From: TomCrouser@aol.com
Date: Mon, 2 Sep 1996 11:04:21 -0400
Subject: Need An Outside Salesperson?
Content-Length: 18766
X-UIDL: 841682586.016

Crouser Report OnLine Copyright 1996 Thomas P. Crouser, September 2, 1996 -
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Need An Outside Salesperson?
Transmitted from Charleston, West Virginia

Pamela and I have finished up our summer tour of everywhere. Out of the 168
days since our spring group meeting in Orlando and the end of August, we
spent 118 or 70% of the days traveling. In that time, we worked in 32 full
two-day on-site visitations; put on two three day client conferences
(production and sales); attended (and had a booth) at the NAQP meeting in
Chicago; and presented six seminars to printers from San Francisco to Ft.
Lauderdale. We also wrote six articles for Quick Printing magazine; six
monthly Crouser Reports; and 40 editions of the Crouser Report OnLine. In our
spare time we wrote a couple chapters of that book I have always been wanting
to do and made about 20 cold calls here and there on printers. We also were
delayed by the 

Bob Dole for President

 aircraft three times; drove over
Independence Pass in Colorado at night; flat out missed one flight in Iowa
which gave us time to visit the Amana colonies; and spent a wonderful 4th of
July with the family.

So, now I have a few days to catch up on some really interesting messages. I
apologize for not being able to respond to all of your questions quickly, but
some of you write harder questions than others. Here s one from a printer who
needs to go sell something to someone. Yet, as with many, he looks to all
other alternatives first. Here s the exchange of letters which paints the
picture better than I can. Enjoy. (The names have been changed as is the
custom with many of our messages you see in this column.)
*****
Subj:	Sales Compensation
From:	Victor@little.net (Victor Vickers)
To:	      TomCrouser@aol.com

I found this discussion (about sales compensation) very interesting and
challenging. We are a small shop...doing about $320,000 a year.  It is also a
small town, serving a population base of a maximum of 50,000 people, with
about 1600 businesses. By my calculations, we could afford to hire an outside
salesperson for several months.  If she or he didn t perform in that time,
then we would have to look at other alternatives.  My question is this: do
you think outside salespeople pay in our kind of situation?  I ve heard
arguments pro and con so would love to have your expert opinion!
*****
Hey, Victor. Give me some more information. Take your top 25 accounts sales
wise and tell me what percentage of your business is generated by your top
account and what percentage is generated totally by your top 25 accounts.
Then, send me your zip code or geographic area. I ll check those 1600
businesses and see what s in there. Do that and I think I will be able to
give you better insight into your question.
Later. Tom
*****
To: TomCrouser@aol.com
From: Victor@little.net (Victor Vickers)
Subject: Sales Compensation

 Hi Tom . . .Thanks for being willing to take a look at this.  Let me give
you a little more information--maybe more than you want. We hit the $300,000
mark about two years ago and have been more or less languishing there since.
 A major reason for this is that our major customer went broke about eight
months ago so we have lost around $20,000 a year from that account (Besides
sticking us for $5000!) and we have not made that up in new sales.  In fact,
to date, we are actually doing less this year than last.  I have been looking
at several options but none of then really excite me. 

1. Add different services like mailing, ad specialties, etc.  A possibility
but doesn t seen to attack the basic problem of few new customers and no new
big customers.

2.  Chuck printing altogether and try to become a 

Kinko s

...  i.e., become
a long hours,  copy only shop that does everything possible for those type of
customers. Broker out what printing we get. As you will see by my figures
below we already have captured a significant amount of this work (Cash is our
#1 

customer

 at 14.56%) and it has definitely been where the growth is
taking place. The down side is it s a big risk. We would need $100-$300,000
worth of equipment to really meet this market - - spot color high speed
copier, blueprint machines, better self-service machines and self-service
computers, etc. You are always in my mind when I think this way--those darned
ratios! Our fixed costs are already 30%-32% so this alternative would push
those percentages way up. If it doesn t work, we may be down the tubes.

3.  Increase advertising/marketing.  We are doing this. We are now doing
monthly mailings to 1600 businesses, daily spot ads in the newspaper and have
also thought about TV/Radio ads, but have heard so much negative about that
approach for a small shop like ours...

4   Have me become the outside salesperson.  This would probably be the best
of all worlds.  It is also the worst.  The truth is, I hate sales. I work on
the counter a lot but even dislike that.  When I have done outside sales they
have been a miserable failure and I m sure it s because of my attitude. I
think I m a good supervisor, good technician, good manager, good organizer,
but I m not a salesman.

5  So that leaves outside salesperson. If it is a viable alternative it is
the first thing that excites me as a possible way to go.  It would leave me
free to manager, which I enjoy, and hopefully overtime increase sales. 

So to the figures you requested.  They make an interesting analysis, so I
need to explain them a little.

Exactly as my computer kicks them out, the top 25 customers comprise 62.14%
of our total sales. No. 1 is 

cash

 at 14.56%. no. 2, at 4.9% is a printing
broker and no. 3 at 4.8% is the company that went out of business.
Incidentally nos. 6 and 10 are also printing brokers and we will be losing
no. 10 in August! She is our contract graphic artist/typesetter who sends us
a great deal of business but she is moving out of the area. 

If you eliminate Cash sales, printing brokers, and the one that went out of
business, the top 25 drops to 40% of our total sales with the largest
customer becoming the local hospital at 4.36%. 

As an aside, as long as I m rambling on, we have been working on our ratios
and the quick ration is now up to about 1.8:1--and that sure helped when we
took the hit from the customer going our of business and had to pay a lot
more taxes than we figured.  Last year those taxes got us into a cash flow
problem...this year we sailed through it in great shape!

Thanks again for taking a look at this.  I ve never analyzed the figures like
this. My first reaction is they are somewhat scary!  So I m looking forward
to your comments. Victor
*****
And, before we finished with the analysis, this message came from Victor.
*****
Subj:	Outside salesperson
From:	Victor@little.net (Victor Vickers)
To:	TomCrouser@aol.com

I recently fired two of our four full time staff, including our
counter-person. This has again raised the question of outside sales as I
figure out if a new direction is feasible. I m considering hiring a person
to work at the counter (inside sales) half time and do outside sales half
time. This person would replace our full time counter person.

Incidentally, to make the situation more of a mess, the other person I fired
was our press person. He was good when he wanted to be but just got a worse
and worse attitude that started affecting his work.  Anyway, press operators
are next to impossible to find in our small town. In fact, they are non
existent so that means always training a new one. Right now, I m farming out
much of the work to another shop that is a one-man operation. He is an
excellent press operator, a lousy business man and is starving for work.  He
if very interested in trying to work out a deal with us to do all of our
press work. He has left it up to me to name my price, saying 

I know you will
be fair.

 Any ideas on this concept. It has a lot of appeal but is also quite
scary being dependent on another shop!
*****
Tom s Response:

Well, Victor. Let s try to take first things first. Your largest customer
($20,000 per year) went out of business and stuck you with $5,000. Your sales
hit $300,000 and have languished there. And, you are considering every
alternative under the sun except the obvious which is go sell something to
someone.

No, don t hire a salesperson. No don t hire a part time counter person who
will also go out and sell. That s because since they know nothing about sales
and you no nothing about sales, they will tend to stay inside and
commensurate with you about the sad state of affairs. Accomplishment:
nothing.

Victor, do you believe in yourself? Don t you believe in what you are doing
(printing)? What is it about sales which gives you a problem? My friend,
Howard Hess (the Atlanta based sales consultant) asked our Sales Conference
attendees to write down adjectives describing salespeople. They first came
back with: slick; manipulative; non-trustworthy. . .you get the picture. But,
why? Most people who have a jaundiced view of sales feels that it is getting
the other person to do what they don t want them to do. That s pish posh.
Sales is problem solving. You have customers who would welcome you with open
arms if they were only given a chance.

How do I know? I saw it happen this week. Twice. I made twelve sales calls
with a printer in Dallas THIS WEEK. These were pretty much cold calls to get
the lay of the prospect and find out who buys the printing so we could do a
more directed attack. In TWO separate situations, the prospect THANKED us for
stopping by since they were going to have to go out and look for a printer.
That s TWO out of TWELVE, Victor.

So, my first reaction is that you have a jaundiced view of sales which is
keeping you from accomplishing what you need to do. In fact, I think you
would do anything EXCEPT this one thing which would save your business. Well,
Victor, get over it. Get some training. YOUR BUSINESS IS DYING RIGHT BEFORE
YOUR EYES!

How do I know? Well, you said it best. If you eliminate Cash sales,
printing brokers, and the one that went out of business, the top 25 drops to
40% of our total sales with the largest customer becoming the local hospital
at 4.36% Add to that the fact your sales are less than they were last year
and, presto, you have a dying business.

Actually, the Top 25 accounts provide you with 37% of your sales (but who is
nit-picking?) which tells me you don t have any real printing accounts,
except the hospital. You sell the hospital some $13,000 per year which means
all others in your top 25 average $3,200 each which is not much.

Now, here s a secret. Most very profitable printing companies have 50%-75% of
their total sales in 25 accounts or less. (Actually, I have seen only two
very profitable shops in my career which didn t fit this pattern.) That means
they have significant accounts which buy in the $12,000+ range. I first
noticed this pattern years ago in Pittsburgh working with a multiple shop
operation. We wanted to know the difference between the $1 million + shops in
the chain and the $300,000 shops. Findings: about five significant accounts.
That was it. And the pattern has held pretty true ever since. So, Victor, my
guess is you could change your outlook on life if you picked up an account
giving you some $50-$60,000 in business.

But, how do you do that? 

Send them direct mail!

 you say. Well, yes, it
helps. But these accounts are not impressed with a 10 cent copy coupon. In
fact, why do we always send the SAME direct mail piece to ALL of our
prospects? So, yes, we direct mail to them. But in order to sell to
significant accounts you have to go sell them. 

So, let s hire someone to do
it for me!

 Nah. If you have never done it, you ll never be able to lead,
coach, empathize with or understand the salesperson working for you. You will
expect great results without understanding the toil required. You will be
saying, 

Go take that hill, men. . . and when you return, be sure to have
your ammunition resupply forms filled out in triplicate.

 Never have seen a
sales effort work under a manager of people, but it works tremendously well
under a leader.

So, I will assume you are up to the task of leadership, Victor. Where do we
go from here? (Sales training for Victor might be appropriate here depending
upon his skill and experience. However, don t spend too much time in
preparation for we are dealing with a dying business here, remember? Just go
sell something to someone.)

Well, who do we sell? This, by the way, is about the time when the seminar
attendee says, 

Yes, but you don t understand my market.

 So, I asked Victor
to provide me with his zip code market area.

We counted a total of 1804 businesses in the three zip code market.
 Importantly, 675 of these companies have more than ten employees. And, more
importantly than that, given what I think is Victor s capabilities, I would
suspect the best prospects would be companies in the 10-49 employee group.
That group would be large enough to require real printing, but small enough
not to have extensive equipment of their own (this does not mean we overlook
anyone, just that we concentrate our efforts on the most likely ones). Now,
it certainly matters what these businesses do, but that information is also
available. In fact, for about $400, Victor can have the following information
on these companies within his market area in a computer format (once you buy
them they are yours forever to use as many times as you wish) :

Contact Name; Business Name; Address And Zip; SIC Code; Telephone Number; Fax
Number; Employee Size; Sales Volume; Year 1st Appeared In Yellow Pages (Age
Of Business); Office Size; And Credit Rating.  You also get an address
manager (computer program) which allows the 

slicing

 of data and the
printout of mailing lists and reports is included in the cost.

Now, does this mean anything? Not unless you are interested in selling
something to someone. If you are, it is a list of all of your potential
significant accounts within YOUR market area.

How do you go about selling to these prospects? Should you make an
appointment or what? What do you say? There are many good sales programs out
there which allow you to learn the steps and techniques of sales. I wrote one
a few years ago designed just for folks who had print shops, hated sales, but
had to anyway. It s entitled 

Successful Outbound Sales

 and is in an
audio-cassette format (more information at the end of this message). So, you
get some training and go to it. But, even if you can t afford or can t obtain
training, go to it anyway. The biggest failure of the salesperson-owner is
that they just don t make the calls.

So, let me revisit your options as you listed them.

1. Add different services like mailing, ad specialties, etc.  A possibility
but doesn t seen to attack the basic problem of few new customers and no new
big customers.

And it doesn t solve the problem that one has to go sell these additional
services.

2.  Chuck printing altogether and try to become a 

Kinko s

...  

Don t see this happening at all considering the investment AND considering
the size of your market. 1800 firms isn t a lot.

3.  Increase advertising/marketing.  We are doing this. We are now doing
monthly mailings to 1600 businesses, daily spot ads in the newspaper and have
also thought about TV/Radio ads, but have heard so much negative about that
approach for a small shop like ours...

Would rather see you mail to 500 targeted accounts with a warm body following
up in sales. The top fifteen methods of advertising in the small press
printing business is: 1) Direct Mail 2) Sales Calls. . .15) Yellow Pages. As
for numbers 3 through 14, they don t exist. Everything else is below 15.

4   Have me become the outside salesperson.  This would probably be the
best of all worlds.  It is also the worst.  The truth is, I hate sales. I
work on the counter a lot but even dislike that.  When I have done outside
sales they have been a miserable failure and I m sure it s because of my
attitude. I think I m a good supervisor, good technician, good manager, good
organizer, but I m not a salesman.

Well, grow up and change your attitude. Who is the genius who got us into
this business in the first place? Did the genius investigate the ways
printing shops get sales? 

5  So that leaves outside salesperson. If it is a viable alternative it is
the first thing that excites me as a possible way to go.  It would leave me
free to manager, which I enjoy, and hopefully overtime increase sales. 

Of course it excites you. It s an abdication of your responsibilities and
will allow you to continue playing while someone else does the important
work. Kick yourself in the butt and go sell something to someone. And have a
nice day. Good luck and keep in touch.

Happy Trails, Tom
***** *****


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***** *****
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