The Low Cost Sales Leader: ADP's John Gleason
September 22, 2008
ADP's John Gleason Champions Diversity and Flexibility
By Mike McCue
For nearly 60 years, Automatic Data Processing, Inc. has been the face of payroll processing for companies big and small—ranging from Mom-and-Pop corner stores to industry behemoths. Better known by the acronym ADP, the company is responsible for paying one out of every six non-government workers in the United States.
What is only now starting to gain widespread understanding is that ADP is more than a payroll processing company, paying more than 33 million people worldwide and offering solutions that address tax and compliance issues, human resources and benefits administration. And they don't just do it here in the States; with more than 585,000 clients in 50 countries (including employer services and dealer services), ADP is the largest provider of HR services not just in North America, but also in Europe, Latin America and the Pacific Rim.
"Only about 55% of our annual revenues come from payroll processing, with the other 45% coming from areas such as workman's compensation insurance, taxes and compliance, and 401k/retirement products," says John Gleason, ADP's corporate vice president of sales for the employer services division. A graduate of the University of Illinois, Gleason joined ADP as a district manager in 1983 and was named to his current position in 2005.
The diversity of ADP's product portfolio is especially important in today's turbulent economy, with unemployment claims nearing
a six-year high at press time. "Obviously, we would prefer a strong economic environment with improving employment conditions, but ADP is fortunate that we have a portfolio of diverse offerings designed to help companies reduce their HR and payroll expenses," Gleason says. The company also benefits from a business model in which 90% of revenues are recurring.
The diversity of its product offerings have kept ADP's products and services from being commoditized, but the focus on solution selling is what has maintained the business' health through tough times. The company has always had a reputation as a stellar face-to-face sales organization (fielding more than 5,000 sales reps in the U.S. alone), but in 2005, ADP created a TeleSales division to increase market penetration and lower the overall cost of sales.
To make it all work, ADP managers have become adept at identifying the characteristics that make an individual a good salesperson. More importantly, they've learned when and how to transition those quota carriers and sales reps into effective sales leaders—a common problem that most organizations face, and one that carries a high price tag if not handled properly.
"Companies with world-class sales operations realize the characteristics that make a sales rep successful are not necessarily the same ones that make a sales manager successful," Gleason says. "Those organizations that can identify salespeople with the right personality traits and work ethic to become part of management—and just as importantly, have a plan in place to help transition them from one job to the other—are the ones that produce the best bottom-line results."
Selling the Comprehensive Solution
While 80% of the Fortune 500 use at least one of ADP's products or services (a number that includes 90% of the Fortune 100), small-to-medium businesses comprise the majority of the company's customer base. Indeed, more than 400,000 of ADP's clients fall into that category. Before ADP could sell its expanded portfolio of products and services, it needed customers (and prospective customers) to realize that more than payroll processing was available. That was done through awareness campaigns and the implementation of the TeleSales program.
According to Gleason, large companies currently have the greatest awareness of the breadth of ADP solutions. "We've spent a lot of time and effort to raise the visibility of our product portfolio, but with more than 585,000 clients across the globe, you can never say you're perfect," he says. "Still, we think we do a very good job of spreading the word, and we're always working to improve the awareness of what ADP really can offer as a company."
If ADP hadn't made the strategic decision more than 10 years ago to evolve beyond payroll processing, the company would be at a severe disadvantage in today's solutions-oriented selling environment. "If we had continued to put all of our eggs in the payroll basket, we wouldn't have gained the comprehensive understanding of our clients' business challenges and the tools they need to meet them," Gleason explains. "Because we now touch so many parts of their businesses, we use that knowledge to design a comprehensive solution that delivers a suite of products in the most cost-effective way possible."
To do that, ADP needed to be cost-effective in terms of the way it handled its sales operation. With a large field sales force acclaimed for its effectiveness in face-to-face sales, the company had to achieve deeper penetration into its customers' businesses without letting the costs of its sales spiral out of control. That led to the creation of its TeleSales program three years ago.
"John saw the need to have ADP's field sales organization focus more on solution sales," recounts Mary Donato, president of Applied Principles and an S&MM columnist who worked with Gleason to develop the TeleSales strategy and implementation plan. "At the same time, they needed a cost-effective approach to providing coverage to clients whose needs could be met with the traditional products. An integrated coverage model using field sales and TeleSales has worked extremely well. It's provided clients with the face-to-face interaction on more complex solutions and knowledgeable, skilled salespeople on the less complex products.
"TeleSales representatives hired by ADP have successful sales backgrounds and, typically, inside sales experience," she continues. "An added benefit is that the TeleSales reps are generating quality leads for the field reps. It's become a true partnership approach."
The success of the program speaks for itself. Last year, the TeleSales group delivered $81 million in net new revenue, up from $11 million three years ago. "One-year growth last year exceeded 130%," Gleason explains, "so even though the TeleSales reps don't drive to their appointments, we've ensured that they possess the same level of product knowledge and insight into customer needs as our field reps do."
 The Right People, Doing the Right Things
With approximately 46,000 employees, including more than 5,000 sales reps in the field and 600 more in the TeleSales program, the challenge of maximizing human capital was a steep one for ADP. Many companies simply assume that success in selling is a direct indicator of success in sales management, so they take their top performers and make them team leaders. But the skill sets are not the same, and giving someone the title of manager doesn't magically confer management abilities.
To make matters worse, if you take that approach and get it wrong, it's doubly disastrous. In addition to putting the wrong person in management, you've taken a top-performing sales rep out of the field.
That's why ADP prefers a transitional approach. "We spend a lot of time focusing on the career development of our employees," Gleason says. "Our most successful salespeople have a real client-service orientation and a strong work ethic. Customers like to buy from knowledgeable people whom they like and trust, so we look for those qualities in a salesperson before we hire them.
"When we have a successful rep who expresses a desire to explore a career path in management, we give that person the opportunity to try out those responsibilities one step at a time," he adds. "As that process moves along, and the individual displays an aptitude for coaching and developing others, then we know we're going in the right direction."
In other words, the company doesn't simply pluck its top salespeople out of the field and expect them to become leaders overnight. "ADP is one of the top companies in providing training and career advancement opportunities to its associates," Donato says. "When looking for management candidates, they look within their own organization first due to the great talent pool they have."
While most businesses spend the lion's share of their training resources on new hires, ADP inverts that formula to devote a higher proportion of its resources to developing current employees. For example, a rep who produces great results selling to small clients would be given the opportunity to produce the same results with mid-sized customers, and then moved up to handling national accounts. When this type of performer then asks about opportunities in management, ADP moves the rep into its sales training manager position.
"When that happens, the rep is given indirect management of another sales associate," Gleason says. "We teach the trainee various coaching techniques, strategies to motivate people and tips on conducting a review session. But that management trainee still has an individual sales quota to maintain as they develop their leadership capabilities."
And that, ultimately, is the secret to ADP's success. If a salesperson begins to assume some management duties and decides it just isn't the right fit, there are no hard feelings or perceptions of failure; the rep simply goes back to focusing on what he or she does best: pitching, closing and selling.
"When someone begins the sales training management program, it is very much a trial period—not just for the company, but for the employee as well," Gleason says. "Sometimes that person simply doesn't have the knack for managing others, while at other times, the person might have the knack for management but doesn't enjoy it as much as they did being a salesperson. Sales management training is not a one-way street at this company."
Sales & Marketing Management Magazine
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