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Get Home Building Sales Employees Hooked

Here's what sales professionals and hiring consultants say you need to know to keep your best employees on the line

By Craig Guillot, Contributing Editor
August 1, 2007
GIANTS

Sidebars:
Talent Profile: Auto Sales
Talent Profile: Medical Sales
Talent Profile: Software/Tech Sales

In today's world of job-hopping, downsizing, mergers and layoffs, the days of working for a company for 30 years are gone. On average, most people now change jobs every five years. And with a tight labor market, instant access to job information, light-speed transmission of resumes and cell phones, a dissatisfied employee can land a new job before you're even aware that he or she was looking at the door. Why are people leaving? The 2006 General Social Survey by the National Opinion Research Center at the University of Chicago found that of 27,000 respondents across all occupations, only 47 percent of those surveyed were happy with their current jobs.

Now that the housing market has stalled, salespeople and their skills are more important then ever to home builders — and retaining top performers is critical to the bottom line. Home builders will increasingly find themselves competing for sales talent with everyone from business vendors and commercial distributors to automobile dealerships. Companies are willing to train talented salespeople with their products and services, which means your sales staff could be wooed by industries you'd least expect.

We've asked leaders from the medical, automotive and software industries about their sales retention strategies and found that whether one is selling homes or software solutions, salespeople generally seek the same qualities: adequate compensation, a supportive manager and, above all, an accommodating and caring culture.

Compensation Only A Small Factor in Retention

Contrary to the stereotype, salespeople are not entirely motivated by money. With all compensation plans equal — or within 10 percent of one another — salespeople will drift to companies that have a solid supportive and appreciative culture. It may sound simple, but most companies fail to foster cultures that encourage loyalty and retention, with management often thinking it only takes an annual raise to keep an employee happy. Derrick Barton, chief talent leader and CEO for the Center for Talent Retention, says that many organizations go wrong from the beginning by seeing their sales positions as simply a job to fill.

"You have to look at employees and people within your organization as talent, and you have to invest in and make time to grow and leverage that," says Barton. "When a person sees it as just a job, it's just that much easier to leave."

For a salesperson, compensation is not a simple number; it involves how realistic and attainable that financial or sales goal really is. Salespeople need to have support systems and resources in place and have a clear line of sight to what their real income can and will be. Some employers try to keep their sales reps around by telling them they "can" make $100,000 per year when 90 percent of the people are making $60,000 a year.

Training and Support

Don McNamara, president of Heritage Associates, a California-based management consulting and training firm, says that retention starts with hiring the right people. He says managers in all industries often pick the wrong people for sales positions. Companies that already have high turnover rates are usually eager just to fill positions with warm bodies. This is especially true with auto dealerships and home builders and only continues the cycle of turnover and low retention.

McNamara says that one of the most common reasons for sales turnover in any field is unsupportive and ineffective front-line sales managers.

"The sales manager needs to be a proactive individual, not one who just sits behind a desk and shouts orders. I've seen many companies lose their sales force because the sales manager is not working with the salespeople or doing anything for them," says McNamara.

A good sales manager works to understand what motivates each of the salespeople, works to help them become more successful, and rewards them with compensation and further training and responsibilities. In large companies, retention strategies are often left to the human resources department, but it is front-line managers who have the real effect on employee satisfaction.

Finding the Sweet Spot

Sales managers must discover what motivates their top producers, and in many cases, that can include non-traditional incentives and accolades. No two salespeople are alike, and each may be motivated by different factors that can range from money to recognition to time off.

Some top producers need nothing more than a handshake and a sincere expression of appreciation while others need tangible bonuses. Motivation can also vary by age and demographics. While a mere two weeks of vacation may be the norm for many Americans, many 20- and 30-somethings are looking toward more time off as an incentive. Vacations and time off reenergize, invigorate and add quality to employees' lives.

An employer that offers its salespeople a little more flexibility and freedom in their personal lives can offer benefits that money can't buy. Flex time allows people to hit the gym, pick their children up from school in the afternoons and indulge in more personal pleasures.

And although flex time and telecommuting may not be as practical for home builders looking to staff model homes, the reality is these options may further entice salespeople into other industries; it's an important concept to note.

"People aren't looking to come and go as they please, but they're looking for flexibility to help them balance their work and personal life. [Companies] that allow people to meet both their personal needs and the business' needs have a competitive edge in the talent marketplace," says Barton.

Mike Dwight, executive vice president of Southern California home builder Frontier Homes (ranked No. 88 on the 2007 Professional Builder Giant 400), says that along with adequate compensation and independence, salespeople can be heavily motivated by simple recognition.

He says that home builders tend to be "hammers and nails guys" who don't deal well with the subjective and often emotional side of high-maintenance salespeople. Dwight offers his salespeople independence in virtually managing their own stores, the freedom to generate their own marketing ideas and discretion on incentives. Above all, he focuses on recognition for those who perform.

Says Dwight: "[Salespeople] are certainly looking for recognition. Like any other business, nothing happens here until someone sells something. You have to remember that they're the ones that keep your business running."

Related Links

Employee Turnover Cost Calculator

Salary Comparison Information

Article on Retention Leadership


Author Information
Craig Guillot is a New Orleans-based freelance writer. His work has appeared in such publications as the Washington Post, San Francisco Chronicle, Bankrate.com and Nationalgeographic.com.

 

Talent Profile: Auto Sales

Average annual income: $46,698 (National Automobile Dealers Association, 2005)

Job characteristics: Long hours; high income potential after two years; selling to a wide variety of customers.

Most common reasons for turnover: Lack of training; low income in early months on the job; high pressure to perform with lack of support and recognition from upper management.

Few people are as stigmatized as car salesmen. Most industry experts say it's exactly the opposite and that the most productive salespeople in the automotive industry exude honesty, integrity and a genuine interest in meeting the needs of customers. Because professional and successful salespeople are a rare breed, dealers must work hard to hang onto top performers.

Long and odd hours, low base salaries and cautious customers make this a high-pressure, difficult environment. Ernie Kasprowicz, general manager of AutoMax Sales Training & Consulting, says that many salespeople are turned off in their first few months on the job because it can take awhile to make decent money.

Curt Tueffert, president of Brick Wall Motivation, a company that helps motivate and retain salespeople in the automotive industry, says car salespeople seek a strong income, a supportive management team and a chance to move up in the organization. This usually includes moving into finance or insurance management where they might see more stable, higher incomes.

Most dealerships have standard medical benefits and 401ks, but some dealers use time off and trips as a performance-based incentive and benefit. The combination — giving an employee and his or her spouse a trip as well as the time off — can sometimes go further than cash for the right employees.

"Recognition for a job well done is very important. Salespeople need to know that management is behind them and they need to be rewarded for their efforts," says Kasprowicz.

Variable changing salaries are a major factor in the industry and Tueffert says the quickest way to lose a sales rep is to change pay structure. Although some dealerships are on 100 percent commission plans, most have base salaries with commissions that can come in the form of a percentage of the sales price or a flat fee per car.

Tueffert notes that each person is individually motivated and that generational and hidden psychological challenges can often come into play. He says that at the end of the day, a person is only going to be motivated by the variables and factors in their life. This can include everything to saving for a new home, preparing to send a child to college, a recent divorce or simply a desire to move up into a new position.

"Every salesperson is different. They're all motivated and managed differently. You can't line them all up and slap them in the same hand. If I can individually figure out what turns these people on, I can get them to talk through brick walls for me," says Tueffert.


Talent Profile: Medical Sales

Average Annual Income: $93,700 (pharmaceutical sales representative, Salary.com)

Job Characteristics: High pressure; potential for high income; stable career; travel

Common reasons for turnover: Micro-management from superiors; lack of recognition; merging and consolidation of companies, which lead to job elimination and stressed corporate cultures.

In a booming, virtually recession-proof industry where salaries often top six figures, medical sales is an enviable career. Representatives call on hospitals, doctors and medical professionals and have access to some of the latest breaking technologies. Jimmy Taylor, an Atlanta-based medical sales recruiter, says many people are drawn to the industry not just because they can make lots of money but because they can help people while they're doing it.

Taylor estimates that the average tenure for a sales rep in a medical division is about two to five years.

As an industry filled with big-name Wall Street firms, he says that many medical and pharmaceutical companies are fueled solely by the bottom line. That culture leads to a high-pressure, performance-based environment where people often feel small and unappreciated.

As in many industries, medical companies must alter their retention strategies to cater to demographics. Those who enter the field in their 20s and 30s are almost entirely motivated by money and travel, but as they grow into their 40s and 50s, benefits, job security and company culture become far more important.

Medical recruiter Bill Halderson of William Halderson Associates says common complaints with medical sales reps are that they don't get enough support or follow- up from the home office. Sales reps need to know that the products they are selling are instantly available for demonstration and distribution.

Reps lose face and the personal relationships they've spent time establishing when their company doesn't have the product or support to back them up. It might sound unlikely, but Halderson says it can happen quite often.

"Salespeople are very money-motivated. Anything that affects the cash flow or the stream of their commissions is going to have a major effect on them," says Halderson.


Talent Profile: Software/Tech Sales

Average annual income: $77,604 (account representative, senior — technology, Salary.com survey)

Job characteristics: Upper-level business-to-business sales; calling upon upper management of Fortune 2000 companies; high-pressure, long sales process

Common reasons for turnover: Pressure to perform; lack of support from management or home office; inferior products; poor company culture.

Much like the housing boom of the last five years, in the late '90s, many tech and software sales reps were simply sitting back and taking orders rather than polishing their sales skills. The tech industry is heavily driven by experienced and knowledgeable salespeople who sell software packages that can cost in excess of $1 million. Calling on upper level management of some of the world's top companies, software and tech salespeople are usually highly educated and have lots of real-world business experience.

"It's a very different type of sales. You need a business person first with sales skills versus a salesperson first. We're targeting senior vice presidents," says Ray Rike, vice president of sales for Accruent, a real-estate performance management solution provider.

Accruent's new software suite sells for $1 million-plus and is marketed to Fortune 2000 industries. Rike says the company is currently in a boom period and grew 300 percent last year with a sales force that included 10 direct reps in the field, five "solution consultants" who understand the technicalities of the software and five inside salespeople who generate leads. Rike says that companies typically see a three-year term with good salespeople and that only two of his reps have been there longer than a year and a half.

Unlike other industries where reps may be more motivated by company culture and benefits, Rike says that top-performing software salespeople are almost entirely motivated by money. And in this field, the money can be quite big; Rike says a good salesperson with Accruent can make $300,000 to $500,000 per year.

Paul Hill, COO of Clarity Systems, has approximately a dozen inside and outside salespeople in each of 12 geographic regions. The salespeople he tends to hire have been corporate controllers, financial analysts, MBAs and CPAs. In a tough market dominated by big companies such as Microsoft and Oracle, Hill says there is a cannibalization in the market that is constantly putting pressure on retention. As a small company, Clarity appeals to salespeople's entrepreneurial aspirations as part of its retention plan.

Hill says he spends a lot of time making sure the compensation plan is right. He strives to make sure that his salespeople have all the tools they need such as presentations, demonstrations, collateral material, ROI calculators and all the other things they need to do their job. Hill says he fosters an environment where Clarity's salespeople can work independently yet with the full support of the company.

"I see my job as to fundamentally support the salespeople in their pursuit of opportunities. I spend a good portion of my time ensuring that there are sufficient resources to make them more effective."


© 2008, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.

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