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Follow on TwitterLast night we saw Ruth Badger in action for the first episode of the new Sky One business show Badger Or Bust. Is this episode she helped Red Seven:
Red seven is the largest specialist party planning service for Stag and Hens in Britain. Their turnover is £4.5 million and they state that their margin is around 30% of this. The company has grown from one man operating in his bedroom ten years ago on a borrowed computer to what it is today.
Red Seven get one thousand leads a week but are only converting 12% into deals. Since every caller will go on to organise a stag and hen party Red 7 are losing an astronomically high (88%) number of leads to their competitors. Red Seven feels that rival stag and hen party organisers are coming up fast on the rails and could overtake them if their conversion rates don’t increase. The company desperately needs to act now to improve their sales performance if it is to stay on top of their market.
Arguably Red Seven are not losing 88% of the leads as not all leads would have converted no matter how good their sales people were, but the sales calls that were shown in the early part of the programme were terrible. As per the theme of the show Ruth Badger told them what was wrong and talked them through how to improve, the key points being:
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Know your product.
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Be enthusiastic and build rapport.
Nothing earth shattering and good solid advice from Ruth Badger. What I have to wonder though is why when sales is the only activity that generates revenue (every other business activity generates a cost) the boss was not already investing in his sales team and ensuring they had some basic training (including what the product is) and provided with a script/crib sheet about each destination.
As far as motivating the sales team goes, I’m a firm believer in targets tied to remuneration and when the £500 bonus was on offer it certainly seemed to get results, bringing in around £60,000 worth of sales. Now with a margin of 30% that’s a profit of £18,000 (probably gross profit) so there’s certainly scope for a regular bonus.
The lesson? Invest in your sales, without sales you don’t have a business!
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Good Points – however, the boss WAS investing in his sales team, with many many processes regarding knowledge, acheivement, motivation and reward.
Making the TV programme was part of that process – an outsider reitterating key points.
Participating in an excercise such as this as a business tool succeeds at many things – particularly as a training method and PR excercise, pretty much due to our current desire to be lead or pursuaded by this kind of TV.
When considering training, development and motivational excercises, you must understand your team to succeed. With the current climate about business programmes, the age of celebrity etc – this particularly appeals to the age range of our team, and they loved the prospect of being on TV – so as a business TOOL, this was perfect, and we now have a reality training video!
All staff at Redseven, not just the sales team featured, attend educational visits for everything they sell, so they get hands on experience and knowledge. The edit of the programme simply reitterated the importance of building on this, and since the programme, we have maintained the mastermind theme as a team competition, which has had good results.
Giving £500 in a day is unsustainable, and is a fairly lazy way to make a point, but make a point it did. The team do receive bonuses and prizes etc. The point of that excercise was to break some barriers about their beleif on how many the team can convert. For that short sharp shock, it worked, and the team now beleive they can succeed at this, rather than dismissing with an old mantra “too high to get”.
What was not shown on film was the fact that we were recruiting for a Sales Manager to replace Katrina. It wasn’t shown, because we didn’t find anyone we felt was good enough, and we’re still searching…..
Without a doubt, the main points we wanted to acheive when agreeing to make the programme was to hammer home to the team that enthusiasm for their customers pays dividends, as does learning about the experiences.
Redseven’s success has been built around the customer experience, yet there is always room for improvement, and we participated in this to ensure we made a few changes successfully.
So, job done for both Ruth and Redseven – now we need to ensure we maintain that change and momentum.
Ian,
Thanks for the comments, it’s great to hear from someone at Redseven.
I would not suggest giving £500 away each day either, but I do believe in regularly using cash insentives to motivate a sales team and if it were my business would offer a regular bonus and salaries based largely on commission.
John, Hi – Indeed, this is exactly our structure. All sales people receive a basic salary, plus commission for each reservation within a target structure. Furthermore, we provide bonus for acheiving targets earlier. And then again, we also have quarterly bonus opportunities, as well as having an annual incentive where someone will win a Mini Cooper.
There should be no time where someone isn’t acheiving something and being rewarded and recognised for it. However, the balance is not correct, clearly.
Some people are motivated by hard cash, others with a Boots voucher, others with something else. The big thing to acheieve is for us as a company to understand what motivates each and every person, and build a reward structure around that.
Future recruitment standards will dictate that we’ll be ensuring successful applicants have a common motivation – commission and bonus, which streamlines the management of aceiving goals, and should gain good results for both the team and the company.
Many thanks for your reply.
Sounds really positive. I wish you all the best.
If someone reading this wanted to apply for the Sales Manager job who should they contact?
Indeed, if there is someone reading that feel they have what it takes they should post their CV and details to Human Resources – address details are on the website.
I have just watched the programme on Sky 3 and it is interesting to read your comments John along with Ian’s responses.
It is great to see such a turnaround happen from an intensive involvement like this.
Reading between the lines it shows the importance of manging for today and tomorrow. It seems that Ian has allowed certain things to slide thinking that the new sales manager would correct things in the future.
Great stuff Guys, I have only recently heard about Redseven and was looking through there news section when I realised Lucas started his business like me. In my bedroom with my computer aimed and stags and hens. I am already getting a lot of the Irish market business and have a poor conversion rate of 14% , can anyone point me in the direction of where i would get to see this documentary?
Id love to see how to improve my business. I have being building the website over a year and only started to take business 3 months ago. Lucas , if you see this i applied for you travel agents program today.