What Would Peter Do?

My recent issue of the Harvard Business Review (HBR) had a cover that really caught my eye.  This year (2009) is the centennial year of the birth of management guru Peter Drucker (who passed away in 2005).  In my mind, Mr. Drucker is one of the heroes of business, along with men like W. Edwards Deming (the American who introduced total quality control or TQM to the Japanese after World War II because Detroit wanted nothing to do with it) and Thomas Watson (the founder of IBM). Read more…

The Sorry State of Financial Savvy Today

While reading a recent issue of The Harvard Business Review, I came across an article titled “Are Your People Financially Literate?” by Karen Berman and Joe Knight (October 2009, page 28). The title woke my curiosity since I am an advocate of business people knowing the financial ropes as well as they can. The article was stunning. The research at their web site (http://www.financedog.com/blogs/18) showed that only 38% of those they have tested made a passing score. (Even I did poorly on the six-question sample test the site offers as a teaser to buy their services.) Read more…

Paying Sales Pros (Part 3 of 3)

The seasoned veteran sales professional is a person who has been selling residential and light commercial HVAC systems for several years. He or she has a good grasp of sales skills as evidenced by a closing rate of 65% or higher.  (Some I know hit 90%, and not on price!)

They are masters of the subtle question and know how to elicit strong emotional drivers from their clients and harness their solution to those drivers so sales are (to a casual observer) very easy. (But they fully understand how complex and difficult selling at such a high level is!)

Such professionals often have the ability Read more…

Territory Manager Field Guide Coming Soon!

I am excited to announce this on my web page!

I am putting the finishing touches on a manuscript for a book I am tentatively calling “The Territory Manager’s Field Guide.” This practical book will contain 30 chapters that contain helpful tips on how to run a successful territory. The information has been drawn from my own experience as a pace-setting territory manager as well as leading territory managers from around the country I have met in workshops over the years.

This will be a large work– the manuscript in Word 2007 is about 600 pages long! It will also come with a CD-ROM with PDF files, Excel spreadsheets, and other useful tools to help a territory manager be the best he or she can be.

I have already begun talks with my publisher and hope to be able to make a formal announcement and take pre-publishing orders by the end of the year.

Come back to my web page from time to time to get updates and release announcements.

Paying Young Sales Professionals (Part 2 of 3)

Sales people who have survived their first year (and I use the term “survived” with purpose) will probably go on to become decent sales people. Some of them will even become great (but not that many—maybe 6%).

So how do we pay sales people who are no longer rookies but not yet at that level of experience and skill that the truly great sales people attain?

Clearly, a level of pay that is above that of a first-year rookie is appropriate, provided the sales person is producing at a rate that is better than a rookie. (For convenience, let’s call this sales person an apprentice. They have graduated from pure rookie-dom, but are not yet at the level of a journeyman.)

Read more…

Paying Rookie Comfort Consultants

The other day, I received an email from a territory manager in the Midwest who I have known for almost 20 years. He is one of the sharpest men I know in this business, and he wrote to warmly discuss how my blog posts have been helpful to him and his dealers. I am grateful for that! But he also suggested a topic that has lead to this series of posts—how do you pay sales people, especially beginners?

In the LIBRARY section of this web page, you can download an article titled “Pricing For Commissions.” I explain in that article (click here to download a copy) how to set your pricing to recover commissions so your company nets out the profit you want. But I do not explain in that article how to pay sales professionals in the first place.

Let this first article of a series of 3 lay some groundwork. Read more…

Got Biz Plan?

I am not a big advocate of written business plans— at least, not those 10-chapter MBA thesis projects that a Harvard B-school graduate student would write.  Those tomes are fine for getting a loan or impressing an imbecile to buy shares in your venture, but they are not much use to a small business person for the day to day running of a struggling business.

But I am a proponent of a written business plan for any small business.  It’s just that it needs to be short (no more than 10 pages) and as wordless as possible.  Which is why I have become a fan of Michael D. Ames, a professor of business at California State University (Fullerton). He wrote a paper titled “Rethinking The Business Plan Paradigm” (you can download a PDF copy here. Read more…

The Labor Bugaboo!

The biggest killer of otherwise healthy HVAC businesses is labor that is not under control.  And I don’t mean installers and service techs acting like drug-crazed maniacs.  I mean labor that is not properly and efficiently used by management.

I use a rule of thumb to bring home its horrible cost.  I call it the UT RULE (which stands for the unbillable time rule) and it goes like this:

If you have typical unbillable time in your company, it could be costing you 2,000 times the net hourly pay (with benefits) of your field people!

Read more…

A Contractor’s Birthright

What should an HVAC contractor be able to expect from the sales rep who calls on him or her from his major brand supplier?  In this blog, I will paint a picture of what a superb sales rep should be able to do for a contractor.

First, a superb sales rep (I’ll use the acronym SSR from here on out to save my fingers some wear and tear on my keyboard) knows that you create the pool of profits from which everyone in this business drinks. You, of course, derive your livelihood from what you do, but so does that sales rep and the company he works for.  The factory that supplies that distributor with equipment depends on the profits YOU generate.  The suppliers to the factory (metals, refrigerants, motors, etc.) depend on those profits too. Read more…

I’ve Been To Disney World!!

Last week, the wife and I accompanied our daughter and son-in-law and our two grandchildren (Luke, 16 months, Alexis, 8 years) to Walt Disney World in Orlando, Florida for a vacation and birthday celebration (Alexis turned 8 while we were there).

Several observations about WDW:

1.  Florida is humid. Very humid. For me, one who is used to the dry desert heat, Florida was worse than a clam bake, with me as the clam. After walking only 50 yards, my shirt was soaked.  I wish Mr. D had decided to build his park near Phoenix—but then, it would have been only 5 hours away from Disney Land in the Los Angeles area, and that would have been a poor move from a business sense. Read more…