Profiting At The Bottom Line™

This month’s focus: When Good Sales People Assume They’re Great Reality Check

There’s probably no job surrounded in both hype as well as horror stories: than sales. Yet, no matter how hard you slice it one thing is crystal clear: It’s both the hardest, as well as the most important to any business when it can be done both effectively, and consistently. Without it – there is no business. Period.

It is in this framework that sales is also the most rewarding, as well as rewarded profession in all of business. And for those that have mastered the art, as well as made their living based on the earnings of a commissioned structured paycheck. One thing is certain: you can tell from a mile away who is truly selling and closing based on their own efforts – and who is doing the same based on efforts such as special pricing, side deals, and more outside the normal structure. Circumventing all the pricing models or volume requirements and obtaining price overrides and such via management workarounds and more.

It’s easy to spot. And you as a business owner or manager can see it. However, the one most blinded to their brilliance will in fact many times be – just that sales person demanding the special treatment. And what their next demand in “special treatment” that surly will arrive at your threshold sooner than later is: “I believe my sales numbers warrant a discussion on increased compensation.”

And they will be correct. However, how you address the issue, and when; is where you can either help make that good salesperson great. Or, turn that person into your competitors “new good.”

Case Study: I had just taken over at the helm of a significant sized company that was in the midst of a desperate turnaround and reorganizing. The principal’s of the corporation were family members and with the death of the patriarch the members had a falling out that became downright spiteful with each other. The real issue for the company was that one of the principal’s left taking a product line and customer list they had developed (and believed they owned) leaving the now flailing company with a near +40% hole in sales and; a “poisoning of the well” to suppliers making replacement deals near impossible.

The real issue? The company was built on the afore mentioned “product line.” And without it? Competitors as well as anyone else that knew of our ordeal watched from the sidelines like vultures. There was only one option as far as I was concerned: Sell what we have and what we can grow into. Forget trying to get back the 40% we lost – make up for it with 40% of something we never had. And that’s what we did.

To do this I employed very liberal pricing guidelines and policies. I personally had to approve nearly all price overrides, or special caveats to nearly all new sales. I worked with banks and creditors for special financing. I worked with credit departments from suppliers in negotiating expansions in credit lines to allow us to move more product faster and more.

I had one salesperson who was at the time in charge of a small product line we were adding. It was that very line I decided we needed to fill the hole and we did. However, not without making deals, special pricing and other giveaways that didn’t require a salesperson to make – it was more of an order-taker function. The deals were being made on the back side – not on the side of the sales person. That was more of a facilitator function at that point in time, rather than what one would estimate in a “commissioned base position.” However, as people will be (and we’re all the same at some point in our careers) my sales person started believing that “they” were the reason for such an increase in the numbers, and wanted compensation. So – I had the conversation.

I first let them speak and state what was on their mind and it was what I had expected. i.e., “I’ve increased sales from X to X etc., etc., and based on those numbers from competitors I believe I’m being under-compensated.” I acknowledged and agreed they had a fair point. However…

I then began using the numbers they articulated.(note: I received an answer to each of these) I asked, “How close to these levels can you hold your sales without any need for management overrides?” “How soon can you articulate and influence these X number of accounts to pay terms more in line with our preferred models?” “How many of these customers will buy from us if we match prices to our competitors quotes rather than needing to beat them?” There were a few more but for brevity sake I believe you get the point. They were honest questions that needed to be answered honestly by any salesperson who’s serious about fair compensation. It circumvented the whole argument, “Pay me – or I walk!”

Compensating salespeople fairly while protecting both your bottom line as well as their bottom line (and ego) can only happen if you’re ready beforehand. i.e., Before they ask.

For if you’re not prepared. Or, you come off using figures or numbers unrealistic, unreasonable, or off the cuff out of your being unprepared. Your credibility to that sales persons well-being will become suspect signalling they should walk. Precisely at the time you needed to keep that promising potentially “great” sales person running  – on your side.

And not straight to your competitors.

© 2015 Mark St.Cyr

Profiting At The Bottom Line™ is a monthly memo, which is pithy, powerful, and to the point. It focuses on innovative techniques and or ideas that you can put to work immediately in your daily or business life.