In today’s pool industry, every dig is critical. But in trying to get that signature on the dotted line, some sales professionals will push the limits of what they can promise and at what price.
Yet with margins shrinking across the board, companies can’t afford to make less than needed profit, nor do they want to find themselves struggling to explain why the crews can’t deliver that amazing new waterfeature.
To address these issues, some businesses have instituted standard procedures to garner the most sales, at the highest profit possible and with the fewest headaches. Here, three experts explain their strategies.
Ron Robertson, president
Robertson Pools Inc.
Our salespeople are on a commission-only basis, with a potential for overage. If they’re not making money for my company and I’m still paying them, there’s a problem. A salesman will get stale if you just keep paying them a salary.
But our salespeople can make more than the basic commission. We have a par that we want to meet on each job, based on cost plus a certain percentage. If somebody sells a job within 3 percent of par, they get a 6-percent commission. If they are more than 3 but less than 7 percent from par, they lose one percentage point. At 93 percent of par or less, the salesperson loses another point.
But if they bring that job in above par, they get 50 percent of the difference.
For the first two to three months they’re with my company, salespeople work on salary and just train with the sales manager. The sales manager sells pools, and he trains the new person to work in our way. Then we start feeding them leads after a couple months. My newest guy made his first sale three months after he started. I think a longer training period prevents mistakes down the line.
Staying in line
I believe the most positive thing we do is carefully audit every job. Several eyes look at each project even before excavation, and this eliminates a lot of surprises.
Every job is audited by the sales manager before it goes to construction. If he finds that the salesperson underestimated the square footage of the deck, for example, he adjusts that and takes it off their commission.
Then I get the plan, and I look at it with a construction eye. I make sure the job actually can be built, that the plumbing will work correctly — that type of thing.
Throughout construction, I get every invoice. If I see a discrepancy and have to make an adjustment, the salesperson gets a back charge if it was their mistake. I can back charge the whole difference or part of it, based on how bad the error is.
When the project is completed, it goes through another audit. As long as the cost fits somewhere within a few percentage points, it’s a clean job.
If a salesperson is back-charged, they have two weeks to respond, and if they say, “I just missed that gas line — I didn’t even look at it,” they get back-charged. If they say it was on the plan but the gas guy ran the line in another direction, then I find out what happened and the salesperson may not get the back charge. If it’s an act of God, then the company eats it.
Andy Everleigh, president
Environmental Pools Inc.
Our compensation varies. We have some salespeople who are commission-based, but we’re trying to phase out of that.
I’m looking to get off the old-school way of commission-only and move toward salary plus commission, because our salespeople get so much help from the corporation. Because of the magnitude of the projects, they usually work as part of a team, say with our landscape architect, as opposed to the old days where one sales guy was closing the deal.
This means the salespeople aren’t doing as much as before, so the commission scale is going down. In the past, the commission would be so high that you couldn’t justify giving that amount and then paying someone else to do the design work. So we’re moving toward offering a salary and lower commissions. My preference would be to have everybody salaried, with a landscape architect supporting each salesperson.
Because projects have become larger, our salespeople now get a piece of the hardscapes and a lot of other amenities, as opposed to just the pool.
Salespeople always complain that there aren’t enough leads, especially in this market. So we’ve created an incentive based on how many new leads they can generate on their own. We’re specifically looking for landscape architects and high-end home builders. The sales representatives must talk to at least three or four people in industries related to ours. At the end of the month, the one who generates the most sales based on those self-generated leads receives an incentive.
It’s been amazing. Salespeople typically want the leads given to them, but as they’ve gone through this exercise, they found they can generate new leads and sales on their own.
We began another new incentive in the last few weeks. We’ve had each salesperson revisit past prospects who never made a decision. These are homeowners who they had visited and done design work for since 2007. In the last three weeks, we’ve probably sold four jobs based on that program, and we’ve gotten a number of new appointments.
The initiative holds us accountable, because the salespeople must commit to calling seven to 10 clients. At a meeting the following week, they have to report on who they contacted. At the end of the month, the one who generated the most sales from former leads will get a bonus. Even if they don’t win, they’re still making more money.
I think these incentives have been working out because consumers feel a little more confident. They’ve said, “Thanks for calling us back. We were thinking about you.” I don’t think we would have even gotten a response a year ago.
Staying in line
Sometimes before they sell a job, we send a project manager out to do pre-site inspections. Especially if we’re doing a vanishing edge or raised spa, we need to shoot elevations before we could put a bid together.
We usually want to know where the gas lines are, where the electrical service is — all those little gray areas that always come back to bite you. Then we know the salesperson won’t over-commit.
I believe doing this will get deals sold. Clients say, “The other builder never even mentioned that. They never looked at that.”
Customers always want a discount — it seems they don’t want you to make any profit whatsoever. So we have given the sales staff more flexibility with pricing than before, but it’s done through the office rather than letting them decide arbitrarily. If a potential client says that another builder gave a lower price, we may have our sales manager step in and give a contract analysis. He’ll look at the other contract (if the client will show it to us) and compare it to ours. Customers figure the salesperson just wants the deal, so they trust the manager more. He’s giving them more of a view from the outside looking in.
Jordan Clarkson, vice president and general manager
Pools by John Clarkson
Our salesperson gets a blend of salary plus commission. I think that encourages him to be part of the process the whole way. If they’re just paid commission and they collect when the pool is dug, then they have less incentive to participate, because they’re not getting paid to be part of the process — they’re being paid to sell.
Staying in line
The way we keep people from promising things we can’t deliver is by having the salesperson look at a project through the whole process. So even though he’s not an on-site supervisor, he’s very involved with the client all through the project. If the salesperson or consultant knows they have to face that homeowner, they’re less likely to bend reality. They’re also going to be more understanding of the process. We encourage training on the construction part of it, so he knows how a pool is built and better understands the costs.
The salesperson also talks to the company owner or construction manager to make sure we can deliver what’s promised. We do that on anything out of the ordinary, anything that’s newer to us. We have a very good team where we encourage communication, so we’ll all meet and go through a particular design or detail. Maybe it’s not the whole project, but say we’re doing this fire feature and we have to figure out how we are going to make it work, how we are going to coordinate it.
We use a particular estimating system, so we have a way of accurately pricing pools. Then, when it goes beyond that, the salesperson will meet with a manager.
And once the project is sold, they have to turn it in for review.