The administration for recording sales profitability can be ridiculously onerous, at one stage I found reporting and checking sales commission claims against the sales actuals and then calculating the commissions owing back to sales became a huge time waster. Do not let this become a distraction and de-motivator for your sales-force or operators.
Rewards, I think have to come in all kinds of mixes and of course for some it is a much easier mathematical equation than for others. I think sales professionals – proven, high quality salespeople should take roles with exceptional commission and low basics – living and dying by their sword of expertise.
A starvation salary.
Less experienced sales beginners should have a reasonable salary but again should understand from the outset that the upsides of earnings come significantly, from their ability to win the right kind of business in the right terms for the company’s focused sales growth strategy. (Which by the way most companies have not even clarified to leadership let alone the company as a whole!)
When my original company was small it was simple to record orders, to report the profitability of business sold and to pay a hefty percentage of commission against goods delivered and paid for by individual properties. This simplistic system with a few salespeople was easy to manage and highly motivational for them.
As the company grew and areas for sales territories had to be re-clarified, we broke our sales team into:
The commission schemes had to change to reflect these groups and even more so as we internationalised the business growth.
What is utterly never going to change, and this is whether sales or administration related, is the fact that you should set rewards for the things you want achieved.
Actions are too often linked vaguely and without clarity and this muddy water without key performance indicators, and a clear role description off which someone is recruited can lead to massive heartache when there are career development reviews (not naff appraisals). Avoid these pains early by putting clear expectations for earning potential in place.
One of the best and simplest rewards mechanisms we had at Pacific, on top of individual reward standards for sales people, was how we shared sales profit achieved beyond our targets. So, when we achieved the month’s targets for sales profitability, a percentage of any sales profit made beyond this point was shared equally amongst every member of the company. (I think we were about 6-14 people during this phase.)
A joint accounting effort.
The joint effort of accounting getting invoices out, dispatch processing orders and the whole sales momentum in the last days of every month amounted to a massive team culture and effort which we always retained – hugely beneficial as we growth accelerated.
The sales sum.
The “sales sum” reporting system that was emailed to all company members every day, reporting a salesperson’s performance % to target of that sales month and their cumulative percentage to target for the year was a completely transparent and motivational communication which kept everyone in the picture making an effort to support lagging sales – or frankly to separating the wheat from the chaff.
Rewards must be transparent.
Rewards with business objectives must be linked and transparent: a monthly company meeting showing progress towards targets was an imperative on the second Tuesday of every month and all company members were expected to attend these meetings. We all played our part.
Don’t forget to celebrate the simple stuff.
Celebrating simple stuff still works surprisingly well – e.g. ‘ipad for best salesperson at the end of the quarter’ (although it would have been a television back then). We even invested in the annual Golden Soap Awards (not surprising given we sold toiletries). These highly sought after accolades from best new performer, top customer service person through to top sales person were very powerful. In those cases the plaque and the award credibility were the prizes.
The company also had an annual BHAG (Big Hairy-Arsed Goal) which they set, the first of which famously saw them all on a fully expenses paid trip to Barbados – which they earned.
Make sure you understand what an individual wants, versus what you think they want.
Be bothered to ask the question. We had a lady who hated flowers, not clever to give her flowers.
The Personal Touch.
Gin, Jelly Tots, a long stemmed rose on Valentines Day etc. These gestures were part of a process that we planned and I kept tabs on it, making sure that I felt every person had been personally thanked, given small tokens. I even paid for legal advice for a divorce as a perk once! And to keep a balanced perspective I kept a chart so it didn’t get out of hand.
Operations and Admins.
Another point to make here is how did we manage the operational people who assisted sales? My consideration is that anyone in sales earned their commission. My sales hunters shared an administrative supporter who had to carefully support their salespeople equally.
I know these salespeople sometimes shared bonuses and gifts with their sales support teams. The whole company all shared in the annual profit and in a 5% pot share of the bonus of their salary according to how well they delivered on their key performance indicators.
My Top 20 motivators for Staff:
Download this printable and add to it for your business. Motivate Your Staff
Setting the right targets
Too often I see businesses strive to win or maintain key accounts or champion huge sales revenue, but struggle to increase profitable revenue. They take their eye off the important metrics and get easily distracted.
We have excellent training available through Company Shortcuts to help businesses identify their key metrics and you can find out more on our website:
Once you are clear what your profit priorities are, then when your sales team smash the targets linked to these metrics you will drive profitable growth.
If you have found any of this useful, I hope you will act on it immediately, if only printing off my Top 20 and adding to it for your team!
Reach out and ask for help if you are not sure how to implement, because we exist to support and encourage ambitious sales professional and business leaders. Contact us on: Leadership@companyshortcuts.com
Lara Morgan is best known for growing Pacific Direct, from start-up to successful exit, 23 years later. She now invests her time in fast growth companies and represents UKTI as an Export Ambassador, having previously exported to 110 countries. Her vast experience and business knowledge includes specialisms in licensing luxury brands, manufacturing toiletries and selling to the hospitality environment through complex global distribution chains. She’s also an expert in leadership and developing talent having learnt through her own experiences of employing 500 employees in an open fast growth sales culture.