This is the 13th in a number of articles serializing The Sales Force — Working With Reps by Charles Cohon, MANA’s president and CEO. The entire book may be found in the member area of MANA’s website.

Jim Anderson felt smug. His salaried sales force program had been in place at Troothe Industries for the last four years, and the most recent refinement he’d made on his sales force management technique seemed like the final, finishing touch on a system that almost ran itself. It gave him an almost real-time account of his sales force’s activities each workday with such accuracy that many sales forces would have fought its implementation, knowing it would expose personal activities that occasionally, but unavoidably, encroached into their workdays. However, the trusting relationship Jim had built with his sales force made Jim’s promise that infrequent personal errands during the workday would not be held against them sufficient to dispel any knee-jerk resistance the salespeople might have mounted to a system that identified their activities in such detail.

The new system relied on each salesperson to start each sales call by using his or her cell phone to speed-dial a special voice mail box dedicated to that salesperson’s call reports and simply announce the name of the account and his or her odometer reading. As they left the account, they called the number again and left the details of that sales call — who they saw, what they talked about, what collateral material needed to be mailed or “to do” action items. They even used the system to let Jim know if an occasional personal emergency interrupted their normal sales calls — proof positive that they accepted Jim’s word that those situations would not trigger a reprimand.

With the salespeople supplying this level of detail, the office staff had everything they needed to close the loop on each sales call. First, a clerk transcribed the salespeople’s verbal reports into a word processing document. An inside salesperson took that file, completed the action items and pasted the results into Troothe Industries’ sales force automation software. Each salesperson’s Personal Digital Assistant (PDA) hardware received these updates via wireless synchronization, providing confirmation that each action item had been completed. The comprehensiveness of each salesperson’s reports also meant that the office staff had enough detail to take responsibility for filling out each salesperson’s expense reports. Freeing the salespeople from the chore of monthly expense reporting had not been the original goal of the system, but this byproduct of the new procedures was the sales force’s favorite.

To let him keep tabs on the sales force’s activities, Jim received both a printed copy of the word processing file and an electronic copy of the voice mails, giving him the choice of reading the transcriptions at his desk or listening to the actual voice mail messages while he traveled. He got the first hint that something was wrong with his salaried sales system while listening to call reports phoned in by June Calloway, the first salesperson he’d hired when he came to Troothe Industries.

“I just left Jill at Fenway Industries. She wants us to check to see if we can improve the schedule date on her open order 763012 and she reminded me that as soon as our catalog is back in print she needs two copies for the engineers that started at Fenway three months ago.”

June’s reports continued to play from the speakers in Jim’s car, but he abruptly stopped the recording and replayed that last section: “…as soon as our catalog is back in print…” he heard her say.

“Why are we out of catalogs, and how long has the catalog shelf been empty?” Jim wondered. He promised himself that he’d investigate first thing the next morning.

It wasn’t June’s weekly scheduled office day that morning, but Jim reached her easily in her car. “June, I was just listening to the call report you phoned in after your visit to Fenway a couple of days ago. You mentioned something about Jill reminding you that she’d wanted some catalogs and we need to get them out as soon as they’re back in print. Have you been having trouble getting catalogs?”

“Gee, Jim, I figured you must have known about that. Sure, we’re out of catalogs. Jill asked me for those catalogs the first week those two new engineers started at Fenway, which was about three months ago. I’ve been in contact with those engineers and I’ve explained that until it’s back in print they can look at our catalog on the web. They seem to be OK with that.”

June’s tone became slightly defensive as she continued. “And any time they complain that it’s too hard to find the information they need on our website, the inside sales department is really good about e-mailing a file to the customer.”

Jim was mad at himself for not knowing Troothe’s master catalog was out of print. “June, let me be sure I understand. Our master catalog has been out of print for three months? What has the sales force been using to make presentations to new prospects?” Jill couldn’t know that Jim was mad only at himself, so the irritation in his voice, though controlled, put her even more on the defensive. “We’ve been doing the best we can with what we have available,” she said. “We refer customers to our website for information, print out website pages to give to customers and photocopy our personal copies of the last catalog. It may not be ideal, but we’re doing the best….”

Jim interrupted, “Right, you’re doing the best with what we’ve given you to work with. June, didn’t it occur to you to tell me you didn’t have the sales tools you need?”

June’s voice started to sound a bit shaky. “Honestly Jim, I was just doing what I thought you wanted me to do.” Jim realized that he’d been taking out his frustration on June, and that she probably was driving while they spoke, so he carefully backpedaled.

“I’m not blaming you, June. If we aren’t giving you the correct sales tools, it’s not your fault. It’s management’s responsibility to keep you supplied with catalogs. I’m just surprised to hear that we’re out of catalogs, and frankly I’m a little embarrassed to discover that for a whole quarter we’ve been sending our sales force out without adequate tools. This is an issue for management to take up with the marketing department, not the sales force. If I sounded irritated, please don’t think I’m mad at you, because I’m not.”

The conversation continued for a few minutes, just long enough for Jim to do everything he could so June wouldn’t think that she was in trouble with her boss. When the call was over, Jim bounded out of his chair. His strides were unusually brisk as he walked/ran to the marketing department and stuck his head into the open doorway of the marketing manager’s office. “Rick, have you got a second?”

“Sit down, Jim. What can I do for you?”

Jim paused. He didn’t want to start the conversation confrontationally, so he took a deep breath and made an effort to keep his tone light. “Rick, I understand we’re out of master catalogs. Can you give me an update on that?”

Rick’s tone made it clear that the lack of catalogs didn’t bother him. “Oh, right. Well, we’re expecting to release the new WR72 flange any time now and it didn’t make sense to reprint our master catalog without it, so we haven’t gone to press yet. I’d guess we should be ready to release the WR72 within a month, and we should be able to get catalogs printed within four weeks of the official release.”

Jim found Rick’s nonchalance maddening. Before losing his temper with Rick the way he’d lost it with June, however, Jim quickly excused himself and returned to his office. Fortunately, his waste basket was pliable rubber and was empty, so with the door closed no one heard the swift kick he gave it or the muffled thump it made as it hit the cinderblock wall of his office.

Jim was rummaging through the janitor’s closet, looking for something he could use to remove the big black mark the rubber wastebasket had left on his office wall, when it dawned on him why he’d been so frustrated. June had just been doing her job the best way she knew how. So was Rick, Jim admitted to himself grudgingly. The reason Jim had reacted too strongly to the problem was that it had revealed a weakness in the salaried sales force system of which he’d been so proud — a weakness that hadn’t existed in the commission system he’d left behind at Bigglie Products, his previous employer.

Back at Bigglie, if the catalog supply had run out, the commissioned salespeople would have complained vigorously to management. Sometimes management felt the salespeople were too quick to complain, but there was never any risk that a problem affecting customers would go unnoticed by management. When finished goods inventory was low, phone queues in customer service too long or product quality below their competitor’s levels, complaints from the sales force often were management’s first notification that customers were not getting what they needed from Bigglie.

Jim was sure the reason Bigglie salespeople’s complaints were so forceful was not that they cared more than Troothe’s salespeople, it was just that when Bigglie’s performance faltered the salespeople’s commission plunged — Bigglie paid no commission on lost sales even when management ineptitude was completely responsible for the loss. The intensity with which Bigglie’s commissioned sales force brought customer concerns to management’s attention was driven strictly by economics, Jim reasoned. Bigglie’s sales force had an overriding financial interest in keeping its customers happy and would not hesitate to challenge Bigglie executives when its commission income was threatened by management fumbles.

After picking up a bottle of cleaning solution and some paper towels, he put his hand on the doorknob to leave the janitor’s closet, but stopped momentarily, lost in thought. “There were just too many problems with a commissioned sales force for us to go back down that road again,” Jim reflected to himself. “Even though I have identified a problem with the salaried sales force system, there has to be a way to fix it without abandoning it completely. It seems crazy that this problem stems from the fact that we don’t penalize our sales force for sales lost for reasons outside their control. We treat them fairly, so they don’t complain, but if they don’t complain, management isn’t triggered to make corrective actions. I’m going to have to sit down with Harold and talk this one out.”

Once he’d gotten the mark off his wall, Jim took a walk out to the factory floor. Harold was an operations guy at heart, and insisted on working in a glass-walled structure “close to where the real work is being done.” Jim found Harold busy but willing to make time for his old friend, so he accepted Harold’s invitation to sit down and explain the new problem he’d identified.

After Jim detailed the problem, Harold sat quietly for a minute, considering his response. “Jim, let me put this in another context to see if I understand the problem. Before weather satellites, sailors used barometers to read the changes in barometric pressure that were precursors of a thunderstorm. That is, they had an early warning system. You’d come to expect complaints from the sales force to provide a similar alert if management got sloppy, giving us a chance to correct our mistakes before customer dissatisfaction escalated to the point where we started to lose sales. If our salaried sales force isn’t providing us with that early warning system, perhaps it’s because it doesn’t have a financial incentive to tell us when we’re fouling up, and you’re concerned that without complaints from the sales force we risk being blindsided. Is that pretty much it?”

“That’s it, Harold, but what are we going to do about it?”

“I’m assuming,” Harold replied, “that you’re not proposing that we go back to paying our sales force on a commission basis. The problem that you’re describing — that our sales force is too compliant to management’s dictates — is not nearly as bad as the problems created by compensating salespeople using a commission system. I admit that you’ve identified a useful ‘checks and balances’ element of the commission system that we don’t now enjoy, but overall I’m sure we’re better off now than we were at Bigglie.”

Jim nodded. “I don’t disagree, but there is a glaring, fundamental flaw in our system. I don’t feel comfortable just leaving it at ‘of two flawed systems available, we picked the one with the fewest flaws.’”

“Fair enough, Jim,” Harold replied. “You need a barometer, an early warning system, to fix this problem. There isn’t any law that says the warning has to come from the sales force. What about somewhere else in the sales channel? I’ve heard you refer to the distributors that buy our products in bulk and resell them in smaller quantities as ‘channel partners.’ We don’t pay them a commission like a sales force, but they have a real financial stake in how well we meet customer expectations that isn’t too unlike the stake of a commissioned sales force. If our direct sales force isn’t being critical enough to suit you, could you organize our distributor network to provide the feedback you need?”

“Harold, I think you are on to something there. I am going to pay a visit to Maria Gonzales to discuss that.”

To be continued next month.

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