Jan 29 2008
Your Salespeople Are The Center Of Your Business
The JF Guest Author Spot
Your salespeople are the center of your business. Nothing can happen without them. Too often, especially lately, business owners fail to see the value of their sales force. Maybe their sales force is ineffective. Maybe the leadership hasn’t set up and enforced realistic goals and expectations. Or maybe the company leadership doesn’t realize how the sales force impacts their business.
As I work with salespeople and business owners around the country, I hear the same messages. The owners are saying ‘I’m paying my salespeople too much.’ And the salespeople are saying ‘I don’t get any support, assistance, or resources to help me succeed.’
What in the world is going on? For starters, business owners have decided that they aren’t getting value for their dollar from their salespeople. Well, unless they are paying them a really high base without any sales goals or quotas, I doubt that’s true. Think about it – without salespeople, you don’t have customers. If you have a reasonable compensation plan in place, for every dollar you pay your salesperson, you should be getting at least two dollars. So, in reality, the more money your salespeople are making, the more money you are making.
Most business owners have never tried to sell, or have failed miserably at it. Sales is hard work. You have to constantly pursue new business, have a very tough skin, enjoy the hunt as well as the conquest, excel at matching the prospect to the product, and be able to start up a conversation with complete strangers. Wow! How many people do you think can do all of that confidently and successfully? Not many. That’s why it should pay well.
It’s basic economics. The demand is high and the supply is low. When this occurs, the compensation must be high to attract the appropriate people. Now, I don’t believe that high compensation includes a high base salary. When you have a high base, you run the risk of employing people to do sales who merely pull their paycheck – without results to show for their efforts. The reason is this – when the base salary is high, there is no real incentive to produce. Conversely, when the base is low and the commission structure is fair and attainable, your salespeople will be eager to sell. They are earning a base to take the worry away. At the same time, the real money is in the sale. So, they have a vested interest in selling. The more they sell, the more they’ll make. That’s the ideal program.
There are three steps every business owner should implement with their sales force to ensure results are being realized.
1. Establish a reasonable, fair, attainable pay structure with a small base salary, quotas, benchmarks, and commissions based on margins not sales dollars. The commissions should be significant enough that your salespeople can earn a good income from their efforts. **If you are in an industry that is highly competitive and commoditize to the point where margins are extremely low, you may want to offer a higher base and year-end bonus plan.
2. Create a system for gauging quotas and benchmarks. This system should be clear and easy to follow. The consequences for poor and good performance should be spelled out. The end result should be a program that your salespeople can easily follow so they can monitor their own performance and are aware of the consequences of their actions. Measurability is key to the success of any sales program.
3. Work the system constantly. More often than not, the place where there is a breakdown between the ownership and the sales force is at the monitoring stage. For some reason, the ownership fails to effectively monitor the performance of their sales staff and communicate consistently with that staff regarding their results. To achieve success, the ownership has to consistently monitor their sales staff’s performance and implement the consequences. Open, consistent communication helps keep the program working and no one feeling resentment.
Business owners owe it to themselves, their staff, and their clients to make sure they are working their sales program effectively. And they should have no doubt that it is up to them to make sure the program is followed. When there is a reasonable, effective program in place that everyone has opted onto, the business will grow at a great pace and everyone will feel that they are winning.
Copyright© 2008 Seize This Day Coaching
Diane Helbig is a Professional Coach, and the president of Seize This Day Coaching. She works one-on-one and in groups with small business owners, entrepreneurs, and salespeople to help them create successful business development strategies. As a team, they embrace the possibilities. Diane’s website is http://www.seizethisdaycoaching.com and her blog is http://www.seizethisdaycoaching.blogspot.com
Diane is also one of the most recent recruits to the Top Sales Experts team and you can read more about her here
Today’s News: This week I received an invitation to join a fantastic new site, dedicated to networking sales professionals, AccountMaven.com. Membership is by invitation only, but because you are reading my blog, I am going to invite you myself - you can register by following this link I will take the time to complete a tour in the next few days and report again in the next two weeks - enjoy!
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Tomorrow: I am on to negotiation skills again and give you my tips for preparing for a successful outcome.
