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The Truth Is Almost Never What It Seems

“Bob” and “Joe” are salespeople on a 21-person team where everyone is paid a small salary and commissions. Bob and Joe are great friends, and are the top producers on their team. Together they produce 83 percent of the company’s sales volume and average $250,000 a year in salary and commissions each.

At every monthly meeting they get the pat on the back for being top producers. Depending on which guy wins in any given month, he gets the front-door parking spot for the next month and his picture on the wall.

At the end of the year, one of them always wins the sales trophy and the all-expenses paid trip.

And all the other salespeople scratch their heads in wonder at how these guys seem to pull this off without ever looking like they're doing any work.

Speaking of the rest of the team, the other 19 salespeople produce 17 percent of the company’s sales and average $47,000 a year in salary and commissions. And no matter how many times you've changed people, tweaked compensation, moved managers or begged, this just doesn't seem to change.

Unfortunately, the stockholders and board of directors has noticed. And since you are the executive who built this team, you are the one who was told, “The fat must be trimmed from the sales budget or you’ll be trimmed from the company.”

At this point, which of these two groups would you look at to trim some of that fat?

• 2 salespeople who cost you $500,000 and produce 83 percent of your sales.
• 19 salespeople who cost you $893,000 and produce 17 percent of your sales.

Admittedly this is an absurd question without more facts. But for conversation's sake, which would you choose to let go based on current knowledge? Would it be the producers or the underachievers on the team?

Easy choice, right?

Let’s add another factor to your decision.

Bob and Joe each work a total of one hour and six minutes a day, but the rest of the team works a full day and sometimes more.

Who would you fire now? Any change?

Have I at least piqued your curiosity?

More factors needed? Fine.

Within the 19-person sales group there are three natural leaders, 12 hard-working people two slackers and two rookies.

Between you and me, the slackers are toast. But that's just a short-term fix that doesn't address the real problem. So let’s add a few more factors and increase your understanding of how this happened so you can make a more informed choice.

Your company brokers used goods that come from many sources, and you never know at any given moment what will be for sale tomorrow. You’ve built a bunch of systems to move the inventory through the warehouse, and one of those systems is designed to inform the entire sales team of what’s available, so they can get out there and sell it.

It's a fast-pace sales environment, and everyone, including your customers, knows it.

At exactly 9 a.m. and 1 p.m. every day, the system releases the "new inventory for sale" counts to your entire team. There is a rule that says “Whoever gets a truckload under contract first, wins.” (You want competitive salespeople, so you’ve leveraged competition everywhere.)

Of course, one of the fall-outs of this rule is that salespeople and customers come to agreement too quickly, and occasionally a customer cancels a deal. So your inventory system lets the salesperson tag the inventory as “Under Contract” once they have a verbal order, making it off limits to the rest of the team. But it also allows them to change it to “Contract Canceled” up to 30 minutes later, if the customer doesn't commit to the electronic contract.

Of course, you would rather have contracts that are solid, so each month you reward a family dinner gift certificate to the salesperson with the least amount of canceled contracts.

Something that has always caused you wonder about Bob and Joe, however, is they always seem to have the most canceled contracts. But you’ve always laughed it off, because they are the top two producers in your company and they can afford dinner out whenever they like.

Based on this new intel, have you changed your mind about what fat to trim?

Probably not. But the story isn’t over, is it?

What if you learned Bob and Joe are the top salespeople, because they’ve figured out how to get into the inventory system at 8:57 a.m. and 12:57 p.m. – three minutes earlier than the rest of the team.

Here’s their entire sales process (this gets implemented twice each day):

• 8:57 a.m. – Begin searching inventory for truckloads of the easy-to-move stuff. Note the lot number of every large quantity of the hot items my customers will want right away.
• 9:00 a.m. – Start tagging the best lots with “Under Contract” so the other salespeople can’t get to them.
• 9:05 a.m. – Blast my customers with the inventory list that’s available. Set the starting price and give them a 10-minute window to respond with their best offers.
• 9:15 a.m. – Blast all customers with the current bids and give them one more chance to increase their offers.
• 9:23 a.m. – Close the sales based on best offers received.
• 9:25 a.m. – Change "Under Contract" to “Contract Canceled” on all lots not moved.
• 9:30 a.m. to 12:57 p.m. – Do whatever I want.

Any change in thinking about who you would fire now? Is the fact that Bob and Joe are cheating enough to cross your ethical boundaries?

I’ll admit, it’s a complex choice. On one hand you must congratulate these guys on their creative approach. But on the other, you must wonder what else they might be doing that goes against your ethical standards and beliefs.

And as an executive at the company, your obligations are to your stockholders, your company and the entire team first, and to any single employee last.

Now let me ask you a totally different set of questions that go to the core of the point I'm making.

Suppose you had built your sales team so that everyone was paid a salary to implement the company’s sales systems. And suppose you gave the dinners to the people who found ways to improve the system itself. And suppose you gave bonuses to the entire team whenever the changes they made in the system increased the volume of sales that system produced.

• Would 90 percent of your team be sucking in 64 percent of the team’s salary budget while producing only 17 percent of the result? (Would you even be carrying 21 salespeople.)
• Would Bob and Joe have horded their secrets, or would they have shared them with the team?
• When they shared their ideas with the team, is it possible one of the other team members might have taken the “create a short-window auction” concept and perhaps figured out how to use that concept to move some of the less-desirable product?
• Would you be spending $1.4 million on your sales team's salary?
• Would the stockholders and board of directors be on your ass to trim the fat -- would you even have any fat to be trimmed?
• Would your own job be on the line?

This is but one example in hundreds of why sales commissions must die.

And yes, it's an absolutely true example.

Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

Lifeblood

I've explained the following numbers in person at least 500 times over the past 30 years. I've also shared this information in speeches on several occasions. And every time, including yesterday with a young salesman, I get great feedback on both the simplicity of the thinking and the objectivity of the list.

I learned this thinking from Dad in the '70s. Admittedly, the numbers have changed over time -- with the explosion of the Internet in the '90s and its virtually free methods for communicating with the masses, the numbers grew substantially. But the basic concept and its ability to positively impact an individual's success has remained the same.

So today, I decided to put it in print. I hope you enjoy the idea and its objective nature as much today as I did when Dad grilled it into my head in my youth.

It's Not Who You Know, It's What They Think About You

"Your Rolodex is the lifeblood of your business," Dad said. "Treat every person in it as though he is the most important person you will ever know, because he is."

The Rolodex pictured here is exactly the one I remember from my youth -- it sat on Dad's desk next to his rotary phone. I remember countless times watching him roll through these cards, penciling in birth dates, children's and pet's names, favorite restaurants -- anything he knew that would help him strengthen the relationships he had with the people he believed controlled his future.

Dad built a residential remodeling company, fed, clothed and housed a wife and three kids, and built a rental property portfolio that still supports him, Mom and my niece Jessica who is disabled -- all from the contents of that little brown box.

I hope you enjoy his lesson as much as I have.

One Relationship At A Time

Dad never worked further than 30 miles from his house in his life, and his Rolodex probably never contained more than 1,000 names. Given the flat world in which we live, I've updated the numbers below to reflect our reality. Still, the concepts are the same as he taught me, because they work.

Your database of contacts is indeed the lifeblood of success. I'm sure you've heard that before, but guessing you never had someone boil it down to specific, objective numbers -- a measurable goal toward which you can strive.

Following is the configuration of database contacts -- people with whom you communicate for business purposes -- I believe will allow any individual to achieve stratospheric success in any endeavor. More may be better -- these are my minimums.

• 20,000 Followers
  I describe a "follower" as a person who has decided to listen to your opinion when you voice it. That's it. Nothing more. Not someone who agrees with you -- just someone who will listen.
   
• 2,000 Professional Acquaintances
  A professional acquaintance is someone you know through your business who, if you leave a voicemail that says nothing more than "I need to chat with you for a few minutes. Please give me a call when you can." will return your call. And you, of course, will do the same for him or her.
   
• 200 Walking Ambassadors
  I define a walking ambassador as someone who cares at least as much about your success as he or she cares about his or her own. These are the people who are literally more excited to give you a referral or recommendation than they are to receive one themselves. Of course, the only way to get 200 walking ambassadors is to become a walking ambassador for 200 people. (Note: This is not a back-scratch trade. It won't always be the same 200 people, and it won't work if you keep track. You must simply become a staunch advocate for others in whom you believe and trust karma to do its thing.)
   
• 20 Adopted Souls
  This is my very favorite category -- one I added myself instead of learning from Dad. Its the list of people you simply cannot resist helping because they touch your heart. It's the people with huge passion but no experience. The ones with soft spirit and bright eyes. These are the people you simply decide to help "just because," and from whom you will never accept a dime in payment. (I'll credit Mom with this attitude -- her adopted souls list is probably larger than my followers list.)
   
• 5 Business Partners
  I hate the word "can't," so I won't say you can't reach stratospheric success levels alone. But I will say it is easier and a whole lot more fun if you develop, nurture and leverage the five most important business relationships you'll ever have. By "partner" I don't exactly mean legal partnerships, although those can be part of this category. I'm talking about people to whom you've married your success, and who have married their success to yours.
   
• 2 Lifetime Mentors
  I know everything there is to know about sales -- just ask me and I'll be glad to tell you. It's that type of arrogant confidence my clients want, and for which they pay. But it wasn't until I realized how stupid that statement really was that I added this last category and finally got my own confident arrogance the hell out of my own way. No matter how smart you may be, you don't know it all, and until you open your mind to the wisdom of others, you'll never be wise enough to share yours.

This is the goal I have for my Rolodex -- the minimum numbers toward which I strive -- and the numbers I believe every entrepreneur or salesperson with stratospheric dreams must have.

People are the lifeblood of your success. The more people, and the stronger each relationship, the more success you'll have.

Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

John McCain Is A Salesdrip

First, let me frame what I'm about to say with a few factoids so you know from where I speak:

• I can't remember ever writing a political commentary in my life. Mostly, because there's so much salesdrip behavior in politics, if I started, I'd never have time to get anything else done.
• This one just pissed me off, however, so here I am.
• All politicians spin the hell out of whatever the other guy says or does -- they drop context to change the meaning of the statement all the time. I think it stinks to high heaven, and I believe it's one of the reasons the vast majority of Americans don't go to the polls at all. I mean, if we "buy" from people we know, like and trust, how can we like and trust people who readily twist other people's words? (Especially when they do it believing we're too stupid to see through their spin.)
• I am not a Democrat. I am not a Republican. I am not an Independent. I hold no party affiliations whatsoever, because I believe different times call for different measures. So I tend to vote for the person I believe can best do what needs doing at the time. I tend to side with the Republicans on most business issues and the Democrats on most moral issues, although that is never an absolute.
• I am still on the fence about whether to vote for McCain or Obama. I'll probably make my final decision days before I actually vote, because for me in this election, it's more of a measure of which candidate has the most class. (Seriously, I think either one could do a decent job.) Although I will admit that I'm leaning toward Obama at this point.

Why am I calling McCain to the mat for salesdrip behavior?

Yesterday, when talking about McCain's campaign, policies, attitudes, etc., Obama said the words, "You can put lipstick on a pig but it's still a pig." (Words McCain used to describe Hillary Clinton's policies a year ago, by the way.)

McCain almost immediately put out an add that says "Obama on Sarah Palin: You can put lipstick on a pig, but it's still a pig."

John McCain, Obama WAS NOT speaking of Sarah Palin when he used that phrase, and you damned well know it. So as long as you stand behind your ad you are a lying son of a bitch and you are a salesdrip of the worst magnitude. You should be ashamed of yourself and you should be man enough to admit you screwed the pooch on this one and apologize.

You should be better than this if you're going to run this country.

Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association