Monday, November 26, 2007

The Art of Salesmanship

Yesterday morning, just before our holiday road trip, the phone rang.


"Hello, it's Curt. Your firewood guy. How are you?"

"Hey Curt, Good. how are you?"

"Great. Say, I never told you this before but we also sell Christmas trees and wanted to know if you might need one?"

"Well, we usually buy one down the street from the Optimists."

"Oh, okay. know...I'm about ten minutes from your you want to at least look at them?"

"I would but we're going to be leaving in about forty minutes for a road trip. I don't want to be late and I haven't even gotten ready yet."

"Sure. Well, we hand select each tree each year. These are really beautiful trees. Most places get their trees a few weeks before they sell them."

"Yeah, I noticed that the trees showed up where we buy them a couple weeks ago...all bundled up. But...can you call me next year? I'll probably buy one from you then."

"Sure. I can but we cut them every year the first Saturday after Thanksgiving and deliver them fresh the same day. These are really beautiful trees."

"How much are they?"

"Seventy five dollars."

"That's about what we pay for our tree every year."

"I'm five minutes from your house...can I stop by?"

"...okay.... why don't you come by the house real quick."

Salesmanship is a great and lost art. A talent. A gift.

Think about it; nothing gets done in a free enterprise economy without someone selling something.

An entrepreneur sells a husband or a wife on the idea of quitting "the job" to start a business.

Then a sale is made to investors, bankers and the first few employees.

And of course, to customers.

Politicians sell themselves to staff volunteers, then to campaign contributors and then to voters.

No one has a job in America, without someone selling something; an idea, a new product or service, or a new way of doing something...unless you work for the government.

Without salespeople, our economy would stop on a dime.

A top salesperson in a corporation may be responsible for the creation hundreds of jobs.

Your server at the restaurant is a salesperson. So is your doctor and so is your CPA, if they are good at what they do.

An author sells an idea to an agent, then an editor and ultimately to a publisher.

A good financial advisor doesn't sell products, rather a process. A process helps their client get where they want and need to be in the future.

Most employees sells their services, first via their resume, then an interview.

Show me a great leader and I'll show you a great salesperson.
So why did I buy the tree? Because I admired Curt's ability to push, but not to far. To sell me and without giving up too soon.

If you disagree, maybe it is because you have a different definition of a sale. A professional sale is an honest and ethical transfer of enthusiasm and conviction to a prospect that needs or wants what the salesperson has to offer. In the end, both parties feel they left each other better than they found them, and the result is a win-win.

Curt's tree was better. As we sampled the trees on the back of his truck, they were full, aromatic and beautiful. They were fresh cut. I picked one and it was delivered to my door at the same price as the one I'd usually have to go pick from rows and rows, wait my turn to pay, tie to the top of my truck, and carry it into the house.

His product was better, more convenient, and at a fair price.

That's genuine, honest, professional salesmanship.

They say the easiest sales are always made to salespeople. Do you know why that is? Because professionals always always have an appreciation for other professionals in their field. Good salespeople are true professionals.

Next year...guess where I'll be getting my tree?

Along the same lines, here is one of my favorite scenes from Boiler Room (caution: vulgar language).


Freddy B. said...

They say salespeople are the easiest to sell, and I need to be sold a tree, so please forward Curt's number to me.

jkruse said...

I'm glad you posted this, because we had a 'back and forth' a while ago that I didn't get to finish. (I hate it when work interferes with my life.) The topic was taxes stifling business, and you told me about a software salesman who was taking the last quarter of the year off, (or at least slacking) because he'd rather not have to pay the incremental taxes on any further income.

One interpretation of that statement (yours, I think) is that the egregious taxes paid by that salesman kept him from being as productive as he could have been. I started thinking about how I'd feel if I were that person's employer. Clearly, my business is suffering if he's working for me - I'm not moving as much product as I could be. The most obvious (to me) interpretation of this anecdote is that this person is overpaid. If he doesn't need the extra commission on the last quarter's worth of potential sales, I've paid him too much for the first nine months of the year. I don't know how low you'd have to make his tax rate to make him feel like working again. Any ideas?

jroosh said...

Many people don't realize that our federal income tax system is progressive but not retroactive. The software salesguy knows this so if he has a sale that he can manipulate into next year and he doesn't need the money right away, he may sandbag the sale for next year when he can be taxed at a lower rate and therefore take home more money with the same effort.

If this happens every year it effectively lowers the productivity of the company.

If it happens at every company, it lowers the productivity of our country.

If that happens, tax revenues are actually lower in aggregate.

This is a simplistic way of showing how a heavier tax burden actually lowers overall tax revenues nationally and how a lower one can actually increase tax revenues.

As for being overpaid? I not following you on that one. I don't believe there is such a thing as an overpaid salesperson. If he/she sells more, he/she makes more, and more jobs are created to support him/her.

jkruse said...

I don't think you're being consistent here. At first you said he was coasting because he didn't need the money. Next you say he's just delaying the sale until next year because he can do without that income until then - but he'll make the sale either way. If that's really the case, then he's not actually lowering the productivity of the company because eventually all of the potential sales get made.

If, on the other hand, he's actually leaving potential sales on the table and not closing the deal, then he's absolutely hurting the productivity of the company. Why did he do this? You told me it's because he doesn't need the money and would rather not have to work too hard for a few months. If I'm his employer, it sounds like I need that salesperson to be a bit more hungry than he is. I'm all for employees to be duly compensated, but I've got to believe this guy would be working a bit harder if he didn't have it so easy.

I'm familiar with the Laffer Curve, but something peculiar happens when Grover Norquist's disciples describe it. Somehow they're convinced that we're always on the right side of the peak, and that revenues would increase if the rates were a bit lower. How do they know this? In fact, the curve that conservatives describe doesn't actually look anything like the Laffer curve. They're sure that no matter what the tax rates are, if they were lower the revenues would go up. If that's the case - let's set all the rates to 0 and watch our infinite revenues start rolling in!

jroosh said...

I didn't say he was coasting because he didn't need the money ever, just not before the end of the year when it would be taxed more heavily versus if he waited until after the first.

If you think all potential sales would be made, I would disagree; and I have managed enough sales people to know this. If a salesperson is sandbagging, they are not prospecting for their next deal with the same intensity that they would be if their funnel weren't qued up.

Pushing taxes to zero to see what happens doesn't make any more sense than pushing them to 100%.

Neither extreme is viable.

However, in the case of zero, at least the person that earned the money gets to keep all of it and would be 100% incented.

jkruse said...

Two items:

1. So we agree that pushing tax rates to zero makes no sense. So then how can you be sure that pushing them lower than they already are will result in increased revenues? It's an argument that gets made a lot.

2. I have to quibble with your contention that taxed income represents labor that's not fully incented. Don't schools present some form of incentive? How about bridges that don't fall down? Or our grand adventures in the Middle East? Nearly every person I know is in favor of at least one of the items on that list. If you do enjoy these things, how can you not take pride in contributing to them? I remember when people proudly described themselves as taxpayers, and didn't bitch up a storm about not getting to keep their money. Maybe my horizons have just been expanded since my youth.

jroosh said...

Krusey, thank you for the lively debate...

The argument about lowering taxes gets made a lot because its been provent to be true. Rondald Reagan proved it for one.

As you said, we both agree that zero taxes makes no sense. I want schools and bridges too. But schools keep asking for more money and aren't improving their results. Higher taxes wouldn't have saved the I35W bridge either.

I am also proud to be a contributing member of society but dont' make the assumption that the only way I can give back to society is via taxes because I give back, like many Americans, in many other ways.

I don't mind working to pay taxes until May as long as I know everyone else that can work is also working.

The days of the past that you are referring too are long gone as our congress has figured out that they can keep increasing spending and taxes. Not for the greater good but for the sake of gaining and dispensing power and influence. Soon our country will be bankrupt because of it.

I'm not sure if the last bit of you comment is a typo, but did you mean to say it's not their money? Just whose money is it?

jkruse said...

Yeah, yeah, Reagan's tax cuts. Here's a pretty good summary of what I don't feel like writing:

Even if Reagan's tax cuts did increase revenues, that's not proof that all tax cuts will do the same, right? The Laffer Curve has a peak. Eventually, as you move toward the origin on the x-axis, you cross the peak and revenues decline. I've never heard a "conservative" cede this point.

And no, that last line was not a typo. You and your salesman can keep all of your money, as long as you stay the hell off my roads. Freedom isn't free means more than sticking a yellow magnet on the back of your Suburban.

Bike Bubba said...

To help the salesman move more product, you'd reduce his wages?

Sounds like a great way to end up looking to hire a new salesman, and to find one who's nowhere near as good as the old one, Kruse.

Also, one of the big reasons those salesmen stop hustling at the end of the year is the AMT--more or less a monster bump in taxes for an extra dollar's worth of income. It's not just that someone's going from 28% to 31% in the tax brackets, but rather going from having their deductions and exemptions to not having them.