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BILL LEE: Measure Twice, Cut Once

5. Identify the salespeople who are repeat offenders
Each month, breakout all returns by salesperson. You’ll usually find that one or two of your salespeople are ac­counting for the majority of returns. For example, some salespeople get in a hurry and tend to “throw material at jobs” rather than taking time to do a quality take-off. Counsel with these habitual offenders and help them fig­ure out what they could do differently to cut down on the number of returns they are responsible for.

6. Identify the customers who are repeat offenders
Repeat this process with customers. A handful of customers will usually ac­count for a disproportionate share of returns. If you can identify the culprits, you’re in a position to sit down with them and try to come up with a solution.

7. Penalize salespeople who make mistakes
In an attempt to reduce returns, several dealers subtract the full value of special order returns from their salespeople’s commissions until they’re either re­turned to the vendor for credit or sold to another customer.

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8. Don’t allow salespeople to buy special order material
This is controversial because most deal­ers believe in allowing salespeople to sell, purchase and price special orders. However, dealers who have turned over all purchasing and pricing to purchas­ing personnel report fewer mistakes and higher gross margins.

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