By the Numbers

As a successful remodeling business grows from a one- or two-person operation to a company that warrants a dedicated sales staff, the owner must often assume the role of sales manager. But managing people who sell requires a different set of skills from selling itself. Though entrepreneurs tend to be good sales-people, sales managers also need to be teachers and mentors. The transition can be a tough one.

Hopkins & Porter Construction in Potomac, Md., provides a good example of how this transition can take place smoothly. Mike Porter Denker and Guy Hopkins Semmes started the business in 1977, and as is the case with most startups, the partners did everything at first, from estimating and selling to production. Neither had any formal business training, but as the company grew they found themselves having to hire and train a sales staff. That meant they could no longer rely solely on their own instincts.

“You have to write job descriptions together, codify all the things that you do, and be able to explain how and why you do them,” says Denker, who is now general manager. “You also begin running your business more by the numbers, looking at things like volume per salesperson and leads in versus sales made. These things really came to the fore when we started managing other salespeople.”

Managers like Denker who have walked the growth path say that the best way to get through it with your company and your sanity intact is to create good growth “maps.” Like a solid accounting system, it's best to have the maps in place before you grow. Creating those maps means thinking through whom to hire, how to train them, what jobs to give them, and how to evaluate their performance. Getting this right can be the difference between smooth growth and chaotic collapse.

The traits that make someone good at selling remodeling jobs are the same as those needed to sell anything. “The most important qualities, and the hardest to find, are a good attitude, passion, and the ability to accept rejection and get back up,” says Gary Marrokal, president of Marrokal Construction, a San Diego remodeler with more than $15 million in sales this year. He also checks references and tries to determine whether a candidate will fit the company's customer-focused culture. “Clients are a lot more difficult to work with than they used to be. They're working too hard, and they're stressed,” he says. “We want to make sure we have a team of people that respects that and doesn't add to their stress.”

Despite the fact that personality traits top the list of requirements, most remodelers tend to look for salespeople who combine these traits with some industry experience. That includes Marrokal. His salespeople are referred to as “design consultants” or DCs, because they help customers design their remodels. His hires range from former designers, to a framing contractor, to an electrician. He describes his DCs as “top performers,” with four of them averaging $3.5 million each in sales per year. He attributes much of that success to good training.

Training may be the most important part of sales management, but in a growing company it can be complicated by the fact that the sales manager is still learning how to do his job, while at the same time trying to train new salespeople. The advice from remodelers who have been through this process is to get all the help you can.

When Tom Gilday and his brother Kevin started Gilday Renovations in Silver Spring, Md., they relied on their combined knowledge to sell and manage jobs. As they grew to a $7 million company with 40 employees, they recognized the need for formal training. They now put all new salespeople through the Sandler Sales Institute program, a nationwide sales training franchise. Sandler training teaches salespeople how to deal with the emotions that buyers go through. “It reminds them of who they are and what their role is. It also teaches them to look at potential negative elements and how they might impact sales,” Gilday says.

Hopkins & Porter also puts its salespeople through Sandler. According to Joe Leonard, the company's vice president of sales, Sandler's system also teaches people to compartmentalize the sales process (design, product choice, construction contract, etc.) and to have specific strategies for each phase. He believes that putting all salespeople through the same training has made everyone better because it provides a common language that lets salespeople help one another work through problems.

But training classes are just the beginning: managers must also plan for ongoing coaching, something that can happen at weekly sales meetings. The sales manager uses this time to encourage salespeople to air problems and ask questions so that they can learn from one another's experiences.

The focus of these discussions differs from company to company. Denker puts a priority on dissecting positive referrals that don't make it to the contract stage. “That's a big deal. We take them apart and figure out what went wrong,” he says. At Chicago-area remodeler Normandy Builders, general manager Andy Wells often uses sales meetings to discuss how to manage customer expectations. How do you gauge the customer's mood during the course of a $100,000 kitchen remodel? How do you know what options to offer so you don't set up disappointment by whetting their appetite for something they can't afford? “Once people start seeing things they can't afford, that's when the trouble arises,” Wells says. The discussions include how to figure out which customers are willing to pay for extras and which ones have really tight budgets. “If you misjudge, you can lose the whole sale,” he notes.

Although this coaching and training can be informal, fast-growing companies may favor a more systematic approach. That's the case with Normandy Builders, where sales grew from $7 million in 1997 to $25 million in 2005. “We don't micromanage,” says Wells, who joined the company in 1997, and became sales manager in 2001. “But we do set minimum performance benchmarks and manage those benchmarks, making sure that we have adequate closing ratios, volume, and profitability. If they're not adequate, then we examine them to see what has gone wrong.” He says that salespeople don't feel put upon by this oversight, but rather welcome it. However, it's up to the manager to make sure that salespeople understand that the goal is to help them sell more.

New managers many not be prepared for the time and the money required for initial and ongoing training. And they may not see immediate returns. “It's a cost of doing business that you don't get a lot of return on unless the people you train work out,” Wells says. “You've got to pay that price, though,” because otherwise your salespeople will never reach their potential.

Another skill that new sales managers must develop is the ability to accurately match salespeople to leads.

Marrokal gets about one third of his work from TV and radio ads, and he usually assigns these leads to new people. That's typical. High-end remodelers tend to get most of their work from referrals. The most experienced salespeople are assigned to past customers, referrals from past customers, and large or complex jobs. New hires get the simpler jobs and the more generic referrals that come in over the transom.

It also helps to track which types of jobs each salesperson has the most success with. “You learn the talents of different people and try to match them up with projects [that make best use of their talents],” Wells says. Some salespeople do their best work selling kitchens, while others are better at bath remodels or second-story additions. Some develop an expertise in a particular type of architecture. “If someone has done a hundred projects in Oak Park [a Chicago suburb known for its prairie-style homes], we probably want to send him to any leads we get from that area, because the houses there are all kind of the same,” Wells says.

Then there's the question of how involved to keep salespeople in a project after the sale. Although the decision may have more to do with the owner's management style than with anything else, everyone needs to be clear on this point.

Denker's salespeople are involved in change orders. They also call customers regularly, participate in production meetings, and handle issues with product warranties. “We want them to keep a hand on the pulse of customer satisfaction,” Denker says.

Marrokal's DCs are involved in a project from start to finish. “We have them visit each job every two or three weeks. They also close out the project and give the client a gift,” he says. Every Friday, Marrokal meets with his DCs, designers, project managers, and office managers. They review each project and rate how satisfied each customer is on a scale of 1 to 5, with 5 being the most satisfied. Anything below a 4 is discussed, with the goal of raising that number. If there's a problem with a job, the DCs are involved in the solution.

Wells also wants his salespeople visiting large jobs weekly, even though the day-to-day management is in the hands of a project manager. “It's nice to have a fresh set of eyes looking at the project, holding the customers' hands, and helping them with anything else they want to purchase,” Wells says. His salespeople handle change orders and must learn to negotiate the prices for those changes. Of course, learning to accurately price and negotiate is something that comes with time and training. “We have a cost list that is a guideline,” Wells says, “but a lot of it comes from experience.”

Part of managing anyone is measuring their job performance. In the case of salespeople, the obvious measure of success is the volume of business they sell. But experienced managers also look at the attitudes and behaviors that determine that success. For instance, Denker tracks each salesperson's effectiveness over a given time period, and he wants to know how long it takes them to bring each project from lead to contract. “If things are taking too long, you need to mentor that person and figure out what the stumbling blocks are,” he advises.

Sales managers should also ask customers how satisfied they are with their salesperson. “I'm not detached. I drop by jobs and talk with them. At this level [with this kind of customer], it's necessary,” Gilday says.

This type of feedback is important enough that Gilday and Wells are in the process of creating surveys to track customer satisfaction. The surveys aren't a response to problems, but just another way to prepare for more growth. They're being proactive rather than reactive. “Our referral rate is very high, and we don't get a lot of negative calls and letters, but we always like to have more information [about how our customers feel],” Wells says. “If you understand how to make the customer happy, good things will come from that.”

And he adds that being proactive has been one of the keys to the company's success. “It has allowed us to grow without chaos,” Wells concludes. “We have grown steadily over the years because we've made plans and put those plans into action.”

Charlie Wardell is a freelance writer in Vineyard Haven, Mass.