Total Quality Sales Management

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>> Hi. My name is Gehard Gschwandtner and welcome to Selling Powers Daily Report. Today we continue our conversation with Howard Stevens, who's the founder and CEO of H.R. Chally. Welcome Howard.

>> Howard: Thank you Gehard.

>> Gerhard: Tell us about true quality management as it applies to sales.

>> Howard: We're actually thinking of, of trying to establish the idea of TQSM, Total Quality Sales Management, because we haven't used it in sales. And the concept here again is to focus on eliminating errors. Some of what sales 2.0, that we have been trying to get across recently, is a good example of that. If you can't measure it, you can't find out where your mistakes are and begin to correct those mistakes.

>> Gerhard: This is a little over my head, but give me some practical examples

>> Howard: Sure.

>> Gerhard: On what should a sales manager do. What mistakes should they look at?

>> Howard: If we look at CSO insights, the perpetual problems that have continued in every one of their annual surveys in terms of the three most common problems are the very lowest percentage, often less than 50% of sales people who actually reach quota. The second one has to do with the idea of actually closing the final deal. And according to CSO's results, well that only happens about 50% of the time. So you go 50% of the people not reaching quota, 50% of the time they're not closing the deal. And then to top it all off, turn over in sales is worst than any other function in business, varying between some 30% and 50%, if you think about the cost there. So the, the question of the sales manager should be, what can I do to improve the close rate? What can I do to improve the number of people?

>> Gerhard: Yeah, every sales manager out there is scratching their heads and they don't have the tools to find a quick remedy. What, what is the remedy?

>> Howard: Ah let's, let's take an example of the turnover rates.

>> Gerhard: Okay.

>> Howard: If you will. Today, as we mentioned yesterday, we set all sorts of definitions of doing the right things. But very seldom do we work on eliminating the wrong things. And here's a statistical example. I've heard research reports that said, borrow the techniques of your top 20% and apply them to the middle 60%.

>> Gerhard: Right.

>> Howard: And that makes sense. That's a proactive effort. But the reality is you're spending most of your resources and research, or pardon me, coaching

>> Gerhard: On the top.

>> Howard: The problem. No on the bottom. Most sales managers spent most of their time dealing and struggling with the 20% on the bottom.

>> Gerhard: To pay attention to the squeaky wheel.

>> Howard: Yeah. And if we were aggressive enough to replace those individuals, either reassign them or get another job, the first year you've altered that bottom 20% you'd have a 17% increase in sales.

>> Gerhard: Let me, let me respond to that.

>> Howard: Sure.

>> Gerhard: Because I've recently read some research from the Sales Executive Board, and they have studied the top performers and they found three things. One is that top performers learn faster from win loss reviews.

>> Howard: Correct.

>> Gerhard: Or they performed more win loss reviews. They also have opportunity scorecard, where their score prospects according to their potential for buying. And the third is that they spend a lot less time getting information they need in order to make customers presentations. So when you take those skills and teach them the core 60%, then the theory is that the core 60% is going to increase sales more than by focusing just on the top or on the bottom performers.

>> Howard: That's absolutely correct. And if you look at the three things you've just said, they are total quality management techniques. The first thing they did was do their own win loss reviews. Which it was to say what went wrong with the bad ones. Figure out who am I going to avoid dealing with. As we had in the discussions yesterday when people were making estimates, how much would that improve? That will improve 6 or 7% your, your average buy in. Statistically however, if you eliminate the bottom 20% you get twice as much improvement in half the time.

>> Gerhard: So the take away for me today is learn from your mistakes and don't put them under the rug.

>> Howard: Yeah. That, that's it exactly.

>> Gerhard: Thank you Howard. We're going to continue our conversation with Howard Stevens tomorrow where we talk about the future of the sales profession.

==== Transcribed by Automatic Sync Technologies ====