Building a Better Sales Culture

Tanner Bolt & Nut, a specialty fastener and tool distributor based in Brooklyn, recently finished a banner year — it experienced an 8% increase in sales revenue in 2005. Although the results were helped by an improved economy and material price increases that were passed on to customers, there was another factor: a change in how the company’s sales team did business.

Jeff Tannenbaum, the company’s owner and president recognized that changes were needed. The objective was to institute a program to change behavior and compensation, develop goals, drive sales and build teamwork. Prior to the changes, Tanner did not have regular sales meetings, accountability or team goal-setting.

The company has over 6,000 customers nationwide in its database, of which 30% are active. Sales efforts could best be characterized as passive, with the staff primarily answering phones and taking orders.

First, a sales training program was implemented so that the entire company had a systematic approach to telephone sales and a common language. Meetings focused on developing phone scripts, working on questioning techniques and improving presentation skills. For example, employees were taught to call customers who hadn’t ordered recently and ask why. Simply saying, “We notice you haven’t ordered lately, and we’re wondering if there were any problems” was an easy but effective technique for recapturing customers.

Goals were established for each individual on the sales team. Early targets were modest: One set of goals was for Tanner staff to make two telephone calls a day to customers who had stopped doing business, ask for two referrals a week from existing customers and follow up on requests for quotes. In addition, the sales staff was required to ask customers for two add-on sales a week (“If you’re buying this security fastener, perhaps you’d be interested in the drill bits needed to install them”).

A change in compensation was also important. Staffers were informed that they would need to adopt the new procedures to qualify for a bonus. The staff could now earn a bonus every quarter, an opportunity that hadn’t existed before. Those quickest to adapt would split a larger bonus pool. Everyone accepted this, and several individuals changed their behavior to generate more pay. In fact, those that lagged behind found they couldn’t hide, as performances were reviewed at weekly sales meetings.

Tanner had a customer turnover rate of about 25% each year. A drop-off list was created from the database. The criterion was established that customers who placed orders over $500 and had not ordered in three months would get a call. Each salesperson was to make calls from this list. They were required to keep records of why the customer hadn’t ordered. If the call resulted in a new order, the salesperson took note of the dollar figure. After a couple of weeks it was noted that 70% of the drop-offs occurred because a new purchasing agent simply wasn’t familiar with Tanner Bolt & Nut.

The program, which began last spring, had its bumps. Cultural change takes time. but with the introduction of specific goals, the results were immediate. During the first week, sales jumped $500 per day. By the end of November it was close to $1,500 per day, with one week surpassing $10,000.

Finding a common sales language has helped everyone. Sales meetings have become lively and talkative, with valuable information changing hands. Most importantly, Tanner Bolt & Nut is positioned to grow in good times and bad.

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