Is a 100% Commission Plan The Best Way To Compensate Salespeople?

By Robert Estupinian

As the economy continues to challenge many businesses the question of effective compensation systems becomes more of a concern for many organizations. A recent article in USA Today highlights some of the concerns that many people have today about commissions.  (http://www.usatoday.com/money/economy/2008-06-01-commission-tips-pay-income_N.htm)

 

Without a doubt the life blood of the business is sales. Without sales nothing happens, no revenue and no profits. Yet, like marketing and advertising costs business owners want to make sure that they are getting a return on their investment. As such the question on how to structure the compensation for these salespeople is of major concern. And when times are tight reducing or eliminating payroll expenses is a serious consideration. The last thing any business wants to do is have a payroll cost and no return associated with it.

 

Therefore, most organizations usually see a 100% commission program as a basic form of compensation when it comes to paying their salespeople.  Under this compensation plan the salesperson is only compensated when they bring in a transaction.  Often the salesperson is considered an independent contractor meaning that the employer is exempt from having to pay the typical employer expenses such as payroll and benefits. In some cases such independent salespersons may even represent many other comparable products.

 

The obvious benefit of the 100% commission salesperson is the cost of employment and assumed low risk of hiring.  However, one concern with this type of compensation program stems from the level of control that a business can have over the salesperson. In order to preserve the independent contractor status the internal revenue service has outlined several rules that restrict the amount of control that a business can have over its independent contractors. Violating these rules can then impose severe tax liability on the organization. For example, businesses have to be very careful on requiring independent contractors to work specific hours, having to attend company meetings, among other things.  More information about this issue can be found at:

http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

 

One thing to remember is that there still is a risk of hiring the wrong person regardless of the financial cost. I have worked with organizations that felt they were not financially impacted from a non performing salesperson simply because they did not have to pay a check. The fact is that a non performing person can have just as much if not more harmful effects on your bottom line. The first thing to remember is that if you hired them they represent you and your company.  Their behavior and lack of production has an eroding effect on your whole operation and takes away valuable opportunities in the marketplace. A non performing salesperson also gives management the illusion that they have a sales force and can end up affecting projections and the allocation of resources.

 

 

There is common misconception that 100% commission programs attract less than qualified salespeople. This is simply not true. Many top corporations including the major wire houses and high end consulting companies consistently attract people with very impressive resumes and educational backgrounds. To these individuals the form of compensation is attractive because of the opportunity to make as much money without limitations. The idea of a salary would be limiting to their financial goals. Therefore, the lack of salary is not a detriment but rather liberating and the value is in the opportunity the position affords.

 

So should you consider developing or changing your sales force compensation to a 100% commission program? The answer depends on the individual business and requires taking a look at a few key areas including but not limited to the gross margins and company culture. Like anything there is no “one size fits all answer” to this question. The worst thing that most organizations do is adopt a compensation program without really doing the analysis first. The analysis is not something that should take a long time, but not doing it can cost you dearly.

Why Should Business Owners Care About Sales Strategy?

By Robert Estupinian

 

During slowing economic times business owners will consider a sales training program as a way to increase revenues and profits. While it is true that sales training can improve the bottom line it is as important that the right kind of sales training be implemented and coordinated with a well thought out sales strategy.

 

Simply teaching salespeople sales techniques will not necessarily translate into higher sales. Yet much of the time this is exactly what is done by a lot of organizations. I have had situations where I have been brought in to “increase the conversion rate of the salespeople”, or asked to “teach them to close better”. Almost without an exception the solution lies not in sharpening their sales techniques, but in improving their sales strategy.

 

Sales strategy is the “how” of “how will we approach the clients and get them to buy?” There are many different ways to approach the prospects and the salespeople need to be in line with the process so that they complement rather than interfere with the process.

 

This begins with understanding who the target audience is and why the organization is targeting them. Sure, I understand the obvious answer; the target is anyone who has a need and the ability to buy our product/services.  But the fact is that it goes way beyond that. What I am referring to really is about understanding the needs, pains, and desires of this target audience.

 

This goes way beyond the superficial information of who they are and what they do. The market intelligence that I am referring to is the type of information that will make the difference and leaves the prospect saying, “This Company really knows me”.  When that happens the sales process is simplified and the prospect walks themselves through to the purchase.

 

Once the organization has this information they are in a better position to develop a marketing and sales strategy that complements each other, and unifies that message to the prospect. There are several well documented methodologies for doing this type of research, and it does not have to take a long time or a lot of money. In fact, I have performed this type of analysis for various organizations, and developed the whole process in a very short period of time.

 

The bottom line is that a good sales strategy makes all parts of the organization run smoothly and is one often a missed opportunity to maximize your profits.

 

If you would like any more information or have any questions about this process, please feel free to contact Robert Estupinian at 408-879-7280 or email at Robert@mutualvisionllc.com

When Going After A Star Performer Is A Bad Thing.

By Robert Estupinian

A few weeks ago I was sitting down talking with a business owner who was interested in recruiting one of the top salespeople from a major competitor. Based on the stories she shared with me about this star performer, the possibility of having the salesperson come to work for her was a great opportunity. However, I want to share with you some of the thoughts that came to mind and that anyone considering hiring a star performer should consider.

 

Past performance is not indicative of future performance.

The annuals of most sales organizations are filled with the accounts of those too good to be true hires that never produced. In some cases they did produce, but the results were less than lackluster, and yet the compensation they received was significant. There are many reasons why this occurs.  First, many times the salesperson may be successful because of the structure and support that they are receiving at their current employer. It could be as easy as having an administrative assistant that goes beyond the call of duty regularly to support the salesperson. This was the case with one “top” mortgage loan officer a few years ago. Once they were recruited away this “top” producer was never able to obtain even a percentage of the sales that he achieved before. Upon investigation it was not the salesperson, but rather his processor that was really doing all the selling and follow-up.

 

Secondly, any company thinking about hiring a star performer must make sure that they are not inheriting someone else’s headache. At times the legend of these star performers runs long after they last produced. A common joke among commercial brokers is the account of the broker who continues to talk about the big multimillion dollar deal that they closed. The punch line is that the deal occurred two years ago, and they have not done anything since. Yet, when these commercial salespeople they speak about the event as if it just happened.

 

Similarly, it is important to look at the selling environment at the time that the results were obtained by the star performer. This is never more important than in today’s selling environment. Yesterday’s star producer may not be able to compete in today’s challenging economic environment. As things get tougher there are those salespersons that will leap from one company to the other never producing at any of them. A year ago I ran into this situation with a client who hired a “top” producer from a major bank. Previous to working for the major bank she had worked for a smaller regional bank and had a lot of success there. The major bank hired her away and then my client hired her away from the major bank because of her legendary abilities. As you can imagine once at my client’s company she did not produce at all and they ended up terminating her soon afterward. Upon looking into the situation I discovered that when she worked for the small regional bank she was selling in a 100% virgin territory. There literally was no other competitor for 100 miles. By the time that my client hired her she was competing with seven other comparable service providers and she did not have the skills to effectively produce under those circumstances.

 

Good fit is more important.

A good question to ask anytime you bring anyone into your organization is, will this potential hire be a good fit for the team and the organization?  This single question will make more of an impact than simply looking to hire someone that has the potential to bring in the numbers. Let me explain by virtue of a true example. A financial services organization that I consulted with was able to recruit away a “top” investment advisor. This advisor was able to bring in the numbers faster than anyone ever had in the history of the firm. His numbers in the first 60 days were literally 200% better than anyone had previously been able to accomplish during the same time. Management was elated and the future appeared to be bright for both the firm and the new advisor. However, by day 90 complaints began to come in from the individuals that this advisor had sold to. By 120 days from his hire date he was still bringing in business, but the firm was also cancelling and refunding clients.  After a careful review of the situation it became apparent that this advisor would say and do anything to get the business including misrepresenting the facts. 

 

In another situation I ran into an organization that hired a “top” producer who did perform ethically, but ended up tearing down the entire sales team. One reason was the ego needs of this top producer. He required perks and special attention that was not available to the rest of the sales team. Whatever this top producer asked for was granted including price concessions and bonuses not available to the rest of the sales team. To add insult to injury, the top producer looked down on the rest of the sales team as being inferior to him. He refused to attend any sales meetings or work with any other sales team members. In short order the special treatment and his arrogance began to affect the rest of the sales team and slowly they began to leave the organization. Once this happen his production was not sufficient to cover the loss of production from the sales people that had left. The true cost of losing those good sales people was more than the profit that this “top” producer had brought in.

 

The foregoing information is just a sample of the few things that any business owner should consider before hiring a star performer. This being said, this does not mean that you never hire star performers; rather you need to take into consideration many aspects of the hire rather than just the numbers that they can potentially produce. Working with a sales consultant that can investigate and evaluate the fit and performance of a star performer is one way to maximize your success and at the same time minimize your frustrations. If you have any questions about this article or would like to discuss your situation, I welcome you to contact me at 408-879-7280 or email me at Robert@mutualvisionllc.com

How to Screw Up a Sales Incentive and Compensation Programs

By Robert Estupinian

 

A lot of business owners have told me that they believe that sales compensation programs failed or are not effective. Another common concern is the perceived difficulty of developing an effective sales force compensation program. The fact is that a properly designed incentive and compensation program can be easily implemented and can actually become an asset of the company if done properly.

 

When looking to develop a sales compensation and incentive program you can begin by avoiding five of the most common mistakes companies have made. Let’s begin to examine some of these mistakes.

 

1. Designing a Program That Does Not Involve Input From The Sales Department.

I have seen a lot of compensation programs that were designed by the CFO and his staff. These plans are often DOA (dead on arrival) by the time that the sales manager received the “good news”.  I was present at one company, when the new incentive program was introduced to the sales staff and the sales manager was totally unaware that the company was launching an incentive program. As you can imagine the program failed miserably and the sales manager ended up leaving shortly after its introduction.  By not including the input of at least the sales manager and preferably a top producing sales person, you miss a great opportunity to really understand what motivates the sales team and learn about their expectations. I am not saying that the numbers are not important. After all the sales incentive and compensation program must produce a return on investment that is a true benefit for the company first and foremost. However, in order for the program to be of real value to the company, as well as the sales team, you need input.

 

1. Changing The Rules of The Incentive Program

Nothing will demoralize a staff more than changing the rules in your incentive or compensation program once it is launched. At times this happens because the program was launched too quickly without looking at all the financial aspects first.  A common perception is to change the program because too many salespeople are hitting the targets to easily. 

 

1.  Paying Late

To a salesperson the incentive and compensation program is all too important. This is not an extra bonus for them. Rather, this is the other half of their compensation. Paying late communicates to them that the company does not care about them and that the incentive is not that important.   Another dangerous tendency is placing policies that delay the payout of incentives. These policies can actually create a situation where salespeople begin to do unethical things. I discovered this behavior occurring with a major mortgage company a few years ago. According to the policies of this particular company, a salesperson would only receive their commission on transactions that closed by the last working day of the month. Otherwise if the transaction closed one day later they would have to wait a full month before that commission would be paid. The result is that these salespeople began to do whatever was necessary to close a transaction to the detriment of the clients.

 

1. Sending an Incentive Check Without Details.

Alright so the company delivered the incentive check on time, but there is nothing on the stub except the amount of the check. This is at best is simply frustrating to anyone who has worked hard, and has a significant pipeline of business. The first thing that most salespeople wonder is if there is a transaction missing from the check, or has a mistake been made in the calculation. This results in time being wasted by a lot of people trying to get the details of the check amount. The whole thing is perceived as confusing and unprofessional by the sales staff  and this can develop into a disgruntle employee.

 

1. Making The Program Too Confusing.

A program that requires an advance degree in applied mathematics is simply not going to work. In fact such programs have the opposite effect with salespeople. They are not motivated but demotivated and begin to look for work with the competition. A program should be easily understood and administered in order to be effective for all concern. Having a simply but effective program also helps in being able to attract and retain salespeople.

 

We could go on and on about the various mistakes that companies have made trying to implement an incentive and compensation program. The fact is that an good Incentive and compensation program can be designed that increase the bottom line and helps retain and attract good salespeople. The secrete to putting it all together is having a sales consultant that understands both the needs of the business to increase their return on investment and the sales teams needs.

 

If you would like more information on Sales force compensation please contact me at 408-879-7280.

The Use of Independent Sales Representatives

By Robert Estupinian

 

One area that I often consult with involves helping organizations that want to expand into different territories in order to increase their market share.  Many times the market opportunities are located in different areas where the organization does not have an existing office.  Although the market potential may have been properly investigated in advance there is nobody in the organization that has personal knowledge or contacts in the proposed area.

 

At times companies try to hire a salesperson, train them, and then set them lose in the territory hoping that they will be able to mine the market share that their research showed. In most instances I find that these companies end up hiring and training many salespeople without ever realizing a return on their investment.

 

A different approach to this problem is using the services of independent sales representatives. These folks are seasoned sales professionals that not only know the sales territory, but have established contacts in that area. In most cases you will find that these professionals need very little training and very little supervision. Often you will find these salespeople selling complementary services and products and thereby allowing your organization to benefit from their established relationships. An added benefit is the cost involved. Since these sales professionals are representing more than just your company they are 100% commissioned thereby limiting your labor and benefit costs.

 

By using this type of sales professional you can test the market to see if your product or service is viable before investing heavily into the new market. The length of the relationship can take many forms from a temporary engagement to hiring them full time to work exclusively for your organization. Remember that managing these professionals is different than managing the rest of the sales force. By their nature independent sales representative do not like to be micro managed and instead like to be considered more like valued vendors. The beauty of this arrangement is that you are not locked in or highly invested in the relationship and in most cases you can terminate the relationship rather quickly.

 

A few years ago a new manufacture of medical implants wanted to offer their products in Northern California but was dealing with limited resources. I recommended that they consider using the services of independent sales representatives in the targeted marketing area that were selling complementary products to the same audience. Within a month we had identified several independent sales representatives that sold medical equipment to the doctors in the Northern California area. In less than ninety days this new manufacture had effectively established itself in the market and was beginning to enter new markets using the same process.

 

If you would like more information on how to incorporate an independent sales representative in your business, please contact our office.

When Prospecting and Selling Do Not Work Well Together.

By Robert Estupinian

 

A couple of years ago the Harvard Business Review featured a research article about the ability of salespeople to handle more than one task. The research showed that on average most salespeople were really good at only one thing.  The other tasks that they were asked to do were either not done at all, or done below an acceptable standard. This is a concern because the fact is that most sales positions these days  require salespeople to perform various tasks.

 

One set of tasks that are customarily required to be accomplished in tandem by most organizations is prospecting and selling. In a lot of  sales organizations it is believed that the salesperson is expected to find the leads, cultivate them, set the appointment, identify the needs, develop solutions, present, close, and then do the follow up. That is a lot for one person to be able to do well. Just looking at the list of things to do it is reasonable to understand why on average a lot of sales people will not be able to do the whole process well from beginning to end.

 

I have discovered that those that are good at selling usually do not like prospecting. This is not to say that they will not ask for business or seek an opportunity to offer their services.  Instead, when I am referring to prospecting I am referring to finding leads, qualifying those leads, and set the appointment. These are inherently a different set of skills than the skills necessary to identify needs, develop solutions, present, close, then follow up to be sure that everything goes well.  When organizations require their salespeople to do all these tasks they often complain of poor sales performance.

  

Some of the current business research demonstrates that just because an employee is good at prospecting  it does not mean that they are necessarily good at selling. Many years ago I came across this situation when I was building a sales force for a new financial planning firm. In the process of doing an interview I discovered a very bright young lady who told me that her best attribute was the ability to set up appointments and get people excited about the appointment. She was so confident in this particular skill that she asked for a phone and immediately set up an appointment for one of our staff members. As you could imagine we were all very impressed and hired her on the spot. What we soon discovered was that as good as she was at making appointments she was completely the opposite at conducting the sales meeting. Despite working with her on developing the skills necessary to be good at consultative selling, she was simply not going to be good at it. Instead of getting rid of her, I decided to use her to set appointments for the other financial planners who were good at consultative selling, but hated prospecting .  The results were beyond imagination. The new financial planning staff was elated to know that they were getting very good appointments, and they began to close at an above average rate. Later the firm discovered that having this prospecting system in place became a major draw for recruiting other financial planners, and also prevented other firms from stealing away their planners.

 

The prospecting system proved to be the most advantageous strategy that the firm ever employed, and took them from being an unknown in the financial services world to a force to be reckoned with in less than a year.

 

This concept is nothing new and is employed by many of the large companies. They recognize that there are differences between prospecting and selling. However, they may take this concept deeper and place personnel into other areas such as technical sales support and account maintenance.  I am not saying that this is necessary for all organizations. A lot depends on the complexity of your sales process and the size of your organization.

 

Nevertheless, it is important to take a look at what is involved in your selling process and develop the systems that will allow your staff to maximize their abilities in the market place. So what is best for your organization depends on host of variables and this is an area where a sales consultant can walk you through the options.

When Not to Promote a Top Salesperson to Sales Manager

By Robert Estupinian

I recently had the opportunity to work with a small software business that had a sales team composed of three sales people. Recently the company had just lost their sales manager and they were trying to decide if they should make one of the salespeople the manager or go outside the company in search of a manager. The president of the company was a fellow who not only developed the software, but had marketed and sold it himself. This remarkable gentleman had taken a concept from inception to a viable business. Now his company had grown to such a degree that he was hiring others to do much of the work that he once did. With hiring came the headaches and the frustration that others were not doing things the way he used to do them. His most recent disappointment was the departed sales manager that was not getting the salespeople to produce despite the fact that only a year earlier this manager had been the top salesperson. The president was also upset that the manager’s own personal production had totally evaporated. The president believed that the manager was simply not doing anything and there was no other choice but to fire him.  I was shortly brought in after the departure of the sales manager to assist in locating a new sales manager for this company.

One of the common mistakes made by a lot of employers is to hire a sales manager based on that person’s personal production as a salesperson.  Many organizations make this mistake because the concept makes logical sense. After all who better to motivate, train, and supervise other salespeople than the person who did the work the best?

However, research has shown that in most situations top salespeople are often lousy sales managers. One reason for this result is that being a top producer and managing  a sales team require two different sets of skills.  The fact is that rarely do people posses both in equal amounts. This is not to say that someone who can’t sell can therefore be a sales manager. Rather a good sales manager posses good sales skills, but has superior strengths in being able to train, motivate, hire, promote and lead sales people.

A second reason is that top sales people are often motivated by different things. Many top salespeople are motivated by the hunt and the glory that comes from beating all others. A sales manager should not be in a competitive environment with his salespeople, but rather should be available to provide support and direction.

Third, not everyone who is good at a particular skill is also going to be good at teaching that skill to others.  Let me explain, many years ago I was asked to go skiing with some friends who were really good at the sport. I had never skied before and they naturally offered to teach me. I was assured that once I was on the slopes it was going to be easy because they were so good at it. As you can imagine the day was one frustration after another. Despite their great abilities I could not pick up what they were trying to teach me. So, I hired one of the pros and that allowed me to get more out of the experience as well as keep my friends from killing me.  The point is that the same thing often happens with top sales people. They are good at selling but that does not translate to them being able to coach others on increasing their sales success.  A manager needs to have a lot more skills than just being able to sell they need to be able to motivate, train, hire, and manage the various personalities.

Lastly, it is important for the sales manager to work effectively with the organization and be able to incorporate the overall mission of the company into the sales operation. The last thing that any company needs is a sales manager who believes that it is important to make sales at all costs. The sales manager must be able to work effectively with all the other key departments for the organization to function well.

Just Showing Up is Not Enough

By Robert Estupinian

 I am often told by many organizations that their sales force needs help in being more productive and that they feel this could simply be achieved by getting them to make more sales calls. The common complain is that these salespeople are just not making enough calls to bring in the numbers that the company needs. Most owners sincerely believe that the path to succeeding in sales rest in simply making more calls. The reason is that in a lot of cases these owners are formerly great salespeople themselves and whenever they wanted to increase their production they would simply make more calls. However, what is often overlooked is the quality of the calls that the salespeople are actually making. Quite often I find that it is not that the salespeople are not making sufficient calls, it is simply that they are showing up, and basically winging it. What I find is:

1. There was no advance preparation done before making the call. They simply walked in hoping that the prospect would tell them what they needed.
2. They have not qualified the prospect to see if they should even be calling on them.
3. All the prospects are treated equally.
4. They don’t know if they are talking to the right person who will be able to make the buying decision.
5. There is no objective that is set for the visit.
6. There is no prepared presentation.
7. There is no value in their presentation or visit. So, bottom line they have no reason to be there.

As you can see doing more of this inefficient activity will not produce more sales and at worse it will lose you sales. Many of the top selling organizations take the time to make sure that their salespeople are fully trained to make the very best presentations to the right prospects. These organizations will not leave anything to the imagination of the sales staff. They will insist what the sales professional that represents their company will dress like right down to the type of pen that they will use. This principle is true for whatever the size of your organization and despite what you are selling. Marketing expert and noted author, Jeff Polish, demonstrated this principle with carpet cleaners. He was able to show that carpet cleaners could easily increase their profitability by simply formulating their presentation, and improving the appearance of their crew. So if this is true for carpet cleaners how much more is it important for your company? Take the time to develop and train your sales force so that they are just not showing up.

How to Maintain an Objective Prospective When You Need Sales NOW

By Robert Estupinian

A common approach by organizations when the sales are disappearing is what I call the shotgun approach to sales management.  This approach is categorized by throwing every conceivable idea at the problem all at once in hopes that something will work to turn around the lagging sales.  A few years ago I was brought in to consult with an organization that  was experiencing problems with the effectiveness of their sales team. The organization had been experiencing a series of months where it appeared that each month the sales force was bring in less sales than the month before.  The effects were very serious as revenues were dropping in proportion to the drop in sales.  Just prior to contacting me, senior management had decided that the best way to tackle this problem was to get serious fast.  So the following day a single memo went out that told the sales force that they now had: to increase their minimum sales quotas, had four new reports to produce, and then offered them a sales contest.  As you can imagine the results were less than favorable.  After a month the high performers had left for the competition and the average producers were fumbling around trying to make sure their reports were properly submitted.  Management received their requested reports, but the information was useless.  The worst part was that sales were now worse than before the intervention.

Although it is easy to criticize this approach it is a familiar approach that a lot of organizations utilize when sales have just about evaporated.  It is often very difficult to maintain objectivity when you are in the middle of the firestorm, and want to get  relief fast.  As a professional sales consultant I am able to come in with an objective prospective and see opportunities amidst the crises.  This is not to say that the management of these organizations that I work with are lacking in anyway. Rather, as  research has shown, sometimes the best ideas come from outside the organization rather than from within.  This is true for product development as it is for performance issues such as sales.  Secondly, by focusing on sales performance and working with a host of varying situations I can bring new and innovated approaches to many problems.  The benefit of using a consultant during these times is that organizations avoid the shotgun approach to solving their problems and begin to attack the problem with a surgical targeted approach.  This often leads to increase in sales in less time while maintaining the morale of the sales force.

How to Evaluate Your Sales Team When Things Slow Down

By Robert Estupinian

In my last post we began to discuss the different ways that organizations can evaluate their sales teams in order to determine if they are producing at optimal levels. The best thing about these comments is that they are applicable to any size business regardless of the size of the organization.  Yet, often these vital steps are ignored in hopes of getting a quicker result. So let’s continue to review what you can do in evaluating your sales team.

One of the first things to consider is to take an honest look at the market you are selling in and what is truly happening in that market. The prolific writer and marketing expert, Dan Kennedy, once stated that “the best marketing could not overcome the worst economics”. In other words, there are times when the decrease in sales results is due to market conditions rather than under-performing salespeople. I once came across such a problem while consulting with a central coast company. This particular company was concern that one of their top salespeople were no longer producing the numbers that they had produced for years. Upon doing a review of the market place we determined that this salesperson was actually bringing in 82% of all the available business in that market. In fact the market was so bad that many of the competitors had since left the area for greener pastures. This salesperson had not only survived but actually had taken over much of the market share left behind by the competition. When we now explain the same results under this new view we can see that this salesperson was actually exceptional rather than a slacker.

A second step to consider is doing a proper evaluation of the lead generation system to determine if the program for obtaining leads is still valid. This step needs to be evaluated for both the organization (if leads are generated through a central program), and for the individual salespeople (if they generate their own leads). As I stated in the previous post, this is where we want to make sure that quality is being looked at rather than quantity. About a year ago I had the opportunity to work with a real estate brokerage in California who was complaining about the amount of listings that their agents were getting especially given the fact that this firm was purchasing a lot of leads. Upon reviewing the source and quality of the leads, I soon discovered that the leads were no longer qualified leads. In reviewing the program I found  that only about 1 in 30 leads would become a listing. The sad thing is that the broker owner was spending in excess of $6,000 per month to obtain these leads. A similar situation occurred with an insurance agency that was providing leads to independent insurance brokers as a way to induce them to sell their product. Upon doing a full evaluation, I discovered that these brokers were signing up to get the leads but then were using those leads to sell other products. Once we were able to make a few modifications to their program the number of new brokers signing up for the program dropped in half, but the number of sales also doubled. So taking the time to evaluate this area of your business can end up not only saving you money, but also increase your profit.

We will be continuing to discussing these issues in the next posting.