Today, Out of Home Sales Expert, Kevin Gephart talks about how to pay and manage sales reps.
Kevin how do you adjust a compensation plan for someone’s current book of business versus additional business?
Because I have spent about one fifth of my career in management, and many more years as a rep, I have a unique perspective to see sales management challenges from both sides.
Companies are getting very smart about lowering the commission with agency RFP’s versus self-generated calls. Given the skill set and work involved, compensate self-generated new business at about twice the rate of agency RFP contracts.
Reps think they are doing a great job generating say $1,000,000 of business a year but what happens every year is the company creeps up the base book of business required to earn a bonus. So, there’s tension between keeping your reps hungry and not setting the threshold so high it’s demotivating.
Every sales department should have a big banner on the wall that says: “This is not a place to work – this is a place to grow.” I don’t know any business owner who is willing to forego enterprise growth. If their enterprise wasn’t growing, they could take all the money they have tied up in the business, put it in a bank CD and just and just call it good. Reps must understand they are signing up for a business where growth is a requirement. A rep might have a bad year, maybe a bad quarter, that would be understandable, however, if reps think they’re going to coast at the same level of business year in and year out they’re in the wrong business.
How do you measure sales rep activity?
You must have a good sales CRM system. You wouldn’t operate your business office without a good software system and not knowing where everything is financially. Don’t operate a sales department without having that same insight. When reps leave your company, they leave with a huge amount of your customer intel. Would you allow a real estate rep to leave with all the lessor information only in their head? Don’t allow a rep to leave with all of your sales intel stored in their head. Get it in a CRM system and then coach your reps to achieve their KPI’s within the system. Sell the reps on the huge benefit to them of maintaining a good CRM system.
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