Sales Men and Women – Masters of Personal Relationships
I have heard it debated whether men and women choose a sales career or if the sales career chooses them. While many books and seminars are sold on how to sell, most of them are ineffective and contradictory. Selling, it seems, is almost all art and very little science. It isn’t just having the gift of gab; it is becoming a master at building and maintaining personal relationships. Then, as high sales producers evolve into sales management so they can replicate themselves – a move that brings them to their pinnacle of earnings – they get hit right between the eyes with the secret that Mama and sales training didn’t tell them. The secret is that the sale isn’t complete until the product or service is provided and the cash is collected. Someone else provides the product or service, but it is the master of the relationship that is in the best position to collect the invoice. That’s right – I’m talking about accounts receivable (AR) collection.
I will begin by backing up a bit and mentioning that AR collection is just part of what is called working capital management. Working capital for business is often referred to as simply the excess of short-term assets over short-term liabilities. Short-term assets include cash and other assets expected to be turned into cash within one year – marketable securities, accounts receivable, short-term notes receivable, inventory and prepaid expenses. Short-term liabilities include those expected to be paid with cash within one year – accounts payable, short-term debt such as credit lines, the short-term portion of long-term debt and accrued expenses.
In virtually every company, the elephant in the room stomping all over its working capital is incomplete sales – uncollected AR. Often, multiple years’ profits for the company are sitting in AR at any given time. Why? It is because, in most companies, the collection of AR is relegated to the bean-counters in the accounting or AR departments. Have these bean-counters ever mastered personal relationships – even one? Likely not. Who has mastered personal relationships? The men and women in the sales department.
Turning AR into cash efficiently and effectively is a systematic process and part of the management discipline that sales people absolutely must learn to succeed. And why should it be pushed down to the top sales producer? Because they have the personal relationships with the customers, are known to them, can walk right in, and get their phone calls, emails or messages answered.
The sales men and women calling on the customer or client on a regular basis is in the best position to know the person or persons that must authorize payment, and field the “Yeah, but…” questions that accounts payable clerks are trained to ask. Those personal and professional relationships are infinitely more powerful than office staff or collections agents calling for payment, especially when the bean-counters often have to go back to the salesperson anyway to find out what was promised or negotiated with the customer or client.
The best sales men and women, the ones that thrive and get paid like rock stars, are the ones that not only rely on their personal relationships to collect AR, but also get to know the one that unofficially controls the purse strings – the customer’s accounts payable (AP) person! They get to know this person quite well, stopping by regularly when they are in the customer’s office. Remember, being the company that gets paid, especially when money is tight, means maintaining a relationship with this client’s AP contact. And, who is better positioned and skilled than the masters of relationships in the sales department?
Remember that customer relationships not only get you paid sooner, they often get the firm in the door to make more sales. I hear sales people say over and over that they look for excuses to get back in the customer’s door. They don’t need to offer an incentive or sales flyer as an excuse to follow-up – collecting the invoice is the perfect reason. Because of the relationships that have been built, it is easy to do, and makes the salesperson the hero come bonus and promotion time!