The Les Mills (East-coast, USA) story
Erin Kelly and I get on pretty well. But when we first met, we argued about a bunch of stuff!
We disagreed on commissions, of course. Erin wasn't so sure it made sense to convert salespeople from piece-rate pay to salaries. Then there was the whole idea of centralizing the lion's share of sales activities — and even moving the locus of sales from the field to inside. Erin had been around sales a long time and she wasn't quite sure how that theory would survive contact with reality!
This morning, two years on, Erin and I connected again (in the video below) and we chatted about Erin's experience implementing the plan we hatched together back in March 2011*.
Turns out that reality has been quite accommodating, where our theory is concerned. In Erin's own words, after moving all salespeople to salaries, downsizing the field team from 10 to just a few, building an inside-sales team and using events to generate around 50% of sales opportunities:
Productivity has definitely not suffered. It's actually improved. Sales performance has improved overall. Sales Revenue is up. Costs are down, from an overhead perspective.
A big part of that is due to Erin's management capability (which is truly impressive). But the story certainly is testament to the power of SPE.
Watch the interview and see what you think (let me know in the comments below)!
In case you're wondering, Les Mills is a really exciting organization. It's the world leader in group fitness. About 16,000 fitness clubs, worldwide, license Les Mills programs — and those programs are delivered by hundreds of thousands of accredited instructors. In spite of the fact that Les Mills hails from a pretty small town in a pretty small country (Auckland, New Zealand), the organization is a global heavyweight. It blew past $100m in revenues years ago and, in a number of countries, it's hard to operate a fitness center without providing members with Les Mills programs.
After I stopped recording the interview above, Erin mentioned that she has been attending a Challenger Sale workshop. Over the course of this workshop, both the elimination of sales commissions and the team-based approach to sales were discussed. In each case, Erin was the only executive in the room who had actually ventured down this path. She was struck — as I am often — by the enormous divide between the incredulity of executives at the mere mention of these ideas and just how easy they are to apply successfully, in practice.
Why, do you think, is there such a divide? (You can comment below.)
* We worked with Erin and her team for the first six months of the transition. (That was just before we transitioned from fixed-duration projects to ongoing engagements.)