In a slumping economy, companies try to keep sales -- and salespeople -- moving with coaching and incentives, and focusing on fundamentals like making calls and building relationships.
Nothing happens in business without a sale.
But with sales harder to come by, how do companies motivate salespeople to keep selling?
That's a question that confronts Luke Kujawa of boat retailer Crystal Pierz Marine each year as summer ends, not just during the occasional economic slump, now accompanied by an unprecedented credit crisis, battering companies less accustomed to such downturns.
In July, Crystal Pierz closed six of 12 stores and laid off two-thirds of its 150 employees in response to what Kujawa, the company's president and chief operating officer, called the worst market he had seen in 24 years in the business.
"It's almost a second layer right now because it's the off-season of a very seasonal business," Kujawa said of the sour economy's added drag on sales. "In a down market it's just as -- or more -- important that we're able to generate some sales and get some activity going at this time of year."
Like many companies, Crystal Pierz uses incentive and recognition programs, offering travel, cash or other prizes to spur salespeople, Kujawa said. He and others also recommended taking a back-to-basics approach, staying active in sales efforts, building customer relationships and avoiding too much bad news.
"Even a strong, motivated sales force can only read so much negative financial data without getting kind of down," Kujawa said. "When that happens, instead of making those 10 calls a day, that might drop to six and then three and then two and one and then nothing. And all of a sudden, even when things turn around, that's become the norm. And they're not doing what they were doing when they were successful. There's nothing like a downturn to turn good habits into bad habits."
Richard Rexeisen, a marketing professor at the University of St. Thomas Opus College of Business, said this is a good time for sales managers to spend more time coaching. That means listening to how salespeople are doing personally, asking about feedback they receive from customers and offering some reassurance, said Rexeisen, who spent two decades in sales and sales management.
"The sales manager, by giving more of themselves, is in fact investing in [and] rewarding their salespeople," Rexeisen said. "And if they listen carefully they're going to hear from those good salespeople what that person needs to help them be successful."
That can help avoid the paralysis that can develop when a company goes into a crisis.
"What you need to do as a business owner, a sales manager or a business leader is you have to avoid the temptation of looking into the headlights like a deer," Rexeisen said. "By your working, focusing on what you can control, coaching and other activities, you literally [function as the] role model. ..."
Incentives can help too: "Money motivates good salespeople," Rexeisen said.
Shorter-term programs, running monthly or bimonthly, may enable companies to adjust better to changing market conditions, Rexeisen said. Incentives based on internal competition instead of market goals may be more realistic and fair with markets now so volatile.
Eden Prairie-based Incentive Services, a performance marketing company, has designed and managed employee motivation programs for companies around the country through ups and downs since CEO Joseph Cronin founded it in 1981.
Incentive Services works with companies to identify business issues they want to address through employee performance improvement programs, said Cronin's son, Patrick, who is vice president of sales. Incentive Services sets up the programs, in such subjects as safety training or job education; fulfills reward orders, and provides companies with a detailed analysis of how employees and the program perform, Patrick Cronin said.
"When there are tougher economic times we've seen companies rely more on these types of programs," he said. They include employee-engagement programs, culture-enhancement programs and typically there are return-on-investment measures plugged in.
"The programs we put in generally are not cut because of economic downturns. They are really held onto because it's a way for the employer to say, 'We can't give you a raise, your department may have been downsized but you're still really important to us,'" Cronin said.
Neil Anderson was a top seller of travel and hotel incentive packages for American Airlines before he founded the Courage Group, an entrepreneurial services and consulting company in Richfield.
Anderson typically sold incentive packages to companies looking for different ways to compensate employees and expand sales. "With travel costs climbing even more, this might be more popular than ever," he said.
In these down times, companies should have their top sales producers train their entire sales staffs in how to generate new business, Anderson said.
Companies also need to take care of those "rainmakers," to keep top salespeople from leaving for competitors, Anderson said. This may require adjusting compensation or adding to bonus levels.
At Crystal Pierz, one of the more popular incentive programs has been a "money tree," from which a salesperson who closes a deal gets to grab an envelope with cash inside, Kujawa said.
"You've got to get back to blocking-and-tackling," Kujawa said. "You've got to get back to building relationships and getting yourself in front of people. Maybe people aren't walking in the door. But how many past customers do you have that you can just call? In a market like this, there's not necessarily an immediate payback. But it's all about building for the long term."