”) has started three alarm companies from scratch, been president of five different alarm companies, and worked through crisis situations in numerous companies, either as an on-site executive or paid financial advisor. Bill knows the alarm business.

Michael Carter (“Mike”) has been a sales manager and vice president of sales and marketing for five of the largest alarm companies in the US. He also has ten years of experience driving sales and marketing programs as a consultant and coach. Michael knows sales, marketing, and sales management for alarm companies. For more information about LVI please visit our website: Larrabee Ventures.com.

Together we will answer your questions and help you get your business out of the fog and back on the open road.

Your Expectations For A New Salesperson

Once you’ve determined what you are looking for in a new salesperson, the next steps are to develop a Job Profile, followed by the Job Description and a plan to cultivate your new team member’s success.
For now, set these expectations:

• Where the new salesperson works.
• Who the new salesperson reports to, what does he report and how often.
• What territory the salesperson will work. If you have only one salesperson serving a metropolitan area, limit the territory the rep initially works.
• What vertical markets the salesperson will serve.
• What revenue targets apply to each vertical market.
• What existing clients the salesperson will work with.
• What the salesperson’s objectives will be in working with prospects.
• What the salesperson’s sales production quota will be and how it ramps up during the first six months, and year.
• How the quota will be divided by products and services for each month, quarter, and year.
• The program for onboarding the new salesperson.
• The sales training program. All salespeople, especially experienced salespeople, need regular training to develop and hone their sales skills.
• The involvement of the other departments in onboarding and sales training.
• Operations must be involved in acclimating each new salesperson and ensuring that your company’s new sales representative understands its products, services, and capabilities.

The Job Profile

This profile will outline:

• Who the salesperson will report to
• Skills required
• What the job is on a daily basis
• Onboarding process
• Ongoing sales training
• Technical training

The Job Description

When advertising the position inside or outside your organization, or posting it on your website, create the most attractive and complete job description possible. Make sure it is easily understood by anyone who reads it.

You want to make sure it shows why an applicant would want to work for you and not your competition.

Five key points to keep in mind while creating your job description:

1. Check out the competition.  Do your research and see what the competition is offering in their recruiting.
2. Look at and understand what would make your company appealing to a candidate.
3. Know why someone would want to work for you.
4. Have your management team read the job description.  Ask each manager if he or she were a salesperson, would they apply for this job? If yes, why? If no, why not?
5. Does this job description clearly describe what you’re looking for?

Leadership has not taken the required time to analyze, plan, and develop a strategy for their sales efforts. They haven’t taken the time to put their salespeople in a position to win, and that’s the one thing planning does.

To produce exceptional results requires exceptional dedication. That dedication is shown in your commitment to put in the time to develop your strategy, to constantly challenge the effectiveness of the strategy and insure that you have the tactics in place to make that strategy successful and, in turn, to challenge your salespeople to make the same commitment to excellence.

By developing an accurate job description, you are taking the first step in sales leadership. In the process of developing the sales job description, you are learning more about what you need to do to insure their success.

If you have any questions or comments, give us a call at 1-800-232-3584

Indeed: “How to write an Outside Sales Representative Job Description”

Monster: “Create a Job Description that Entices Candidates to Apply”

RecruitLoop: “5 Simple Steps To Writing A Concise Job Description”

Larrabee Ventures, Inc. (LVI)

LVI is staffed by highly experienced alarm professionals.

William Larrabee (“Bill”) has started three alarm companies from scratch, been president of five different alarm companies, and worked through crisis situations in numerous companies, either as an on-site executive or paid financial advisor. Bill knows the alarm business.

Michael Carter (“Mike”) has been a sales manager and vice president of sales and marketing for five of the largest alarm companies in the US. He also has ten years of experience driving sales and marketing programs as a consultant and coach. Michael knows sales, marketing, and sales management for alarm companies. For more information about LVI please visit our website: Larrabee Ventures.com.

Together we will answer your questions and help you get your business out of the fog and back on the open road.

Alarm and electronic security industry sales team turnover is high. Many reasons contribute to the overall high failure rate of salespeople.

A primary cause of high turnover is that salespeople are often placed in positions with requirements and responsibilities that do not match their prior experience and specialized sales skills.

If you missed it, you may want to read our last post on sales recruiting and hiring, “7 Key Elements of Recruiting and Hiring Salespeople”. It can provide you with more insight on the hiring and recruiting process.

Before You Hire New Salespeople

There are some broadly applicable sales skills which every salesperson should possess. These general skills are essential in any sales position, but finding top-performing salespeople requires a deeper look into the track records and professional profiles of the candidates.

Before you make an offer, make sure you clearly answer these questions:

• Which specific sales skills has the candidate most fully developed?
• How closely do the candidate’s skills match what he or she needs to be successful selling for your business?
• Which kinds of customers has the candidate been most successful selling?
• What kinds of customers will the candidate be selling for your business?
• What level of performance has the candidate achieved in prior positions?
• What are your specific expectations for your new salesperson?
• Has the candidate previously performed at the level equal to the expectations you have for the sales position?

Types of Salespeople

Previously, we mentioned here that you must focus on whether you need to hire a hunter or a farmer. Readers have asked how to know the difference between the two. The answer is to look into the candidate’s prior experience to find out what kinds of sales activities the candidate has performed in their previous positions.

The Hunter

What does the candidate’s resume tell you?

Address the following questions with your candidate:

• Cold call on new prospects?
• Develop his or her own leads?
• Work the phone to develop leads?
• Handle accounts of the type and size you need your new salesperson to work with?

If all of his or her answers are yes, then you are interviewing a hunter.

But, dig deeper to understand why the individual is seeking a different sales job.

Was the candidate actually satisfied with the kind of sales work he or she has been doing?

Or, would the candidate prefer a different way of selling?

Make sure that the experientially validated hunter is not really a farmer at heart, and vice versa.

The Farmer

If the hunter’s sales profile does not apply to the candidate, then address the following questions to determine whether or not the candidate is a farmer.

• How much experience does the candidate have nurturing a select groups of prospects or clients?
• Has the candidate mainly worked leads provided by the company?
• Has he or she done any self-generating of leads?
• Has the candidate been responsible for developing add-on sales or expanding existing client business?

Before you hire a farmer, be sure you have a client base to work and an abundance of company-provided leads. Typically, farmers do not enjoy nor excel at developing their own leads and are not inclined to change easily into becoming star lead creators.

On the other hand, hunters can usually transition to become farmers, with additional technical training. But after hunters develop farming habits, they’re not likely to return to roles requiring them to develop their own leads.

Differences Between Sales Positions

When you are looking to fill a particular sales position it is important, both for you and for the candidate, to clearly identify the type of sales position, the typical prospects to be served and the salesperson’s specific responsibilities.

There are many kinds of sales positions in the alarm and security industry. They can be summarized into the following categories:

• Inside sales
• Outside sales
• Phone sales

In each of the above types of sales positions, various kinds of clients may be pursued.

• Residential
• Small businesses
• Regional or national businesses
• Corporate accounts
• Government
• Institutional

For each of the above kinds of clients, various sales responsibilities may be involved:

• Working with new clients
• Working with existing clients
• Working with both new and existing clients

You want to ask and answer these questions:

• To whom will your new salesperson be selling?
• Considering the kinds of clients the candidate has previously worked best with, how do they compare to the clients you need to have your salesperson work with?
• Which of the candidate’s sales skills are most well developed?

In other words, decide how well the candidate’s previous success and job responsibilities compare to the job responsibilities and success you require for the position you’re seeking to fill.

If the candidate’s prior experience and sales skills do not match up well with your requirements, you probably should pass on this candidate and interview additional prospects.

The point is, both hunters and farmers are important assets to alarm and security companies, but they fill different roles. The first fundamental is simply to make sure the position you want to fill fits the hunter or the farmer and then to identify whether the candidate is the hunter or farmer you believe will be successful in the position.

To Find The Right Salespeople, Broaden Your Search Criteria

Don’t limit your sales applicant pool exclusively to electronic security salespeople. Focus, instead, on finding a new salesperson who has the right applicable experience. Keep in mind that you can set up a training program to teach new salespeople the technical features and functions of security equipment and systems.

So, if you want the most highly-talented salesperson, let product knowledge be much lower on your scale of priority qualifications, and think in terms of proven sales skills as the most important factor in your hiring choice. Don’t get stuck on the question, “Does the candidate have alarm or electronic security sales experience?”

• If you need someone to do outside sales to your residential market, don’t prioritize concerns about the differences in your own industry and whatever industry the candidate may have been previously employed in. Instead, ask, “Does the candidate have experience selling to homeowners?”
• If you need a salesperson to work the small business market, look for someone who has done well selling to small businesses.
• If you need an outside salesperson to make cold calls and develop leads, look for someone with a track record of success in doing that.

Be Prepared To Train Your Salespeople

To insist on hiring only experienced electronic security salespeople is to dodge the issue of training a new salesperson. Don’t be afraid to train, or unwilling to invest in training someone.

Keep this as your perspective instead:

• You can teach the technical aspects of the job. For example:
  • If you are serving the residential or small business market, you can design a two- or three-week program to provide your new salesperson with the sales and technical skills needed.
• You want your new salesperson to have excellent sales skills.
  • You can train your new salesperson to present, demonstrate, close, and overcome objections. This means that you can even hire someone with a technical background and natural sales aptitude and develop him or her into a highly-productive salesperson.

Conclusion

Finding the right salesperson for your organization isn’t easy.  The key is knowing what you are looking for.  It takes time, energy and most important a process.  Who knows, it may help you to find a top producer.

In the next post, “Recruiting The Best Sales People Requires A Good Job Profile”, we will look at how to define and advertise to get a winning salesperson.

If you have any comments or questions, we would love to hear from you.

Resources used in this article:

Forbes: “Why Can’t I Find Good Salespeople? Mastering the 3 Keys to Identifying and Developing Sales Stars”

Huffington Post: “How to Hire the Right Salesperson for Your Small Business”

Inc: “4 Secrets for Hiring the Right Salespeople”

Larrabee Ventures, Inc. (LVI)

LVI is staffed by highly experienced alarm professionals.

William Larrabee (“Bill”) has started three alarm companies from scratch, been president of five different alarm companies, and worked through crisis situations in numerous companies, either as an on-site executive or paid financial advisor. Bill knows the alarm business.

Michael Carter (“Mike”) has been a sales manager and vice president of sales and marketing for five of the largest alarm companies in the US. He also has ten years of experience driving sales and marketing programs as a consultant and coach. Michael knows sales, marketing, and sales management for alarm companies. For more information about LVI please visit our website: Larrabee Ventures.com.

Together we will answer your questions and help you get your business out of the fog and back on the open road.

Do you find it difficult to attract and keep good salespeople?  Recruiting can be difficult if you don’t have a process.

It may be time to update your recruiting and hiring process. Most alarm and electronic security systems business managers and HR executives recognize the difficult challenges in managing a typically high sales department turnover.

This is not just an alarm industry problem. According to an article in the Harvard Business Review, across the spectrum of US companies in all industries, sales departments experienced a staggering total of 25-30% turnover in 2015.

Effectively, the average company must hire and train an entirely new sales staff every three to four years.

The drain on productivity associated with such high sales team turnover represents an enormous loss for alarm and security firms as well as for vast numbers of US businesses of all types.

Sales team turnover results in lost profits including the impact of lost sales as well as the high costs of hiring, training and developing new, replacement, sales personnel. Turnover is a pervasive problem in US business that can severely shrink profit margins, sometimes to potentially ruinous extremes for small businesses and start-ups.

Here are 7 key measures you can take to more systematically develop a higher retention rate in your sales team.  Remember, it all starts with recruiting:

1.

Be clear on the type of salesperson you need

Salespeople and sales positions in alarm and security systems businesses vary from one company to the next.

Salespeople vary from dauntless “hunters” who thrive on cold calling their way to higher volumes of short-cycle sales—to “farmers” who flourish in cultivating long-cycle relationships yielding larger sales. In between are those “farming-hunters” who operate in the realm of medium sales cycles to provide security systems to medium-sized businesses.

Here are some specifics you need to clarify before you recruit:

• Specify the responsibilities you expect your new salesperson to fulfill.
• Clarify the degree of technical knowledge necessary to perform effectively.
• Specify the kinds of customers / clients that the sales representative will call on.
  • Residential (working with families)
  • Small Businesses (working with small business owners)
  • Franchise Owners and Operators (light commercial, working with business owners and their managers)
  • Property Management Companies (working with managers who represent building owners)
  • Government and Safety Officials (some small business, light commercial and large commercial sales require coordination with government agencies for approvals and permitting.)
  • General Contractors
  • Schools (K-12)
  • Universities
  • Hospitals
  • Storage Facilities
  • National Accounts

2.

Enhance the appeal of your company as an employer

More than 100 studies have now confirmed what has long been observed by employers—that employees who report feeling fully committed to their jobs tend to be much more productive and contribute much more to customer satisfaction.

Compare your company to your competition and consider why someone would rather work for you.

Think about what naturally makes employees feel the most enthusiastic and loyal to an employer.

Here are some key actions you should take:

• Shift from striving to squeeze more productivity to facilitating satisfaction of employees’ core needs—mental, physical, emotional, and spiritual. This can free and inspire team members to perform optimally every day.
• Specify expectations, i.e, clarify what is recognizable as success in the role.
• Allow professionals as much autonomy as feasible to accomplish their work.
• Design an appealing work environment.
• Institute two-way performance reviews.
• Make every company employee, from top to bottom, accountable for treating all others respectfully and with care.
• Encourage supervisors to regularly recognize employees for positive contributions.
• Give employees a financial stake in the company’s success (bonuses, or profit sharing, etc.).
• Make it possible for employees to devote time to value-added projects they’re passionate about.
• Provide ongoing opportunities and employee incentives to learn, develop and grow.
• Make sure your company stands for increasing profits and much more. Commit to adding value to your local community and the world.

3.

Develop a description of the sales position you want to fill

Selling is a talent, a skill and a process. Sales tasks vary with changes in the market, your business strategy, your business development stage, your customer types and their buying processes.

• What market you want to reach and your new sales candidate’s experience indicates how he or she can relate to that market.
• Whether your tasks involve the personalized service and strategic lead cultivation of longer-cycle large commercial sales, or are the less complex and variable residential and small business sales, you need to hire based on degree of match for the tasks, not on attributes superfluous to them.

Although sales traits like assertiveness and empathy are important, the force of these influences on sales should not be overestimated.

Current research indicates that matching abilities to tasks is actually a more successful approach in sales hiring. The key is to know with whom your salesperson will be working, and to determine if the candidate for the position is capable of succeeding with that particular type of person.

4.

Develop a sales talent pool

Treat sales recruiting as an ongoing activity.

Recruiting is challenging, as there is no obvious resource for new entrants into the employment market to fill sales positions.

Reportedly, more than half of college graduates, across the array of majors, will likely work in sales during some period. However, fewer than 100 of the approximately 4,000 US colleges offer sales courses, much less comprehensive sales education programs.

You can succeed by combining sales recruitment strategies, such as these.

• Advertise your company’s employer attributes, even when you’re not hiring.
• Include a Careers tab on your Website with both sales and technical positions.
• Interview prospects even if you’re not ready to hire.
• Recruit sales talent from competitors.
• Offer a bonus to employees for applicant referrals.
• Ask your customers to refer talented people to you and reward them if they do.

Your website and social platforms like LinkedIn and Twitter are important tools in the recruiting process. Make sure you are present on these platforms and attractive to potential sales talent.

5.

When you discover talented people, hire them

Exceptional salespeople are rare.

Searching to find and recruit the right salesperson(s) for hard-to-fit revenue-generating roles can be frustrating, expensive, time consuming and require months to bear fruit.

Even after a highly qualified candidate is identified, training and ramp-up time remains a drag on revenues and profits for additional weeks or months into the future.

So, when you encounter a very talented sales professional, create a position and find a way to bring him or her on board at the earliest possible time.

6.

Prepare for interviewing salespeople

Practice and develop techniques for interviewing.

Consider methods employed by larger companies such as offering a summer job, internship or part-time position as an opportunity for the candidate to showcase skills to your firm’s professionals prior to consideration for full-time employment.

• Prepare a list of questions to ask each applicant.
• Compare answers from the candidates.
• Assemble a team from various departments that interact with the salespeople, and engage them in the interviewing process.

Evaluating candidates:

Priorities for candidates’ sales competencies have evolved over time.

Current sales employee data across the US business sector indicates that you should consider multiple factors in your evaluation of each sales candidate, weighing them as follows:

• Fit with company culture 10%
• Formal interview 30%
• Background reference checks 30%
• Assessment results 30%

Evaluating these multiple factors may seem a bit counter-intuitive to some managers who are accustomed to highly prioritizing how a candidate is likely to fit into the workplace culture.

Please, please check background references for every candidate before making an offer.

Modern buying processes require updated sales competencies. Research indicates that sales competencies viewed as critical ten years ago are now less important.

Key sales skills to look for during the interview process:

• Do they have the ability to use logical analysis to prioritize tasks?
• Do they believe in your company’s strategic vision?
• Do they have the ability to advance that vision?
• Do they seem capable of devoting the time and effort needed to succeed?
• Can they cultivate leads?

7.

Institute A Program For Sales Skills Development

A reliable long-term development program for training and fully integrating new salespeople into your organization is appealing to aspiring professionals.

Some companies have new hires spend several weeks in classroom training. Others incorporate extensive field training, joint sales calls, and face-to-face sales situation role playing.

Engaging new sales trainees in role play of their customers’ work affords a deeper appreciation for their customers’ human situation and needs. This can help salespeople acquire a stronger sense of connection with their prospective customers.

• Set a 90-day timeframe as the ramp-up phase for new sales employees to become operational and productive at a normal level.
• Provide ongoing advanced sales training in closing, objection handling, sales psychology, business philosophy, and relevant analytics.
• Set training benchmarks and conduct sales skills testing on an ongoing basis. Adapt as your market evolves, and build the competencies it requires today, not in bygone times.
• Create formalized selling and closing processes to allow salespeople a canned basic sales presentation that they can then customize to fit effectively with their own personalities.
• Have a well-structured sales process. Research data now reflects that high-performing sales managers are much more likely to have well-structured, closely monitored, and efficiently enforced sales processes than under-performers.
• Focus on sales team development.  To keep the best salespeople, it is becoming more and more necessary for any company in its industry to be among the best places of its type to work.
• Don’t let yours be a cliché company that maintains equipment and trucks better than it attends to its staff. Closely monitor and nurture sales team development.

Without question, finding good sales talent is not easy.  Our goal is to provide you with tips and tools to make it a little easier.  In the next post, “Keys To Finding The Right Salespeople For Your Alarm Company”  We will show you what to look for in your next salesperson.

Resources used in this article:

Harvard Business Review,The Best Ways to Hire Salespeople

United States Department of Labor, Training and Education

Harvard Business Review,The Twelve Attributes of a Truly Great Place to Work

Larrabee Ventures, Inc. (LVI)

LVI is staffed by highly experienced alarm professionals.

William Larrabee (“Bill”) has started three alarm companies from scratch, been president of five different alarm companies, and worked through crisis situations in numerous companies, either as an on-site executive or paid financial advisor. Bill knows the alarm business.

Michael Carter (“Mike”) has been a sales manager and vice president of sales and marketing for five of the largest alarm companies in the US. He also has ten years of experience driving sales and marketing programs as a consultant and coach. Michael knows sales, marketing, and sales management for alarm companies. For more information about LVI please visit our website: Larrabee Ventures.com.

Together we will answer your questions and help you get your business out of the fog and back on the open road.