So your best salesperson wins a great new customer.
Things are good and this is one of the customers you have been targeting for a while. Sales will increase and so will your profits...nothing but good news, right?
Hopefully.
Now take a step back, does the salesperson refer to this new client as "his" or "hers"? If you hear this phase then you have a problem.
This client is YOURS - you paid the salary of the salesperson to win this client, you will have paid the commission and probably the mileage of the car to get to the appointments. You will have paid the mobile telephone bill for all the calls and all the emails will have been sent from your domain name. You cannot allow this client to be owned or controlled by the salesperson.
Regardless of how much your salesperson resists you need to make sure someone else meets this client, your client. Take them to lunch or just meet with them, if nothing else call them and introduce yourself.
These words are not intended to ensure that you undermine your sales staff or to imply you should not have complete trust, they are intended to protect the investment you have made in securing your clients. I have lost count of the businesses I have met that have experienced desperate times after a key salesperson left the business only to embark on a complete assault of all clients known to them and have "stolen" the clients for their new employer. These clients are often told many untruths as encouragement to change.
I have found one consistent fact in most of these cases - despite what could be many years of loyal service, the salesperson will generally lose all loyalty to you once they are working for a competitor and have new targets to meet. In the cold light of day - the "existing" clients of the salesperson will be the easiest catch out there and many find it hard to resist.
When I raise this issue with clients I am often told "don't worry, that is all covered in our employment contract. Our salespeople cannot approach our clients for a year after they leave". "That's great" I reply "have you considered if and how you could enforce that contract before the damage is too severe?" Silence is the most common response to this question.
Take a minute to think this through. You have 500 clients of which 40 clients place orders every month. Your salesman, let's called him Kevin, he has left for pastures new and you can still recall the handshake he gave and the assurance that he won't cause you any problems in his new job. A couple of weeks after Kevin left you have noticed sales are a little down, nothing severe but enough to register with you. End of the month arrives and sales are more noticeably down, by 30%. You look through your sales ledger and see there are ten or so regulars that have been quiet. You call a couple of the owners you know, they are not available but you are assured of a call back. A week goes by, no calls returned and still sales are falling. You call another few regular clients. Finally one tells you the news that will send a small chill down your spine "Oh Kevin came to see us and told us he could save us 20% on our bills so we have signed up with him".
Kevin has been busy, in fact by the time you are first advised he has broken his word to you he has already signed up 20 of your "regular" clients and in effect has halved your businesses regular income.
Now Kevin won't answer his phone or reply to your messages, emails or letters. You contact your Solicitor to enforce the contract of employment. A very strong letter is sent out and you feel that all will be OK. Kevin may take notice, he may not but you will not win those clients back as a client will not be told who they must buy from. If you attempt to reduce your prices to match or undercut those of Kevin you will be asked why you didn't offer these prices before. Either way you have lost and there is nothing you can do.
You may send a few more letters to Kevin threatening court action but you won't actually go to court as your Solicitor will tell you that you are unlikely to win. Perhaps you do go to court and you do win, what have you won? Can you realistically collect any compensation? Will you get your clients back? It is all so stacked against you, the damage is done and you will need a minor miracle to come out of things unscathed.
So what can you do?
Well there is little you can do to guarantee this will never happen to you but there are many steps to reduce the possibility. Certainly a tight contract will deter some and a good amount will keep their word to you. For sales staff I always consider paying an additional 2.5% commission as a loyalty payment to be paid no less than six months after they have left your employment. If "Kevin" earns around £3000 per month then you will add £75 to the loyalty fund each month. After five years of service this fund could be £4,500 and that is hard for anyone to walk away from and may well focus his mind on keeping his word. Six months after he left you will have had chance to build new relationships with your clients and Kevin will find it much more difficult to win that client's business. I have found this method effective in retaining loyalty and also taking them out for lunch on their final day to set things on the correct course seems to end things well. Finally, as a last action on leaving day I draft a letter to all customers for the leaving salesperson to personally sign and send to thank them for their business and to send them best wishes for the future. This letter always concludes with: "due to my personal desire to keep my word to, agreement with and my respect for ABC Limited I will be unable to keep in contact with you professionally and hope that you can understand these principles...." I have never had a single person, having shaken my hand that then refuses to sign these letters.
Whilst there are many options to protect your business - the easiest and most effective of all is to recognise you need to manage your clients in a way that means they have a relationship with you and your business too - not just your salesperson. This will not happen overnight and certainly should not start when a salesperson has just resigned or left - your clients will see right through that. Regular contact with all clients is essential, whether it is a monthly customer service call or an event/open day when your clients can meet you in a social environment your clients will stay much more loyal if they know many members of staff at your business.
Encourage your non-sales staff to build good relationships with clients when they have the opportunity to do so. If a client makes a payment ask staff to call them to confirm receipt and say thank you - simple little touches that will often lead to a brief chat or moment of humour can really help build relationships and make a big difference when changes do occur.
Losing a client is painful at any time, it is agony when you lose a client to someone to whom you paid a handsome wage and trusted.
Please follow us on Twitter @salesfrienduk, subscribe to us, like us, follow us, share us and comment.
No comments:
Post a Comment