Lisbiz Strategies: Does your commission system inspire losers?
January 16/23, 2017: Volume 31, Number 16
By Lisbeth Calandrino
Let’s face it; salespeople lose more customers than they sell. Let’s not pretend they don’t. Businesses keep mediocre salespeople and expect them to motivate themselves to get better. Finding salespeople isn’t hard but finding the right ones and inspiring them to become the best is a different story. Businesses are always trying to figure out how to build exceptional salespeople without breaking the bank. Here are some thoughts to consider.
First of all, everyone is different. What motivates you probably doesn’t motivate me. When it comes to motivation, there isn’t a one-size-fits-all solution. Think about how your parents used to motivate you to take on challenges. Did you have a choice or were you told, “This is what you need to do.” It’s likely you do it the same way. Inspiring people is different than telling them what to do.
Do you set quotas for your salespeople and get the same outcome all the time? The good salespeople win and the bad ones lose. What do you do with the losers? Are they worth inspiring or should you fire them?
Do you use the same commission system for everyone? I get lots of calls asking about the best types of commission systems. The truth is there isn’t a commission system in the world that will work for everyone on your sales team. The real question should be, “How do I motivate each of my staff to sell higher?”
Does your commission system encourage losers? Here’s how this works: You set a quota for the top producers. You’re only willing to pay out so much commission so the top producers stop producing. The low producers don’t work very hard because they know they can’t outsell the top ones. It’s called a “lose-lose” system.
Instead of setting goals for everyone, ask your salespeople about their goals and what you can do to help them reach them. Ask them, “What works for you?” Usually only the peak performers meet and exceed their quotas.
Change the end goal; make it possible for everyone to win something. Ask your salespeople what they are reaching for; what makes them want to compete? Do they want a fishing trip or an extra day off? What quotas can they set for themselves? Would they like to go to a special workshop? Are they saving money to help their kids get to college or do they want to take some classes?
Let salespeople compete against themselves. You know they can’t beat the top guy, but what can they do to reach their own goals and move closer to your goals? Let’s say you want them to sell $1 million and they’re selling $600,000. Determine what it would take for them to sell $650,000 and and reward them for reaching that goal. Once they reach that goal you can up the numbers.
What skills do your salespeople need? When I get calls about training, it usually includes what the owner wants. However, it is better to ask the salespeople what skills they think they are lacking to close more sales. Once you know what those skills are, you can devise a training program that provides each person with the right coaching. Let’s not bore the peak performers or overburden the under performers. It’s up to you and your managers to design an appropriate training program.