Selling Power Magazine Article

At Ecolab Inc. salespeople keep promises. Absolutely. Because  the company’s global field sales force is personally responsible for delivering and maintaining the products and services it sells.

“It’s exactly the right model, in our minds,” says Ecolab CEO and chairman Douglas M. Baker Jr., who worked in a variety of sales and marketing positions prior to joining the company 20 years ago. “At the simplest level, our salespeople are committing themselves to the customer and the customer’s results. They’re promising the customer that we are going to deliver results at a certain cost, and they are responsible for helping that customer realize those results. It’s a hybrid sales model, but it’s really quite natural for us.”

Ecolab’s sales-and-service force tracks back to the roots of the company. In the early 1920s, Merritt “M.J.” Osborn, a St. Paul, Minnesota-based salesman and entrepreneur in search of a product to sell, realized that when the carpets were cleaned in hotel rooms, the rooms had to remain unoccupied for up to two weeks. So he hired a chemist to create a product that could clean carpets overnight, called the product Absorbit, and formed a company named Economics Laboratory (renamed Ecolab in 1986) to sell it. Soon after, Osborn added a second product to the fledgling company’s portfolio: Soilax, a nonsudsing cleanser designed for mechanical dishwashers, which were becoming commonplace. Soilax’s success created a solid foundation for the company’s institutional business, which remains its mainstay today, accounting for 25 percent of Ecolab’s sales in the United States.

Soilax also provided the impetus for a growing emphasis on service. “People usually don’t go into restaurant management or become chefs because they love to clean. Dishwashing doesn’t capture the imagination of most restaurateurs,” explains Baker. “So the service we offer as experts in this area is very important to them. They want our help.”

This enduring reality meshed perfectly with Osborn’s view of the link between sales and service. His philosophy, according to an Ecolab history written for the company’s 75th anniversary: “Accept the customers’ problems as if they were your own.” Thus, from early on, Ecolab’s field sales force was responsible not only for selling the company’s products, but also for delivering and installing them, teaching customers how to use them, and ensuring that they were working properly on a continuing basis.

It has proven to be a highly successful model for Ecolab. From a sales staff of one – M.J. Osborn himself – the company’s sales-and-service force has grown to more than 14,000 associates worldwide. In 2008, it sold $6 billion in products and services globally. Ecolab currently operates in more than 160 countries and serves a wide variety of markets and industries ranging from restaurants, manufacturing plants, hospitals, and schools to cruise lines, commercial laundries, and car washes. The company is the global leader in cleaning, sanitizing, and food-safety and infection-prevention products and services.

The Right Strategy for a Sales-and-Service Force
The sales-and-service force has driven organic growth at Ecolab for close to 90 years. But like any sales model, the foundation of its success is its alignment with the company’s business portfolio and strategy.

Ecolab’s portfolio and strategy are now well tailored, but the tailoring has not always gone smoothly. In 1980, the company attempted to expand into environmental services by acquiring Apollo Technologies, a company that provided chemical systems to control emissions at coal-burning plants, but shut it down at a loss three years later. Over the years, Ecolab successfully developed a large portfolio of household cleansers and detergents, but it divested that business as the consumer packaged-goods sector became increasingly competitive and margins suffered. The company also dabbled in residential services, acquiring ChemLawn in 1987, but it sold that company, too, after its results foundered.

In 1990, however, Ecolab regained its strategic footing and began to reorganize around its core institutional business. “Ecolab’s core business and shareholder value would be best served if we concentrated on our institutional and industrial cleaning and sanitizing markets,” said then-CEO Sandy Grieve. “We decided that our future should be entirely in the cleaning and sanitizing business, where we began, where we are well positioned, and where the worldwide market potential is enormous.”       

It was the right decision, and as Ecolab refocused its efforts, it also articulated a new strategy: “Circle the Customer – Circle the Globe.” It meant that the company would seek to continually expand its portfolio of related products and services for its existing customers, no matter where they did business around the world.

With a few adjustments (see Selling New Customers and Major Accounts), the company’s sales-and-service model proved to be an excellent fit with its new positioning.  Combining service with sales requires that salespeople spend more time with existing customers – installing systems, checking to see if the customer’s equipment is working properly, training employees on proper and efficient procedures, auditing results, and solving new customer problems. The more time salespeople spend with customers, the more trust they build and customer needs they discover. As long as the company (continued on page 2)

can continue to “circle the customer” by providing new products and services, the field sales-and-service organization’s ability to sell an ever-expanding line, up-sell, and cross-sell can be a major source of growth.

“The secret is that the service is integral to the sales process,” says Baker. “As a sales-and-service associate, the majority of your time is spent in existing accounts, and you are solving the customer’s problems. That makes it a lot easier to sell an additional solution to the customer. You are leveraging the goodwill and trust that you have developed as a result of servicing the customer on other platforms. The service component of the job is integral to developing new business, which is why having these two things together is so important.”

Ecolab’s institutional division provides a good example of how this works. The division sells all the products needed to clean a restaurant, especially the kitchen. These include the detergents and computer-controlled dispensing systems that hook up to the dishwasher and all the other products needed to clean and sanitize a restaurant – surface sanitizers, hand-cleaning products, degreasers, delimers, floor cleaners, glass cleaners, etc.

“Our sales-and service associates in that division have twenty-five different product categories to sell to a restaurant,” says Baker. “They’re not only responsible for selling these items, but also for training the restaurant staff on how to use them. They audit results on a monthly basis. They make sure that the dishes are clean. They balance the dishwasher and make sure it is operating correctly. They capture all this information on a tablet PC and share it with the restaurant’s manager. If the restaurant is part of a chain, they download the information to a central repository so that the chain’s headquarters can see what is going on in all their units.”

All of this activity also sets the stage for sales-and-service associates to offer the customer Ecolab products and service solutions in adjoining categories. “They can sell that restaurant pest-elimination products and services and kitchen equipment parts and repair services,” says Baker, “and they can sell water-purification products and services and audit services.”

Fielding a Winning Sales-and-Service Team

Because the sales-and-service model is a hybrid that includes many nonsales activities, building a winning field force can be a challenge. Ecolab meets that challenge by aligning its recruitment, training, career development, and compensation systems with the company’s special needs. “You are looking for people who like and will work well in this model. There are some natural limitations, but when we find the right people, it really is a magical formula,” says Baker.

Finding the right people is the first challenge in building a winning sales-and-service team. Traditionally, Ecolab has hired new salespeople through referrals from its own salespeople. “Our people are always running into good candidates in the industries that we serve,” says Baker. “They might be plant managers or hotel managers or chefs who want a new career. That’s still a fairly rich area for us, because these candidates have an understanding of the customer needs in their segment because they’ve actually lived it.”

But over the past 20 years, as Ecolab’s need for salespeople grew, its recruiting efforts also had to expand. Today, about one-third of new hires come through employee referrals, and the rest are generated from college and Web-based recruiting.
“We’ve become fairly sophisticated in finding people online, and most importantly, winnowing down the large number of applicants, you get to a pretty refined pool of potential new hires. We do it through a series of online tests and then, if we are still interested, phone interviews,” says Baker.

Once the company identifies qualified candidates, they all enter the same selection process. “In all cases, there is an interview process that includes aptitude testing. We also ask all applicants to spend a day working with one of our people in the field so they have a realistic picture of what our people do. We try to weed out anyone who is going to be turned off by any aspect of the work. Then, there are more interviews, including an interview with the person the candidate is going to be working for during training,” says Baker. “But what really sets us apart from our competition is that we go to great lengths to develop and train our teams to understand our customers and solve their problems.”

In the United States, Ecolab’s training for new sales hires lasts about a year. It starts with a week at headquarters in St. Paul, where new associates are introduced to the company, its philosophy, and its culture. They are then sent into the field for several months as “unassigned” associates, learning the day-to-day aspects of the job from other reps. After this, new hires are assigned a territory, where they begin to work under the close supervision of district managers, the first-line supervisors in Ecolab’s field force. During their first year on the job, associates must also complete online training courses to develop the knowledge they will need to operate effectively on their own and earn the certifications they need in specialized areas, such as food safety and warewashing (the science of cleaning dishware, glassware, and utensils).

Given the investment the company is making in sales-and-service associates, it is no surprise that it is also intently focused on their performance and the retention and career development of high performers. “This might not have been unique forty years ago, but we are still a company that likes (continued on page 3)

people,” says Baker. “We like people to stay with us and develop with us. We think this is important because the intuition, insight, and knowledge that people develop over time are very difficult to replace.”

The company appraises the performance of associates using a number of metrics, including customer retention and development and the ability to sell new customers. Sales-and-service associates receive a base salary, but most of their compensation comes from commissions. “If an associate loses a customer, the company and the individual take an income hit,” explains Baker. “There is also a growth bonus. We pay almost double commission on all sales above last year. So there is a strong incentive for our sales folks to grow the business. There is also a bonus for hitting sales targets.”

When associates perform well, they are also offered advancement opportunities. “We promote from within in the sales function. It is very much an opportunity to start at the entry level and progress through the organization,” says Baker (see Two Paths for Advancement).

Finally, Ecolab tries to equip its sales-and-service associates for success. “We have been doing some real work in the field to free up sales time for our people,” says Baker. “We are asking them to tell us what gets in the way of their spending more time with customers. How can we streamline reports? What service issues are repetitive and can be eliminated through engineering? But we also have to make sure they view our effort as benevolent and not something that is going to disrupt them in their efforts to grow the business.”

In conjunction with these efforts, over the past four years, the company has been rolling out technology improvements designed to enhance sales effectiveness. Ecolab has provided laptops, tablets, and other handhelds to the sales-and-service force, and it uses them to feed sales leads and opportunities directly to associates.

Ecolab has also developed proprietary CRM programs that are customized for its different divisions. “They are specific to the offering and the industry,” says Baker. “So we’ve got a number of platforms that our people can use to capture the information they need, take inventory, place orders, get answers, check credit, and connect with St. Paul or their regional headquarters.”

Ecolab’s ultimate goal? “Our goal is to make our sales team successful,” answers Baker. “The whole reason we have a sales team is because we know that is the best way to grow our top line. No company hires its first salesperson because it wants him or her to be efficient. Companies hire salespeople to sell. So our job has got to be to help them sell.” •


Selling New Customers and Major Accounts
The sales-and-service model has two inherent flaws: First, there is only so much time in a day, and if salespeople are spending close to 80 percent of their time with existing customers (as they do at Ecolab), the acquisition of new customers will likely suffer. Second, since the sales-and-service force is focused on customers at the unit level, there must be a mechanism for selling major accounts at the headquarters level.

Ecolab has solved both of these problems by creating specialized sales positions. At the territory level, the company established a dedicated sales specialist position with no service responsibilities. "We'll offer this position to associates who have been very successful at developing new business," says Baker. "These are people who seek new accounts full time for up to twenty-four months. It's a stepping stone for people who want to refine their selling skills before they become district managers, and it helps generate new accounts."

To address the major-account challenge, the company created a dedicated sales force of approximately 200 people.  "If you look back over the past decade, it's clear that multiunit operators are playing a significantly greater role in our markets. In most cases, corporate headquarters will select providers, and these major accounts require a different selling process from day-to-day sales," says Baker. "Those who are calling on headquarters have to understand the breadth of our product lines and service offerings that are continually expanding. They also need to understand the corporate-level challenges our customers face as they expand geographically and how we are positioned to help them."


Two Paths for Advancement
One of the reasons that Ecolab has been able to successfully develop sales talent internally (and earn a spot among Selling Power’s 50 Best Companies to Sell For) is that the company provides alternate paths for high-performing salespeople who want to advance their careers.

“We typically will promote the best sales-and-service associates in one of two directions: managing the field or selling major accounts,” says Baker. “Virtually every manager and member of the major-accounts team started in our field organization and developed his or her skills over years of selling.”

The salesperson’s strengths and interests determine which route he or she is offered – and some associates eventually serve in both roles. But the major-accounts team is especially valuable as an important outlet for great salespeople who either do not want to become managers or who do not have the temperament for the job.

“It is a coveted job,” explains Baker. “We provide special training, because high-level sales demands specific skills, and we can reward and compensate the salespeople on that team in such a way that they can make it a career.”