Contractor Tip of the Month: Is Your Competition on Your Payroll?

Words: Damian Lang

Have you ever paid the salary of one of your competitor’s employees? I am confident your answer is a resounding no. But you may be wrong. In fact, this may be happening every day. When these incidents occur, most of them are not intentionally malicious; but they are damaging to your bottom line. The good news is you can implement safeguards to combat the problem.

My wife, Rachelle, recently had an experience that is a prime example of a business paying its competition. When I ran out of cologne, she stopped at a popular retailer in Columbus, Ohio, to pick out a new scent for me. A nice young salesperson helped her find exactly what she wanted. When Rachelle told her she wanted to buy it, the woman whispered, "You can buy it cheaper on Amazon." Being a savvy shopper who can sniff out a good deal, my wife appreciated the tip and ordered the cologne online instead.

Over a glass of wine that evening, Rachelle shared the experience with me. I laughed and told her it was Amazon's best commercial, and the company paid nothing to produce it. This is how I imagine the conversation took place later between the salesperson and her manager:

Manager: "How did your customer like the new cologne you showed her?"

Salesperson: "She loved it. I think she will eventually buy it."

The manager probably walked away happy, anticipating a sale. But little did she know that an Amazon driver would be pulling up to my house the next day and dropping off my new cologne on the doorstep.

I had a similar experience at a trade show in Orlando. My crew from EZG Manufacturing and I noticed a potential buyer bouncing between our booth and the competition's booth across the aisle. My salesperson, Steve, was doing his best to reel in the potential customer. But this consumer was diligent and determined to gather all the facts before making a commitment.

Later, when he returned to our booth ready to buy, Steve asked him why he decided to buy from us. We were astounded at his response:

"The sales guy at the other booth told me to keep this between the two of us, that his machine was okay, but I would have much better luck with the Fence Hog from EZG over the competing machine his company had on display."

Turns out our best sales associate that day was our competitor. This got me thinking. On that day, the competition was on my side. But how often are the tables turned and my competitor is the benefactor?

Here are some of the safeguards we put in place to prevent us from unwittingly having the competition on our payroll.

Proper Training: Every member of our sales team should be an expert on our products and services. Equally important, they should also be experts on our competitors' offerings. This knowledge enables them to strategically tailor their sales pitch. It further serves to prevent well-educated customers from convincing them that the competition's product is better than our own.

We also subscribe to the use of testimonials, both for marketing and training purposes. There is no better way to drive home the message that our product is superior than to hear it from the mouths of our customers.

Incentives and Rewards: Motivating your sales team is extremely important, and a system of rewards is a primary means of encouraging performance. The inverse is the case of employees with hourly wages, which tend to diminish their accountability.

With proper incentives in place, employees feel they have a stake in the outcome of a transaction and are more likely to go the extra mile to make the sale.

Goals: Goals equally benefit both you and your employees. As the employer, they give your business a sense of direction. When your team is meeting sales goals, you can feel confident that your company is on the right track. For your employees, goals keep them motivated and productive. Be sure everyone knows what it takes to achieve them and the repercussions of poor performance.

Treat People Right: Treating your employees well is crucial for fostering a positive work environment and cultivating loyalty. I have repeatedly heard leaders say, "I treat my employees the way I would want to be treated." This is a terrible practice because you are assuming everyone shares your expectations.

My advice is to treat your employees the way they want to be treated. We are all motivated differently, so everyone should know why a sale for your company is so important. Remember, happy employees do not send customers to the competition.

Trust: This requires effort on the part of both parties. The employee must trust that you are going to produce a quality product and that you will pay them to sell it. You must trust that your employees will be loyal to your brand. It is your responsibility to make sure they know why.

In the cologne example, the salesperson did not factor in the value the store provided that Amazon did not: immediate gratification, scent testing, and personal sales support. These extra services separate the two retailers. If the salesperson was properly trained and incentivized, she would have closed the deal for her own company instead of Amazon.

Of course, in the world of sales, we must recognize that we may not always have a superior product or service. In that case, temporarily directing someone to your competitor may be necessary to build trust. But it is critical that this is a short-term redirect of business and includes a plan to bring them back.

It stinks when your company loses a sale, whether it is a small bottle of eau de toilette cologne or a 1,200-pound Fence Hog. And it hurts even more when you find out it was your own employee who turned the customer away. But it does not have to be this way.

If you and your sales team are on the same page, you can avoid the stench of unintentionally paying your salespeople to make money for your competitors.

BIO
Damian Lang is CEO at Lang Masonry Contractors, JVS Masonry, Buckner and Sons Masonry, Wolf Creek Construction, Buckeye Construction and Restoration, 3 Promise Labor Services, Malta Dynamics Fall Protection and Safety Company, and EZG Manufacturing. To view the products and equipment his companies created to make job sites safer and more efficient, visit his websites at ezgmfg.com or maltadynamics.com. To receive his free e-newsletters or to speak with Damian on his management systems or products, email dlang@watertownenterprises.com, or call 740-749-3512.

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