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In the world of sales, there are often no right answers. What would you do in this tough sales situation? Make the call below, and see instantly how your judgment compares. Final results will appear in LBM Journal. Be sure to check back next month for a fresh Tough Call.

Tough Call - The Trouble With Jack

There's an old joke about starting up business in the residential construction supply industry:

Q: How do you make a small fortune in the lumber business?

A: Start with a big fortune.

Thanks to a mixture of skill, experience, a solid housing market (and, okay, maybe a luttle luck), LumberLand, the company you launched five years ago, is doing just fine. It hasn't generated a small fortune yet, but hey, you didn't start with a big fortune anyway.

Without question, one of the reasons for your success is Jack, the sales rep who's been with you since day one. You knew were lucky when he agreed to join your fledgling, seriously undercapitalized startup. After all, you both knew he could earn higher commissions at a larger, more established yard. Despite the low initial commission rate and the questionable future, Jack joined up and worked hard to help establish LumberLand as a serious player in a competitive market.

In the past five years, thanks to strong and growing relationships that Jack helped establish with some of the area's more innovative builders, LumberLand has grown and prospered. And you have high hopes for several new initiatives--including a limited installed sales effort. You've done your homework about existing installed efforts in the area, and with the insights you'll acquire at the Installed Sales Summit (January 10-12 in Atlanta -- call 800.277.7888 for details), you're confident that the future is bright. Provided, of course, that your sales team is up to the challenge. And that is the million-dollar question.

The problem, in a word, is Jack. After the superhuman effort in the beginning, his sales dropped sharply. To make up for the drop in sales, you added another outside rep and gave him half of Jack's territory. Losing part of his teritory lit a fire under him for a while, and his sales did rebound--thanks to strong orders from existing clients. Unfortunately, there are key prospects he's never approached and he knows nothing about in his new, smaller territory. Part of the reason is his distaste for cold-calling and building new relationships. The other part is his personal life--including a pending divorce.

The loyalty you feel for Jack conflicts with the knowledge that Jack's aversion to going after new business, combined with his rife-with-crisis personali life, is costing your company sales and profits.

What should you do?

 

Fire Him:
Business is business. It's great that Jack used to be a valuable member of your team, but that was then, this is now. He comes up short in the "what have you done for me lately" category, and you can't afford to support him as he works through h
Counsel Him:
Sit him down and have a heart-to-heart. Let him know that while you appreciate all that he's done, you're concerned about the lack of attention to potential new business. You understand his rough circumstances, but his performance is hurting the company--
Threaten Him:
Even with the lack of new business, the commissions he earns from established business provide Jack with a very healthy income. Unless he gets back to the Jack who helped you launch the business, he's going to have to look for a new job.
Incent Him:
Since he's averse to going after new business, be creative and change the rules to make cold-calling more attractive. For example, pay higher commissions for initial orders from new customers. Set sales and margin goals for new business--with a healthy bo

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LBM JOURNAL Strategies for Lunmber/Building Material Distribution Pros