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Tough Call - When Procedures Trump Sales

A barrage of new procedures are alienating your customers, demoralizing your salespeople, and hammering the bottom line. Your company is going down fast, and the owner seems oblivious.

Smilin’ Mike is your classic entrepreneur. Thanks to a combination of street smarts, dogged determination and a winning personality, Mike and his trademark blinding smile grew Mike’s Construction Supply into a successful four-location business.

When you came onboard five years ago to manage his third location, you were struck by his passion and his expectation that his stores would be number one in whatever markets he chose to enter.

With a handshake, you dove in and put his vision to work in your market. Within just three years, you’d earned the business of many leading area builders—along with the loyalty of legions of remodelers and serious DIYers.

That was then. The new reality isn’t as pretty. Instead of trusting his instincts and surrounding himself with others who share his vision, Smilin’ Mike turned much of the business over to Petunia Principle, a “professional” administrator and Ben Counter, an accountant with a serious distaste for salespeople. Petunia and Ben have created procedures that have no place in a sales organization.

One example: in the old days, if a salesperson made a mistake on an invoice, a quick phone call cleared it up and the order was delivered as scheduled. Now, an imperfect purchase order is returned to the salesperson, who must redo it correctly before the order is released. While that makes for a cleaner paperwork stream, it throws a wrench into the sales process.

Just yesterday, Buck Builder called and said that he’s pulling his business until your company remembers who the customers are. It seems that Buck had a full crew waiting for a full day for a delivery that never came (the order, you learned, was cancelled by accounting).

The new procedures cost the company sales and customers, and that’s not all. Charged with cutting expenses, Ben has proved remarkably adept at taking money from your salespeople’s pockets. For example, if a customer pays by credit card, the credit card processing fee is pulled from the salesperson’s commissions. And a fresh set of penalties have effectively cut overall sales commissions between 15% and 20%.

Given the current economy, sales were tough enough. Now, with procedures taking precedence over sales, and salespeople earning lower commissions and paying credit card fees, your yard’s results have taken a huge hit. You know that much of the lost sales are directly attributable to Petunia and Ben—but amazingly, Mike is oblivious. He holds you responsible and won’t listen to any complaints about the new procedures.

You’ve seen how the company’s financials have taken a dramatic downturn since Petunia and Ben were give free rein. Unless
something dramatic changes soon, Smilin’ Mike will be smiling no more. Your customers are starting to defect, salespeople are demoralized, and their numbers show it. You know that the company can only go downhill for so long before it hits bottom.

What would you do?

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