How to Change a Crappy Sales Compensation Plan to a Better One

Posted by Dave Kurlan on Thu, Nov 03, 2016 @ 07:11 AM

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Image Copyright 123RF Stock Photo

Nearly every company gets to the point where they must realign territories, accounts or roles.  While doing that is always challenging, perhaps the biggest issue is how salespeople will respond to the impact this change has on their total compensation.  That problem is the biggest reason why it is so important to create an effective compensation plan.

Let's take John, who is being paid a $75,000 base salary and earns commissions of 10% on the revenue generated in the territory.  If the territory generates $1 million in sales, John gets $100,000 in commissions and his total compensation is $175,000.  It's also important to note that John spends most of his time on 20 great accounts and has little time leftover for the other accounts in the territory and he no longer prospects for new business.  The company has decided to split the territory, hoping that a new salesperson will hunt for new business and John will have time to do the same.  As part of this change, John will lose 10 accounts, worth $500,000 in revenue, to the new salesperson and initially, his total comp will be reduced by $50,000!  John will not be a happy camper.  How could this have been avoided?

First, this is simply an example - one example - and not the only way to create a sales compensation plan.  However, this example will illustrate the most important component to be changed.

For the sake of argument, let's assume that the following compensation plan was given to John when he started selling at this company.  To make it simple, let's retain John's $75,000 base salary but explain that the salary pays him to manage and service his existing and future accounts. In addition to his base salary, he will earn 20% on the gross profit of new business (first year) he generates with new customers and 20% of the gross profit on the growth of his existing customers.  So if he has $1 million in existing business and grows it by 20% to $1.2 million, and the company's gross profit is 30%,  his commission on existing customers is $12,000.

Later, if you decide to take accounts away or reduce the size of the territory, it has a far less significant impact on earnings.

I am also a proponent of a sliding base/commission plan.  You can read about my concept here.

I also wrote these articles about sales compensation:

Get Sales Compensation Right to Recruit Winning Salespeople

Do We Have Sales Compensation All Wrong?

Sales Compensation and Stupid Human Tricks

But I'm a Sales Guy! The Story of Motivation and Compensation

A Different Look at Sales Compensation

Compensation - the Unchanging Role

Does Changing Compensation Increase Sales?

Sales Compensation - Exceptions to the Rule

When it Comes to Compensation Sales is Not Like Baseball

Sales Candidates, Sales Compensation and the Number of Resumes

Compensation Stupidity Again?

Top 7 Sales Force Compensation Secrets

How Wrong are Company Methods to Rank and Compensate Salespeople?

Dunkin Dunuts - Time to Make Sales Compensation and Sales Competencies Work 

Topics: Dave Kurlan, sales compensation, sales commissions, dunkin donuts

Which Thoughts Affect How Successful You Will be in Sales?

Posted by Dave Kurlan on Mon, Jun 27, 2016 @ 08:06 AM

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I finished reading Game 7 - Ron Darling's book on the final game of the 1986 World Series, and I'm half way through Shoe Dog - Nike creator Phil Knight's memoir.  They're similar books because each devotes so much ink and analysis as to how their own thinking and beliefs - both positive and negative - shaped their actions and outcomes.  Read them and imagine sales instead of baseball and entrepreneurship, and both books will help shape the ideal thought process to support selling!  I highly recommend both books.  I wrote a lot about beliefs in selling in both Mindless Selling and my best-seller, Baseline Selling.  As a matter of fact, when Objective Management Group (OMG) measures this, only 45% of the sales population have 80% or more of the possible supportive sales beliefs and only 6% (elite territory) have better than 87% of the possible supportive sales beliefs!

We're half way through 2016 and I've posted 60 more articles to my Blog.  I used to measure the effectiveness of an article by the number of reads, but these days, that's more a measure of whether the title or first sentence successfully got a reader to click through.  Today, I think a better measure of an article's overall impact is the number of LinkedIn shares it receives.  As I usually do every six months, I listed the top ten articles from January through June ranked by LinkedIn shares.  Chances are that you didn't read them all so here goes:

#1 - Breaking News - More Salespeople Suck Than Ever Before

#2 - Must Read - This Email Proves How Poorly the Bottom 74% of Salespeople Perform

#3 - Learn How We Discovered They Had the Wrong Salespeople

#4 - The 5 Questions That Get Prospects to Buy so You Don't Have to Sell

#5 - How Boomers and Millennials Differ in Sales

#6 - Sales Coaching and the Challenges of Different Types of Salespeople

#7 - What do you Blame When Salespeople Don't Schedule Enough New Meetings?

#8 - What Percentage of Sales Managers Have the Necessary Coaching Skills?

#9 - How Wrong are Company Methods to Rank and Compensate Salespeople? 

#10 - Why Uncovering Pain Doesn't Close the Sale with a CEO and the 3 Conditions You Do Need

While those were the most shared, there are a couple that should have been shared more often but weren't:

The 3 Most Important Questions about Sales Process

It's Coming Sooner Than You Think - 5 Keys to Prepare Your Sales Force for the Recession

Topics: Dave Kurlan, sales process, Sales Coaching, Top Performer, sales performance, self-limiting sales beliefs, sales compensation, linkedin, uncovering pain, phil knight, nike, ron darling

Are These the Best Roles for Shy People in Sales?

Posted by Dave Kurlan on Thu, May 12, 2016 @ 06:05 AM

I received an email inviting me to review and share an infographic on shy people in sales.  Being an introvert myself, I thought it would be interesting to check it out and see if it resonated.  When I finally got around to reading it, I was surprised by several things I read...and I'm sure you'll be surprised too...

The infographic shows that introverts make up 57% of the population, but it doesn't say what percentage of the sales population is introverted...a striking omission.  I've written about introverts and extroverts before and this is one of the better articles.

They list 5 traits which, according to industry experts, typically make a good salesperson.  They include:

  1. self awareness
  2. assertiveness
  3. optimism
  4. empathy
  5. problem solving skills

They must have talked to the wrong experts because these personality traits are not predictive of sales success! Since the top tier of the infographic listed dimensions from the Myers-Briggs personality assessment, it shouldn't be a surprise that personality traits were used.  But why?  What's most important to know about personality traits is that both good and bad salespeople have them!

If you want to read about sales specific qualities of top salespeople, refer to these two articles:  Article 1 and Article 2.

Getting back to the infographic, it provides examples of sales careers that would be good for introverts.  Really?  If an introvert is suitable for sales, then why only certain types of sales positions?  The most absurd part of this infographic is the income they attached to each sales position.  They used a government website for the income research. It must have been as old as the research on the traits of successful salespeople - only worse!  The salary research must have been from 40 years ago!  Their top category, sales engineer, had a median salary of $96,000.  Today, that's close to the average compensation for salesperson across all industries.  Entry-level salespeople earn, on average, close to $70,000, but most of the salaries listed on the infographic were under $50,000!

I love a good infographic, even though most of the time the info part is made up!  They actually performed research for this one, but in my opinion, used bad sources.  Too bad.  It could have been really useful!

How about a shy millennial?  I don't have any data on that combination, but there is a very short video on managing salespeople who are millennials on the Selling Power YouTube channel.

Topics: Dave Kurlan, sales compensation, personality traits of successful salespeople, introverts in sales

How Wrong are Company Methods to Rank and Compensate Salespeople?

Posted by Dave Kurlan on Tue, Feb 23, 2016 @ 06:02 AM

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When report cards and grades are available, measuring the academic success of your child or grandchild is a lot easier than it is to measure sales success.  School grades go up and we say, "Great effort!"  School grades go down and we say, "Oh-oh, something is seriously wrong here!"   Academic grades are a reflection of test scores, completed homework and class participation. Sales grades are another story altogether and that is where most companies make terrible, horrible, awful mistakes.  Do you think you know what those mistakes are?

When we evaluate sales forces, the most predictable event during the review is when the executives question why their "best salesperson" appears to be so weak on his or her evaluation.  After all, at most companies, salespeople discover how "good" they are by looking at two numbers:

  • Sales for the current period
  • Commissions for the current period

Do you ever wonder when, if ever, those two numbers are measures of actual performance?  Let's take Ken, who inherited a $3 million territory 3 years ago and now has his territory humming along at $3.1 million.  By all accounts, he generates the most revenue and earns the highest commissions in the company and when measured that way, he's doing the best job.  But is he really?

For comparison, let's look at Bob, who started his new territory from scratch 18 months ago.  It's only producing $750K, the lowest sales number in the company, and his commissions are only a quarter of Ken's.  When measured that way, he is the worst salesperson in the company.  But is he really?

I hate measuring performance by looking at revenue and commissions because it's almost always about as accurate as a salesperson's resume and those are mostly fiction.  Neither of these two guys are being paid what they are worth and neither of them deserve the "grades" they are getting.

The reality is that Bob went from 0 to $750K in 18 months - 700% better growth than their top salesperson, Ken, who grew his inherited territory by only $100K over 36 months.  On the other hand, Bob worked hard, found and closed new business, and got paid significantly less money than Ken.  Ken didn't work hard at all, didn't find any new business, and got negligible growth from a couple of big accounts.

Why aren't salespeople being measured on their effort, behaviors that grow the business, and relative success.  What's relative?  Relative to expectations.   The only problem is that expectations are often wrong, too low, or too high.  For instance, just last week a client said that after 9 months, 5 of their 6 most recent hires, all recommended by OMG's Sales Candidate Assessment, were ranked in the bottom 5 out of 30.  That didn't sound right, so we dug into the data, pushed back and asked questions.  We learned that these 5 all inherited seriously underperforming territories that were ranked in the bottom 5 before they even began.  On top of that, their sales cycle is 9-12 months, so it would take at least a year for their efforts to even begin to pay dividends and we were still 3 months short of that.   Expectations must be realistic!

So how can a company measure sales performance when they can't see beyond revenue ranked by salesperson?

If that's a measure that a company insists on using, it could be filtered a bit.  They could use revenue from new accounts.  That puts everyone on level playing field and in that model, Bob would be considered more successful than Ken.  Candidly, I wouldn't even want Ken working as a salesperson for me.  I might be OK with him as a lower paid account manager, but I want Bob.  Send me Bob.  I want Bob.  More Bobs.

Are your salespeople being paid on the effort they put forth to grow your company?  Are you compensating them for the right activities and behaviors?  Are you overpaying account managers and undercompensating hunters?

How about the low-paid inside sales team that spends all day making calls and scheduling meetings for the high-paid account executives?  Is that balance appropriate?  I concede that there is a skill gap between the two roles, but without those inside reps, those account executives meet a lot fewer new prospects.

Let's get sales compensation right once and for all and stop looking at account managers with great territories as your best salespeople.  They aren't.

Topics: Dave Kurlan, sales performance, sales compensation

Closing Sales, Process, Hauntings, Training & More

Posted by Dave Kurlan on Mon, Mar 23, 2015 @ 06:03 AM

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Photo Credit: Psychic Library

Today I will explore the least-read articles I have ever written.  That's right.  The least read.  It's very fashionable - and a best practice - to continue promoting the most-read, most-liked, most-favorited, most-shared, most-tweeted and most-commented articles; but I don't think anyone has gathered up their worst work and said, "Look at this!"  It's actually not my worst writing.  It's all every bit as good, and in some cases, better than my best articles.  Sometimes crappy articles spread like wildfire and the good stuff comes out on a day when people aren't paying attention.  So here are the 10 best articles I ever wrote that hardly anyone noticed.

Closing Sales - The Fine Line Between Patience and Pressure  August 2007

The Impact of Sales Training  October 2006

Great Sales Opportunities That Don't Close March 2010

Salespeople - Can Their Work Ethic Be as Good as BB King's?  March 2007

How to be Memorable - Things to Do When You are Selling Yourself  August 2009

What Do Sales Managers Do with Their Time?  May 2007

My Sales Process, Strategies and Tactics in Your Voice  October 2010

But I'm a Sales Guy! The Story of Motivation and Compensation June 2007

Top 14 Requirements to Perform a Sales Force Makeover April 2009 

Hauntings and Salespeople  November 2006

Topics: Dave Kurlan, sales process, sales training, sales motivation, Sales Tactics, Closing Sales, sales compensation, sales opportunities, bb king, how to be memorable, time management for sales managers, sales methodologies

Sales Compensation and Stupid Human Tricks

Posted by Dave Kurlan on Thu, Feb 12, 2015 @ 07:02 AM

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Copyright: 123RF Stock Photo

OK, so we'll begin with something more along the lines of stupid pet tricks before we get to stupid human tricks.  There is a great TED talk about two monkeys that were unfairly compensated.  This is a must-see video!  With compensation - fair or unfair - in mind, I reviewed this year's 2015 Sales Compensation Survey Highlights by the Alexander Group and Sales Compensation Solutions.

The first finding that I noticed - we have seen this particular data point in nearly every white paper, report, survey, analysis, study and anecdotal story - is that only 50% of all reps made quota last year.  In surveys like this, a small number of large companies were involved and very often, when the companies are this large, the findings don't apply equally to your company and mine.  However, in this case, it's fair to say that this particular finding accurately represents the state of salespeople and quotas across the board.

The second finding that I noticed is that 60% of the companies will make mid-year adjustments to their quota.  In which direction do you suppose those quota adjustments will go?  The median quota was $2 Million USD.  Let's attempt to determine what the thinking was behind these quota adjustments:

Executive 1: "We will set the quota at $2M this year."
Executive 2, six months later: "Well, reps aren't hitting their quota.  Should we train our sales managers to become more effective at coaching their salespeople, train the salespeople better, evaluate the sales force to find out what's preventing them from being more successful, or all three?"
Executive 1: "Or we could simply lower their quota to show what great managers we are - they'll love us!"
Executive 2: "Yes!  That would be so much easier - we can complete that in an hour.  It could take months for those other 3 suggestions to kick-in!"

I have favorite blogs and newsletters too.  One of my favorites bloggers is Dr. William Campbell Douglass, a renegade MD who exposes the ties, lies and buys that take place between Big Pharma and our government.  I am borrowing a line from this article of his because the line describes what occurred in my imaginary, but very real discussion above.  Dr. Douglass said, "It’s like watching a lunatic argue with himself, and lose."

How else can you explain how quotas are set, missed and adjusted as often as the Boston Red Sox go from worst to first to worst and the New England Patriots go to the Super Bowl?  [Sorry - I had to get a sports analogy in there somehow.]

The Sales Compensation Survey also indicated that 64% of companies plan to increase base pay.  What should you do when your salespeople complain that their commissions aren't high enough?  That's right - they raise the base pay.  If you've been reading my blog since 2006 then you know how I feel about base pay versus commission.  It's not one size fits all and base pay is important to salespeople who are intrinsically motivated while commissions are important to salespeople who are extrinsically motivated.  If you have a plan that offers commissions, there is never, ever a reason to increase the base pay.  If commissioned salespeople want more money, all they have to do is sell more!  Even the CFO's of these companies should be able to figure that one out!  But the more likely scenario is that the same brilliant, large company Sales Leaders who were involved in the "set it, miss it, adjust it" quota goof, gave in to the demands of their large company entitlement-minded salespeople who would leave if they didn't get their raises.  I'm sorry, do they want their salespeople to fail?

The survey findings are good and important - the authors did a great job collecting and reporting on the information and I have nothing but praise for what they produced.  My issues are with the idiots who are running the companies that participated in the surveys!

In most cases, if these companies did a better job on selection - and that goes right to the Sales Leadership roles - all of their salespeople would hit and surpass quota, quota would go up each year, base pay would decrease, commissions would increase, and everybody would be thrilled.  Speaking of selection, there are a two upcoming events you might want to attend:

On February 19, I'll be presenting an online webinar hosted by TAB - The Alternative Board - on how to find, attract, assess, interview, select, hire and retain your next salesperson.  Register here.

On February 26, I will conduct a guided tour of the Magic in Objective Management Group's (OMG) Sales Candidate Assessments.  Register here.

The latest issue of Top Sales World's magazine is available here.  Be sure to check out my article on the best practices for onboarding new salespeople.

And from the "I can't believe it file", I was recently named to 3 more Top 100 lists:

Did you notice that each of these lists are related to Social Selling?  I'm flattered to be on their lists, but I don't consider myself an influencer in Social Selling as much as a participant and protagonist!  When I am influencing relative to social selling, it's usually that we need to spend more time on actual selling and less time pretending to be selling.  

Topics: Dave Kurlan, sales compensation, sales commissions, social selling, Top Sales World

Get Sales Compensation Right to Recruit Winning Salespeople

Posted by Dave Kurlan on Tue, Aug 13, 2013 @ 12:08 PM

sales compensationSales candidates, especially good ones, are exponentially more difficult to attract than they were just two years ago.  We regularly observe clients struggling when it comes to getting resumes from quality candidates.  One of the reasons is compensation.

1. True or False: The higher the compensation, the better.

2. True or False: Compensation isn't that important to most salespeople.

3. True or False: Compensation is always relative.

4. True or False: Base salary is usually more important than % of commission.


The answers are False, False, True and False.

There are four variables that impact the importance of compensation:

  1. Requirements - If there aren't many significant requirements, expectations, experiences, or expertises, then $50,000 may be fair.  But if you need a salesperson who has had success selling expensive products or services to CEO's amid a tremendous amount of competition and you need this person to both find and close new business, then you are describing a salesperson who would expect a compensation plan to pay them in excess of $125,000 and as much as $250,000.
  2. Industry Norms - If you want one of the effective salespeople to join your company, you need to divorce yourself from the mindset that, "In our industry, it's traditional to pay..."  That's fine if you will never, ever interview and hire salespeople from outside your industry.  But if your industry provides a $135,000 base and the salesperson being interviewed comes from an industry that pays a $35,000 base,  you will overpay and undermotivate.
  3. Splits - Once again, you'll need to move away from the one-size-fits-all comp plan.  Extrinsically motivated salespeople will thrive on a low base and high commission plan while intrinsically motivated salespeople will perform more effectively on a high base with small commission plan.  That's why I always ask candidates to provide me with an earnings history broken down by salary and commission (and bonus if applicable).
  4. Needs - What a salesperson needs to earn to pay bills must be considered at the start and you may need to subsidize this person during ramp-up if the plan is weighted toward commissions and if income will fall short of the bill-paying requirement.  Regardless of motivation type, what salespeople desire to earn to get what they want in life must be considered for long-term retention.  When salespeople are successful and their income continues to grow, they will grow with you.  When success or income stagnates, look for them to add your company to the previous employers listed on their resumes.
I have written about and am on record saying that, in order to build an over-achieving sales force, you need to eliminate the 80/20 rule - the rule that says that 80% of your salespeople will suck -and replace it with the 100/0 rule - the rule that says that 100% of your salespeople will be over-achievers.

Well, I found some sanity over the 80/20 rule in Perry Marshall's new book, 80/20 Sales & Marketing: The Definitive Guide to Working Less and Making More.  Perry busts some long-standing myths and backs it up with sound data.  I read the first chapter and am hooked - a must read for me and perhaps for you too!

Topics: Dave Kurlan, sales recruiting, sales management, sales leadership, Sales Candidate, sales compensation, sales talent

Sales Incentives, Awards, Lead Follow-Up and Sales Effectiveness

Posted by Dave Kurlan on Wed, Dec 19, 2012 @ 13:12 PM

sales incentivesToday I had the following email exchange:

Subject: Question on Comp

Dave,

I have a question on comp and need help.  We have "appointment setters" who have a quota of 16 appointments per quarter.  If they get above that #, they get a bonus of $250 per meeting.  This incentivizes them to book meetings which are probably not the best qualified.  Sales complains that the leads suck.  The appointment setters are upset, blaming the low closing percentage on the salespeople.  We have the sales process dialed in and are training on it now.  I'm stuck on comp.  Ideas?

Dave Kurlan wrote:

They should receive the incentive only if the opportunity makes it as far as 2nd base in the sales process.

Dave

Subject: Re: Question on Comp

Got it....that still puts all eyes on the salesperson's ability to execute.  No pressure there!  How do you manage the culture to prevent finger-pointing?

Dave Kurlan wrote:

Make finger-pointing unacceptable.  Punishable.  Some leads will suck – that's a condition.  Some salespeople will suck – that too is a condition.  It’s only a problem when the leads or the salespeople consistently suck, at which time, change is required.  Until such time, salespeople must be trained to become more effective while marketers must be trained to develop stronger leads.

Dave

My Editorial:

Salespeople must be trained to be more effective at lead follow-up and consultative selling, both of which are quite different and much more challenging than selling was just 5 years ago.  Many of those salespeople won't be able to make the transition from transactional selling to consultative selling.  That's one of more than 20 conditions which justify evaluating the sales force.

Marketers must be trained to develop stronger leads by developing better ad placement, improving their targeting with stronger calls-to-action and audience-specific landing pages resulting in more qualified leads.  One of the issues about which I've written in much more detail is the difference between a lead and a contact.  Many marketers believe that anyone who raises their hand, fills out a web form or accepts an appoinment is a lead, but that isn't necessarily the case.  Certainly some are, but it's the marketer's job to differentiate between contacts who simply want free information and leads who have legitimate interest in solving a problem, taking advantage of an opportunity or simply buying what you're selling.

In the case of appointment setters, as in the email above, training them to be more effective with the appointment-setting conversation will pay dividends too.  Not only will the appointments be more qualified, there will actually be more, better-qualified appointments!

Good News!

At yesterday's Top Sales Awards event, I was honored with three awards for 2012.

Objective Management Group (OMG) won Gold for Top Sales Assessment Tool for the 2nd consecutive year!

My Blog, Understanding the Sales Force, won Silver for Top Sales & Marketing Blog of 2012, the 2nd consecutive year of being recognized.

And the most humbling award of all (I wasn't even aware that I'd been nominated!) was my induction into the Sales & Marketing Hall of Fame.

There was no popular vote in these categories, so this year's recognition was much more meaningful than last year's when popular vote counted for 50% of the results.  I'd like to thank the judges for their votes and my industry colleagues and competitors for pushing me to be the best that I/we can be.

Last Word:

Tomorrow will be my final post of 2012 and my 1,000th article since I began writing on this blog in 2006.  In honor of my 1,000th article, I'll reveal the Top Sales Article from among 15 for which my readers have been voting. 

Topics: Dave Kurlan, sales force evaluation, sales training, sales compensation, lead follow up, sales and marketing fight, sales effectiveness, sales assessments

A Different Look at Sales Compensation

Posted by Dave Kurlan on Fri, Apr 06, 2012 @ 10:04 AM

Sales Commission Calculator resized 600The pros and cons of both commission-based sales positions and salaried positions have been well-documented, so we won't be discussing that in this article.  Let's talk about something other than questioning which compensation plan is best for your company and its salespeople.

Suppose you're eyeing a new gadget; however, this must-have toy will set you back $5,000.  What if you also need to replace a couple home appliances, spend $20,000 on a landscaping project, pay for a funeral, dish out for a European vacation, and endure a new college tuition?  After all of that supposing, the calculator shows that you need to come up with around $75,000 - soon.

With a salaried position, salespeople are essentially on a fixed income - perhaps a more attractive fixed income than a retiree, but fixed none the less.  And these days, with most people living at or above their means, fixed simply becomes another word for broke!  The thought of coming up with $75,000 in discretionary funds is daunting unless a salesperson is the rare exception who has been squirreling away most of his income.  This is the world of the salaried salesperson.  Play it safe, but don't expect any big commission checks.

With a commission-based plan, the salesperson simply makes a decision to step it up.  How much more do they need to sell in order to earn an extra $75,000 this quarter?  Can they do it?  Can they come close?  This is how the commission-based salesperson thinks and functions.  Make a financial commitment to something and then earn the money to pay for it.  Of course, the obvious downside to this scenario is this:  If this salesperson doesn't have a big financial commitment at this time, there is a possibility for a period of complacency where s/he doesn't work as hard until performance finally suffers or the next financial opportunity appears.  While this does happen on occasion, it is an ongoing risk with salaried salespeople.

Even if you see the obvious advantage to commission sales (it doesn't have to be 100% commission-based), you can't easily change from salary to commission.  Why?  Most of your sales force will quit!  If they wanted to work in a commission sales environment, they wouldn't have gone to work for you in the first place...

There is a compromise though.  You can make both groups of salespeople happy.  I wrote this article two years ago to illustrate exactly how you can make this possible.

Sales Force Compensation is just one of many important topics we will discuss at Kurlan and Associate, Inc.'s Sales Leadership Event May 10-11 in Boston.

Topics: Dave Kurlan, sales leadership, sales management training, sales compensation, commission sales, salaried sales

Tenure - Could it Possibly Be a Good Thing for your Sales Force?

Posted by Dave Kurlan on Mon, Jul 25, 2011 @ 08:07 AM

  How do you feel about tenure?  Is it ever a good thing?  Is there value in helping people feel secure about their employment stability and financial future?

To a point.  It's good when people feel positive about their situation, allowing them to perform their most brilliant work.  It's bad when their sense of permanence causes them to do as little as possible.  It's good when it makes the company appear stable to those prospective companies who would consider doing business with you.  It's bad when their sense of entitlement causes them to believe that the work that must be done is now beneath them.  And so goes the tenure argument.

What about tenure with salespeople?

I am not aware of any company that awards their salespeople with tenure.  That said, many companies may as well be dishing out tenure with some of the silly things that they do.  Here are ten examples where the company's philosophies have the same effect as tenure:

  1. Salespeople can only be terminated for lying, stealing or cheating;
  2. Quotas are negotiated;
  3. Under performance does not cause a reprimand or termination;
  4. Quotas are only guidelines and are not enforced;
  5. Salespeople who migrate to account management in lieu of new business development are not confronted;
  6. Compensation is salary with little or no bonus or commission;
  7. Management defends and protects bad hiring decisions;
  8. Salespeople are left to their own devices - for better or for worse;
  9. Company is reluctant to develop a true sales culture;
  10. Salespeople are considered family.
Can you think of any additional examples?
By the way, some of you may have become discouraged from leaving comments because my Blog was getting spammed for a couple of months and if you checked the box to be notified of any comments after yours, you would have received the spam too.  That problem has been rectified so you can safely leave comments again.  I apologize for the aggravation!

Topics: Dave Kurlan, sales management, Sales Coaching, sales motivation, sales compensation, complacency

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About Dave

Best-Selling Author, Keynote Speaker and Sales Thought Leader.  Dave Kurlan's Understanding the Sales Force Blog has earned a medal for the Top Sales & Marketing Blog award for six consecutive years.  Dave's Blog earned a Bronze Medal in 2016 and this article earned a Bronze Medal for Top Sales Blog post in 2016. Read more about Dave.

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