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 - Expanding Outside
You're about to hire your first outside salesperson from among four finalists. Who would you hire?
You run a lumberyard in a relatively small market (population: 70,000). While the local competition is healthy and aggressive, there's been plenty of business to go around. You get some jobs; they get some. It's worked out fine. And now, with starts picking up in your market, you're anxious to see some healthy sales increases. Considering the size of your market, and the limited competition, you've never needed to have an outside salesperson. The business either came in the door or called. That was fine with you... the simpler the better. But the recent rebound in your market came with some unexpected and unwelcome baggage: an outside salesperson from a market 80 miles away.
Apparently, the green shoots of growth that your market is experiencing aren’t happening throughout your region. So, the dominant LBM dealer in that town has decided to go where the business is; his top outside salesperson has been calling on builders and remodelers in your market. And he's having some success. In fact, a few customers who you viewed as yours have placed small "test" orders with the out-of-town firm. You called one of your better customers to learn more. "They've got good products and they really sharpened their pencil," he explained. "With the prices and terms they offered, we couldn't afford not to give them a try."
Clearly, to protect your existing accounts and grab some new business, it’s time to add an outside salesperson. The only question is... well, you've got lots of questions! The biggest one has to do with pay. Traditionally, your company has paid its salespeople a salary, and small additional commission. You’re near the end of the interviewing process with four qualified candidates—each of which prefers a different pay structure. Here are the four final candidates, their pay preference, and the pros/cons as you see them.
Apparently, the green shoots of growth that your market is experiencing aren’t happening throughout your region. So, the dominant LBM dealer in that town has decided to go where the business is; his top outside salesperson has been calling on builders and remodelers in your market. And he's having some success. In fact, a few customers who you viewed as yours have placed small "test" orders with the out-of-town firm. You called one of your better customers to learn more. "They've got good products and they really sharpened their pencil," he explained. "With the prices and terms they offered, we couldn't afford not to give them a try."
Clearly, to protect your existing accounts and grab some new business, it’s time to add an outside salesperson. The only question is... well, you've got lots of questions! The biggest one has to do with pay. Traditionally, your company has paid its salespeople a salary, and small additional commission. You’re near the end of the interviewing process with four qualified candidates—each of which prefers a different pay structure. Here are the four final candidates, their pay preference, and the pros/cons as you see them.
- Sam is has a proven track record as a successful salesperson. But he’s the first to admit that he’s risk-averse. He wants to know exactly how much he’ll earn, and doesn’t want to leave anything to chance. He prefers straight salary.
- Another proven performer, Bob is adamant about the need to control his earnings. He believes he can make serious things happen for your company—and when he does, he wants to be compensated for it. He prefers straight commission.
- A young man with what could be a bright future, John is anxious to build a career in outside sales. Since he has yet to prove himself, he prefers a small salary as a guarantee—along with commissions once he reaches certain sales goals. John will likely cost less, but require a leap of faith.
- Carl has the strongest resume—having been the top outside-salesperson at several different yards—but he also desires the most complicated pay structure, with commission that rises based on incremental sales margins, along with a range of perks.
These are your choices. You believe any one of them could do the job, but you can only hire one. Who would you hire?
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TOUGH CALL: ONLINE POLL
What would you do? It's not always black and white. Check your decision-making savvy with LBM Journal's Tough Call, and see instantly how your judgment stacks up. This month:
A customer whose business is more trouble than its worth happens to be a good friend. What would you do?
PREVIOUS TOUGH CALL: RESULTS
Your answers to our April Tough Call:
| Answer | Votes | Percent |
|---|---|---|
| Roll the dice. |   | 9.26% |
| Re-quote. |  | 20.38% |
| Test the waters. |  | 37.04% |
| Yes, this time. |  | 33.34% |
