The major problems that most sales managers don’t do are contained in the 3 step system:
Not finding “all-stars”
Not training consultative selling
Not compensating exclusively on performance
It really is this simple. These are the 3 pillars of effective sales manager training. I guarantee that if your sales team isn’t performing the way that you’d like, then you’re doing something wrong in one of these three areas.
So let’s dig in.
Compensating Exclusively On Performance
This one is both uncommonly simple and not obvious to 95% of sales mangers or business owners. Simply put, every sales person on your team should be paid entirely on commission. Paying a guaranteed salary, with or without commission bonuses, encourages retired performance. Let me explain…
Which of these salesperson do you think is more motivated, pro-active, and productive? Bob and Jim both work for Widgets International, Inc.
Bob, is paid $70,000 per year and receives a 5% commission on every widget sold.
Jim, is paid only on commission. He receives a generous, yet fair 25% commission on every widget sold.
Furthermore, Jim is an independent contractor, and Bob is a full time employee that receives top of the line fringe benefits, 3 weeks paid vacation, and a company car.
I hope this idea is starting to make sense. Bob, who makes a comfortable $70,000 per year (not including other benefits) has little incentive to perform to his highest potential. The real cost of Bob is much more than $70,000 per year, and this is before he sells a single widget.
Jim, on the other hand, gets paid only after he puts money into the company bank account. Although he makes 25% commission on every sale he is magically transformed into a profit center, not a cost. This is an essential point and is worth repeating…
He transformed into a profit center, not a cost.
Let’s look at this example a little bit closer. For illustrative purposes a widget costs the end consumer $3,000. That would mean that Bob would make a $150 commission (5%) on every widget sold and Jim would make a $750 commission (25%) on every sale.
At first you might be thinking, “Why would I ever want to pay that much to my salespeople? Won’t that destroy my profit margins?”
Let me put it other terms. Bob, who was comfortable with his job managed to sell 43 widgets in 2009. Jim, who only eats after he makes a sale, sold 331 widgets, more than 7 times that of Bob.
What could these types of numbers do for your company? What if you didn’t have to pay your salespeople until after they made you money?
Finding “All-Star” Salespeople
The personality type of the “all-star” salesperson that could revolutionize your business is very, very specific. And, unfortunately I have bad news for you; these people are hard to come by.
From my experience, this unique person is only 2% of the population. Said another way, you’ll probably have to interview around 50 people just to find one person that fits this mold!
But once you learn the:
- The 3 specific qualities of an all-star salesperson and
- The 7 word phrase that will identify all-stars in 30 seconds or less…
…you’ll be able to find the best salespeople 10 times faster, with 97% less work.
The three qualities of an all-star salesperson are most likely not what you’ve consciously looked for in the past. Here’s what you’re looking for. You want someone that is:
3. Socially Intelligent
Without any one of these qualities, you will be flushing money right down the drain.
There are many strategies to build your business, but nothing works unless your sales team can sell effectively. Sales training and coaching is hands down the most profitable way to build your business. When your sales team runs like a well-oiled machine, you control your future.