Finding the Best Sales RepsBy Mary Seaman
Article Date: 08-01-2005
Copyright(C) 2005 Associated Equipment Distributors. All Rights Reserved.
Great Southern Tractor developed a custom training program that allows them to hire sales reps with no equipment distribution experience.
Recruiting and retaining quality salespeople is an ongoing struggle in the construction equipment distribution industry. But Great Southern Tractor Co. has developed its own program for selecting, training and retaining their equipment and product support salesmen.
"In our industry," says Jim King, vice president of product support, "we tend to recycle each other's sales and product support salespeople. You get people who have sold multiple product lines in the same area, and you're hiring them because they are supposed to have a known customer base. It doesn't work."
With fewer new people entering the industry, dealers are forced to either recruit each other's sales reps, or hire and train salespeople from outside equipment distribution. According to King, the success of Great Southern's training program is that the company hires from other industries, because the recruits lack preconceived notions about selling equipment, and they are more receptive to training.
"We felt we needed to bring new people into the industry," says King. "People without industry experience don't know they can't rent this piece for $1,200 a month or get 15 percent gross margin. Salespeople that have worked in this industry have developed ideas about what they can and can't do. We wanted to get back to what we felt could be done."
King says Great Southern started recruiting in 2002, after realizing they had too few salespeople for the size of the territory. The company, which represents Komatsu and Dynapac, advertised the open positions in the local newspaper. After collecting 130 resumes, they were able to pare them down to about 40 applicants.
The hiring process Great Southern has developed involves multiple interviews and an aptitude test, which pinpoints a candidate's behaviors and attributes. (The dealership uses an aptitude test developed by a company that specializes in that area.)
Once the new salespeople were hired, they entered the company's training program, an eight-week course that consists of time in the classroom and in the field. Both product support sales reps and equipment salespeople undergo the same training. King and Dan Lyle, general sales manager for Great Southern, teach most of the classes, although some subjects are taught by manufacturer reps.
At the end of each week, the new trainees are tested on their knowledge of the week's lesson. If they don't pass that week's test, they are required to complete additional assignments and re-take the test. After eight weeks, the trainees are given a final exam, and at that point, they find out whether they'll go into product support sales or equipment sales.
"We wanted everyone to receive the same training," says King.
In the last three years, 18 people have gone through the program and Great Southern has kept 11 out of the 18.
"We have gotten some outstanding performers from that group," says King.
According to King, one of the key factors in retaining these salespeople is that instead of paying a high commission and a low salary to their salespeople, Great Southern has reversed it.
The equipment and product support salespeople receive a salary plus commission based on units. Their commission is the same, regardless of the size of the equipment. Further, for every five units sold, the salespeople receive a bonus, and for each five-unit increment, the dollar amount increases. In other words, the more units they sell, the more money they make.
"Normally equipment sales reps are called ‘elephant hunters'," says King, "meaning they want to sell the large equipment that generates the most commission. But for us, we hope the sales guy sells either the large or compact equipment - it's the same amount of commission."
Another reason for the commission based on units, says King, is that almost all distributors now have a product line that includes compact machines.
"The challenge," says King, "has been how to sell the compact machines without hiring a sales force dedicated to small equipment."
The purpose of the salary, he says, is to make it easier to retain the salespeople when the economy slows. With the industry's cycles, as long as things are good and salesmen are making money, they stay with the dealership, says King. But, when the economy dips, salespeople leave their dealerships and go to work for a
dealer that will give them a first-year guarantee.
"The salary helps the sales guys get through the tough times," says King. "It helps with retention to have the salary higher and commissions lower."
Since beginning the training and retention program, Great Southern has seen dramatic increases in rentals, territory coverage and market share.
"I can't say our business has doubled," says King, "but it's definitely improved, and we've gotten some very professional people working for us that we're proud to have represent us."
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