Photo by Roman Kraft
I was consulting with a company that had education centers all over North America they taught various technical courses to high school graduates.
This company had a fair number of salespeople whose job it was to sell these technical courses, which sold for about $9,000 at the time, to people who had graduated from high school or who were about to graduate from high school. Each year, the top 5 percent of their sales force (those who generated the most dollars) were rewarded with a week-long trip to Maui for them and their spouses. My job was to go to Maui and pump up these “5 percenters” and show them what they needed to do in order to be a 5 percenter the following year.
About a month before the program, I was paid a visit by the vice-president of sales for this company. Several days prior to our meeting, he had watched a videotape of me making a similar type of presentation to another group. This vice-president kicked off the meeting by saying, “Ross, I watched your presentation and I have some real problems with it.” Needless to say, I was stunned as well as crushed by his comment.
He went on, “In your presentation, you say that if salespersons do their job right, over time, 80 percent of their sales should come from repeat and referral business.”
“Absolutely,” I said, “but only if they do their job right.”
“Well, I beg to differ with you,” he said, “because our situation is unique.”
“In what way?” I asked. The vice-president went on to say, “First of all, we have no repeat business. The reason is that once someone takes our course, he or she is certainly not going to take it again. In other words, all of our sales are one-time sales and we get very few referrals from our students. So keep that in mind when you make your presentation.” He also told me the major problem he wanted me to address was that very few of the salespeople who made their way into this elite top 5 percent group attained this achievement from year to year. He speculated that most of these people were so burned out as a result of the effort it took to achieve this lofty goal, that it took them a good part of the next year to recover. Consequently, their performance dropped off dramatically. He said that any tools I could give these people to help alleviate this problem would be greatly appreciated.
After we parted company, I was still in a state of shock. When he said his salespeople experienced no repeat business and very little in the way of referrals, he had struck a heavy blow at the core of everything I stood for. I sat in the Phoenix airport for quite a while after he left, trying to figure out where my thinking had gone wrong. Then all of a sudden, the light went on.
“Ahah!” I thought to myself. “If the only people this vice-president considers to be his company’s customers are the high school graduates who are qualified to take the technical courses his company offers, I’ll just bet that his company’s real customers are people like high school guidance counselors, principals, and other school officials who are in a position to refer these high school graduates to his salespeople. This is where the repeat and referral business comes from, not from the high school graduates themselves.”
At this point, I remember smiling victoriously and thinking, “This guy has no clue which side his bread is buttered on and I can’t wait to get to Maui.” A month later, when the time for the program finally arrived, I was ready. There were about eighty people assembled. After some discussion about the my sales model and how it works, I finally got to the point in the program where I asked the question, “Who are the people who stand between you salespeople and success or failure?” In other words, I asked them to tell me specifically who their customers were.
Immediately several hands went up and the unanimous answer was, “High school seniors and graduates.” I then asked the salespeople to redefine the question from meaning only those people who were qualified to take their courses. I asked them to expand it to also include those people who were in a position to refer qualified high school seniors and graduates to them. Then I asked the group, “Now tell me who your customers are.”
At first the room fell silent and then the hands slowly started to go up. The first answer was, “High school guidance counselors and other school officials.” The next person said that he got a number of referrals from people at the Veteran’s Administration office. Another person said that he had gotten to know several people at the Employment Security Commission and that this had been a good source of referrals. Someone else related a similar story regarding his experience in dealing with the Salvation Army. And so it went until we had listed more than twenty sources that could refer high school seniors and graduates to these salespeople.
At this point, one of the several people who made this top 5 percent group every year said that referrals from sources like this were the primary reason for her success. She went on to say, “If I had to sell all the courses by myself, I’d burn out long before I got to Maui. But by building and maintaining close personal relationships with people who are in a position to refer my customers to me, I start out the year with 80 percent of my quota already in the bag.” She went on to say, “Once someone comes in with a strong referral from a high school or Veteran’s Administration counselor, they’re already sold. All I have to do is fill out the paperwork.”
The vice president of sales, who had visited me a month earlier in Phoenix, was sitting in the back of the room listening very attentively as this woman made her comments. When she finished, the vice-president look up at me, smiled, and gave me a very appreciative “thumbs up.”
The lesson to be learned here is that when you try to identify those people who stand between you and success or failure, don’t just look at the people who spend the money. Rather, take some time trying to find out who actually influences the decision. Often, these people are far more important to your success than the actual decision makers.
