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The Hidden Pitfall that Destroys Employee Engagement

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Do your employees actually care about working for you, or are they just going through the motions?

If you feel like it’s the latter, have you tried motivation exercises, extra employee perks, rah-rah speeches and a ton of other gimmicks to get them switched on…to no avail?

Have you gone on firing sprees in the hopes of finding better employees, people who are really going to plug in and help you take your company to the next level? Do you find that promising employees hit the ground running, only to peter out after a couple of months?

The problem may not be your employees, and it may not be your perks. The problem might lie in the company itself.

Some companies engage in unethical practices. It’s easy to fall prey to this temptation. You’re there to make money, and sometimes doing something just a little bit underhanded makes making the money that much easier. Burying a hidden charge in the fine print or making customers run through 97 hoops in order to cancel their recurring billing arrangements may do a great job of keeping the company cash flow strong. But at what price?

This is just an example, of course. There are dozens of ways that companies can trip, fall, and roll right off of the moral high road.

The thing is, your employees are aware of these moral failings. Most of them keep their mouth shut, because they’ve got families to feed and the job market’s tight. But they don’t have any love for you or your company thanks to these unethical practices. Most of them are just waiting for the day when they can find someone else to work for.

They don’t identify with you, the company owner. Not really. In their eyes, you’ve got more money than they’ve ever dreamed of touching. They’ve never been a company owner. They have been the little guy, getting screwed over by bad company practices. They know how it feels, and they don’t really feel good about participating in it.

You may not even be the source of the unethical practice. It could be a manager who is encouraging it to massage his metrics because he’s hoping to score a big bonus or a big raise. These sorts of cancers crop up in organizations from time to time, and it’s important to catch them and eliminate them before they metastasize.

In Drive: The Surprising Truth about What Motivates Us, author Daniel Pink reveals that most employees are motivated by feeling as though there is some sort of greater meaning or purpose to their work. Can any employee really feel as though they are engaged in that meaning or that purpose if they know that some arm of your organization is actively engaged in screwing over other people?

Employee disillusionment may well be a symptom to a much greater and deeper problem within your company. It may be a sign that you’re looking at all the wrong metrics. That you’ve sent the message that profits are all that matter, no matter what it takes to get there. That you’re okay with salespeople who lie to make the sale, with customer service agents who promise one thing just to get a customer off of the phone faster but who deliver another to maintain some other almighty metric, or that products and services can be shoddy if it shaves a few bucks here and there. You might not have even meant to send those messages—it may have happened when you set your company’s metrics, and attached rewards and punishments to those metrics.

Thus, you must make sure that you are evaluating the impact of each and every one of your policies on a regular basis. You must understand how your policies affect your customers in particular. Then, improve upon them, both to improve the customer’s experience and to make employees feel good about working for you.

Highlight the ways that your company improves other people’s lives every single day. Make that your company’s mission. The money will follow. For example, at we help companies stay in business that would otherwise have a hard time doing so, because we help protect and defend them from spurious, defamatory attacks. We know what we’re good at, we know what we stand for, and we know why we’re here. We also make sure that none of our policies hurt the very people we’re trying to help. I’m happy to report that right now, at least, we’ve got a team who responds to that mission, who cares about it, and who comes into work every day ready to make some magic on behalf of our clients.

I also know that one careless decision from the captain’s chair could bring all of that crashing down: a billing policy that I don’t really think through, or a performance metric that emphasizes numbers over relationships. Constant vigilance and a commitment to integrity keeps our organization healthy, and it will help yours, too.

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7 Reasons Why Entrepreneurs Often Fail at Marketing

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Inadequate marketing tanks start-ups. Since start-up failure is far more common than start-up success it’s relatively safe to say that most entrepreneurs are lousy at marketing.

None of the marketing pitfalls below are insurmountable, but they are useful as diagnostic tools, especially if your business isn’t getting enough steady leads to produce profits month after month.

1. The entrepreneur has no time.

Most start-ups begin as solo shows, which means that the entrepreneur is trying to do everything that entire departments of people are doing for other companies. This can be overwhelming even when there aren’t many customers. Starting a business isn’t for the faint of heart for a reason: these days, three people handle the work I used to do myself.

Marketing doesn’t always provide immediate benefits, either, which means it often slips to the bottom of the pile in favor of activities which bring in money now. Unfortunately, this isn’t a situation that can continue if you want to grow your business in the long run. Make daily marketing a priority—or hire an agency to do it for you.

2. The entrepreneur has no budget.

Once upon a time, one could use most Internet marketing channels for free, or nearly for free, and reap considerable benefits from doing so. Many people are still stuck in the mindset that marketing can be 100% free, and that any scrappy start-up in the garage can compete with Fortune 500 companies with multimillion dollar budgets.

That was before the days of Panda, Penguin, Hummingbird, Facebook newsfeed algorithm changes and other changes which have slowly forced “free” marketing methods into near invisibility over time. You can still do a lot of work for free, but you can’t stop there.

3. The entrepreneur has no skills.

Most entrepreneurs do not launch businesses because they’re professional marketers unless, of course, they are launching marketing firms. Copywriting is a real skill that goes way beyond “putting words on paper.” The only people who can really do stellar graphic design are graphic designers. Branding expertise is hard to DIY, too.

There’s plenty of information out there, so it’s not hard to pick up at least the basics of some of these skills. It is, however, difficult for, say, an accountant (or an internet reputation specialist) to look polished, professional, consistent, and appealing without getting at least a little bit of help.

4. The entrepreneur has no plan.

A marketing plan is a must if you want to start a business. I argue, and will always argue, that it’s going to be more vital than a business plan. If you don’t know how you’re going to get the word out then the strength of your offering just doesn’t matter.

A competitor whose offering is not even half as good as yours can beat you if that competitor had a plan and you didn’t.

5. The entrepreneur never changes the channel.

Some entrepreneurs get the hang of a single marketing channel—such as content marketing or social media—and then stay there. They never branch out to the myriad of other options that are available to them.

These days you need to jump into almost everything: paid search engine marketing, SEO/local SEO, public relations, direct mail, print media, e-mail marketing, and more. You’ve got to be everywhere you possibly can be so that you rise above the noise.

6. The entrepreneur doesn’t understand how different channels work together.

It’s not enough to flood different marketing channels with your information. These channels have to work together seamlessly. One has to lead into the other. Your direct mail, piece, for example, needs to lead to a landing page that captures an e-mail address before moving people on to your website where they can then go and make a purchase. All of these elements must have a consistent look and feel so the customer never feels jolted out of the experience.

7. The entrepreneur is uncomfortable with the whole idea in the first place.

Marketing has always made people uncomfortable. It feels a bit like bragging, and we’re often told that bragging is inappropriate when we’re children.

We’re not children anymore though, and it’s vital to break through this psychological hurdle before you launch your business. If you’re truly providing solutions to people’s problems or an answer to their desires then you should never be afraid to say so.

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Hiring New Employees? Put Them to the Test First.

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The New York Times recently ran an article on “test driving” employees before you hire them. This is a fantastic strategy.

Finding good people is one of the hardest parts of building a great company. Any employee represents a significant expense, too—especially high level employees, who will cost you an arm and a leg. You can’t afford to take any chances.

I don’t necessarily advocate staffing your company with temporary workers, as the companies profiled in the article did. That course of action comes with a host of other problems. A temp-to-perm program can impact your reputation by making you look exploitative (just ask It can also dilute your company culture.

Fortunately, there are other ways to put potential employees to the test.

1.  Watch their approach.

Look beyond that glorified marketing document known as a “resume.” Look instead to the methods your candidates used to conduct their job search.

For example, did the candidate reach out through his or her network? Did he or she take the time to learn your name and, in so doing, address the cover letter to a real human being? Does he or she actively blog or tweet about your field or industry?

Look for something that makes this candidate stand out. The candidate should know how stiff the competition is, so what he or she does (or doesn’t do) to rise above the noise can be telling.

2. Get them to work on the spot.

Here at we often assign test projects during our job interviews. This tells us whether the candidate really knows as much as he or she claims to know. It also tells us how the candidate performs under pressure.

Someone who is capable of producing on the spot and who has a good attitude about being asked to do so is likely a good bet.

3. Put them on probation.

A 90 day probation is highly reasonable for rank-and-file employees. Executive employees might even warrant a six month or a one year probation period. During this period you’ll get a chance to see whether or not your tentative employees really fit into the company culture. You’ll also get to see their skills, and their work ethic.

If it’s not working out you can let these candidates go. No harm, no foul. Both parties understand this period functions as an extended interview, and there’s a lot less pain and trouble involved in saying “no thank you” if it doesn’t work out.

Believe it or not, employees often appreciate these chances to “show their stuff.” After all, the outcome of their employment is quite a bit more within their control during the course of these tests. If they aren’t hired they will know the reasons are performance-based, and that they don’t have anything to do with the often random and arbitrary reasons why people don’t get hired during a more traditional interview process. You’ll both know you’re a good fit for each other by the end of the process, and as a result you get a happier, more committed employee. In short, putting candidates to the test may seem a bit harsh, but in the end it’s a win-win for both of you.

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Hey Entrepreneurs—It Is Not Always Better to Do Everything Yourself

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I don’t believe in business loans, angel investors, or VC funding. In general, I believe in allowing a business to fund itself. You pursue sales, you grow your customer base, and then you grow your business.

So I understand the impulse to “bootstrap,” and to save every last dime by trying to wear every “hat” in the business. I understand wanting to pinch every penny, and I understand the impulse that leads you to ask yourself questions like, “How hard can it be?” while tackling the kinds of problems that other professionals get paid big bucks to devote their lives to.

However, sometimes those pinched pennies can be very costly in the long run. There are some business functions that you probably just don’t have the expertise to handle. Unless one of the following three business functions describes the actual service that you’re offering to customers right now, you should probably consider investing in them as soon as you’ve got the cash flow to do so.


Quickbooks and H&R Block are not necessarily good business solutions.

You can miss vital deductions. You can make mistakes that trigger audits. If you’re a sole-proprietor or an LLC and you don’t do things just right you could be crushed by self-employment taxes.

Tax problems can actually drive you out of business. I know one independent contractor who started looking for jobs after winding up in debt to the IRS. He said that he just couldn’t see how he wouldn’t be $20,000 in the hole in two years. I made him visit the accountant. He’d thought that the accountant would be too expensive. Turns out the accountant was far cheaper than the IRS was. He’s still in business today.

Accountants also help you grow. You can feel a lot more confident about hiring employees, for example, if you’re already working with an accountant who offers payroll services. You’ll know that the taxes are taken care of, which means you can focus on hiring and training the right people.


The Internet makes it seem like practicing the law is just a matter of downloading a few forms and filling them out. That’s a mistake. Unless you have passed the bar exam yourself you simply don’t know all that you need to know to protect your business.

Omitting or including a tiny little turn of phrase on one of those forms could make a huge difference to the future of your business. You may not even know which forms you need to download.

A form also can’t shield you from a lawsuit. A lawsuit could end your business before it starts. Thus, you need a lawyer on your side, preferably before you’re facing one. You need to be proactive. You need someone who will look at your advertising language to see if you’re running afoul of some regulation you’ve never heard of. You need someone to pay attention to your products to make sure they’re not going to create problems. You need someone who can defend you from patent trolls.

In short, you need someone in your corner, and that someone needs to know what he’s doing.


Most entrepreneurs are crappy marketers. They want to be off doing whatever they’re good at—that thing that helped them create the business in the first place.

But a business can’t grow without good marketing. It’s just a fact of life. You have to invest in it, you have to respect it, and you have to turn it over to someone who does enjoy it and is good at it if you’re no good at it.

If your marketing plan is working then by all means, continue to do it yourself. Unlike the other two disciplines, marketing does not require specialized training or an advanced degree. If your marketing plan isn’t working like it should be, however, hiring a marketing firm, consultant, or professional could be a life-or-death decision for your business.

Invest the money in real professionals. I know it’s painful now, but you’ll thank me later.

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Is Your Vacation Policy Killing Employee Loyalty?

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Pre-cation benefits are making headlines lately. The idea is to give employees 2 weeks of paid vacation before they come in to work, as a new sort of job benefit. The policy is innovative, but it can also be problematic.

For example, one article describes it as a “trap,”—noting that it encourages a common, insidious practice. Many employers give out vacation days on paper only to penalize employees for taking them. The writer of the dissenting article feared that this benefit would sort of turn into the one vacation workers get so long as they continue to work for the company, regardless of any additional vacation days on offer.

On the opposite extreme, you’ve got companies who are downright forcing employees to take vacations, a practice which I don’t agree with. Once I’ve set my rules and expectations about employee work output and vacation time, it’s up to them to determine how they will work within those guidelines and parameters. I believe in motivating and empowering my employees by treating them like adults.

Of course, this works in my company because I uphold my end of that agreement. I would never penalize an employee for taking his earned vacation benefits. To do so would be the equivalent of penalizing an employee for wanting his agreed-upon salary.

The key, then, is to avoid swinging to either extreme. Don’t force vacations, and don’t penalize people for taking them. Offering “precations” can be just fine—but only if you avoid turning it into a “bait and switch” somewhere along the line. If your offer letter comes with a precation and ten additional days of vacation time after one year then guess what? That employee’s job needs to be there when he or she comes back from vacation. If the employee isn’t a good hire make sure the pink slip conversation happens well before the scheduled vacation time does.

Here’s why. The moment you fire someone for using a benefit you chose to offer you’ve lost integrity. The same goes if you choose to penalize someone in any other way over using their vacation days—even if it’s just an off-handed comment that they don’t seem to be “dedicated team players.”

When you engage in these behaviors you’re sending a message to your employees, one that says your word does not matter. You’re just another liar, just another employer who is out to squeeze and screw them for everything they’re worth before tossing them aside like so much garbage.

Once you’ve sent that message there’s no going back. You can use every positive, forward-thinking leadership strategy in the book. You can create teamwork seminars. You can institute empowerment practices and wax poetic about your “open door policy.” You can offer a flexible telecommute policy. It won’t matter. Everything you do from that point on will be suspect, and employees will start disengaging.

Integrity is the best employee-motivation tool on the planet. Either offer the vacation benefit and honor it, or don’t offer vacation at all.

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Want to Boost Your Company’s Reputation? Do Good.

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It would be hard to overstate the reputation benefits of performing “good works,” especially if you make those good works a regular part of your company’s policy and procedure. Such actions help you create a positive reputation firewall that will help to shield you from any defamatory reviews that you receive, as well as any legitimate customer problems that you encounter.

Here are three ways that you can start right now.

Pay employees more.

Most consumers are also workers. Workers are painfully aware that most companies do not value them, and they know that people just like them have harder lives as a result of these attitudes.

It’s hard for consumers to feel any loyalty to the company or brand as a result.

Companies who take the opposite approach still post very nice profits – and they avoid some fairly major problems that could actively create legitimate negative reviews. Furthermore, companies who treat their employees well are so rare that they tend to receive positive news coverage as a result of their policies.

Don’t forget that there are now quite a few sites devoted to allowing employees to post anonymous reviews of their employers. These reviews can be just as damaging as customer reviews can be. Cultivating happy employees is just good business, and it’s hard to be happy if you aren’t sure where your next meal is coming from.

Donate some product.

This week, retailer Meijer partnered with Skechers shoes to donate over 22,500 pairs of brand new “BOBS” shoes to impoverished Detroit-area children. Both companies can expect a positive impact on their reputations as the story gets out to more news outlets. They can expect to make more sales, too: people will feel just a little bit better about doing business with both brands.

This action won’t wipe out any negative reviews either company may already have acquired. But it will push them down in the search results, and it may cause customers to give these reviews a lot less weight. A story about a grumpy cashier won’t erase a customer’s good feelings about helping Detroit’s needy kids.

Go green.

Finding ways to become more sustainable can be incredibly profitable. “Going green” also generates yet another legitimate reason to write a positive press release. It’s a story which is likely to be well received by both publications and customers alike.

One caveat: make sure your practices actually create positive change. “Greenwashing” ultimately backfires, once it’s discovered.

The bottom line…

People are all too willing to believe terrible things about companies who routinely act badly, but the reverse is also true. People are inclined to be more forgiving of companies who openly and consistently choose to take the high road.

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How to Reduce the Risk of Being an Entrepreneur

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Most people who talk about entrepreneurship talk about risk. After all, we’ve all heard all of the stories of people who lost it all in a failed quest to launch a business.

It’s true that you’ll always risk something by choosing to go into business. But you can choose what to risk, and how much you risk, by doing so. By using the following tips you can follow an entrepreneurship journey that’s no riskier than staying right where you are in your current job.

Avoid big business loans.

Starting a business does not have to go hand-in-hand with obtaining massive amounts of debt. Many businesses start debt-free, and quite a few of them run debt-free for the rest of their lives.

To do this, you have to be willing to start small. You could take out a $300,000 business loan to buy a car wash. Or you could choose to start a mobile car wash with your own car, a magnet sign, a bucket and some soap; an investment of about $100.

This strategy does not mean the big, shiny car wash is out of reach. It means that you’ll need to put aside some percentage of your profits so that you can eventually get what you want. It means you’ll run your business in a series of baby steps, allowing your sales to pay for your growth. Perhaps your next expenditure will be on marketing, or on branded mobile car wash vans. Perhaps you want to hire other car washers so you can leverage their own time.  Mobile detailing is usually marketed to high-end clients who might not think twice about paying $120 for a service package. If you could do 8 of those each day, 5 days a week while saving 30% of that revenue you could buy the $300,000 car wash building in cash in a little over a year.

Avoid venture capital.

Shark Tank has many people thinking about VC funding even before they think about loan funding. But VC funding is not easy to obtain, and it’s not easy to live with once you get it. In fact, you could lose so much control over your own company that you wind up getting fired from it! That’s a huge risk for someone who puts in his own blood, sweat, tears, money, and effort into building a business.

I’m not saying VC doesn’t have its place. I am saying that most businesses don’t need it and shouldn’t pursue it. If you don’t need to build a huge factory full of highly expensive technical equipment just to get your business off the ground then you should skip VC altogether. Again, let your sales pay for your growth.

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How to Motivate Your Customer Service Team

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Customer service reps have a tough job. They deal with angry or unhappy people all day long.

They also aren’t always aware of how valuable they are to their organization. Many organizations struggle to capture the value of an agent in real monetary terms, and they fail to share that value with their agents. Thus, an agent can feel like his only role is to be the whipping boy for the rest of the organization.

On average, companies lose 26% of their front line customer service agents every year thanks to these realities. Burn out among agents is understandable, but it’s also expensive.

What can you do to keep your team motivated and on the job?

Offer commissions on upsells.

A customer service call is not just an opportunity to save a customer. It’s an opportunity to upsell the customer, too.

Why shouldn’t customer service agents earn a commission on that revenue, just as the front line sales staff does?

Allowing customer service agents to earn a commission helps them feel as though they can control their own circumstances. In most companies, agents are paid a fixed amount that doesn’t change even if they are perfection incarnate on the job. Commission offers that little extra incentive, and turns the agent’s time on the phone into a game. How much more can the agent earn?

Help agents understand their importance to the company.

Any employee wants to understand how important they are. We do this by sending out weekly customer satisfaction surveys to clients. This helps us generate a rolling Customer Service Rating number for each agent. It gives agents a goal to shoot for each week. It also makes their importance clear by showing just how much each agent is doing to contribute to our corporate image overall.

You’ll want to develop your own systems of course, systems that match what your company is doing and how it operates. You could choose to track the number of accounts saved, for example, since every customer service call could result, ultimately, in a customer’s decision to stop doing business with you.

It can take some time to set up these sorts of solutions, but it’s time well spent. You’ll spend roughly $8800 replacing each agent who leaves your company, so imagine how much money you can save by making even an incremental improvement in your turnover rate on an annual basis.

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Two Simple Elements of Start-up Success

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I’ve got good news and bad news.

The good news: starting a successful business isn’t all that complicated. If you can get just two elements of business success right, and get them right before you open your doors, then you’ll have a really good shot at success.

Element #1: Filling a need.

Most people decide they want to go into business for themselves and then spend weeks, months, or even years trying to wrack their brains for some new, big idea. Once they have the idea they convince themselves the idea is worth millions. They’re usually so relieved to think up something, anything that someone else isn’t already doing that they never stop to ask themselves if anyone actually needs this thing they’ve come up with.

The most successful entrepreneurs don’t do that. Instead, they spot a problem. They think: “I can solve that problem.” Then they do it.

The problem doesn’t even have to be world-changing. The problem could be: “There aren’t any pet sitting services in my city. Yet there are 32 vet offices, so there must be plenty of pets.” This approach is customer focused instead of owner focused, which makes it easy to make a compelling case for customers to do business with you.

Novelty isn’t necessarily the issue. The issue is whether or not the product or service flows naturally from the problem.

Element #2: Creating a marketing plan.

You can’t make money if nobody knows about the bold new solution to the problem you have been observing. That means you’d better figure out how to get the word out to people who have the problem!

Start by figuring out where those people might be. Sometimes that’s easy. Our pet-sitter already knows that pet owners go to the vet. Sometimes it’s a little harder, but it has to be done.

Then, figure out how to place your message in that space. Perhaps you’ll drop a brochure or a business card in the waiting room. Perhaps you’ll set up a website or a Facebook page. Most likely, you’ll use a variety of methods to get the word out.

Any way you do it, you’ll have to reach these people in a way that empathizes with their problems while communicating your solution. Knowing what you’ll say, how you’ll say it, and where you’ll say it are the basic elements of a successful marketing plan. You also need to be sure that you’re available to speak to these people: over the phone, via e-mail, and in person. Otherwise you won’t close any deals.

This plan will help keep you focused. It will ensure that you actually know what to do in order to build your business every single day. Without it, you’re likely to spend most of your time watching Netflix with one hand on the phone, hoping that “business picks up soon.”

So what’s the bad news?

The bad news is simple. Most people get these two elements of start-up success dead wrong, and business never does pick up. This is why the road to business ownership is littered with so many failed ventures.

But it doesn’t have to be that way.

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Is Your Sales Team Stalling?

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“Stalling” behaviors kill productivity and reduce your revenue. And most sales teams are plagued by them.

Most stalls look legitimate on the surface. They usually involve taking the least productive elements of the job to the extreme. Driving, for example, is a normal and necessary part of an outside sales person’s life, but if 6 hours of 8 are spent driving then that rep just isn’t making too many sales.

All stalls are like that. They look a bit like the job. They just don’t force your reps to get in touch with actual people.

So how can you put an end to this behavior and get your sales team back on track?

Identify the stalls.

Which specific stalling behaviors do your team members engage in? Does your outside rep schedule appointments to force drives that are 45 minutes apart, without stopping to prospect in each area to minimize the disruption? Does your inside sales rep spend 3 hours researching prospects on LinkedIn?

Once you’ve identified the specific revenue killers you can begin analyzing the problem.

Identify the reasons behind the stalls.

Stalling behavior may seem nonsensical or even a little insane to you, especially if your representatives are only paid on commission. Don’t they know that these activities won’t make them any money?

But human behavior is what it is. And people stall for a variety of reasons. The most common reasons are:

  • The rep isn’t sure what to do.
  • Your rep is afraid of making a mistake.
  • Your rep is just not very organized or efficient in the first place.

Fortunately, all of these are problems that can be addressed and fixed. Sit down and talk with each rep and identify which of the three reasons is behind your rep’s stall.

Someone who is afraid of making a mistake may say, “But I have to do that much research. What if I get on the phone and sound dumb because I missed the one detail that was truly important?”

Someone who just isn’t sure what to do may say, “I don’t know. I’m not sure I should just walk into people’s offices. It may be a bad time for them, and what if I don’t talk to the right person?”

Someone who is generally inefficient may say, “I can’t help that I had a 9:00 on the south side of town and a 1:00 on the north side, boss. And traffic was terrible. That just happens sometimes.”

Restart that engine!

Now that you’ve identified the problem you can come up with a plan.

For example, you can suggest that the perpetual driver should designate a day of the week to each area of town. If his territory covers four zip codes then Tuesday can be zip code A, Wednesday can be zip code B, Thursday can be zip code C, and so on. Then, when he’s suggesting times to prospects he can say, “I have Thursday open. Would morning or afternoon be okay?” That way, he’s running multiple appointments in the same zip code each day.

You can give the perpetual researcher a specific questionnaire to fill out, or a list of the five things she absolutely must know about a client before making contact. For example, “Sue, you really only need to know the person’s name, job title, industry, major product, and closest competitor. You can find that out in a couple of minutes. Then pick up the phone and make your call while it’s all fresh in your mind.”

Other fixes may be appropriate to your business model and sales cycle. These are just examples! You could even calculate the amount of money that they are actively losing by engaging in these behaviors. Be sure to monitor the team. You want to ensure that they’re following the plan until the plan becomes habit. And once it does, those nasty stalls will become a thing of the past.

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