How to Evaluate a Company's Sales Force

Interview with Samuel Lucci from Partners Through People

Mariusz Skonieczny, Classic Value Investors: Many investors focus so much on studying companies that they lose sight of the big picture. What I mean by this is that they forget that the most important aspect of business is sales. Without them, nothing else matters. Because you are a professional sales trainer, I think that your knowledge will help investors evaluate the sales forces of the companies that they invest in. You used to have a retail business with four satellite locations but you were not satisfied with your sales results. Can you tell us your story?

Samuel J. Lucci, Partners Through People: One January afternoon I calculated the potential business that my sales staff quoted against the results they produced. It was a paltry 22% of potential. It was then that I made the decision to make the development of sales people my life’s purpose. It really is the greatest chance for return on investment because all other costs are constant or already paid. Unfortunately most CEO’s and decision makers don’t understand this for a lot of reasons. First is because results from training development are so spotty and unpredictable. Second is because it takes time to produce results. Third is because they don’t want to make the investment.

This commitment has paid off for me and my clients. My businesses are growing in this economy and in fact I’m starting two new enterprises in 2010. One of them has national potential.

Mariusz Skonieczny, Classic Value Investors: Why do most people fail at selling?

Samuel J. Lucci, Partners Through People: There is no short or quick answer but to produce at top efficiency a sales person must be as effective in dealing with people as they are in selling what they sell. Our program teaches sales people to think more and react less. We call it the evolution to dynamic thinking. Over a thirty five year period I have uncovered the core causes of these deficiencies and we have developed a program to correct it. We call it our ASK solution.

Mariusz Skonieczny, Classic Value Investors: As investors, we are not running the companies that we invest in, and we rely on the management to do it for us. Therefore, it is important that we learn how to evaluate a company’s sales force. Realizing that the management will not grant us the level of access that they would grant to hired consultants, are there ways that we can learn about the strengths and weaknesses of a company’s sales force?

Samuel J. Lucci, Partners Through People: This would generally be difficult but I would use this line of questioning.

-          What is your attitude towards sale in general—–Look for level of importance

-          What is your attitude toward sales force development—-look for level of commitment

-          What selection processes do you use—Look for level of sophistication

Mariusz Skonieczny, Classic Value Investors: When talking with sales representatives from a particular company, what questions could one ask to determine if a salesperson is a professional or sales impersonator?

Samuel J. Lucci, Partners Through People:

-          Why do you sell? Are they looking at win—win?

-          Why do you sell for this company? Are they committed?

-          Why should I buy from you? Are they convincing?

-          How much training and development have you had? Tell me about it—did they learn anything?

Mariusz Skonieczny, Classic Value Investors: Can you learn about a company’s sales force by speaking with its customers or competitors? If so, what kind of questions or clues should one look for?

Samuel J. Lucci, Partners Through People: Customer definitely yes

-          What was your experience?

-          Would you buy again?

-          Would you recommend them?

Competitor maybe. If the competitor is sharp they will not reveal anything to you. You might ask if you had the chance to work for the company in question, would you? Why?

Mariusz Skonieczny, Classic Value Investors: In one of your articles, you stated that having underperforming salespeople can hurt your business at any time, but in a recession it multiplies the damage. Why?

Samuel J. Lucci, Partners Through People: Some of you might think that I am crazy but the aftermath of a recession is the most fertile business climate you will ever live in. It’s all about the evolution to dynamic thinking—Think more—React less– is the key. Your competitors are almost certain to be afraid and cautious. When they are crawling you should run and they will never catch up. I want to caution the readers that this economic collapse and recovery is not a typical one. It’s a game changer and I said so in November of 08 when the financial system was about to collapse. I have been through this cycle since the seventies. The recovery will not be broad based or sustained long term. It is imperative that investors pick the right companies. Hopefully the questions that I offered above will help. My final thought is this. The American consumer is emotionally wounded and trying to recover. They will buy from companies that offer honest value and lasting results. For example I predicted home remodeling sale to surge and they are in the first quarter of 2010. I expect this to be the remodeling decade.

Mariusz Skonieczny, Classic Value Investors: Thank you very much for your incredible insights. I hope that investors will take your words to heart and pick the right companies to invest in. If people want to learn more about your business, where can they learn more about you and your company?

Samuel J. Lucci, Partners Through People: They can visit www.partnersthroughpeople.com.

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