Talking with my son the other day (he’s sixteen right now), I was telling him, “Regardless of what you do in life, learn how to sell”. Unemployment numbers are high in the US, yet all of my clients are looking for sales people! So there are jobs, but not jobs for just anyone….there is always a job for an excellent sales person.
Here’s the problem…
If you have great sales people, make sure they are happy! Here’s a trend I run across frequently, and today is no exception. I was talking with a top sales person for a large high-tech company this morning (one everyone who know the name of). His sales last year were great – many of the reps I see on a daily basis would give a lot for the accounts this guy calls on, and would be living well if they closed the business he closed last year. But 2011 is over, and 2012 is on us – so as you might have guessed, his quota is higher.
Raising quota is normal, so neither one of us are surprised. The problem is, his management feels like they should double his quota, not because it’s low (and in fact it is far from low), but because he did well. He shared with me, that the remaining money to be collected on just one of his Q4 deals would have bought a small house in 2011, but with the new comp structure, he can buy a half-decent used car with his Q1 collections. What’s happening here?
A sales team has big hitters, those with potential, and a handful (which might be big or small) of non-performers. Sales managers have a hard time letting people go, so instead of promoting large commissions for big winners, they tend to spread the wealth by propping up low performers. By propping up, I mean setting ridiculously low quotas for one rep, while imposing astronomic quotas on their high-performance colleague. Helping one person to make enough to live on even if they produce almost nothing, while controlling another’s income because if “just seems to high”.
Why This Never Makes Sense
When this happens, and it happens all the time, the bad performers stay, while the superstars look for new jobs. For some reason, many sales managers are making choices to have a large sales team of mediocre performers, rather than a smaller team of big hitters. Big hitters will always outsell the mediocre team – while costing the company far less to maintain – why would they do this. I believe it’s fear. It’s hard to fire people, especially when they are great people (great to spend time with on social occasions), with a forecast that always seems to sound good. Everything is at 50% and is supposed to close next month…but every month, that same list rolls over to the next month.
The Goal Should be…
The goal of the sale team is to sell. When managers choose to meddle with comp plans rather than replacing low performance sales people, they are making a trade. It seems easier to change the comp plan, rather than sending someone out on the street in a bad economy. But the trade off is this…sales managers can either fire the low performers, or the good people will leave. You can’t have it both ways – you just can’t afford to keep everyone happy.
© 2012, David Stelzl