SI Review: November 2011


Step Out of the Box

15 sales tips to help firms thrive in today’s economy

The rules for businesses in today’s economy have clearly altered. And the last couple of years have been tough for the staffing industry. Staffing firms have had to innovate to stay afloat. We at Staffing Industry Analysts strive to bring ideas to the table that can help your firm grow and prosper even amid a difficult economy. Here is a list of original, yet inventive sales ideas from five industry experts that can propel your firm forward.

No. 1 Maximize any diversity advantage

More and more businesses consider diversity and non-discrimination policies in their procurement standards and require that a certain percentage of their business is awarded to diverse organizations such as those owned by women, minorities or a person with a disability. Diversity can give a company a tremendous advantage with the federal government. Let’s say that a large buyer is evaluating five staffing firms that are pretty close in terms of service offerings. If the buyer requires a certain percentage of its business be awarded to diverse organizations — and one of those staffing firms touts its diversity status — that firm will have an advantage.

No. 2 Buy or merge, for little or no money down

During tough economic times, healthier companies may find tremendous opportunities in buying firms that are strapped for cash or whose owners are simply tired. Greg Palmer, former CEO of RemedyTemps and founder of G. Palmer & Associates, describes one situation where his company advised a client in the purchase of another firm with no money down. The company kept the owners on board, promising a later earn out should they hit certain numbers. “I would suggest you know your competitors in the market,” Palmer says. “Have friendly relationships with them. If you’re interested, pick the phone up and call them and say, ‘Look, I’m in the market to possibly merge or buy.’”

No. 3 Write a book, become known

You have knowledge and expertise. If published, that becomes a strong marketing tool, says Jim Lanzalotto, who runs Scanlon.Louis, a strategy and marketing outsourcing firm that helps companies grow. If you do things differently, write a book about it. People will remember you for it, he asserts. Palmer agrees. Write a blog, be quoted in newspapers, hire a publicist. It’s a competitive marketplace; get your name out there so you’re the first person clients think of when they need something, Palmer says.

No. 4 Invest in client service

It’s natural for suppliers to respond to reduced volumes by reducing the resources they devote to those buyers. Aaron Green, co-founder of PSG Global Solutions (an offshore recruiting firm serving the staffing industry) and founder of Professional Staffing Group (a Boston-based temporary and direct hire staffing firm), says his firm chose the opposite approach. Despite depressed volumes, PSG invested more resources into relationships. Doing so opened the door “to have conversations that we might not otherwise have had,” he says. Those resources identified two recruitment process outsourcing opportunities and helped the company win additional business, Green asserts.

It’s also important to measure how you’re perceived by your customers. A common method for doing so is the Net Promoter Score. By asking your customers how likely they would be to recommend your services to others, you can gauge your reputation in the market.

No. 5 Form complementary alliances with non-staffing firms

Companies that are really successful are ones that form alliances with others that offer a complementary service, says Bryan Peña, Staffing Industry Analysts’ vice president of contingent workforce strategies and research. An IT staffing firm, for example, could form partnerships with a hardware retailer. Look at verticals that touch your clients, what the hiring managers need. Form those complementary relationships. Form sales councils of people from disparate industries. Orchestrate those, share leads, share opportunities, and you’ll find that those are another way to get into clients that you may not have been able to get into, Peña says.

No. 6 Forecast your client’s needs

Most staffing firms already do this to a certain degree, but it could be done better, says Donna Mallard, CEO of Mallard and Associates and partner at Staffing E-Trainer, which provides executive consulting and staff development services to the staffing industry. Schedule regular business reviews with your clients to evaluate the criteria that were established at the beginning of the relationship as well as any key performance indicators. Use this process to forecast and to continue to learn more about your clients’ business and its trends, so you’re better prepared to respond to their changing needs. Companies that do so enjoy high client retention rates as well as referrals, which in turn becomes a marketing opportunity, Mallard says.

No. 7 Add statutory escalation clauses

Statutory costs are the legal part of the direct cost component of gross profit — FICA, FUTA, SUTA, workers’ comp. When any of those costs change, you’ll want to be able to pass the charges along, Palmer advises. Including that in your contract up front will ensure you will be able to do so. Palmer shares the experience of one company that did not have such a clause, and increased statutory rates cost it about $600,000 in terms of profit.

No. 8 Build an experience

Companies that build experiences enjoy stronger market positioning and competitive advantages, Lanzalotto says. Consider the Blackberry, once considered the essential tool for busy professionals. Then came the iPhone. The iPhone provides an experience. People who have iPhones will never go back to a Blackberry, Lanzalotto says. People who have Blackberries say, “I wish I had an iPhone.” It’s all about the experience.

No. 9 Stay focused on your own turf

Salespeople have a tendency to chase, to go outside the box, in an effort to cast a wider net when they should stay focused on what their company does, Green says. He advises companies to have a list of what they will do, what they won’t do and what they might do. “The might-do list needs to be really small,” he advises. Such lists will help keep your staff focused so you avoid drifting outside your areas of expertise and into weaker areas.

No. 10 Build & advertise social responsibility

There’s a big push right now for corporate social responsibility, taking responsibility for the impact you have on society. Efforts can be as simple as putting on your email signature, “Please consider the environment before printing this email,” Mallard says. Or you could go bigger, like raise funds for a charity or host staff volunteer days at schools, for example. Such efforts will build your reputation and improve your employees’ motivation and engagement.

No. 11 Implement a sliding-scale commission plan

Many commission plans out there are focused strictly on gross profit dollars, Palmer says. The theory is the more gross profit that comes into the organization, the more commission somebody should earn. The fallacy with that approach, though, is without any focus on higher margin or a higher markup, you’ll end up with a lot of low-margin, lower-quality business, Palmer says. So he recommends a sliding scale; for example, if a sales rep accounts for less than 20 percent of gross profit, commissions would be 2 percent to 3 percent on the margin. In the mid 20s, maybe somewhere in the 4 percent to 6 percent range, and when a sales rep brings in north of 30 percent on the gross profit, be very generous, Palmer says, setting commissions of more than 10 percent.

No. 12 Discourage discounting, penalize winning on price alone

“The one thing that always surprised me was how easy it was to get a discount” from staffing suppliers, Peña states, referring to his days as a procurement professional. “Often, the salesperson would cave, the first time I would ask.” To discourage sales reps from quickly agreeing to price cuts, Peña suggests reviewing your current compensation plan. How do you treat discounts? How is the whole process handled? How is the salesperson responsible for proposing that discount? How is he or she compensated when that happens? While every company’s deal appetite is different and there are many valid approaches to getting the deal done, it might be a good idea to establish a compensation schedule to reward the selling on value, which is actually much harder.

No. 13 Disrupt your market

Hyundai shook up the auto market when it ran this guarantee: lose your job, return the car and Hyundai would forgive the depreciation. “It completely disrupted the marketplace,” and reshaped the company’s image, Lanzalotto asserts. How can you disrupt your market? Think about how you can completely change the way your market operates, whether it be your local geography, your line of business, your branches.

No. 14 Build your candidate brand

There’s an opportunity to build not just a client brand and the client loyalty, but also the candidate brand, Green says. In a candidate-rich environment, there’s a tendency for staffing firms to focus less on the candidates. Some companies are saying they’re not interviewing right now because they just don’t have the openings, Green says. But it’s important to measure the candidate experience, he asserts, even if you can’t help someone find a job and get paid for it.

No. 15 Innovative pricing

Try to get away from focusing on bill rate, pay rate, markup, etc., for a predictable income stream and to lose some of the transparency that a lot of clients are demanding now, Peña advises. “So think outside the box on your pricing strategies.” Maybe look at pricing per unit, per container, per shift, maybe look at picking up fixed costs for a certain amount of heads or a retainer basis, and then you simply charge statutory expense for the headcount underneath, similar to software or service. Take a look at complementary business models that are profitable, and how can you take those strategies and apply them to your service.


Closing a sale has never been an easy task. In this economy, it’s that much harder. But if you know your market and customer well, there are tactics that you can employ that move you ahead of your competitors. If there are other methods (besides the ones mentioned here) that have worked for you, do write and tell us. We at Staffing Industry Analysts are always interested in hearing from our readers and passing along information that helps your business grow.


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